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VANCOUVER, May 30, 2018 /CNW/ - Avanco Capital Corp. (TSX-V:
AAA.P) ("Avanco") and Hill Street Marketing Inc. ("Hill
Street") are pleased to announce that further to Avanco's press
release dated September 25, 2017, the TSX Venture Exchange
(the "Exchange") has granted its conditional approval to the
completion of the proposed qualifying transaction ("Qualifying
Transaction") of Avanco and Hill Street, and Avanco has filed a
filing statement dated May 29, 2018
(the "Filing Statement") respecting the Qualifying
Transaction on SEDAR.
Qualifying
Transaction
The Qualifying Transaction is structured as a three-cornered
amalgamation, whereby each of Avanco, Hill Street and Avanco's
wholly owned subsidiary, Avanco Hill Street Acquisition Corp.
("Avanco Sub"), are parties to a definitive merger agreement
(the "Definitive Agreement") dated May 28, 2018. Pursuant to the Definitive
Agreement, Avanco Sub and Hill Street will amalgamate under the
terms of the Business Corporations Act (Ontario), and on amalgamation, Avanco will
issue shares and other securities to the former securityholders of
Avanco Sub and Hill Street.
Following completion of the Qualifying Transaction, the former
securityholders of Hill Street will control approximately 37% of
the issued and outstanding shares of Avanco (assuming the maximum
$5,000,000 is raised in the
Concurrent Financing (as defined below)). Upon closing of the
Qualifying Transaction, the amalgamated
entity will be a wholly owned
subsidiary of Avanco, and Avanco will be renamed "Hill
Street Beverage Company", or such other name as may be agreed to by
the board of directors of Avanco and approved by the TSX Venture
Exchange (the "Resulting Issuer").
It is expected that the common shares of the Resulting Issuer
will resume trading on the Exchange upon completion of the
Qualifying Transaction under the symbol "BEER.V".
Concurrent Financing
Concurrent with the closing of the Qualifying Transaction,
Avanco and Avanco Sub intend to complete a brokered private
placement (the "Concurrent Financing") of up to an aggregate
28,571,429 subscription receipts (the "Subscription
Receipts") at a subscription price of $0.175 per Subscription Receipt for aggregate
gross proceeds up to a maximum of $5,000,000, subject to an overallotment option in
favour of the Agent (as defined below). Each Subscription Receipt
is, upon completion of the Qualifying Transaction, convertible into
one unit of the Resulting Issuer ("Resulting Issuer
Units"), with each Resulting
Issuer Unit being comprised of
one common share of the Resulting Issuer (each, a "Resulting
Issuer Share") and one half of one warrant of the Resulting Issuer
(each, a "Resulting Issuer Concurrent Financing Warrant"), with
each Resulting Issuer Concurrent Financing Warrant
exchangeable for one Resulting Issuer Share at a purchase
price of $0.35 per share for a period
of 24 months from the date of issuance. Eight Capital will act as
lead agent and solebook runner in connection with
the Concurrent Financing (the "Agent").
The gross proceeds of the Concurrent Financing, net of 50% of
the Cash Commission (as defined below) and the
reasonable costs and expenses of
the Agent and their counsel
(the "Net Escrowed Funds"), will
be deposited in escrow with an
escrow agent ("the Concurrent Financing
Escrow Agent") on closing of the Concurrent Financing. The Net
Escrowed Funds will be released from escrow immediately prior to
the closing of the Qualifying Transaction and the Agent's sole
satisfaction of the following conditions (the "Escrow Release
Conditions"):
I.
the completion or irrevocable waiver or satisfaction of all
conditions precedent to the Qualifying Transaction;
II. the receipt of
all required shareholder, third party
(as applicable) and regulatory approvals
including, without limitation, the conditional approval of the
Exchange for the Qualifying Transaction and the Concurrent
Financing, if applicable, and the conditional approval of the
Exchange of the listing of the common shares issuable upon
conversion of the Subscription Receipts after giving effect to the
Qualifying Transaction; and
III.
Avanco, Avanco Sub and the Agent (on its own behalf and on behalf
of the syndicate) having delivered a joint notice to the Concurrent
Financing Escrow Agent confirming that the conditions set
forth in (I) and (II) above have been met or waived.
