NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES.
FRANKLIN, IN – (March 21, 2018) – IBC Advanced Alloys Corp. (“IBC” or the “Company”) (TSX-V: IB; OTCQB: IAALF) announces that it has filed a preliminary short form prospectus in the provinces of British Columbia, Alberta and Ontario pursuant to National Instrument 44-101 – Short Form Prospectus Distributions in connection with a marketed offering of debenture units and convertible debenture units for aggregate gross proceeds of up to C$6,000,000 (the “Offering”) to fund an expansion of its production capacity and for other purposes. The Offering will be led by Mackie Research Capital Corporation as lead agent and sole bookrunner on behalf of a syndicate of agents (collectively, the “Agents”).
The Offering will consist of the offering for sale of up to 3,500 debenture units of the Company (“Debenture Units“) and up to 2,500 convertible debenture units of the Company (“Convertible Debenture Units” and together with the Debenture Units, the “Offered Units”) at a price per Offered Unit of C$1,000 (the “Offering Price”). Each Debenture Unit will consist of one 9.5% unsecured debenture of the Company in the principal amount of $1,000 (each, a “Debenture”) with interest payable semi-annually in arrears on June 30 and December 31 of each year and maturing five years from the date the Debentures are issued, and 2,300 common share purchase warrants (each, a “Warrant”) expiring 60 months after the date of issuance of such Warrants. Each Convertible Debenture Unit will consist of one 8.25% unsecured convertible debenture of the Company in the principal amount of $1,000 (each, a “Convertible Debenture”) with interest payable semi-annually in arrears on June 30 and December 31 of each year and maturing five years from the date the Convertible Debentures are issued, and 2,300 Warrants expiring 60 months after the date of issuance of such Warrants.
Each Warrant will entitle the holder thereof to purchase one Common Share (each, a “Warrant Share”) at an exercise price of $0.37 per Warrant Share at any time up to 60 months following the Closing Date, subject to adjustment in certain events.
The Offered Units will be repaid in cash at maturity.
The Convertible Debentures issued under the Convertible Debenture Offering will be convertible at the option of the holder of the Convertible Debenture into Common Shares (the “Debenture Shares”) at any time prior to the earlier of: (i) the close of business on the maturity date; and (ii) the business day immediately preceding the date specified for redemption of the Convertible Debentures upon a change of control of the Company, at a conversion price of $0.31 per Common Share, subject to adjustment in certain events (the “Conversion Price”).
The Company may force the conversion of the principal amount of the then outstanding Convertible Debentures (the “Mandatory Conversion”) at the Conversion Price on not more than 60 days’ and not less than 30 days’ notice should the daily volume weighted average trading price of the Common Shares on the TSX Venture Exchange (the “TSXV”) be greater than $0.62 for the consecutive 30 trading days preceding the date of the notice, subject to the Mandatory Conversion being permitted under the policies of the principal exchange for any trading of the Convertible Debentures at that time.
The Company will apply to list the Debentures, Convertible Debentures, Debenture Shares, Warrant Shares and Broker Shares (as defined herein) on the TSXV.
In addition, the Company has granted the Agents an option (“Over-Allotment Option”) to purchase up to an additional $525,000 Debenture Units and $375,000 Convertible Debenture Units at the Offering Price to cover over-allotments, if any. The Over-Allotment Option shall be exercisable by the Agents, in whole or in part, at any time up to 30 days following the Closing Date.
The Company has agreed to: (i) pay the Agents a cash commission equal to 6.75% of the gross proceeds of the Offering and (ii) issue to the Agents non-transferable broker warrants (the “Broker Warrants”) to purchase such number of Common Shares (collectively, the “Broker Shares”) as is equal to 6.25% of: (a) the number of Common Shares issuable upon conversion of the Convertible Debentures sold under the Offering (based on a conversion price of $0.31 per Common Share) and (b) the number of Common Shares issuable upon exercise of the Warrants sold under the Offering (including any gross proceeds raised on the exercise of the Over-Allotment Option), bearing the same exercise price and term as the Warrants; provided that the cash commission and Broker Warrants shall be reduced by 50% in respect of any purchasers participating in the Offering who are on a president’s list agreed to by the Company and the Agent.
The Company intends to use the net proceeds of the Offering to invest in capital equipment necessary for a planned expansion of production capacity, increase inventory to support greater sales conversion and more efficient product delivery, address maintenance and stock, and for working capital and general corporate purposes. Closing of the Offering is expected to occur the week of April 16, 2018. The Offering is subject to certain conditions including, but not limited to, the receipt of all necessary regulatory and stock exchange approvals, including the approval of the TSXV, and the entering into by the Company and the Agents of an agency agreement. The Units will be offered in the provinces of British Columbia, Alberta and Ontario.
This press release is not an offer or a solicitation of an offer of securities for sale in the United States. The Offered Units have not and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration.
For more information on IBC and its innovative alloy products, go here.
On Behalf of the Board of Directors:
David “Duncan” Heinz, President, CEO and Director
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About IBC Advanced Alloys Corp.
IBC is a leading beryllium and copper advanced alloys company serving a variety of industries such as defense, aerospace, automotive, telecommunications, precision manufacturing, and others. IBC’s Copper Alloys Division manufactures and distributes a variety of copper alloys as castings and forgings, including beryllium copper, chrome copper, and aluminum bronze. IBC’s Engineered Materials Division makes the Beralcast® family of alloys, which can be precision cast and are used in an increasing number of defense, aerospace, and other systems, including the F-35 Joint Strike Fighter. IBC’s has production facilities in Indiana, Massachusetts, Pennsylvania, and Missouri. The Company’s common shares are traded on the TSX Venture Exchange under the symbol “IB” and the OTCQB under the symbol “IAALF”.
This news release was prepared by management of IBC, which takes full responsibility for its contents. The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy of this news release. Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
This disclosure contains certain forward-looking statements that involve substantial known and unknown risks and uncertainties, certain of which are beyond the Company’s control including: the impact of general economic conditions in the areas in which the Company or its customers operate, including the semiconductor manufacturing and oil and gas industries, changes in laws and regulations including the adoption of new environmental laws and regulations and changes in how they are interpreted and enforced, increased competition, the lack of availability of qualified personnel or management, limited availability of raw materials, fluctuations in commodity prices, foreign exchange or interest rates, stock market volatility and obtaining required approvals of regulatory authorities. In addition, there are risks and uncertainties associated with manufacturing activities therefore the Company’s future results, performance or achievements could differ materially from those expressed in these forward-looking statements. All statements included in this press release that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements. These statements are based on assumptions made by the Company based on its experience, perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate in the circumstances. Such forward-looking statements include but are not limited to statements regarding the Offering, use of proceeds of the Offering, the expected Closing Date and receipt of necessary approvals.