TORONTO, ONTARIO–(Marketwired – Nov. 28, 2016) – Xylitol Canada Inc. (TSX VENTURE:XYL) (“Xylitol”) is pleased to announce the completion of a secured convertible debenture financing (the “Financing“) in the principal amount of $477,000 and was completed as an additional tranche to the secured convertible debentures issued on July 29, 2016 and October 3, 2016 (the “Initial Financings“). The net proceeds of the Financing shall be used as working capital for Xylitol to increase their product sales within the North American natural foods market.
The Financing was completed on principally the same terms as the Initial Financings, and included the issuance of debentures (the “Debentures“) maturing four years from the effective closing date of November 28, 2016, and bearing interest at a rate equal to the greater of (a) an annual interest rate of 15% payable per annum (b) a pro rata royalty equal to 3% of net sales per annum, subject to an annualized combined effective interest of a maximum of 24%. The Debentures are convertible into common shares of Xylitol at a price per share equal to the lesser of (i) $0.10, and (ii) if converted within 12 months from the date issuance of the Debentures, the price set by Xylitol, on a per share basis, of an offering of equity securities on or after the date the Debentures are issued. Xylitol may redeem the Debentures at any time by repaying the principal amount of the Debenture then outstanding plus all accrued but unpaid interest thereon. The Financing also included the issuance of 4,770,000 common share purchase warrants (the “Warrants“), each such Warrant being exercisable for one common share of Xylitol for a period of 2 years and an exercise price of $0.08 per share. All Debentures and Warrants will be subject to a four month hold period from the date of issuance.
In connection with the Financing, Xylitol has paid $23,850 in finders’ fees and issued 238,500 finders’ warrants to Fountain Asset Corp., each such warrant being exercisable for one common share of Xylitol for a period of 2 years and an exercise price of $0.08 per share.
Xylitol also announces that it has released its financial and operating results for the three and nine months September 30, 2016.
Highlights of the results include:
| Three months ended September 30, 2016 | 2016 | 2015 | ||||
| Revenue | $ | 1,587,923 | $ | 2,428,349 | ||
| Gross Profit | $ | 320,981 | $ | 563,084 | ||
| Net Loss | $ | (604,571 | ) | $ | (562,345 | ) |
| Loss per share | $ | (0.006 | ) | $ | (0.007 | ) |
| Nine months ended September 30, 2016 | 2016 | 2015 | ||||
| Revenue | $ | 5,414,015 | $ | 6,774,743 | ||
| Gross Profit | $ | 964,915 | $ | 1,263,319 | ||
| Net Loss | $ | (2,718,678 | ) | $ | (2,412,108 | ) |
| Loss per share | $ | (0.029 | ) | $ | (0.026 | ) |
The full text of the Company’s interim consolidated financial statements and related management’s discussion and analysis (“MD&A”) can be found at: www.sedar.com.
About Xylitol Canada Inc.
Xylitol Canada operates two business units that address the growing xylose and xylitol markets. Xylitol Canada’s consumer packaged goods division is based in Denver Colorado and has grown from under $500,000 in revenue in 2010, to over $8,600,000 in 2014. Xylitol Canada operates a 50,000 square foot xylitol facility where it produces and packages a full catalog of natural sugar free products, most notably its natural sugar alternatives. Through this Denver based facility, the Company services major retail customers such as Loblaws, Whole Foods, Costco, Sprouts, and many others.
Xylitol Canada markets xylitol and xylitol based-products and is focused on becoming a major low-cost manufacturer of xylitol and related products, serving the global market from operations in North America. Xylitol Canada’s business strategy is to leverage novel proprietary technology and processes to become North America’s premier manufacturer of low cost, high quality xylitol from readily available environmentally-sustainable biomass. Xylitol is a natural sweetener which is marketed globally including Canada and the United States and is accepted by the American Food and Drug Administration, the World Health Organization and the American Dental Association. Xylitol contains 75% less carbohydrates and 40% less calories than sugar, has a myriad of oral health benefits including the prevention of tooth decay and is safe for diabetics. To date, wider spread use of xylitol has been limited by the lack of a reliable, low cost, high quality supplier.
Neither TSX Venture Exchange Inc. 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.
