VANCOUVER, May 7, 2019 /CNW/ - CruzSur Energy Corp. (the
"Company" or "CruzSur" ) (TSXV: CZR) is pleased to
announce that it has closed its previously announced non-brokered
private placement of secured convertible debentures
("Financing") for aggregate proceeds of $3,350,000.
The subscribers to the financing have been issued convertible
debentures (Debentures") which will bear interest at the
rate of 10% per annum until May 7,
2024.
The principal amount of the Debentures are convertible into
units of the Company at a conversion price of $0.15 per unit. Each unit will be comprised
of one common share of the Company and one share purchase
warrant. Each warrant will entitle the holder to purchase one
common share of the Company at a price of $0.15 until May 7,
2024. At the option of the Company, accrued interest may be
paid in cash or converted into common shares of the Company at the
then market price of the Company's common shares, subject to TSX
Venture Exchange approval.
The Debentures and any Units acquired on conversion thereof are
subject to a hold period expiring on September 8, 2019. No finder's fees were
paid in connection with the Financing.
The Debentures will be secured by a general security agreement
on the assets of the Company.
The Company intends to use the net proceeds from the financing
to restructure the Company's portfolio of assets and settle
outstanding liabilities.
Insiders of the Company were issued Debentures in the aggregate
amount of $1,774,000 and, accordingly
the Financing is a related party transaction. Subscribers
participating in the Financing who could potentially become a
greater than 20% shareholder of the Company upon conversion of the
Debentures have undertaken not to convert their Debentures if such
conversion would result in them owning 20% or more of the voting
securities of the Company, unless and until shareholder approval
(excluding their votes) has been received.
Early Warning Disclosure
Pursuant to the Financing, Frank
Giustra and his related entities acquired Debentures of the
Issuer in the principal amount of $1,085,000, which is convertible into 7,233,333
common shares and 7,233,333 warrants if converted. Prior to
issuance of the Debentures, Mr. Giustra, directly and
indirectly, held and/or controlled, in aggregate, common shares,
representing 10.24% of the current issued and outstanding common
shares of the Issuer and 523,875 warrants and 200,000 stock
options. Assuming conversion of the debenture and the
exercise of the underlying warrants, pre-existing warrants, and
options, Mr. Giustra would own and/or control, directly and
indirectly, 17,671,783 common shares, representing 44.84% of the
issued and outstanding common shares of the Issuer on a partially
diluted basis. As referenced above, Mr. Giustra has undertaken not
to convert Debentures if such conversion would result in him owning
20% or more of the voting securities of the Company, unless and
until shareholder approval (excluding his votes) has been
received.
The Issuer has been advised that Mr. Giustra acquired the
Debenture for investment purposes and may in the future acquire or
dispose of securities of the Issuer, through the market, privately
or otherwise, as circumstances or market conditions warrant. A copy
of the Early Warning Report filed by Mr. Giustra may be obtained
from the Issuer's SEDAR profile.
Serafino Iacono and his related
entities acquired a Debenture of the Issuer in the principal amount
of $633,000 which is convertible into
4,220,000 common shares and 4,220,000 warrants if converted.
Prior to issuance of the Debenture, Mr. Iacono directly and
indirectly, held and/or controlled, in aggregate, common shares,
representing 7.41% of the current issued and outstanding common
shares of the Issuer and 131,250 warrants. Assuming
conversion of the Debenture and the exercise of the underlying and
pre-existing warrants, Mr. Iacono would own and/or control,
directly and indirectly, 10,366,200 common shares, representing
31.61% of the issued and outstanding common shares of the Issuer on
a partially diluted basis. As referenced above, Mr. Iacono has
undertaken not to convert Debentures if such conversion would
result in him owning 20% or more of the voting securities of the
Company, unless and until shareholder approval (excluding his
votes) has been received.
The Issuer has been advised that Mr. Iacono acquired the
Debenture for investment purposes and may in the future acquire or
dispose of securities of the Issuer, through the market, privately
or otherwise, as circumstances or market conditions warrant. A copy
of the Early Warning Report filed by Mr. Iacono may be obtained
from the Issuer's SEDAR profile.
About CruzSur Energy Corp.
CruzSur is investing in proven leadership and technology to
develop oil and natural gas fields it has acquired in areas
surrounding some of the key energy producing areas in Colombia and Argentina. With decades of proven experience
in Latin America and global energy
development, CruzSur's leadership is working with local partners
and service providers to deliver the energy for Latin America's future.
Forward-Looking Information
Except for the statements of historical fact, this news
release contains "forward-looking information" within the meaning
of the applicable Canadian securities legislation that is based on
expectations, estimates and projections as at the date of this news
release. The information in this news release about the completion
of the operations described herein, and other forward-looking
information includes but is not limited to information concerning
the intentions, plans and future actions of the parties to the
transactions described herein and the terms of such
transaction.
Factors that could cause actual results to differ materially
from those described in such forward-looking information include,
but are not limited to, risks related to the Company's inability to
perform the proposed operations.
The forward-looking information in this news release reflects
the current expectations, assumptions and/or beliefs of the Company
based on information currently available to the Company. In
connection with the forward-looking information contained in this
news release, the Company has made assumptions about the Company's
ability to complete the planned operations and activities. The
Company has also assumed that no significant events will occur
outside of the Company's normal course of business. Although the
Company believes that the assumptions inherent in the
forward-looking information are reasonable, forward-looking
information is not a guarantee of future performance and
accordingly undue reliance should not be put on such information
due to the inherent uncertainty therein.
Any forward-looking information speaks only as of the date on
which it is made and, except as may be required by applicable
securities laws, the Company disclaims any intent or obligation to
update any forward-looking information, whether as a result of new
information, future events or results or otherwise.
Neither the TSX Venture Exchange nor its Regulation
Services Provider (as that term is defined in policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
SOURCE CruzSur Energy Corp.