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Share Name | Share Symbol | Market | Type |
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Shore Gold | TSXV:SGF | TSX Venture | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
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0.00 | 0.00% | 0 | - |
On March 19, 2008, Warnex Inc. (TSX:WNX) ("Warnex") announced that it had entered into agreements in principle with the various holders of all of its outstanding debentures, aggregating CDN$11,345,000 in principal amount, in order to modify the terms and conditions of such debentures. Warnex wishes to provide further details as to the implementation of this debt restructuring. Outstanding Debentures The outstanding debentures are held by five different lenders (collectively, the "Lenders"), as follows: - SGF Soquia Inc. ("SGF") holds an aggregate of CDN$3 million of 12% debentures maturing on July 9, 2008 which were convertible into common shares in the share capital of Warnex ("Common Shares") on the following basis: (i) for the period from July 10, 2003 to December 31, 2004, at a price of $1.75 per Common Share; (ii) for the period from January 1, 2005 to December 31, 2005, at a price of $2.00 per Common Share; (iii) for the period from January 1, 2006 to December 31, 2006, at a price of $4.00 per Common Share; and (iv) for the period from January 1, 2007 to December 31, 2007, at a price of $6.00 per Common Share (the "SGF Debentures"). - SIPAR Inc. ("Sipar") holds a CDN$1.5 million 12% non-convertible debenture maturing on June 2, 2008 (the "Sipar Debenture"). - Midsummer Investment, Ltd ("Midsummer") holds a USD$3 million 7% debenture maturing on June 25, 2008 which is convertible into Common Shares at a price of $0.75 per Common Share (the "Midsummer Debenture"). - Islandia, L.P. ("Islandia") holds a USD$1 million 7% debenture maturing on June 25, 2008 which is convertible into Common Shares at a price of $0.75 per Common Share (the "Islandia Debenture"). - Crestview Capital Master, LLC ("Crestview") holds a USD$1 million 7% debenture maturing on June 25, 2008 which is convertible into Common Shares at a price of $0.75 per Common Share t (the "Crestview Debenture"). Outstanding Warrants In addition, the following Lenders also hold the following warrants to purchase Common Shares: - Sipar holds warrants to purchase an aggregate of 2,000,000 Common Shares at a price of CDN$0.75 per share at any time on or before October 24, 2011 (the "Sipar Warrants"). - Midsummer holds warrants to purchase an aggregate of 1,178,237 Common Shares at a price of CDN$1.17 per share at any time on or before June 25, 2009 (the "Midsummer Warrants"). - Islandia holds warrants to purchase an aggregate of 392,746 Common Shares at a price of CDN$1.17 per share at any time on or before June 25, 2009 (the "Islandia Warrants"). - Crestview holds warrants to purchase an aggregate of 392,746 Common Shares at a price of CDN$1.17 per share at any time on or before June 25, 2009 (the "Crestview Warrants"). Amendments Under the terms of the debt restructuring, Warnex and the Lenders have agreed to the following: - As regards the SGF Debentures, (a) CDN$1,000,000 in principal will be converted into 6,666,666 Common Shares at a price of CDN$0.15 per share, (b) CDN$500,000 in principal will be reimbursed and (C) the terms of the SGF Debenture in respect of the remaining CDN$1,500,000 in principal will be amended such that (i) the conversion price will be reduced to be at prices of CDN$0.50 and CDN$0.75, respectively, for each tranche of CDN$750,000 and (ii) the maturity date will be extended to July 9, 2011. - As regards the Sipar Debenture, (a) CDN$500,000 in principal will be converted into 3,333,333 Common Shares at a price of CDN$0.15 per share, (b) CDN$500,000 in principal will be reimbursed and (C) the terms of the Sipar Debenture in respect of the remaining CDN$500,000 in principal will be amended such that the maturity date will be extended to June 2, 2011. In addition, the Sipar Warrants will be amended in order to reduce their exercise price to CDN$0.25. - As regards the Midsummer Debenture, its terms will be amended such that (i) the currency exchange rate will be established at the time of payment, (ii) the feature permitting the payment of interest through the issuance of Common Shares will be removed, (iii) the conversion price will be reduced to be at prices of CDN$0.15, CDN$0.20, CDN$0.25, CDN$0.50 and CDN$0.75, respectively, for each tranche of US$600,000, (iv) the interest rate will be increased to 12% and (e) the maturity date will be extended to June 25, 2011. In addition, the Midsummer Warrants will be amended in order to reduce their exercise price to CDN$0.25 and extend their expiry date to June 25, 2011. - As regards the Islandia Debenture, its terms will be amended such