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SERVICES/
CALGARY,
AB, July 27, 2023 /CNW/ - Highwood Asset
Management Ltd. ("Highwood" or the "Company") (TSXV:
HAM) is pleased to announce that, further to the Company's press
releases dated July 5, 2023 and
July 10, 2023, it has closed its
previously announced "best efforts" marketed offering of
subscription receipts (the "Offering"). Pursuant to the
Offering, the Company issued and sold a total of 5,833,333
subscription receipts ("Subscription Receipts") at a price
of $6.00 per Subscription Receipt for
gross proceeds of approximately $35,000,000. The Offering was conducted pursuant
to an agency agreement with a syndicate of agents led by RBC
Capital Markets, Echelon Wealth Partners Inc. and Raymond James
Ltd. (the "Agents").
The TSX Venture Exchange ("TSXV") has conditionally
accepted for listing the 5,833,333 Subscription Receipts, together
with the Common Shares and Warrants (each as defined below)
underlying the Subscription Receipts and the Common Shares issuable
pursuant to the exercise of the Warrant, subject to receipt of
final approval. The Company expects the Subscriptions Receipts to
commence trading on or about August 1,
2023.
Each Subscription Receipt represents the right of the holder to
receive, upon closing of the previously announced
proposed acquisition by the Company of each of Castlegate
Energy Ltd., Boulder Energy Ltd. and Shale Petroleum Ltd.
(collectively, the "Acquisitions"), without payment of
additional consideration and without further action, one unit of
the Company ("Offered Unit"). Each Offered Unit
will be comprised of one common share of the Company ("Common
Share") and one-half of one Common Share purchase warrant
(each full warrant, a "Warrant") with each Warrant
exercisable into one Common Share (each a "Warrant
Share") at an exercise price of $7.50 per Warrant Share for a period of 36 months
from the issuance date of the Warrants.
The gross proceeds of the Offering, less the portion of the
Agents' fees and expenses that were paid on closing of the
Offering, will be held in escrow and intended to be used to
partially fund the cash consideration payable in respect of the
Acquisitions. If the Acquisitions do not close by September 8, 2023 or if any of the Acquisitions
are terminated at an earlier time, the gross proceeds of the
Offering and pro rata entitlement to interest earned or deemed to
be earned on the escrowed amounts calculated from the closing of
the Offering to, but excluding, the termination date, net
of any applicable withholding taxes, will be paid to holders of
the Subscription Receipts and the Subscription Receipts will be
cancelled. Further information is provided in the Company's
prospectus supplement dated July 12,
2023 to the amended and restated short form base shelf
prospectus dated May 19, 2023 for
the Provinces of British Columbia,
Alberta, Saskatchewan and Ontario and the short form base shelf
prospectus dated May 19, 2023 for the
provinces of Manitoba and
New Brunswick
The Company has now received all regulatory approvals to proceed
with closing of the Acquisitions and is working towards an
anticipated closing date for the Acquisitions in the first week of
August, 2023.
1080766 Alberta Ltd. ("1080766") (a company controlled by
Joel MacLeod, a Director and
Executive Chairman of the Company) acquired 309,416 Subscription
Receipts pursuant to the Offering. Further, Joel MacLeod
directly acquired 57,250 Subscription Receipts pursuant to the
Offering. For the purposes of this press release, all securities
acquired or to be acquired directly by Joel MacLeod are included in the amount of
securities that 1080766 owns and exercises control and
direction over. 1080766 currently owns and exercises control or
direction over 4,045,862 Common Shares, representing approximately
67% of the issued and outstanding Common Shares. Assuming
conversion of the Subscription Receipts upon completion of the
Acquisitions, 1080766 will own and exercise control or direction
over 4,412,528 Common Shares and 183,333 Warrants,
representing approximately 37.2% of the issued and outstanding
Common Shares on a non-diluted basis and approximately 38.1% of
the issued and outstanding Common Shares on a partially-diluted
basis (assuming the exercise of all Warrants held by
1080766). Joel MacLeod is the sole control person of the
1080766. Joel MacLeod and 1080766
are participating in the Offering for investment
purposes.
As previously disclosed in the Company's press release dated
July 5, 2023, upon, or substantially
concurrent with, and conditional upon closing of the Acquisitions,
1080766 intends to purchase an additional aggregate amount of up
to $2.8 million in units of the Company (the "Private
Placement Units") comprised of one Common Share and one-half
of one common share purchase warrant (the "Private
Placement"). The Private Placement Units are intended to be
issued on terms identical to the terms of the Offered Units that
are issuable pursuant to the terms of the Subscription Receipts
under the Offering. Given that 1080766 has participated in the
Offering for $2.2 million, the
aggregate equity commitment from 1080766 under the proposed
transactions, including the Offering and the Private Placement, is
expected to remain at $5
million.
In addition, certain directors and officers of the Company
subscribed for 148,344 Subscription Receipts pursuant to the
Offering.
The involvement of the directors and officers of the
Company and 1080766 in the Offering are "related party
transactions" within the meaning of Multilateral Instrument
61-101 — Protection of Minority Security Holders in Special
Transactions ("MI 61-101") and the Company is
relying on the exemptions in sections 5.5(a) and 5.7(a) [Fair
Market Value Not More Than 25% of Market Capitalization] of
MI 61-101 in order to be exempt from the formal valuation and
minority shareholder approval requirements therein, as the
aggregate fair market value of such transactions does not exceed
25% of the Company's current market capitalization, as determined
in accordance with MI 61-101.
