Jenex Announces Revised Debt Settlement Terms
November 19, 2014
The Jenex Corporation (TSXV: JEN.H) ("Jenex" or the "Corporation") - Jenex announces revisions to the debt settlement terms set out in its press release of July 9, 2014.
Jenex has outstanding debentures and loans (the "Debt") in the total principal amount of $1,275,000. Accrued interest of $3,339,470 was owed on the Debt as of July 31, 2014. Jenex proposes to settle the Debt on the basis that (a) the outstanding principal amount will be paid by the issuance of common shares at a price of $0.05 per share, resulting in the issuance of 25,500,000 common shares to settle $1,275,000 of debt, (b) interest of $600,000 will be settled by issuing $600,000 of secured debentures (the "Debentures"), and (c) the remaining interest owing on the Debt will be settled by the issuance of 10,000,000 warrants (the "Warrants").
The Debentures will be interest free, will become due and payable on the third anniversary of closing, and will be secured by a security interest against the assets of the Corporation.
Each Warrant is exercisable for one Jenex common share at an exercise price of $0.05 on or before the first anniversary of closing. Jenex is listed on the NEX board of the TSX Venture Exchange. NEX will not permit the Warrants to have a term in excess of one year. Jenex has agreed to use all reasonable efforts to list the common shares of Jenex on the TSX Venture Exchange or Canadian Securities Exchange prior to the expiry of the Warrants and to obtain approval to extend the term of the Warrants to three years from the date of original issuance. If Jenex is successful in obtaining that extension of the Warrant term, the principal amount of the Debentures will be reduced from $600,000 to $500,000. Jenex will have the right to require the holders of the Warrants to convert the Warrants into common shares if (a) the volume weighted average closing price of the Corporation's common shares is above $0.10 for 20 consecutive trading days, and (b) the average daily volume of common shares traded during that period is at least 250,000.
$1,000,000 of the Debt is held by a single debt holder. As a result of the issuance of common shares for the outstanding principal amount of the Debt held by him, that debt holder will hold 20,000,000 common shares, representing approximately 18% of the common shares of Jenex following the debt settlements referred to in this news release. The debt holder will receive 8,396,780 Warrants and would hold approximately 24% of the common shares on a partially diluted basis. The debt holder has agreed not to exercise his Warrants so as to increase his holdings of common shares above 20%, without first obtaining the approval of disinterested shareholders at the next meeting of Jenex shareholders.
Jenex also proposes to settle unsecured debts totaling $67,500 by the issuance of 675,000 common shares at a price of $0.10 per share and to settle $370,000 of unsecured debt by the issuance of 7,400,000 common shares at a price of $0.05. Some of the holders of the unsecured debt are related parties of Jenex under Multilateral Instrument 61-101 ("MI 61-101"). Jenex is exempt from the formal valuation requirement and shareholder approval requirement of MI 61-101, as described in more detail in the material change report to be filed in connection with this debt settlement. Having regard to these exemptions and the Corporation's desire to settle outstanding debt as soon as possible, Jenex believes that it is reasonable to close this share issuance less than 21 days after the date of this news release.
The settlement of debt as described above is subject to approval by NEX and the execution of documentation by the holders of Debt.
FORWARD LOOKING STATEMENTS
Certain statements in this news release constitute "forward-looking" statements. These statements relate to future events or the Corporation's future performance and include the proposed settlement of debt described in the news release. All such statements involve substantial known and unknown risks, uncertainties and other factors which may cause the actual results to vary from those expressed or implied by such forward-looking statements. In addition to other risks, the Corporation could be unable to complete some or all of the debt settlement if the Corporation does not receive NEX approval or if the Corporation is unable to reach agreement with the Debt holders on the settlement documentation. Forward-looking statements involve significant risks and uncertainties, they should not be read as guarantees of future performance or results, and they will not necessarily be accurate indications of whether or not such results will be achieved. Actual results could differ materially from those anticipated due to a number of factors and risks. Although the forward-looking statements contained in this news release are based upon what management of the Corporation believes are reasonable assumptions on the date of this news release, the Corporation cannot assure investors that actual results will be consistent with these forward-looking statements. The forward-looking statements contained in this press release are made as of the date hereof and the Corporation disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required under applicable securities regulations.
Neither the 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 press release.
Rob Fia, Chairman
Peter Shippen, CEO