I am a bit confused as KNR moves to obtain OTC listing in USA what effect that will have on debentures from this filing?
However, a successful placement will give management room for more acquisitions
Kontrol Energy Announces Private Placement and Exchange of Debentures
TORONTO, ON / ACCESSWIRE / March 13, 2019 / Kontrol Energy Corp. (CSE: KNR) (OTCQB: KNRLF) (FSE: 1K8) (the "Company" or "Kontrol") announces the commencement of a non-brokered private placement (the "Offering") of up to $6,000,000 principal amount 8% unsecured debentures of the Company maturing on October 31, 2020 (each, a "2020 Debenture"). The 2020 Debentures will be issued as part of a unit (each, a "Unit") comprised of one $1,000 2020 Debenture and 50 common shares of the Company (each, a "Common Share").
The Company intends to allocate up to $5,245,000 of the Units for issuance to holders of the outstanding 8% unsecured debentures of the Company maturing on October 31, 2019 (the "2019 Debentures") who wish to exchange their 2019 Debentures for Units in the Offering. The balance of the Units not issued to holders of 2019 Debentures in exchange for their return for cancellation of their 2019 Debentures will be offered to purchasers for cash. The Company will use net proceeds from the Offering to finance new acquisitions and for general working capital purposes. The holders of the 2019 Debentures are under no obligation to exchange the 2019 Debentures for Units. The 2020 Debentures will bear interest at a rate of 8% per annum, payable monthly in arrears and will mature on October 31, 2020. The 2020 Debentures are non-convertible and non-redeemable and will rank pari passu with the 2019 Debentures and all other unsecured indebtedness of the Company. The 2020 Debentures partially comprising the Units are not listed on any stock exchange or market.
The 2020 Debentures and Common Shares comprising the Units will be subject to a resale restriction of four months and one day from their date of issuance.
The Company may pay a selling commission or finder's fee to securities dealers or finders engaged by the Company not exceeding 5% of the aggregate principal amount of the Offering in cash and 3% of the aggregate principal amount of the Offering in broker warrants (the "Broker's Warrants") from the sale of the Units. Each Broker's Warrant will be exercisable to purchase one additional common share of the Company (the "Broker's Warrant Shares") at a price per share determined by the Company, and/or to the provisions of the Canadian Securities Exchange Policy 6 – Distributions, for a period of 30 months from the closing date.
Completion of the Offering is subject to the Company exchanging a minimum of two hundred 2019 Debentures in exchange for Units in the Offering.
The Offering will be made by way of private placement in Canada and may be offered in other jurisdictions where the Units can be issued pursuant to exemptions, exempt from any prospectus, registration or other similar requirements. The Offering is subject to certain conditions including, but not limited to, the approval of the Canadian Securities Exchange.
The securities offered have not been and will not be registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or applicable exemption from the registration requirements. This document shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawfu"l.