/NOT FOR DISTRIBUTION TO U.S. NEWS WIRE
SERVICES OR FOR DISSEMINATION IN THE
UNITED STATES/
KELOWNA, BC, April 20, 2016 /CNW/ - Mr. Burkhard Franz, President and Chief Executive
Officer of Georox Resources Inc. ("Georox" or the
"Corporation") (GXR: TSX-V; OF6A:FRA) wishes to announce
several developments with respect to the Corporation's financial
affairs.
Share Consolidation
On April 30, 2015, the
shareholders of Georox approved a special resolution authorizing
(if and when the board of directors of the Corporation deemed it
appropriate to do so, but in any event such authorization to be
valid only until the next annual shareholders meeting, and subject
to TSX Venture ("TSX-V") approval) a share consolidation of
Georox's outstanding common shares ("Common Shares") at a
share consolidation ratio of one (1) post-consolidation Common
Share for every three (3) pre-consolidation Common Shares (the
"Consolidation").
On April 19, 2016, the Georox
board of directors resolved to effect the Consolidation, subject to
TSX-V approval. The Georox board resolved to proceed with the
Consolidation after considering the best interests of the
Corporation and its shareholders.
Georox currently has 45,826,687 Common Shares issued and
outstanding. After giving effect to the Consolidation, but before
consideration of the proposed private placement discussed below,
Georox will have 15,275,562 Common Shares outstanding on a basic
basis.
Once implemented, the Consolidation will not change the par
value per share of the Common Shares or the Corporation's
authorized share capital and each shareholder will hold the same
percentage of Common Shares outstanding immediately after the
Consolidation as such shareholder held immediately prior to such
event.
Promptly after the date of filing articles of amendment to
effect the Consolidation, the Corporation will give written notice
thereof to all registered shareholders and will provide them with a
form of a letter of transmittal to be used for the purpose of
surrendering their certificates representing the currently
outstanding Common Shares to the Corporation's registrar and
transfer agent in exchange for new share certificates representing
whole post-Consolidation Common Shares. After the Consolidation,
current issued share certificates representing pre-Consolidation
Common Shares will: (a) constitute good delivery for the purposes
of trades of post-Consolidation Common Shares; and (b) be deemed
for all purposes to represent the number of post-Consolidation
Common Shares to which the shareholder is entitled as a result of
the Consolidation. No delivery of a new share certificate to a
shareholder will be made until the shareholder has surrendered his,
her or its current issued share certificates. Following
Consolidation, the Common Shares will have a new ISIN or CUSIP
number.
The Corporation's name will not be changed in conjunction with
the Consolidation.
Non-Brokered Private Placement
Georox is also seeking to raise up to $700,000 in a non-brokered private placement
("Private Placement").
Under the proposed terms of the Private Placement, and subject
to TSX-V approval, the Corporation will issue, on a
post-Consolidation basis, up to 11,666,667 units at a price of
$0.06 per unit for gross cash
proceeds of approximately $700,000
the ("Offering").
Each unit will consist of one (1) Common Share and one (1)
Common Share purchase warrant. Each whole warrant will entitle the
holder to acquire one (1) Common Share at a price of $0.12 for a period to and including April 30, 2018. The Offering will be completed in
one or more tranches and the securities under the Offering will
have a hold period of four (4) months from the applicable closing
date of each tranche. Closing of the Offering is not subject to a
minimum aggregate subscription amount but shall be subject to
receipt of all required regulatory approvals, including the TSX
Venture Exchange.
The Corporation may pay finders' fees to eligible persons
consisting of cash of up to 10% of the proceeds from the units sold
to investors introduced by and attributable to the efforts of the
finders, or 10% per cent of the number of units issued in
connection with such investor subscriptions under the Offering.
After giving effect to the maximum Offering, Georox will have
26,942,229 Common Shares outstanding on a basic basis. Any
participation by insiders of the Corporation in the Offering will
be on the same terms as the arm's length investors. The Corporation
has no reason to believe that the Private Placement will result in
a change of control of the Corporation.
The Offering is expected to be completed within thirty days.
The Private Placement proceeds will be used for current general
payables, general corporate purposes and expenditures related to
the optimization of production in its Red Earth Property.
Addition to the Georox Board of Directors
Upon closing on at least $100,000
in gross proceeds under the Private Placement, Mr. Mansoor Anjum will be appointed to the Georox
board of directors subject to TSX - V approval. Mr. Anjum is a
business executive with 25 years experience in business development
and financial management in the oil and gas industry. Mr. Anjum has
worked in both the upstream and downstream sectors of the industry
and has significant experience in valuing new acquisitions and
identifying growth opportunities for the companies.
Mr. Anjum is currently President, the owner and director of
Gressenhall Enterprise Ltd., a private company involved in retail
of household furniture and appliances. He was formerly President of
Nebula Energy Ltd., a private oil and gas consulting company, and
was President and CEO of Java Capital Inc., a TSX-V-listed company,
CEO of Meteor Marketing Inc., USA,
a petroleum products distributor with yearly revenues of over
$50 million. Mr. Anjum holds an MBA
degree from the University of Toronto
with a focus in strategy and finance and M.Sc. (mathematics) from
the University of Punjab.
About Georox
The Corporation currently produces approximately 140 boepd of
which 75% is light oil, 24% is heavy oil and 1% is gas.
Production volumes are commonly expressed on a barrel of oil
equivalent ("BOE") basis whereby natural gas volumes are converted
at a ratio of six thousand cubic feet to one barrel of oil. The
intention is to convert oil and natural gas measurement units into
one basis for improved analysis of results and comparisons with
other industry participants. The term BOE may be misleading,
particularly if used in isolation. The conversion ratio is
based on an energy equivalent method and does not represent an
economic value equivalency at the wellhead.
FORWARD-LOOKING STATEMENTS
This news release contains forward-looking statements relating
to the future operations of the Corporation and other statements
that are not historical facts. Forward-looking statements are often
identified by terms such as "will", "may", "should", "anticipate",
"expects" and similar expressions. All statements other than
statements of historical fact, included in this release, including,
without limitation, statements regarding future plans and
objectives of the Corporation, are forward looking statements that
involve risks and uncertainties. There can be no assurance
that such statements will prove to be accurate and actual results
and future events could differ materially from those anticipated in
such statements. More particularly, it contains forward-looking
statements concerning: (i) the completion and potential benefits of
the Consolidation; (ii) the timing and completion of the Offering
and the use of proceeds from the Private Placement; and (iii) the
potential appointment of a new director to Georox's board of
directors.
This news release does not constitute an offer to sell or a
solicitation of an offer to buy any of the Units in the United States. The Units (or constituent
securities) have not been and will not be registered under the
United States Securities Act of 1933, as amended (the "U.S.
Securities Act") or any state securities laws and may not be
offered or sold within the United
States or to U.S. Persons unless registered under the U.S.
Securities Act and applicable state securities laws or an exemption
from such registration is available.
Neither the TSXV nor its Regulation Services Provider (as
that term is defined in the policies of the TSXV) accepts
responsibility for the adequacy or accuracy of this
release.
SOURCE Georox Resources Inc.