BURLINGTON, ON, May 8, 2020 /CNW/ - EcoSynthetix Inc. (TSX:ECO) ("EcoSynthetix" or the "Company"), a renewable chemicals company that produces a portfolio of commercially proven bio-based products, announced today that it intends to make a normal course issuer bid (the "Bid") to repurchase, through the facilities of the Toronto Stock Exchange ("TSX") or alternative Canadian trading systems certain of its outstanding common shares ("Shares").
The number of Shares to be purchased during the period of the Bid from May 13, 2020 to May 12, 2021 will not exceed 4,593,420 Shares being approximately 10% of the outstanding shares as of May 7, 2020, other than the Shares held by directors, senior officers and principal security holders. The actual number of Shares which may be purchased pursuant to the Bid and the timing of any such purchases will be determined by the management of EcoSynthetix. As at May 7, 2020 there were 57,096,713 Shares issued and outstanding. Pursuant to the terms of the Bid, EcoSynthetix will not acquire on any given trading day more than 25% of the average daily trading volume of Shares for the most recently completed six-month period, being 14,721 Shares, other than block purchase exceptions. All purchases made pursuant to the Bid will be made through the facilities of the TSX or alternative Canadian trading systems or by such other means as may be permitted by applicable Canadian securities laws and EcoSynthetix will cancel any such Shares purchased pursuant to the Bid.
The Bid has been authorized by the Board of Directors of EcoSynthetix to allow EcoSynthetix to purchase Shares if in the opinion of management the purchases can be made on terms which will enhance the value of the remaining outstanding Shares.
EcoSynthetix is undertaking the Bid because it believes that the market may undervalue the common shares of EcoSynthetix from time to time and that the common shares may trade in a price range which may not adequately reflect the value of such shares in relation to the business, assets and future prospects of EcoSynthetix from time to time.
Pursuant to the previous notice of intention to conduct a normal course issuer bid, under which the Company sought and received approval from the TSX to purchase up to 4,714,286 Common Shares, 1,568,568 Shares were purchased for the period from May 13, 2019 to May 7, 2020. Such Shares were purchased in open market transactions at the market price of the Shares at the time of acquisition. The volume weighted average price paid for such Shares was $2.24 per Share.
In connection with the Bid, the Company also announced that it has implemented an automatic securities purchase plan (the "Automatic Repurchase Plan") with its designated broker in order to facilitate the purchases of its Shares under the Bid. Under the Automatic Repurchase Plan, the Company's designated broker may purchase Shares pursuant to the NCIB at times when the Company ordinarily would not be active in the market due to regulatory restrictions or self-imposed blackout periods. Purchases made pursuant to the Automatic Repurchase Plan, if any, will be made by the Company's designated broker based upon the parameters prescribed by the TSX, applicable Canadian securities laws and the terms of the written agreement between the Company and its designated broker. The Automatic Repurchase Plan constitutes an "automatic plan" for the purposes of applicable Canadian securities legislation and has been pre-cleared by the TSX.
The Automatic Repurchase Plan will be effective as of May 13, 2020.
About EcoSynthetix Inc. (www.ecosynthetix.com)
EcoSynthetix offers a range of sustainable engineered biopolymers that allow customers to reduce their use of harmful materials, such as formaldehyde and styrene-based chemicals. The Company's flagship products, DuraBind™ and EcoSphere®, are used to manufacture wood composites, paper and packaging, and enable performance improvements, economic benefits and sustainability. The Company is publicly traded on the Toronto Stock Exchange (T:ECO).
Certain statements in this Press Release constitute "forward-looking" statements that involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance, objectives or achievements of the Company, or industry results, to be materially different from any future results, performance, objectives or achievements expressed or implied by such forward looking statements. The forward-looking statements in this Press Release include, but are not limited to, statements regarding the number of Shares to be purchased under the Bid, if any, and the timing of any such purchases, the Company's plans to execute its commercial strategy, convert late-stage industrial trial prospects into customers and expand the number of lines and the volumes at existing customers, and other statements regarding the Company's plans and expectations in 2020. These statements reflect our current views regarding future events and operating performance and are based on information currently available to us, and speak only as of the date of this Press Release. These forward-looking statements involve a number of risks, uncertainties and assumptions and should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such performance or results will be achieved. Those assumptions and risks include, but are not limited to, the Company's ability to successfully allocate capital as needed and to develop new products, as well as the fact that our results of operations and business outlook are subject to significant risk, volatility and uncertainty. Many factors could cause our actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including the factors identified in the "Risk Factors" section of the Company's Annual Information Form dated March 2, 2020. In addition to the risk factors identified in the Company's Annual Information Form, as of the date of this Press Release, the Company has identified additional risks associated with the COVID-19 global pandemic which are described below.
Beginning in December 2019, a new strain of the coronavirus (COVID-19) has spread rapidly through the world including the United States, Asia, Canada and Europe (where, collectively, fairly large portions of the Company's operations and customers are located). For the period ended March 31, 2020, COVID-19 has not caused significant disruption in the Company's business and operating results, however, for the remainder of 2020, COVID-19 will likely continue to have negative material impacts on the global economy which present significant additional risk factors. For the Company, this outbreak might materially impact the Company's ability to manufacture, source (including the delivery of raw materials to its facilities) or distribute its products both domestically and internationally; reduce its ability to effectively market and sell its products; reduce demand for its products; cause a significant decrease in the market price for petroleum-related feedstocks which the Company's products are an alternative, and cause increased credit risk. Any of these additional risks factors could have a significant negative impact on the Company's financial results in 2020 and beyond. Given the dynamic nature of this outbreak, the extent to which the COVID-19 virus impacts the Company's results will depend on future developments, which remain highly uncertain and cannot be accurately predicted at this time.
Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results may vary materially from those described in this Press Release as intended, planned, anticipated, believed, estimated or expected. Unless required by applicable securities law, we do not intend and do not assume any obligation to update these forward-looking statements
SOURCE EcoSynthetix Inc.
For further information: Investor Relations: Ross Marshall, Phone: (416) 526-1563, E-mail: [email protected]