VANCOUVER, B.C. / ACCESSWIRE / April 17, 2014 / WELLSTAR ENERGY CORP. (TSX-V: WSE.H) ("Wellstar", or the "Company") is pleased to announce that the TSX Venture Exchange (the "TSXV"), by a letter dated April 16, 2014, has granted conditional approval regarding the NEX reactivation and concurrent application for graduation to Tier 2 of the TSXV (the "Reactivation"). Final acceptance of the Reactivation is subject to, among other things, completion of a satisfactory concurrent financing and the shares for debt application detailed below.
In connection with the Reactivation, the Company announces that it intends to complete a non-brokered private placement in the aggregate amount up to $1,500,000 consisting of 9% convertible debenture units of the Company (the "CD Units") in the aggregate principal amount of up to $600,000 (the "CD Unit Offering") and a concurrent placement of up to 6,000,000 equity units (the "Units") at a price of $0.15 per Unit, for gross proceeds of up to $900,000 (the "Unit Offering", and together with the CD Offering, the "Offering").
Each CD Unit will consist of $1,000 in principal amount of 9.0% convertible debentures (the "Debentures") maturing in five years, and that number of common share purchase warrants (the "CD Unit Warrants") equal to one-half of the shares issuable upon conversion of $1,000 in principal amount of Debentures. The principal and any accrued and unpaid interest under the Debentures will be unsecured and will be convertible at the holder's option into fully-paid non-assessable common shares of the Company at: (a) with respect to principal, a conversion price equal to the greater of $0.18, or the "Market Price" of the Company's common shares as defined under the policies of the TSXV; and (b) with respect to accrued and unpaid interest at the Market Price of the Company's common shares at the time of settlement. Each CD Unit Warrant will be exercisable for a period of 48 months from the date of issuance at an exercise price of $0.25 per common share.
Each Unit will consist of one common share (a "Unit Share") and one half of one common share purchase warrant (a "Unit Warrant"). Each whole Unit Warrant will entitle the holder thereof to purchase one common share at an exercise price of $0.25 for a period of 24 months following the closing of the Unit Offering.
With respect to the CD Unit Offering, any eligible arm's-length finder will in aggregate upon closing receive a cash placement fee of 9% of the gross proceeds of the CD Offering as well as common share purchase warrants equivalent to 9% of the gross proceeds of the CD Offering based on the conversion price of the Debentures for subscriptions made by purchasers introduced by such finder. With respect to the Unit Offering, any eligible finder will in aggregate receive a cash placement fee of 9% of the gross proceeds of the Unit Offering as well as common share purchase warrants equivalent to 9% of the number of Units sold in the Unit Offering to subscribers introduced by such finder.
The Debentures and CD Unit Warrants comprising the CD Units, the Unit Shares and Unit Warrants comprising the Units, and any underlying common shares, will be subject to a four-month hold period from the date of issue under National Instrument 45-102 and the policies of the TSXV.
Completion of the Offering is subject to receipt of all regulatory approvals, including the approval of the TSXV. Net proceeds from the Offering will be applied towards payment of current liabilities, exploration and development of the Company's oil and gas properties and for general working capital purposes.
In addition, the Company announces that it intends to settle a total of $273,478 of the Company's debt (the "Debt") with certain non-arm's length and arm's length parties (the "Shares for Debt Settlement"). The Debt payable to nine arm's length parties is an aggregate of $183,744.82 and the Company will settle the same by issuing to such parties 3,674,896 common shares at a deemed price of $0.15 per common share. The Debt payable to one Insider (as such term is defined under the policies of the TSXV) is an aggregate of $89,733.22 and the Company will settle the same by issuing to such party 598,221 common shares at a deemed price of $0.15 per common share.
All securities issued in connection with the Shares for Debt Settlement will be subject to a statutory four month hold period in accordance with applicable securities legislation. Closing of the Shares for Debt Settlement remains subject to a number of conditions, including final regulatory approval of the TSXV.
None of the securities issued in connection with the Offering will 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 the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.
For further information please contact Andrew H Rees at (604) 669-6463.
ON BEHALF OF THE BOARD
(signed) "Andrew H. Rees"
Andrew H. Rees
President and Chief Executive Officer
Neither the 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.
Except for historical information contained herein, this news release contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially. Except as required pursuant to applicable securities laws, the Company will not update these forward-looking statements to reflect events or circumstances after the date hereof. More detailed information about potential factors that could affect financial results is included in the documents filed from time to time with the Canadian securities regulatory authorities by the Company. Readers are cautioned not to place undue reliance on forward looking statements.
Not for dissemination in the US or to US wire services.
SOURCE: Wellstar Energy Corp.
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