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Xtract One Technologies Inc. (TSX:XTRA) (OTCQX:XTRAF) (FRA: 0PL) ("Xtract One" or the "Company") is pleased to announce that it has entered into an engagement letter with Eight Capital (the "Agent") pursuant to which the Agent has agreed to conduct a public offering of units (the "Units") on a "commercially reasonable best-efforts" marketed basis (the "Offering"). Each Unit shall consist of one common share in the capital of the Company (each, a "Share") and one common share purchase warrant (each, a "Warrant"). The number of Units to be sold and amount of proceeds to be raised under the Offering will be determined in the context of the market. There can be no assurance as to whether or when the Offering may be completed, or as to the actual size or terms of the Offering.
The Company has granted the Agent an option (the "Over-Allotment Option") to increase the size of the Offering by up to 15%, exercisable in whole or in part at any time, at the sole discretion of the Agent, to acquire either (i) additional Units, (ii) additional Shares or (iii) additional Warrants, or a combination thereof, for a period of 30 days from and including the Closing Date (as defined herein).
The Units will be offered by way of a prospectus supplement (the "Prospectus Supplement") to the Company's short form base shelf prospectus dated February 6, 2024 (the "Shelf Prospectus"), which Prospectus Supplement will be filed with the securities commissions and other similar regulatory authorities in each of the provinces and territories of Canada, except Québec. The Offering is expected to close on or about April 24, 2024 (the "Closing Date") and is subject to certain conditions including, but not limited to, the receipt of all necessary regulatory and stock exchange approvals, including the approval of the Toronto Stock Exchange (the "TSX") and the applicable securities regulatory authorities.
Fees, in cash or securities of the Company or a combination thereof, may be payable to the Agent in accordance with the policies of the TSX.
In addition to and concurrent with the Offering, the Company intends to complete a private placement offering (the "Concurrent Private Placement") of Units to MSG Sports Ventures, LLC ("MSG Sports"), a wholly-owned subsidiary of Madison Square Garden Sports Corp. (NYSE:MSGS), in order to permit MSG Sports to maintain its pro rata interest in the outstanding securities of the Company. The number of Units to be sold and amount of proceeds to be raised under the Concurrent Private Placement will be based on the size of the Offering and whether, or the extent to which, the Over-Allotment Option is exercised by the Agent. No finder's fees or commissions will be paid in connection with the Concurrent Private Placement.
Closing of the Concurrent Private Placement is expected to occur concurrently with the closing of the Offering and is subject to certain conditions including, but not limited to, the concurrent completion of the Offering and the receipt of all necessary regulatory approvals, including the approval of the TSX. Closing of the Offering is not conditional on the closing of the Concurrent Private Placement.
The Concurrent Private Placement with MSG Sports will constitute a "related party transaction" within the meaning of Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101"). The Company is relying on the exemptions from the valuation and minority shareholder approval requirements of MI 61-101 contained in sections 5.5(a) and 5.7(1)(a) of MI 61-101, as the fair market value of the participation in the Concurrent Private Placement by MSG Sports will not exceed 25% of the market capitalization of the Company in accordance with MI 61-101.
Xtract One intends to use the proceeds of the Offering and the Concurrent Private Placement for working capital and general corporate purposes.
