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Enablence Technologies Announces Additional Financings




OTTAWA, ONTARIO — (Marketwired) — 04/05/17 — Enablence Technologies Inc. (“Enablence” or the “Company”) (TSX VENTURE: ENA), a leading supplier of optical components and subsystems for access, metro and long-haul markets, today announces its intention to complete additional financings for approximately $6 million.

Enablence also announces the termination, by mutual agreement, of the non-binding letter of intent with Esrey Energy Ltd. as was detailed in a press release issued on December 8, 2016 (the “Letter of Intent”). Enablence will not pursue the proposed business combination of the two companies. However, the Company will achieve its stated goal announced at the time of execution of the Letter of Intent to raise funds of $10 million to pursue its growth strategy. This goal will be achieved through a combination of the exercise of outstanding warrants, the private placements completed in December 2016 and January 2017 (which raised approximately $4 million), cash advances of $2 million which will be converted as set out below, and with the closing of the financings described below.

As previously announced, the Company intends to use all funds as growth capital for current and future products, plus general corporate purposes. A portion of the funds will be used to fund a capital expenditure program to expand the production of the Company–s Planar Lightwave Circuit (PLC) chips. This expansion is needed to satisfy existing purchase orders and anticipated future demand of the Company–s metro market focused 100G TxRx products. A portion of the funds will also be allocated to complete the development of the 100G TxRx product for the fast growing data centre market and for research and development activities focused on the Company–s next generation 200/400G products. The balance of the funds will be used for general corporate purposes and working capital.

As a portion of the total of $10 million of funds raised, the Company intends to complete a non-brokered private placement financing (the “Equity Financing”) of common shares (the “Shares”) at a price of $0.07 per Share for gross proceeds of approximately $4 million. The Company also intends to complete a non-brokered private placement financing (together with the Equity Financing, the “Financings”) of $1,000 principal amount of unsecured convertible debentures (the “Debentures”) for gross proceeds of up to $2 million.

The Debentures will bear interest at a rate of 10% per annum, payable quarterly commencing on June 30, 2017. The Debentures will be convertible, at the option of their holder, into Shares at a price of $0.09 per Share representing a conversion rate of approximately 11 111 Shares per $1,000 principal amount of Debentures. The Debentures will mature 36 months after their issuance.

As part of the Financings, certain investors have advised the Company that they will enter into debt settlement agreements with the Company to settle outstanding non-interest bearing cash advances totalizing $2 million as mentioned above by the issuance of 7,142,857 Shares for an aggregate value of $500,000 and the issuance of $1.5 million principal amount of Debentures, subject to the approval of the TSX Venture Exchange.

The Company anticipates that certain directors of the Company will participate in the transactions described above. Their participation in the transactions will constitute a “related party transaction” as defined under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”). The transactions will be exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 as neither the fair market value of securities being issued to the related parties nor the consideration being paid by related parties will exceed 25% of the Company–s market capitalization.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy securities in the United States, or to, or for the account or benefit of U.S. persons (as such term is defined in Regulation S under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”)). The securities have not been and will not be registered under the U.S. Securities Act or any state securities laws and may not be offered or sold within the United States or to or for the account or benefit of a “U.S. person” (as defined in Regulation S under the U.S. Securities Act) unless an exemption from such registration is available.

About Enablence Technologies Inc.

Enablence is a publicly traded company that designs, manufactures and sells optical components and subsystems to a global customer base. It utilizes its patented technologies, including planar lightwave circuit (“PLC”) intellectual property, in the production of an array of photonic components and broadband subsystems that deliver a key portion of the infrastructure for current and next-generation telecommunication systems. The Company–s product lines address all three segments of optical networks: access – connecting homes and businesses to the network; metro – communication rings within large cities; and long-haul – linking cities and continents. For more information, visit .

Forward-looking Statements

This press release may contain forward-looking statements regarding potential financing transactions, lending facilities, debt to equity conversion, future sales and orders, funding of ongoing operations based on current expectations, forecasts and assumptions which involve risks and uncertainties associated with our business and the economic environment in which the business operates. All such statements are made pursuant to the –safe harbour– provisions of, and are intended to be forward-looking statements under, applicable Canadian securities legislation. Any statements contained herein that are statements of historical facts may be deemed to be forward-looking statements. By their nature, forward-looking statements require us to make assumptions and are subject to inherent risks and uncertainties. We caution our readers of this press release not to place undue reliance on our forward-looking statements as a number of factors could cause actual results or conditions to differ materially from current expectations. Please refer to the risks set forth in the Company–s continuous disclosure documents that can be found on SEDAR . Enablence does not intend, and disclaims any obligation, except as required by law, to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

Neither 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 release.

Contacts:
Enablence Technologies Inc.
Evan Chen
CEO
+1 613 656-2850 ext. 0





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