that (i) the currency exchange rate will be established at the time of payment, (ii) the feature permitting the payment of interest through the issuance of Common Shares will be removed, (iii) the conversion price will be reduced to be at prices of CDN$0.15, CDN$0.20, CDN$0.25, CDN$0.50 and CDN$0.75, respectively, for each tranche of US$200,000, (iv) the interest rate will be increased to 12% and (e) the maturity date will be extended to June 25, 2011. In addition, the Islandia Warrants will be amended in order to reduce their exercise price to CDN$0.25 and extend their expiry date to June 25, 2011. - As regards the Crestview Debenture, (a) USD$333,334 in principal will be converted into Common Shares at a price of CDN$0.15 per share, using the currency exchange rate prevailing at the time of conversion, (b) USD$333,333 in principal will be reimbursed and (C) the terms of the Crestview Debenture in respect of the remaining USD$333,333 in principal will be amended such that (i) the currency exchange rate will be established at the time of payment, (ii) the convertibility feature will be removed, (iii) the interest rate will be increased to 12% and (iv) the maturity date will be extended to June 25, 2011. In addition, the Crestview Warrants will be amended in order to reduce their exercise price to CDN$0.25. Pursuant to the debt restructuring described above (the "Debt Restructuring"), approximately 12,243,313 Common Shares will be issued to the Lenders at closing, representing approximately 23.56% of the number of Common Shares issued and outstanding prior giving effect to such issuance, and approximately 21,663,729 additional Common Shares may be issued to the Lenders following the closing upon the conversion of debentures or the exercise of warrants, representing, along with the Common Shares to be issued at Closing, approximately 65.24% of the number of issued and outstanding Common Shares prior to giving effect to all such issuances. The Debt Restructuring will not cause a change of control of Warnex. Except for SGF, none of the Lenders will hold more than 10% of the number of issued and outstanding Common Shares after giving effect to all of the issuances described in the preceding paragraph. In addition to the 9,321,428 Common Shares that it currently holds, SGF may be issued an additional 9,166,666 Common Shares pursuant to the Debt Restructuring, representing, in total, approximately 35.57% of the number of issued and outstanding Common Shares prior to giving effect to all such issuances. Regulatory Matters SGF currently holds 9,321,428 Common Shares, representing approximately 18% of the issued and outstanding Common Shares. As a result, SGF is an insider and related party of Warnex within the meaning of applicable securities legislation and, as a consequence, any amendment of the SGF Debentures and the SGF Warrants will constitute a related party transaction pursuant to Regulation 61-101 respecting protection of minority security holders in special transactions ("Regulation 61-101"). The representatives of the SGF who sit on the Board of Directors of Warnex have abstained from all decisions in connection with the Debt Restructuring. Warnex is relying upon exemptions available to it pursuant to Regulation 61-101 and pursuant to the rules and policies of the Toronto Stock Exchange, in light of its current financial situation, in order to avoid the requirement to obtain an independent valuation in connection with the Debt Restructuring and to obtain the approval of its shareholders in connection with its implementation. Given the importance of implementing the Debt Restructuring as expeditiously as possible, the closing of the Debt Restructuring is expected to occur immediately following the execution of definitive documentation and the receipt of all requisite regulatory approvals, including the approval of the Toronto Stock Exchange. The closing may therefore occur prior to the expiry of the 21-day period otherwise contemplated by Regulation 61-101. About Warnex Warnex (www.warnex.ca) is a life sciences company devoted to protecting public health by providing laboratory services to the pharmaceutical and healthcare sectors. Warnex's analytical services division provides pharmaceutical and biotechnology companies with a variety of quality control services, including traditional chemistry, chromatography, microbiology, method development and validation, and stability studies. Warnex's bioanalytical services division specializes in bioequivalence and bioavailability studies for clinical trials. Warnex's medical laboratories division focuses on genetic and biochemical testing for the healthcare industry and has extensive expertise in genetic testing for human identification, molecular diagnostics, and pharmacogenetics.
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