MiniLuxe Holding Corp. (TSXV: MNLX)
("
MiniLuxe" or the "
Company")
announced today that it has completed an initial tranche of a
non-brokered convertible debenture unit offering, with an immediate
closing of gross proceeds of approximately $2.5M USD (the
"
Offering"). Additionally, the Company has signed
indications of interest commitments for an incremental ~ $1.0M USD
to be completed in one or more additional tranches of the Offering
(for a total of approximately $3.5M USD). Above and beyond the
initial closing of the Offering, the Company will evaluate and
potentially close, on a rolling basis, additional tranches of the
Offering (above and beyond the $3.5M USD committed) as it deems
strategic based on needs and fit with prospective investors for up
to $10M USD in gross proceeds.
The initial closing of the Offering resulted in
the issuance of 2,585 units of the Company (each, a
"Unit" and collectively the
"Units") at a price of $1,000 USD per Unit. Each
Unit consists of one $1,000 USD principal amount, 11.5%
paid-in-kind simple interest for an unsecured convertible Debenture
of the Company (each, a "Debenture" and
collectively the "Debentures"), with each
Debenture maturing 42 months following the issuance date, and such
number of Class A subordinate voting share purchase warrants (each
a "Warrant" and collectively the
"Warrants") as is equal to 15% of the principal
amount of Debentures. Each Warrant entitles the holder thereof to
acquire such number of Class A subordinate voting shares as is
equal to 15% of the principal amount of the Debentures at a price
of $0.52 USD (or ~$0.70 CDN) per share for a period of 42 months
from the grant date. The Company believes that the significant
premium of the strike price of the Warrants relative to the 30-day
volume-weighted average price of the Company's Class A subordinate
voting shares is indicative of investor interest in the intrinsic
and future value creation potential of MiniLuxe's business.
Assuming conversion of the Debentures at 24
months and an Offering size of $3.5M USD, the dilutive impact to
existing holders of Class A subordinate voting shares of the
Company of the Units issued in the Offering would be less than 6%.
If the Debentures are converted at maturity, the dilutive impact
would be approximately 6.6% (inclusive of the exercise of all
Warrants). If all of the Warrants are exercised, the Company would
receive additional proceeds of approximately $525,000 USD.
The Company intends to use the gross proceeds of
the Offering to bridge to profitability, while focusing on a
narrower set of growth investments in the areas of fleet expansion
via M&A and franchising and recent product innovation of its
Paintbox press-on nails.
Tony Tjan, Chairman and CEO of MiniLuxe,
commented “Successfully raising this capital is a sign of the
strength of our brand and progress made on MiniLuxe’s fundamentals,
especially in terms of unit economics. This financing vehicle
allows us to accelerate our progress to close the profitability
gap. Against the backdrop of a challenging macro-environment, we
are grateful to have new and existing investors support us as
long-term stakeholders who believe in our vision and the value
creation potential of MiniLuxe.”
Certain directors of the Company (collectively,
the "Insiders") participated in the initial
closing of the Offering and, as such, the initial closing of the
Offering may constitute a related party transaction under
Multilateral Instrument 61-101 – Protection of Minority Security
Holders in Special Transactions ("MI 61-101"), but
is otherwise exempt from the formal valuation and minority approval
requirements of MI 61-101 by virtue Sections 5.5(a) and 5.7(1)(a)
of MI 61-101 in respect of such Insider participation in the
initial closing of the Offering. No special committee was
established in connection with the Offering or the participation of
the Insiders in the initial closing of the Offering, and no
materially contrary view or abstention was expressed or made by any
director of the Company in relation thereto. Further details will
be included in a material change report that will be filed by the
Company in connection with the completion of the initial closing of
the Offering. The Company did not file the material change report
more than 21 days before the initial closing date of the Offering
as the terms of the Offering and the total amount to be invested by
the Insiders in the initial closing of the were not settled until
shortly prior to closing, and the Company wished to complete the
initial tranche of the Offering on an expedited basis for sound
business reasons.
Completion of all tranches of the Offering is
subject to the satisfaction of customary closing conditions,
including the approval of the TSX Venture Exchange. The Debentures
and Warrants issued pursuant to the initial closing of the Offering
will be subject to a hold period of four months and one day from
the issuance date in accordance with applicable securities
laws.
This news release does not constitute an offer
to sell or a solicitation of an offer to buy any of the securities
described in this news release. Such securities have not been, and
will not be, registered under the U.S. Securities Act, or any state
securities laws, and, accordingly, may not be offered or sold
within the United States, or to or for the account or benefit of
persons in the United States or "U.S. Persons", as such term is
defined in Regulation S promulgated under the U.S. Securities Act,
unless registered under the U.S. Securities Act and applicable
state securities laws or pursuant to an exemption from such
registration requirements.
About MiniLuxe
MiniLuxe, a Delaware corporation based in
Boston, Massachusetts. Miniluxe is a lifestyle brand and talent
empowerment platform servicing the beauty and self-care industry.
