Apivio Systems Inc. (formerly Moimstone Corporation) (“Apivio” or the “Company”) (TSX VENTURE:APV) is pleased to announce it has entered into an engagement letter (the “Engagement Letter”) with PI Financial Corp. (the “Agent”) to act as Agent on a “commercially reasonable efforts” basis to sell, on a private placement basis, up to 4,444,445 units (“Units”), at a price of $0.45 per Unit, for aggregate gross proceeds to Apivio of up to $2,000,000 (the “Private Placement”).
Each Unit will consist of one common share and one-half of one transferable common share purchase warrant (each whole warrant, a “Warrant”) with each Warrant exercisable by the holder into one common share of the Company at a price of $0.55 per share for a period of 24 months from the closing date. In the event that Apivio’s common shares trade at a closing price on the TSX Venture Exchange (the “TSX-V”) of greater than $0.85 per common share for a period of 20 consecutive trading days at any time after the closing date of the Private Placement, Apivio may accelerate the expiry date of the Warrants by giving notice to the holders thereof and in such case the Warrants will expire on the 30th day after the date on which such notice is given by Apivio. The Company has also granted the Agent an option to cover over-allotments (the “Over-Allotment Option”) which will allow the Agent to offer up to 666,667 additional Units. The Over-Allotment Option may be exercised in whole or in part at any time prior to the closing date of the Private Placement.
The Private Placement is conditional upon the Company receiving the conditional approval of the TSX-V to list the common shares underlying the Units and the Warrants on the TSX-V. Listing will be subject to satisfying all of the requirements of the TSX-V. All securities issued pursuant to this Private Placement will be subject to a four month and one day hold period in accordance with applicable securities laws. The closing date for the Private Placement is scheduled to occur on or about July 25, 2014, or such other date as agreed to by the Company and the Agent. The net proceeds from the Private Placement will be used for working capital and general corporate purposes.
Pursuant to the Engagement Letter, in return for acting as the Company’s agent in the Private Placement, the Agent will be entitled to compensation in the following form: (a) an 8% commission on the gross proceeds (including any proceeds pursuant to the Over-Allotment Option) of the Private Placement, payable in cash; and (b) 8% compensation option coverage on the gross proceeds (including any proceeds pursuant to the Over-Allotment Option) of the Private Placement (the “Compensation Options”). Each Compensation Option will be exercisable for one common share of the Company for a period of two years following the closing date. The Compensation Options will have an exercise price equal to the lower of $0.45 (the price per Unit) and the lowest price permitted by the TSX-V.
The Private Placement will be exempt from prospectus and registration requirements of applicable securities laws. This news release shall not constitute an offer to sell or a solicitation of an offer to sell any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), or any state securities laws, and accordingly, may not be offered or sold within the United States or to “U.S. Persons”, as such term is defined in Regulation S promulgated under the U.S Securities Act (“U.S. Persons”) except in compliance with the registration requirements of the U.S. Securities Act and applicable state securities requirements or pursuant to exemptions therefrom. This press release does not constitute an offer to sell or a solicitation of an offer to buy any of the Company’s securities in the United States or to U.S. Persons.