Carmanah Technologies Corporation (the “Company” or “Carmanah”), pursuant to the underwriting agreement with a syndicate of underwriters led by Cormark Securities Inc. and including Canaccord Genuity Corp., GMP Securities LP and Salman Partners Inc. (collectively, the “Underwriters”) has agreed to sell 5,650,000 common shares of the Company (“Shares”) at a price of $5.00 per Share to the Underwriters, who in turn will sell Shares to the public, for gross proceeds to the Company of $28,250,000 (the “Offering”). The Underwriters also have the option, exercisable in whole or in part at any time up to 15 days after the closing of the Offering, to purchase up to an additional 750,000 Shares (the “Option”). In the event that the Option is exercised in its entirety, the aggregate gross proceeds of the Offering will be $32,000,000.
All references to “$” in this news release are Canadian dollars unless otherwise indicated.
As outlined in the preliminary short form prospectus of the Company dated April 13, 2015, the net proceeds of the Offering will be used to fund restructuring costs and process improvement expenditures to reduce operating costs, invest in new product development activities, fund an increase in inventory to meet customer demands, fund operating losses and fund the Company’s continued growth strategy, which is expected to include acquisitions.
The Shares to be issued under the Offering will be offered by way of a short form prospectus in all provinces in Canada, except Quebec, in the United States on a private placement basis pursuant to an exemption from the registration requirements of the United States Securities Act of 1933, as amended, and certain other jurisdictions.
This news release does not constitute an offer of securities for sale in the United States. The securities being offered have not been, nor will they be, registered under the Unites States Securities Act of 1933, as amended, and such securities may not be offered or sold within the United States absent U.S. registration or an applicable exemption from U.S. registration requirements.
Closing of the Offering is expected to occur on or about April 28, 2015 and is subject to regulatory approval including that of the Toronto Stock Exchange (the “TSX”). TSX has determined to review the Offering pursuant to their policies regarding private placements. As the number of Shares being made issuable is greater than 25% of the currently outstanding common shares of the Company, the Company is required to seek shareholder approval in accordance with the rules of the TSX. Completion of the Offering is conditional upon the receipt by the Company of written consents to the Offering of the holders of not less than 50% of the issued and outstanding common shares.
Pursuant to the provisions of the underwriting agreement a total of up to 6,752,000 Shares, representing up to approximately 39.8% of the currently outstanding common shares will be issuable. This number includes the exercise of the Option in full and assumes the maximum number of broker warrants are issued to the Underwriters under the Offering. Insiders of the Company will be purchasing up to 500,000 Shares under the Offering, representing approximately 3% of the currently outstanding common shares.
The terms of the Offering were negotiated at arm’s length. The Offering will cause the control position of current insiders to decrease and it is expected that no new control person or entity will be created.
About Carmanah Technologies Corporation
Since its founding in 1996, Carmanah has become one of the most trusted names in solar technology, delivering reliable and cost-effective solar powered products and systems for industrial applications worldwide. To date, Carmanah’s solutions for marine navigation, airfield ground lighting, aviation obstruction, roadway illumination, parking lot lighting, as well as on and off-grid power generation, have been successfully deployed in over 400,000 installations in 110 countries with proven performance in conditions ranging from desert heat to arctic cold.