NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES OF AMERICA
Toronto, Canada, November 10, 2023. Baylin Technologies Inc. (TSX: BYL) (“Baylin” or the “Company”) announces that it will be filing a Rights Offering Circular and Rights Offering Notice with respect to its previously announced offering (the “Rights Offering”) of rights (“Rights”) to purchase common shares (“Common Shares”) of the Company.
Holders of Common Shares of record at the close of business on November 21, 2023 (the “Record Date”) will receive one Right for each Common Share held. The Company currently has 88,547,717 Common Shares outstanding. Each Right will entitle the holder to subscribe for and purchase one Common Share on payment of a subscription price of $0.19 (the “Subscription Price”) for each Common Share (the “Basic Subscription Privilege“). The Subscription Price represents a 17.4% discount to the closing price of the Common Shares on the TSX on November 9, 2023. Holders who exercise their Basic Subscription Privilege in full will be entitled, on a proportionate basis, to subscribe for additional Common Shares that have not been purchased under the Basic Subscription Privilege (the “Additional Subscription Privilege“).
2385796 Ontario Inc., the Company’s largest shareholder, and a related party, which together hold 54,626,763 Common Shares, representing approximately 61.7% of the Common Shares outstanding at the date of this release, have agreed to exercise their Basic Subscription Privilege in full and will consider making (but have not agreed to make) a further investment through their Additional Subscription Privilege. Mr. Jeffrey C. Royer, Chairman of the Board of Directors of the Company, exercises control and direction over these Common Shares.
Certain directors and officers, holding approximately 1% of the Common Shares outstanding at the date of this release, have indicated their intention to participate in the Offering by exercising some or all of their Basic Subscription Privilege.
Use of Proceeds
The Company intends to use the proceeds of the Rights Offering (after payment of expenses of the Rights Offering), to the extent available, (i) to repay the remaining amount of its term loan facility (approximately $13.5 million) and (ii) to provide additional capital for use in its business.
Trading of the Rights
The Rights will trade on the TSX under the symbol “BYL.RT” commencing on November 20, 2023 and will trade until 12:00 noon (Eastern time) on December 19, 2023 (the “Expiry Date“). The Rights will expire at 5:00 p.m. (Eastern time) on the Expiry Date (the “Expiry Time”), after which time unexercised Rights will be void and of no value. The Company expects to close the Rights Offering on or about December 21, 2023.
The Rights are being offered only to shareholders resident in Canada. Accordingly, and subject to the detailed provisions of the Rights Offering Circular, Rights will not be delivered to, and they are not exercisable by, any person outside Canada unless they are able to establish, to the Company’s satisfaction, that their participation in the Rights Offering is exempt from applicable securities and other laws. Holders resident outside Canada should review the Rights Offering Circular to determine their eligibility to participate and the process required to receive and exercise their Rights.
The Rights Offering Notice and an accompanying statement from Computershare Investor Services Inc. (the “Rights Agent“) under its direct registration system which evidences the number of Rights to which Canadian registered shareholders are entitled, and a subscription form for the Rights (the “Subscription Form“) will be mailed to eligible shareholders on or about November 24, 2023. To subscribe for Common Shares, registered shareholders must deliver the completed Subscription Form, together with applicable funds, to the Rights Agents so that it is received before the Expiry Time.
Shareholders who hold their Common Shares through an intermediary, such as a securities broker or dealer, bank or trust company, will receive materials and instructions from their intermediary.
Restrictions on Offers and Sales of the Rights and Common Shares Issuable on Exercise of the Rights
The Rights and the Common Shares issuable on exercise of the Rights have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), or the securities laws of any state of the United States (as defined in Regulation S under the U.S. Securities Act). This news release does not constitute an offer to sell or a solicitation of an offer to buy any of these securities in the United States and these securities may not be offered or sold in the United States or to or for the benefit of U.S. persons (as defined in Regulation S under the U.S. Securities Act) except in transactions exempt from registration under the U.S. Securities Act.
This news release does not constitute an offer to sell or a solicitation of an offer to buy any of these securities in any other jurisdiction and these securities may not be offered or sold in any other jurisdiction in which such offer, solicitation or sale would be unlawful except in compliance with the securities or other applicable laws of such jurisdiction.
OFFERING OF RIGHTS TO ACQUIRE UP TO 88,547,717 COMMON SHARES AT A SUBSCRIPTION PRICE OF $0.19 PER COMMON SHARE
FOR GROSS PROCEEDS OF UP TO $16,824,066