HR Exploration & Energy Gmbh ("HR") acquired, on
July 27, 2023, 1,666,666 Subscription
Receipts pursuant to the Offering at an aggregate purchase price
of $10,000,000 ($6.00 per Subscription Receipt). HR does not
currently own or exercise control or direction over any Common
Shares. Assuming conversion of the Subscription Receipts upon
completion of the Acquisitions, HR will own and exercise control or
direction over approximately 2,610,407 Common Shares and
approximately 833,334 Warrants, representing approximately 17% of
the issued and outstanding Common Shares on a non-diluted basis
and approximately 21% of the issued and outstanding Common Shares
on a partially-diluted basis (assuming the exercise of all
Warrants held by HR). HR is participating in the Offering for
investment purposes. HR may acquire or dispose of additional
securities of the Company in the future through the market,
privately, or otherwise, as circumstances or market conditions
warrant.
Financial Advisors
RBC Capital Markets is acting as financial advisor to Highwood
on the Acquisitions and Echelon Capital Markets, Raymond James and ATB Capital Markets are acting
as strategic advisors to Highwood on the Acquisitions.
About Highwood Asset Management
Ltd.
Highwood Asset Management Ltd. (TSXV: HAM) is a growth
orientated oil and gas exploration and production company committed
to shareholder alignment with high insider ownership while creating
long-term value for its shareholders. The Company has an extensive
inventory of low-risk, oil development drilling locations focused
primarily on horizontal multi-lateral development of its
assets. Operating as a responsible corporate citizen is a key focus
to ensure we deliver on our environmental, social and governance
(ESG) commitments and goals. For more information, please visit the
Company's website at www.highwoodmgmt.com.
Cautionary Note Regarding
Forward-Looking Information
This news release contains certain statements and
information, including forward-looking statements within the
meaning of the "safe harbor" provisions of applicable securities
laws, and which are collectively referred to herein as
"forward-looking statements". The forward-looking statements
contained in this news release are based on Highwood's current
expectations, estimates, projections and assumptions in light of
its experience and its perception of historical trends. When used
in this news release, the words "seek", "anticipate", "plan",
"continue", "estimate", "expect", "may", "will", "project",
"predict", "potential", "targeting", "intend", "could", "might",
"should", "believe" and similar expressions and similar
expressions, as they relate to Highwood or the proposed
Acquisitions, are intended to identify forward-looking statements.
These statements involve known and unknown risks, uncertainties and
other factors that may cause actual results or events to differ
materially from those anticipated in such forward-looking
statements. Actual operational and financial results may differ
materially from Highwood's expectations contained in the
forward-looking statements as a result of various factors, many of
which are beyond the control of the Company.
Undue reliance should not be placed on these forward-looking
statements, as there can be no assurance that the plans, intentions
or expectations upon which they are based will occur. By its
nature, forward-looking information involves numerous assumptions,
known and unknown risks and uncertainties, both general and
specific, that contribute to the possibility that the predictions,
forecasts, projections and other forward-looking statements will
not occur and may cause actual results or events to differ
materially from those anticipated in such forward-looking
statements. Forward-looking statements may include, but are not
limited to, statements with respect to the ability to close the
Acquisitions in the timeframe expected, or at
all; listing of securities of Highwood on the TSXV,
including the timing thereof, the adequacy of funds to fund the
Acquisitions, and; the release of the escrowed funds and the
anticipated use thereof. These forward-looking statements are not
guarantees of future performance and are subject to a number of
known and unknown risks and uncertainties that could cause actual
events or results to differ materially, including, but not limited
to: inability to complete the Acquisitions; the conditions to
completion of the Offering may not be satisfied; and the timing and
receipt of applicable regulatory approvals for each of the
Acquisitions and the Offering. With respect to forward-looking
statements contained in this news release, the Company has made
assumptions regarding, among other things, the timing of obtaining
regulatory and third party approvals, as well as the completion of
the Offering and the Acquisitions. Although Highwood believes the
expectations and material factors and assumptions reflected in
these forward-looking statements are reasonable as of the date
hereof, there can be no assurance that these expectations, factors
and assumptions will prove to be correct. Readers are cautioned not
to place undue reliance on such forward-looking statements, as
there can be no assurance that the plans, intentions or
expectations upon which they are based will occur and the
predictions, forecasts, projections and other forward-looking
statements may not occur, which may cause Highwood's actual
performance and financial results in future periods to differ
materially from any estimates or projections of future performance
or results expressed or implied by this news release.
A more complete discussion of the risks and uncertainties
facing Highwood is disclosed in the prospectus supplement to the
Company's amended and restated short form base shelf prospectus
dated May 19, 2023 for the Provinces
of British Columbia, Alberta, Saskatchewan and Ontario and the short form base shelf
prospectus dated May 19, 2023 for the
provinces of Manitoba and
New Brunswick and Highwood's
continuous disclosure filings with Canadian securities regulatory
authorities at www.sedar.com. All forward-looking information
herein is qualified in its entirety by this cautionary statement,
and Highwood disclaims any obligation to revise or update any such
forward looking information or to publicly announce the result of
any revisions to any of the forward-looking information contained
herein to reflect future results, events, or developments, except
as required by law.
All dollar figures included herein are presented in Canadian
dollars, unless otherwise noted.
SOURCE Highwood Oil Company Ltd.