TORONTO, ONTARIO--(Marketwire - May 14, 2012) - NXA INC. (NXI.V - News) ("NXA" or the "Company") further to its press release on June 24, 2011, the Company announces that it intends to consolidate its outstanding common shares on the basis of one (1) new common share for every fifteen old common shares (the "Consolidation"). Immediately following the Consolidation, the Company intends to convert (the "Conversion") the 10% unsecured convertible debentures issued on December 16, 2010 and February 28, 2011 (collectively, the "Debentures") into common shares of the Company (the "Common Shares").
The Company issued the Debentures in the aggregate principal amount of $1,086,000 in connection with a private placement of units, each of which consisted of $1,000 principal amount Debenture and 5,000 share purchase warrants. Upon completion of the Consolidation, the Debentures will be convertible by the Company at a conversion price of $0.10 per Common Share. Please see the Company's press release of February 28, 2011 for further information.
Currently, the Company has 70,151,003 Common Shares issued and outstanding. After giving effect to the Consolidation, it expects to have approximately 4,676,733 Common Shares issued and outstanding. The Company expects to complete the Conversion immediately after the Consolidation, and will issue a total of 10,860,000 Common Shares to the holders of the Debentures on account of the principal amount outstanding, which will result in approximately 15,536,733 Common Shares issued and outstanding. In accordance with the terms of the Debentures, NXA also intends to convert all accrued and unpaid interest into common shares of the Company pursuant to the "shares for debt" policies (the "Shares for Debt Transaction") of the TSX Venture Exchange (the "TSXVE"), subject to the receipt of TSXVE approval.
Management believes that the current number of outstanding Common Shares is inconsistent with the size, assets and structure of the Company, and proposed the Consolidation in order to increase its flexibility with respect to potential business transactions, including any possible future equity financings. NXA received the approval of its shareholders authorizing the Board of Directors to effect the Consolidation at its annual and special meeting held on June 20, 2011.
Completion of the Consolidation, Conversion and Shares for Debt Transaction is subject to approval by the TSXVE and the receipt of any required regulatory approvals.
Cautionary Statement Regarding Forward-Looking Statements:
This press release contains forward-looking statements regarding a proposed consolidation of the common shares of NXA and the conversion of convertible securities. Actual developments may differ materially from those contemplated by these statements depending upon, among other things, the decisions made by regulators. The forward looking statements contained in this press release represent the Company's views and expectations as of the date of this release and should not be relied upon as representing its views and expectations at any subsequent date.
Shares Outstanding: 70,151,003
Neither 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.
Chief Financial Officer