Emblem Corp EMMBF

Over Allotment Snapped Up as Well

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Emblem increases bought deal offering to $13.91-million

 

 

2017-01-06 21:28 ET - News Release

 

Mr. Danny Brody reports

EMBLEM CORP. ANNOUNCES UPSIZE OF ITS PREVIOUSLY ANNOUNCED BOUGHT DEAL FINANCING TO $13.9 MILLION

 

Emblem Corp. has entered into a revised engagement letter with PI Financial Corp., on behalf of a syndicate of underwriters, including Canaccord Genuity Corp. and GMP Securities LP, to increase the size of its previously announced underwritten private placement to an offering of 3,832,794 special warrants of the company at a price of $3.63 for gross proceeds to the company of $13,913,043. The company has also granted the underwriters an option to purchase up to an additional 15 per cent of the base offering of special warrants, which option is exercisable by giving notice to the company not fewer than 48 hours prior to the closing of the offering. If the underwriter option is exercised in full, the gross proceeds to the company will be $16-million. Closing of the offering is expected to occur on Jan. 26, 2017.

 

As previously announced, each special warrant not previously exercised will be automatically exercised, without payment of additional consideration, on the earlier of: (i) the qualification deadline (as defined below); and (ii) the third business day after the prospectus qualification (as defined below). The holders of special warrants will receive, upon such deemed exercise and for no additional consideration, one unit of the company for each special warrant held. Each unit will be composed of one common share of the company and one-half of one common share purchase warrant. Each warrant will entitle the holder to purchase one common share at an exercise price of $4.75 for a period of 36 months from the date of closing of the offering. The warrants are subject to an accelerated expiry date upon notice from the company if the volume-weighted average trading price of the common shares is equal to or greater than $7 over a period of 10 consecutive trading days.

The company has agreed to use its best efforts to obtain a receipt for a final short-form prospectus qualifying the distribution of the units upon exercise of the special warrants on or before the date that is 45 days following closing of the offering. If the prospectus qualification does not occur before the qualification deadline, each holder shall be entitled to receive, without payment of additional consideration, 1.05 units per special warrant. Unless the prospectus qualification occurs, securities issued in connection with the offering will be subject to a four-month hold period from the date of issue.

The company intends to use the net proceeds of the upsized offering (including any proceeds received as a result of the exercise of the underwriter option) to finance the planned expansion of its facility in Paris, Ont., and for general corporate purposes.

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