Treasury and Secondary Offering of Common Shares

STORAGEVAULT CANADA INC.

TREASURY AND SECONDARY OFFERING OF COMMON SHARES

JUNE 28, 2017

A preliminary short form prospectus containing important information relating to the securities described in this document has not yet been filed with the securities regulatory authorities in each of the provinces of Canada, other than the province of Quebec. A copy of the preliminary short form prospectus is required to be delivered to any investor that received this document and expressed an interest in acquiring the securities.

There will not be any sale or any acceptance of an offer to buy the securities until a receipt for the final short form prospectus has been issued.

This document does not provide full disclosure of all material facts relating to the securities offered. Investors should read the preliminary short form prospectus, final short form prospectus and any amendment, for disclosure of those facts, especially risk factors relating to the securities offered, before making an investment decision.

Issuer: / StorageVault Canada Inc. (“SVI” or the “Company”).
Selling Shareholders: / SaskWorks Venture Fund Inc. and APEX II Investment Fund Limited Partnership (together, the “Selling Shareholders”), each of which are managed by PFM Capital Inc. through its related entities PFM Venture Capital Operations Inc. and PFM Fund Operations Inc. (collectively, “PFM Capital”).
Issue: / 50,944,000 common shares in the capital of the Company (the “Shares”), consisting of a treasury offering (the “Treasury Offering”) by the Company of 32,076,000 Shares (the “Treasury Shares”) and a secondary offering (the “Secondary Offering”), and together with the Treasury Offering, the “Offering”) by the Selling Shareholders of 18,868,000 Shares (the “Secondary Shares”).
Issue Price: / $2.65 per Common Share.
Issue Size: / $135,001,600 comprised of $85,001,400 of Treasury Shares and $50,000,200 Secondary Shares (assuming no exercise of the Over-Allotment Option)
Over-Allotment
Option: / The Company and SaskWorks Venture Fund Inc. (“SaskWorks”) have granted the underwriters of the Offering (the “Underwriters”) an option (the “Over-Allotment Option”), exercisable in whole or in part at the Underwriters’ sole discretion at any time until 30 days following the closing of the Offering, to purchase up to that number of additional common shares as is equal to 15% of the aggregate number of Shares purchased in the Offering to cover over-allotments, if any, and for market stabilization purposes. If the Over-Allotment Option is exercised in full, the Underwriters will purchase an additional 7,641,600 Shares from the Company and Saskworks for gross proceeds of $20,250,240, provided that, prior to filing the preliminary short form prospectus, the Company and SaskWorks may allocate the additional Shares that may be sold under the Over-Allotment Option among the Company and SaskWorks as the Company and SaskWorks determine.
Use of Proceeds: / Net proceeds from the Offering will be used to pay down debt outstanding under current credit facilities, to fund previously announced and future acquisitions, and for general and corporate purposes.
The Company will not receive any proceeds from the Secondary Offering.
Retained Interest: / The Secondary Shares are offered for sale by the Selling Shareholders as part of PFM Capital’s ordinary portfolio management function in reducing investment concentrations in any one investee. Following the closing of the Offering, SaskWorks Venture Fund Inc. will continue to own 23,802,719 common shares of the Company along with warrants to purchase 2,177,998 common shares of the Company and Apex II Investment Fund Limited Partnership will own no common shares of the Company but will retain warrants to purchase 322,002 common shares of the Company.
Dividend: / Cash dividends are payable on a quarterly basis to shareholders. The first dividend that purchasers of the Shares offered hereunder will be entitled to receive is the dividend expected to be paid on October 16, 2017 to shareholders of record on or about September 29, 2017.
Form of Offering: / Public offering, eligible for sale in all provinces of Canada, other than Quebec, pursuant to a short form prospectus and, if in the Underwriters’ reasonable opinion in order to ensure a fully subscribed offering, into the United States under 144A and/or other applicable private placement exemptions, or in such manner so as to not require registration under the U.S. Securities Act of 1933.
Form of Underwriting: / Bought deal, subject to syndication, an underwriting agreement containing “disaster out”, “regulatory out”, and “material adverse change out” clauses running until closing of the Offering.
Listing: / Subject to the receipt of all necessary approvals, the Shares will be listed on the TSX Venture Exchange under the symbol “SVI”.
Eligibility: / Eligible under the usual statutes and for RRSPs, RRIFs, RESPs, DPSPs and TFSAs.
Lead Underwriter: / National Bank Financial Inc. and GMP Securities L.P.
President’s List: / An allotment of up to 8.7% of the Offering (including the Over-Allotment Option, if exercised).
Commission: / 4.00% of the total Offering amount (including the Over-Allotment Option amount), with the exception of the President’s List, for which a commission of 3.0% will be paid. Sales to purchasers on the President’s list will be allocated on proportionate basis to the Treasury Shares and the Secondary Shares.
Closing Date: / July 19, 2017.