TORONTO, ON / ACCESSWIRE / October 7, 2016 / Xylitol Canada Inc. (TSXV: XYL) ("Xylitol" or the "Company") announces that it has entered into a shares for debt agreement (the "Agreement") with Andrew Reid and his spouse, Julie Reid, both of whom are a "Related Party" to the Company, as such term is defined in Multilateral Instrument 61-101 ("MI 61-101"). Pursuant to the Agreement, and subject to the prior approval of the TSX Venture Exchange (the "TSXV"), Mr. and Mrs. Reid will receive an aggregate of 10,361,226 common shares of the Company (the "Debt Shares") at a deemed issuance price of $0.075 per share to retire debt in the aggregate principal amount of $777,092, with such shares to be issued over two closings (the "Shares for Debt Transaction"). The first closing of the Shares for Debt Transaction will include the issuance of 5,180,613 Debt Shares in respect of debt in the principal amount of $388,546 (the "First Closing"). Concurrent with the First Closing, Mr. and Mrs. Reid will transfer 3,500,000 common shares of Xylitol to an arm's length third party for value. The second closing of the Shares for Debt Transaction will include the issuance of 5,180,613 Debt Shares in respect of debt in the principal amount of $388,546 (the "Second Closing"). Concurrent with the Second Closing, Mr. and Mrs. Reid will transfer 1,500,000 common shares of Xylitol to an arm's length third party for value, provided that immediately following the Second Closing Mr. and Mrs. Reid will hold an aggregate number of shares that is less than 20% of all issued and outstanding common shares of Xylitol. Should the Second Closing not occur on or before November 15, 2016, the Company shall call a shareholder's meeting to approve the issuance of 5,180,613 common shares to Andrew and Julie Reid and the creation of a new "Control Person" as such term is defined in the policies of the TSXV.
Related Party Disclosure Pursuant to MI 61-101
Because Mr. and Mrs. Reid collectively hold greater than 10% of the issued and outstanding Common Shares, the Shares for Debt Transaction is considered to be a related party transaction as defined under MI 61-101. The Shares for Debt Transaction is exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 as neither the fair market value of securities being issued to Mr. and Mrs. Reid, nor the consideration being paid by Mr. and Mrs. Reid. will exceed 25% of the Company's market capitalization. The Company has not filed a material change report prior to entering into the Agreement as details of the Shares for Debt Transaction had not been finalized until very recently.
About Xylitol Canada Inc.
Xylitol Canada markets xylitol and xylitol based-products and is focused on becoming a major low-cost manufacturer of xylitol and related products, serving the global market from operations in North America. Xylitol Canada's business strategy is to leverage novel proprietary technology and processes to become North America's premier manufacturer of low cost, high quality xylitol from readily available environmentally-sustainable biomass. Xylitol is a natural sweetener which is marketed globally including Canada and the United States and is accepted by the American Food and Drug Administration, the World Health Organization and the American Dental Association. Xylitol contains 75% less carbohydrates and 40% less calories than sugar, has a myriad of oral health benefits including the prevention of tooth decay and is safe for diabetics. To date, wider spread use of xylitol has been limited by the lack of a reliable, low cost, high quality supplier.
For more information about Xylitol please contact:
Steven Haasz
CEO and a director of Xylitol Canada Inc.
416.804.8231
[email protected]
Neither TSX Venture Exchange Inc. 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.
Completion of the Shares for Debt Transaction is subject to a number of conditions, including but not limited to, TSXV acceptance. There can be no assurance that the Shares for Debt Transaction will be completed as proposed or at all. The TSXV has in no way passed upon the merits of the proposed Shares for Debt Transaction and has neither approved nor disapproved the contents of this press release.
Statements made in this press release include forward-looking statements that involve risks and uncertainties. These statements relate to future events and reflect management's current expectations and assumptions. A number of factors could cause actual events to differ materially from the events discussed in the forward-looking statements, such as the participation of the parties to the Shares for Debt Transaction, TSXV approval, and the satisfaction of customary conditions to closing. These forward-looking statements are made as of the date hereof and the Company does not assume any obligation to update or revise them to reflect new events or circumstances.
SOURCE: Xylitol Canada Inc.