The Company focuses on delivering high-quality nail care and
esthetic services and offers a suite of trusted proprietary
products that are used in the Company’s owned-and-operated studio
services. For over a decade, MiniLuxe has been elevating industry
standards through healthier, ultra-hygienic services, a modern
design esthetic, socially responsible labor practices, and
better-for-you, cleaner products. MiniLuxe’s aims to radically
transform a highly fragmented and under-regulated self-care and
nail care industry through its brand, standards, and technology
platform that collectively enable better talent and client
experiences. For its clients, MiniLuxe offers best-in-class
self-care services and better-for-you products, and for nail care
and beauty professionals, MiniLuxe seeks to become the employer of
choice. In addition to creating long-term durable economic returns
for our stakeholders, the brand seeks to positively impact and
empower one of the most diverse and largest hourly worker segments
through professional development and certification, economic
mobility, and company ownership opportunities (e.g., equity
participation and future franchise opportunities). Since its
inception, MiniLuxe has performed over 3.5 million services.
For further information
Christine MastrangeloInvestor Relations, MiniLuxe Holding
Corp.cmastrangelo@miniluxe.comminiluxe.com
Neither TSX Venture Exchange nor its Regulation
Services Provider (as that term is defined in the policies of the
TSX Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Forward-looking statements
This press release contains "forward-looking
information" and "forward-looking statements" (collectively,
"forward-looking information") concerning the Company and its
subsidiaries within the meaning of applicable securities laws.
Forward-looking information may relate to the future financial
outlook and anticipated events or results of the Company and may
include information regarding the Company's financial position,
business strategy, growth strategies, acquisition prospects and
plans, addressable markets, budgets, operations, financial results,
taxes, dividend policy, plans and objectives. Particularly,
information regarding the Company's expectations of future results,
performance, achievements, prospects or opportunities or the
markets in which the Company operates is forward-looking
information. In some cases, forward-looking information can be
identified by the use of forward-looking terminology such as
"plans", "targets", "expects", "budgets", "scheduled", "estimates",
"outlook", "forecasts", "projects", "prospects", "strategy",
"intends", "anticipates", "believes", or variations of such words
and phrases or statements that certain actions, events or results
"may", "could", "would", "might", or "will" occur. In addition, any
statements that refer to expectations, intentions, projections or
other characterizations of future events or circumstances contain
forward-looking information. Statements containing forward-looking
information are not historical facts but instead represent
management's expectations, estimates and projections regarding
future events or circumstances.
Many factors could cause the Company's actual
results, performance, or achievements to be materially different
from any future results, performance, or achievements that may be
expressed or implied by such forward-looking information,
including, without limitation, those listed in the "Risk Factors"
section of the Company's filing statement dated November 9, 2021.
Should one or more of these risks or uncertainties materialize, or
should assumptions underlying the forward-looking statements prove
incorrect, actual results, performance, or achievements could vary
materially from those expressed or implied by the forward-looking
statements contained in this press release.
Forward-looking information, by its nature, is
based on the Company's opinions, estimates and assumptions in light
of management's experience and perception of historical trends,
current conditions and expected future developments, as well as
other factors that the Company currently believes are appropriate
and reasonable in the circumstances. Those factors should not be
construed as exhaustive. Despite a careful process to prepare and
review forward-looking information, there can be no assurance that
the underlying opinions, estimates and assumptions will prove to be
correct. These factors should be considered carefully, and readers
should not place undue reliance on the forward-looking information.
Although the Company bases its forward-looking information on
assumptions that it believes were reasonable when made, which
include, but are not limited to, assumptions with respect to the
Company's future growth potential, results of operations, future
prospects and opportunities, execution of the Company's business
strategy, there being no material variations in the current tax and
regulatory environments, future levels of indebtedness and current
economic conditions remaining unchanged, the Company cautions
readers that forward-looking statements are not guarantees of
future performance and that our actual results of operations,
financial condition and liquidity, and the development of the
industry in which the Company operates may differ materially from
the forward-looking statements contained in this press release. In
addition, even if the Company's results of operations, financial
condition and liquidity, and the development of the industry in
which it operates are consistent with the forward-looking
information contained in this press release, those results or
developments may not be indicative of results or developments in
subsequent periods.
Although the Company has attempted to identify
important risk factors that could cause actual results to differ
materially from those contained in forward-looking information,
there may be other risk factors not presently known to the Company
or that the Company presently believes are not material that could
also cause actual results or future events to differ materially
from those expressed in such forward-looking information. There can
be no assurance that such information will prove to be accurate, as
actual results and future events could differ materially from those
anticipated in such information. Accordingly, readers should not
place undue reliance on forward-looking information, which speaks
only as of the date made (or as of the date they are otherwise
stated to be made). Any forward-looking statement that is made in
this press release speaks only as of the date of such
statement.
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