The Company believes that the repricing of the Warrants increases the likelihood that shareholder value will be maintained should warrant holders choose to exercise their Warrants at the reduced exercise price. In addition to being beneficial to shareholders, the Company believes that these amendments to the Warrants, which are currently "out of the money" by a significant margin and are expected to expire within a month hereof without ever being exercised, present only potential upside to holders of Warrants at no additional cost to such holders. As of the date of this news release, no Warrants have been exercised and no insiders of NEXE hold or control the Warrants.
Key Highlights
- The Company proposes to reduce the exercise price from
$2.50 to$0.65 per share and extend the expiry date by one year toApril 9, 2024 , subject to certain mandatory acceleration provisions imposed by theTSX Venture Exchange (the "TSXV") (described in further detail below) (the "Amendments"). - While the Company currently has sufficient capital to execute its business plan with working capital of
$26,574,980 and cash and GICs on hand of$21,703,818 as ofNovember 30, 2022 , the Company believes that the proposed amendments are consistent with prudent financial planning in light of volatile and unpredictable capital markets. The Company holds its cash positions with two of the five largest Canadian banks. - The opportunity to extend warrants by one year will provide the Company with an additional safeguard as production is expected to start shortly and the Company is expecting co-packing and private label contracts to fill its capacity. The Company is focused on commissioning its commercial operations.
- The warrants are already set in the Company's current capital structure and there will be no additional financing costs related to warrants being extended and repriced.
- The Company takes a disciplined approach to deploying capital. As operations at the new facility in
Windsor comes online, the Company is consolidating certain operations from its Surrey Facility to the Windsor Facility. - The Company has current capital commitments of less than
$5 million over the next 12 months and has debt of$1.1 million as ofNovember 30, 2022 . The Company holds significant real estate with no associated mortgage or debt.
The Warrants will also be amended to include a mandatory acceleration provision as required under the policies of the
The Amendments are subject to approval by both the TSXV and the holders of Warrants representing 66 2/3% of the outstanding Warrants (together, the "Warrant Amendment Approval"). The Company is seeking the written approval of the holders of the requisite number of Warrants for the Amendments. The Company intends to issue an updated news release upon receipt, if any, of the Warrant Amendment Approval.
The securities being offered have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States or to, or for the account or benefit of,
About
For more information about
On behalf of the Company:
President & Director
For investor relations contact:
VP, Investor Relations & Corporate Strategy
invest@nexeinnovations.com
Office +1-604-359-4725
Mobile +1-604-359-4742
Neither the
Cautionary Note Regarding Forward-Looking Statements
Certain statements in this news release are forward-looking statements or information, which statements include the proposed amendments to the Warrants, the Warrant Amendment Approval, the benefits of that may result from any amendments to the Warrants, the commencement of production, services the Company intends to offer and the Company's overall business strategy. Forward-looking statements consist of statements that are not purely historical, including any statements regarding beliefs, plans, expectations or intentions regarding the future. Such information can generally be identified by the use of forwarding-looking wording such as "may", "expect", "estimate", "anticipate", "intend", "believe" and "continue" or the negative thereof or similar variations. The reader is cautioned that assumptions used in the preparation of any forward-looking information may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted, as a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of the Company, including but not limited to, the ability of the Company to obtain consent for the proposed amendments to the Warrants, execute on its business strategy and those risks set out in the Company's management's discussion and analysis for the three and six months ended
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