VANCOUVER, BRITISH COLUMBIA–(Marketwired – Dec. 11, 2015) –
1. Name and address of the offeror.
|Hodgkinson Equities Corp.
598 – 666 Canada Place
Vancouver, British Columbia
2. The designation and number or principal amount of securities and the offeror’s securityholding percentage in the class of securities of which the offeror acquired ownership or control in the transaction or occurrence giving rise to the obligation to file the news release, and whether it was ownership or control that was acquired in those circumstances.
On December 4, 2015, Hodgkinson Equities Corp. (the “Offeror“) acquired ownership and control of 9,000,000 common share purchase warrants (the “Warrants“) of DXI Energy Inc. (the “Company“) giving the Offeror the right to purchase up to 9,000,000 common shares (the “Common Shares“) of the Company, exercisable on or before December 4, 2020 at a price of either at the absolute discretion of the Offeror: (i) Cdn$0.45 per Common Share or (ii) US$0.35 per Common Share.
The Warrants were issued as partial consideration pursuant to an amended loan facility between the Company, as borrower, and the Offeror, as lender, in the aggregate amount of Cdn$4,500,000. Pursuant to the amended loan facility, the maturity date has been extended to November 30, 2018 and the Company has the right to prepay any or all of the debt and accrued but unpaid interest owing at any time without penalty. In addition to the issuance of the Warrants, the Company also granted to the Offeror additional security.
The Offeror currently holds 2,000,000 Common Shares representing approximately 5.5% of the Company’s issued and outstanding Common Shares.
3. The designation and number or principal amount of securities and the offeror’s securityholding percentage in the class of securities immediately after the transaction or occurrence giving rise to the obligation to file a news release.
Including the 9,000,000 Common Shares issuable upon exercise of the Warrants held by the Offeror but excluding issuance of Common Shares committed to others under existing share compensation agreements, the Offeror would hold a total of 11,000,000 Common Shares representing approximately 30.14% of the Company’s partially diluted Common Shares (again assuming no other shares were issued to the Offeror).
4. The designation and number or principal amount of securities and the percentage of outstanding securities of the class of securities referred to in paragraph 3 over which:
(i) the offeror, either alone or together with joint actors, has ownership and control,
See 2 and 3 above.
(ii) the offeror, either alone or together with joint actors, has ownership but control is held by other persons or companies other than the offeror or any joint actor,
(iii) the offeror, either alone or together with joint actors, has exclusive or shared control but does not have ownership.
5. The name of the market in which the transaction or occurrence that gave rise to the news release took place.
6. The value, in Canadian dollars, of any consideration offered per security if the offeror acquired ownership of a security in the transaction or occurrence giving rise to the obligation to file a news release.
See 2 above.
7. The purpose of the offeror and any joint actors in effecting the transaction or occurrence that gave rise to the news release, including any future intention to acquire ownership of, or control over, additional securities of the reporting issuer.
The Offeror acquired the Warrants for investment purposes and may or may not purchase or sell securities of the Company in the future on the open market or in private transactions, depending on market conditions and other factors material to the Offeror’s investment decisions, and reserves the right to dispose of any or all of its securities in the open market or otherwise, at any time and from time to time, and to engage in any hedging or similar transactions with respect to the securities.
8. The general nature and the material terms of any agreement, other than lending arrangements, with respect to securities of the reporting issuer, entered into by the offeror, or any joint actor, and the issuer of the securities or any other entity in connection with the transaction or occurrence giving rise to the news release, including agreements with respect to the acquisition, holding, disposition or voting of any securities.
The issuance of the Warrants was made pursuant to an amended loan facility between the Company and the Offeror, as lender, and an agreement as to the number of Warrants and the price per Warrant to be acquired. No other agreement exists between the parties with respect to the Warrants.
9. The names of any joint actors in connection with the disclosure required by this form.
10. In the case of a transaction or occurrence that did not take place on a stock exchange or other market that represents a published market for the securities, including an issuance from treasury, the nature and value in Canadian dollars of the consideration paid by the offeror.
The Warrants were acquired at a deemed value of Cdn$0.22 per Warrant.
11. If applicable, a description of any change in any material fact set out in a previous report by the entity under the early warning requirements or Part 4 of National Instrument 62-103 in respect of the reporting issuer’s securities.
12. If applicable, a description of the exemption from securities legislation being relied on by the offeror and the facts supporting that reliance.
Not applicable. However, the Offeror acquired the Warrants under the prospectus exemption provided by Section 2.3 (accredited investor) of NI 45-106 Prospectus and Registration Exemptions.
DXI Energy Inc.