NISKU, AB, Dec.10, 2018 /CNW/ - Hyduke Energy Services Inc. ("Hyduke" or the "Company") (HYD – TSX) wishes to report on the following matters:
Toronto Stock Exchange ("TSX") Listing Review
On December 6, 2018, Hyduke received notice from the TSX that it is reviewing the eligibility for listing on the TSX of Hyduke's securities, pursuant to Part VII of the TSX Company Manual (the "Manual"). The Company is being reviewed under the Remedial Review Process and has been granted 120 days to comply with all requirements for continued listing. If the Company cannot demonstrate that it meets all TSX requirements set out in Part VII of the Manual on or before April 5, 2019, the Company's securities will be delisted 30 days from such date.
TerraNova Partners Loan and Issuance of Warrants
TerraNova Partners III LP ("TerraNova") has provided a demand secured loan to Hyduke in the amount of CDN$350,000, with 10% interest, payable monthly. In connection with the loan, and subject to approval by the TSX, TerraNova will be granted 2,920,000 share purchase warrants ("Warrants"). Each Warrant will entitle TerraNova to purchase one common share ("Common Share") of Hyduke at an exercise price of CDN $0.06/Common Share and will expire 36 months from the date the loan is repaid.
The aggregate number of Common Shares held by TerraNova, TerraNova Partners LP and Vortex Enterprises Corp., companies which are all controlled by Vahan Kololian, a Director of Hyduke, remained unchanged at a combined total of 6,638,235 Common Shares, representing 9.496% of the Company's issued and outstanding Common Shares, before giving effect to any outstanding warrants, and 13.125% of the Company's issued and outstanding Common Shares assuming the exercise in full by TerraNova of its Warrants. It is noted that Mr. Kololian declared his interest, recused himself from any discussions and negotiations and abstained from voting on this transaction in his capacity as a Director of the Company.
Additional Update on Strategic Initiatives
Further to its press release dated December 5, 2018, Hyduke continues to extensively pursue several strategic initiatives in an effort to stabilize the Company and improve the Company's outlook.
The Company has recently listed for sale its head office building (including the manufacturing facility) located in Nisku, AB. If sold, the proceeds will be used to pay off all remaining creditors. The Company intends, beginning in Q1 2019, to restructure its business operations into a cash flow positive operation with a focus on fewer existing operating divisions and diversify its client and service bases beyond the oilfield and into new industries, such as infrastructure, agriculture, forestry and equipment rental and diversify geographically, into the United States.
This news release contains forward-looking information relating to the Company's eligibility for continued listing on the TSX, the anticipated closing of a loan agreement and issuance of warrants to a related party, subject to TSX approval, selling a building and land, diversifying its client, services and geographic bases and being cash flow positive. The use of any of the words "will", "continue" and similar expressions are intended to identify forward-looking statements. Various assumptions were used in drawing the conclusions or making the projections contained in the forward-looking statements throughout this document.
The forward-looking statements included in this document are not guarantees of future performance and should not be unduly relied upon. Forward-looking statements are based on current expectations, estimates and projections that involve a number of factors and risks, which could cause actual results to differ materially from those anticipated and described in the forward-looking statements. These factors and risks include, but are not limited to:
- the ability of the Company to identify strategic alternatives;
- the demand for the Company's services;
- volatility in commodity prices, in particular for oil and natural gas; and
- general economic conditions including the capital and credit markets.
The Company cautions that the foregoing list of assumptions, risks and uncertainties is not exhaustive. The forward-looking statements contained in this press release speak only as of the date of this press release. As a result, you are cautioned not to place undue reliance on this forward-looking information. For a full discussion of the Company's material risk factors, see Hyduke's annual information form for the year ended December 31, 2017, under the heading "Risk Factors" which is accessible through the SEDAR website (www.sedar.com).
While the Company may elect to, the Company is under no obligation and does not undertake to update this information at any particular time, except as required by law.
Trading on the TSX under the symbol "HYD," Hyduke Energy Services Inc. is a supplier of equipment and services to the oil and gas drilling and well servicing industry.
SOURCE Hyduke Energy Services Inc.
For further information: Pat Ross, President and CEO, Tel (780) 955-0355 or Nick Cristiano, CFO, Tel (780) 955-0355