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TORONTO, Dec. 15, 2020 /CNW/ - Baylin Technologies Inc.
(TSX: BYL) (the "Company" or "Baylin") has completed
its previously announced private placement offering (the
"Offering") of 6,666,700 units of the Company (the
"Units") at a price of $0.75
per Unit, each Unit comprised of one common share in the capital of
Baylin (each, a "Common Share") and one-half of one Common
Share purchase warrant (each whole warrant, a "Warrant").
Each whole Warrant will be exercisable for two years from closing
at an exercise price of $1.05 per
Common Share. If at any time during that two-year period the
closing price of the Common Shares of Baylin on the Toronto Stock
Exchange is equal to or higher than $1.40 per Common Share for 20 consecutive trading
days, the Company may notify the holders of the Warrants that the
Warrants will expire 30 days following the notice. The Common
Shares issuable in connection with the Offering are being listed on
the Toronto Stock Exchange.
Paradigm Capital Inc. acted as lead agent for the Offering with
a syndicate comprised of CIBC Capital Markets, Raymond James Ltd.,
Cormark Securities Inc. and PI Financial Corp (collectively, the
"Agents"). In connection with the Offering, the Agents
received a cash commission of $266,251.50 and an aggregate of 200,001 broker
warrants (each, a "Broker Warrant"). Each Broker Warrant
entitles the holder thereof to acquire one Common Share at an
exercise price of $0.87 per Common
Share for a period of two years from the closing of the
Offering.
The net proceeds from the Offering will be used to repay
outstanding debt and for general working capital purposes.
Insiders purchased an aggregate of approximately $1,100,000 of the Units. Their
participation represents a related-party transaction under
Multilateral Instrument 61-101 - Protection of Minority Security
Holders in Special Transactions ("MI 61-101"), however
the transaction is exempt from the formal valuation and minority
shareholder approval requirements of MI 61-101 as neither the fair
market value of the subject matter of the transaction, nor the
consideration paid, exceed 25% of the Company's market
capitalization.
"The equity raise was very well received by the market.
The financial support of the capital markets and investment
community are indicative of their continuing belief in Baylin and
its business", said Randy Dewey,
Baylin's President and CEO.
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 U.S. state securities laws, and may
not be offered or sold in the United
States without registration under the U.S. Securities Act
and all applicable state securities laws or compliance with the
requirements of an applicable exemption therefrom. This press
release does not constitute an offer to sell or the solicitation of
an offer to buy securities in the United
States, nor may there be any sale of these securities in any
jurisdiction in which such offer, solicitation or sale would be
unlawful.
Credit Agreement
The Company and its lenders have agreed to amend the
Company's Credit Agreement dated March 29,
2019, as amended, which became effective on completion of
the Offering. The amendments include changes to the Senior Debt to
EBITDA ratio as follows:
- Senior Debt to EBITDA Ratio: (i) as at December 31, 2020 – no covenant; (ii) as at
March 31, 2021 – 4.00:1.00; (iii) as
at June 30, 2021 – 3.75:1.00; and
(iv) as at September 30, 2021 and
each fiscal quarter end thereafter – 3.00:1.00.
The Company also agreed to a minimum EBITDA covenant for the 12
months ending December 31, 2020, and
a minimum liquidity covenant until September
30, 2021 of $10 million. As
part of the amendments, the Company agreed (without the consent of
the Lenders) not to pay more than $100,000 in cash interest on each of the
December 31, 2020 and June 30, 2021 interest payment dates for its
convertible debentures (the "Debentures") unless, in the
case of the June 30, 2021 interest
payment, the Senior Debt to EBITDA ratio is less than 3.00:1.00,
or, in either case, except in Common Shares of the Company or from
the proceeds generated from the sale of Common Shares for that
purpose other than the Offering, except that, in the case of
the December 31, 2020 interest
payment, the Company may use up to $70,000 from the proceeds of the Offering to pay
the interest due in cash. The amount of interest payable on the
Debentures on the December 31
interest payment date is $560,625. At
December 15, 2020, the Company had
commitments from holders of Debentures representing approximately
60% in principal amount of the Debentures to accept Common Shares
in lieu of cash interest. The Common Shares will be priced at a 15%
discount from the volume-weighted average price of the Common
Shares on the TSX for the five trading days ending on December 29, 2020. The shares will be subject to
a four-month hold period before they can be freely traded.
Randy Dewey, Baylin's President
and CEO said, "The continued support and collaboration from our
financial partners has been a tremendous help during the
uncertainty brought about by the Covid-19 pandemic. These
amendments, together with the other measures we are taking to
reduce costs, should provide us with the necessary financial
stability from which we can move forward confidently to exploit the
many opportunities across our business lines."
About Baylin
Baylin is a leading, diversified, global technology company.
Baylin focuses on research, design, development, manufacturing, and
sales of passive and active radio-frequency products and services.
We strive to meet our customers' needs and anticipate the direction
of the market.
Forward-Looking Statements
This press release includes forward-looking information and
forward-looking statements ("forward-looking statements") within
the meaning of applicable securities laws. They are not statements
of historical fact. Rather, it is disclosure regarding
events, conditions, developments or financial performance that we
expect or anticipate may or will occur in the future including,
among other things, information or statements concerning our
objectives and strategies to achieve those objectives, statements
with respect to management's beliefs, plans, estimates and
intentions and statements concerning anticipated future events,
circumstances, expectations, results, operations or performance.
Forward-looking statements can be identified generally by the use
of forward–looking terminology, such as "anticipate", "believe",
"could" "should", "would", "estimate", "expect", "forecast",
"indicate", "intend", "likely, "may", "plan", "potential",
"project", "outlook", "seek", "target", "trend" or "will" or the
negative or other variations of these words or other comparable
words or phrases and is intended to identify forward-looking
statements, although not all forward-looking statements contain
these words.
The forward-looking statements in this press release include
statements regarding the effect of the amendments to the Company's
Credit Facility and its ability to exploit business
opportunities. Forward-looking information and statements are
based on certain assumptions and estimates made by the Company in
light of the experience and perception of historical trends,
current conditions, expected future developments, including
projected growth in the antenna and related industries, and other
factors it believes are appropriate and reasonable in the
circumstances, but there can be no assurance that such assumptions
and estimates will prove to be correct.
Many factors could cause actual results, level of activity,
performance or achievements or future events or developments to
differ materially from those expressed or implied by the
forward-looking statements, including the risk factors discussed in
the Company's Annual Information Form dated March 11, 2020, which is available on the
Company's profile at www.sedar.com. All the forward-looking
statements made in this press release are qualified by these
cautionary statements and other cautionary statements or factors in
this press release. There can be no assurance that the actual
results or developments will be realized or, even if substantially
realized, will have the expected consequences to, or effects on,
the Company. Unless required by applicable securities law, the
Company does not intend and does not assume any obligation to
update these forward-looking statements.
SOURCE Baylin Technologies Inc.