Seaway to roll back shares one for 10, raise $175,000

2014-03-14 12:16 ET - News Release

 

Mr. Kyle Stevenson reports

SEAWAY ENERGY SERVICES PROPOSES 10:1 SHARE CONSOLIDATION AND DEBENTURE FINANCING

Seaway Energy Services Inc., subject to regulatory approval, proposes a consolidation of its issued common shares on the basis of 10 old shares for one new share.

The proposed consolidation was approved by the company's shareholders at the annual general and special meeting of shareholders held on Aug. 12, 2013. The company currently has 28,877,470 common shares issued and outstanding, and there will be approximately 2,887,747 common shares issued and outstanding on a postconsolidated basis, subject to adjustment as a result of elimination of fractional shares. This proposed consolidation does not change a shareholder's proportionate ownership interest in the company.

The proposed consolidation is subject to acceptance by the TSX Venture Exchange. In particular, the company will be required to meet the exchange's continued listing requirements upon completion of a consolidation. There is no guarantee that exchange acceptance of a consolidation will be given or that the company will meet the exchange's continued listing requirements upon completion.

Once the company's board of directors proceeds to effect the consolidation upon receipt of exchange approval, a further news release will be issued announcing the effective date for the consolidation and a letter of transmittal will be mailed to the company's registered shareholders, which shareholders can use to exchange their current share certificates for certificates representing the consolidated number of shares in the capital of the company. No action will be required to effect consolidation of beneficially held securities by non-registered shareholders that hold securities of the company through an intermediary. Detail with respect to the proposed consolidation is included in the information circular dated July 8, 2013, prepared by the company's management in connection with the shareholder meeting held on Aug. 12, 2013. The circular has been electronically filed with regulators and is available for viewing under the company's issuer profile on SEDAR.

The company also announces that immediately upon the consolidation being effective, it proposes borrowing from various arm's-length parties and one non-arm's-length party up to $175,000 pursuant to convertible debentures. The debentures will bear interest at the rate of 10 per cent per annum for a term of one year convertible in whole or in part by the holder into units of the company at the conversion price of 15 cents per unit (on a postconsolidated basis), each unit to comprise one common share in the capital of the company and one non-transferable warrant to purchase one common share of the company for a period of two years from the date of conversion at an exercise price of 30 cents per share. The company may prepay the principal sum under the debentures in whole or in part, together with all interest accrued and unpaid to the date of payment, at any time without notice, bonus or penalty.

The debentures and the securities issuable on conversion of the debentures are subject to a hold period of four months plus one day from the date of issuance of the debentures in accordance with applicable securities legislation. Funds raised by these debentures will be used for general corporate purposes and to seek other business opportunities. The company is currently seeking potential business opportunities in various sectors, including agricultural, technology, social media and the medical industry.

We seek Safe Harbor.