Synstream Energy Corp. Announces Common Share Issuances for Debt Settlement and Working Capital
Friday, May 8, 2020 10:11 PM
CALGARY, AB / ACCESSWIRE / May 8, 2020 / Synstream Energy Corp. (TSXV:SHM)("Synstream" or the "Company") reports that its board of directors has approved the settlement of up to $553,195.00 of debt through the issuance of common shares of the Company (the "Debt Settlement"). Pursuant to the Debt Settlement, the Company would issue up to 49,172,888 common shares of the Company (the "Shares") at a deemed price of $0.01125 per Share to certain creditors of the Company, including certain of its directors and officers (the "Creditors").
The issuance of the Shares to the Creditors is subject to the approval of the TSX Venture Exchange. All securities issued will be subject to a four month hold period which will expire on the date that is four months and one day from the date of issue.
The Company also announced today that it intends to complete a non-brokered private placement (the "Offering") to sell a total of 8,888,888 common share units (the "Units") of the Company to various investors at a price of $0.01125 per Unit for gross proceeds of $100,000.00. Each Unit will consist of one common share of the Company (a "Common Share") and one common share purchase warrant (a "Warrant") with each warrant entitling the holder thereof to acquire one additional Common Share at a price of $0.05 per Common Share for a period of 18 months after the date of closing of the Offering. No finder's fees will be payable as a consequence of closing this transaction, and securities issued pursuant to the Offering will be subject to a four month hold period. The offering is scheduled to close as soon as possible, and remains subject to regulatory approval. Proceeds will be applied to the Company's working capital.
As certain insiders participated in the Debt Settlement, it is considered to be a "related party transaction" under Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101"). All of the independent directors of the Company, acting in good faith, considered the transactions and have determined that the fair market value of the securities being issued to insiders and the consideration being paid is reasonable. The Company intends to rely on the exemptions from the valuation and minority shareholder approval requirements of MI 61-101 contained in sections 5.5(b) and 5.7(b) of MI 61-101.
The Company also announced today that, subject to regulatory approval, management expects to proceed with a share consolidation approved by shareholders at the Corporation's annual general meeting held in 2016. The resolution approved at that time authorized management to consolidate the outstanding shares on a 1 for 10 or lesser ratio as the Board of Directors may determine. Presently, the Board intends to pursue a consolidation on a 1 for 5 basis, but intends to consult with both counsel and the TSX-Venture Exchange to ensure the viability of this action based on the date and terms of that resolution.
In commenting upon these developments, Johannes Kingma, CEO of Synstream, stated: "Management of Synstream remains active and vigilant in reviewing and pursuing new and viable business opportunities for the Company. Recently, we have determined that our past associations and expertise in the gas-to-liquids and associated natural gas and petroleum sectors offer new and important opportunities when combined with the potential of the biofuel and related industries. We are actively re-engaging in that sector and expect to make announcements in that regard in due course. In the meantime, despite the impact on revenue streams from our conventional oil and gas assets occasioned by the COVID-19 pandemic and the crisis in world oil markets, we continue to pursue active and prudent management protocols to ensure the viability of Synstream, and the changes noted in this press release indicate the most recent measures the Board of Directors is prepared to implement."
For further information, contact:
Chief Executive Officer
Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.
SOURCE: Synstream Energy Corp.