ProSep has entered into agreements for a non-brokered private placement of common shares of the Company for gross proceeds of up to $15 million. The Company will use the net proceeds from the private placement for commercialization, business development and general working capital purposes.
In connection with the proposed private placement, ProSep has entered into subscription agreements (the "Subscription Agreements") with Investissement Québec ("IQ"), Cycle Capital Fund I, L.P. ("Cycle"), Fondaction, le Fonds de développement de la Confédération des Syndicats Nationaux pour la coopération et l'emploi ("Fondaction"), Flint Energy Services Ltd. ("Flint"), and certain members of executive management of the Company ("Management", and collectively with IQ, Cycle, Fondaction and Flint, the "Investors"), under which the Investors have collectively agreed to invest an aggregate amount of approximately $11.1 million for the purchase of Common Shares. Cycle and Fondaction are currently significant shareholders of the Company, holding respectively 36,224,736, and 42,087,299 Common Shares, as of October 4, 2011, which represent 18.8% and 21.8% of the issued and outstanding Common Shares of ProSep.
"This private placement will allow ProSep to significantly strengthen its balance sheet and provide the financial flexibility to meet its growth objectives," said Jacques L. Drouin, ProSep's President and Chief Executive Officer. "We continue to receive the unwavering support of Fondaction and Cycle Capital and now welcome a new group of prominent investors such as Investissement Québec and Flint Energy Services. With a strong shareholder base and a new strategic partnership, we can accelerate the commercialization of our step-change technologies and continue expanding our business in key markets such as Canada's oil sands."
Strategic Alliance with Flint Energy Services Ltd.
ProSep also announced the execution of a commercial agreement (the "Commercial Agreement") with Flint, a major equipment and services supplier to the oil sands industry. Pursuant to the Commercial Agreement, ProSep has appointed Flint as its exclusive commercial representative and preferred supplier of manufacturing services in Canada, except for the Province of Québec, for the purposes of business development, commercialization, and the promotion of the Company's products and technology in Canada. Concurrently with the conclusion of the Commercial Agreement, Flint has also agreed to subscribe for Common Shares in the proposed private placement.
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