CALGARY, Dec. 16 /CNW/ - Resin Systems Inc. ("RS"), (RS - TSX), today announced the closing of its previously announced private placement. At closing, a total of 10,000 units of RS were issued at a price of $1,000 per unit for total gross proceeds of $10 million (the "Offering"). Each unit of RS consisted of a $1,000 principal amount of 15 percent secured redeemable subordinated convertible debenture (the "Debenture") and 4,000 common share purchase warrants, each whole warrant entitling the holder thereof to acquire one (1) common share of RS at a price of $0.18 per share until December 16, 2013. The securities of RS issued pursuant to the Offering are subject to a hold period until April 17, 2009. All of the eligible members of the Board of Directors of RS and certain officers of RS subscribed for an aggregate of $2.77 million of units pursuant to the Offering, including Wilmot Matthews, the chairman of RS, and Paul Giannelia, the president and chief executive officer of RS, who each subscribed for $1.0 million of units.
RS intends to use the proceeds of the Offering for working capital and for general corporate purposes.
The Debentures will be due and payable on December 17, 2013 and accrue interest at 15 percent per annum payable annually (each an "Interest Payment Date") starting November 30, 2009. RS will have the option, subject to regulatory approval, to elect to satisfy its obligation to pay such interest by issuing and delivering that number of freely tradeable common shares obtained by dividing the amount of interest by 85 percent of the volume weighted average trading price of the common shares on the Toronto Stock Exchange ("TSX") for the five consecutive trading days ending five trading days immediately preceding the Interest Payment Date.
The Debentures will be secured by a charge on all of the assets of RS, including all of RS's intellectual property.
The Debentures are convertible into freely tradeable common shares of RS at the option of the holder, in whole or, from time to time, in part, at any time after December 16, 2010 and prior to the close of business on the earlier of maturity and the business day immediately preceding the date specified by RS for redemption of the Debentures. The principal amount of the Debentures and the accrued interest thereon are convertible into that number of freely tradeable common shares obtained by dividing the principal amount of Debentures and the accrued interest thereon being converted by 115 percent of the volume weighted average trading price of the common shares on the TSX for the five consecutive trading days ending five trading days immediately preceding December 16, 2010.
The Debentures are redeemable by RS, in whole or, from time to time, in part, on not more than 60 days and not less than 30 days prior notice, at a redemption price equal to their principal amount plus accrued and unpaid interest, if any.
On maturity or on redemption at any time after December 16, 2010, RS may, at its option, on not more than 60 days and not less than 40 days prior notice and subject to regulatory approval, elect to satisfy its obligation to repay the principal amount of the Debentures and accrued interest thereon by issuing and delivering that number of freely tradeable common shares obtained by dividing the principal amount of the Debentures and the accrued interest thereon by 85 percent of the volume weighted average trading price of the common shares on the TSX for the five consecutive trading days ending five trading days preceding the date fixed for redemption or maturity, as the case may be.
Upon a change in control of RS involving (i) the acquisition of voting control or direction over more than 50 percent of the outstanding common shares of RS, (ii) a business combination where RS is not the surviving entity or the common shares of RS are reclassified, changed or converted, or (iii) the sale or disposition of all or substantially all of the property and assets of RS, at any time while the Debentures are outstanding, each holder of Debentures will have the right to require RS to make an offer to repurchase their Debentures, in whole or in part, within 30 days following the consummation of the change of control, at a price equal to 101 percent of the principal amount thereof plus accrued and unpaid interest.
About RS
RS is a technology innovator that develops advanced composite material products for infrastructure markets. These advanced material products are not only structurally superior to products made with traditional building blocks of wood, steel or concrete, they are also lighter, more durable and longer-lasting. RS has entered the global market with its award winning utility poles and conveyor roller tubes as its initial products, and continues to identify a growing list of additional innovative products.
"RStandard" is a registered trademark of RS.
Reader Advisory
All statements in this news release that do not directly and exclusively relate to historical facts constitute "forward-looking statements". These statements represent RS's intentions, plans, expectations and beliefs. In certain instances, these statements require RS to make assumptions and there is significant risk that these assumptions may not be correct. Furthermore, these statements are subject to risks, uncertainties and other factors, many of which are beyond RS's control. RS disclaims any intention or obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, other than as required by applicable legislation. Readers are cautioned not to place undue reliance on these forward-looking statements. More information about the risks that could cause RS's actual results to significantly differ from RS's current expectations can be found in RS's 2007 annual information form and other documents RS files with the Canadian Securities Authorities and the United States Securities and Exchange Commission.