IBC Advanced Alloys Corp (IAALF)

[bernice]

IBC Advanced arranges $1.35-million private placement

IBC Advanced arranges $1.35-million private placement



2017-06-07 06:56 ET - News Release


Mr. Jim Sims reports

IBC ADVANCED ALLOYS ANNOUNCES PRIVATE PLACEMENT TO RAISE C$1.35 MILLION FOR WORKING CAPITAL AS PRODUCTION RAMP-UP INTENSIFIES

IBC Advanced Alloys Corp. plans to undertake a non-brokered private placement of units at an issue price of 37.5 cents per unit for gross proceeds of up to $1.35-million, with a 25-per-cent oversubscription option. If the oversubscription option is fully exercised, IBC will issue 4.5 million units and receive gross proceeds of $1,687,500 in connection with the private placement.

Each unit will consist of one common share of IBC and a one-half transferable share purchase warrant. Each full warrant shall be exercisable to acquire an additional common share of IBC at a price of 45 cents for a period of two years from the closing date of the private placement. The warrants will contain an acceleration provision, pursuant to which, the warrant holders will either need to exercise the warrants or have them expire within 60 days if IBC's common shares trade at 90 cents or greater for 21 consecutive trading days. The acceleration clause will come into effect after the one-year anniversary of the warrant issuance.

The private placement is subject to the approval of the TSX Venture Exchange. Directors and officers of the company are expected to subscribe for between $100,000 to $300,000 of the private placement. The securities to be issued will be subject to a four-month-and-one-day resale restriction under Canadian law.

The funds raised under the private placement will be used to provide general working capital and to support a current production ramp-up necessary to meet growing customer orders, as well as to serve as a bridge financing until IBC has achieved sustained cash-flow-positive operations, which the company estimates will be achieved by the end of the calendar year. As indicated in the company's fiscal 2017 third quarter financial statements (details here), incoming product orders and sales are increasing in both the copper and beryllium alloys divisions. This requires that the company maintain additional inventory to more efficiently meet customer product needs and delivery timetables, and a stronger cash position to bridge the gap between accounts receivable and accounts payable as the company ramps up production. The company has agreed to pay fees on the private placement of up to 2 per cent cash and 2 per cent compensation options, and the individuals involved can elect to take the cash portion of the fees in units having the same terms as the private placement units.

About IBC Advanced Alloys Corp.

IBC is a leading beryllium and copper advanced alloys company serving a variety of industries such as defence, aerospace, automotive, telecommunications, precision manufacturing and others. IBC's copper division manufactures and distributes a variety of copper alloys as castings and forgings, including beryllium copper, chrome copper and aluminum bronze. IBC's engineered materials division makes the Beralcast family of alloys, which can be precision cast and are used in an increasing number of defence, aerospace and other systems, including the F-35 joint strike fighter. IBC has production facilities in Indiana, Massachusetts, Pennsylvania and Missouri.

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