In the event that the Escrow Release Conditions are not
satisfied on or before the date that is 120 days following closing
of the Concurrent Financing (the "Termination Time"),
the Net Escrowed Funds together with accrued interest earned
thereon will be returned to the holders of the Subscription
Receipts and the Subscription Receipts will be cancelled. To the
extent that the Escrowed Funds are insufficient to refund 100% of
the purchase price of the Subscription Receipts to the holders
thereof, Hill Street and Avanco shall be responsible for any
shortfall.
At the effective time of the completion of the Qualifying
Transaction, the Subscription Receipts will be converted to
Resulting Issuer Units without payment of any additional
consideration or any further action on the part of the holder
thereof.
In connection with the Concurrent Financing, the Agent is
entitled to receive a cash commission equal to 7%
of the gross proceeds raised
under the Concurrent Financing (the
"Cash Commission"). In addition, the Agent is entitled to
receive broker warrants to purchase up to 7% of the
Subscription Receipts sold under the
Concurrent Financing (each, a "Broker
Warrant"), with each Broker Warrant being exercisable for one
Resulting Issuer Unit at a price of $0.175 per Resulting Issuer Unit for a period of
two years from the closing of the Qualifying Transaction.
The Qualifying Transaction is expected to close on or about
June 15, 2018. The completion of the
Qualifying Transaction remains subject to final approval from the
Exchange and satisfaction of certain conditions to closing.
There can be no assurance that the Qualifying Transaction
will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the
Filing Statement, any information released or received with respect
to the transaction may not be accurate or complete and should
not be relied upon. Trading in the securities of
a capital pool company should be considered highly
speculative.
The TSX Venture Exchange has in no way passed on the merits
of the proposed transaction and has neither approved or disapproved
the contents of this press release.
Neither TSX Venture Exchange 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.
FORWARD LOOKING INFORMATION
This press release contains forward-looking statements and
information that are based on the beliefs of management and reflect
the Issuer's current expectations. When used in this press
release, the words "estimate", "project", "belief", "anticipate",
"intend", "expect", "plan", "predict", "may" or "should" and the
negative of these words or such variations thereon or comparable
terminology are intended to identify forward-looking statements and
information. The forward-looking statements and information
in this press release includes information relating to the
acquisition (including the structure of the acquisition), the
Qualifying Transaction (including shareholder approval, principal
shareholder support, and other terms such as the continuation, the
name change, and the completion or termination), the Concurrent
Offering, the principal owner, and the directors and management of
the Resulting Issuer upon completion of the Qualifying
Transaction. Such statements and information reflect
the current view of Avanco with respect to risks and uncertainties
that may cause actual results to differ materially from those
contemplated in those forward-looking statements and
information.
By their nature, forward-looking statements involve known and
unknown risks, uncertainties and other factors which may cause our
actual results, performance or achievements, or other future
events, to be materially different from any future results,
performance or achievements expressed or implied by such
forward-looking statements. Such factors include, among
others, the following risks: risks associated with the completion
of the Qualifying Transaction and matters relating thereto and the
risks associated with the marketing and sale of securities, the
need for additional financing, reliance on key personnel, the
potential for conflicts of interest among certain officers or
directors with certain other projects, and the volatility of
Avanco's common share price and volume. Forward-looking
statements are made based on management's beliefs, estimates and
opinions on the date that statements are made and Avanco undertakes
no obligation to update forward-looking statements if these
beliefs, estimates and opinions or other circumstances should
change. Investors are cautioned against attributing undue
certainty to forward-looking statements.
Avanco cautions that the foregoing list of material factors is
not exhaustive. When relying on Avanco's forward-looking
statements and information to make decisions, investors and others
should carefully consider the foregoing factors and other
uncertainties and potential events. The Issuer has assumed a
certain progression, which may not be realized. It has also
assumed that the material factors referred to in the previous
paragraph will not cause such forward-looking statements and
information to differ materially from actual results or
events. However, the list of these factors is not
exhaustive and is subject to change and there can be no assurance
that such assumptions will reflect the actual outcome of such items
or factors. While Avanco may elect to, it does not undertake
to update this information at any particular time.
THE FORWARD-LOOKING INFORMATION
CONTAINED IN THIS
PRESS RELEASE REPRESENTS THE
EXPECTATIONS OF THE ISSUER AS OF THE DATE OF THIS PRESS RELEASE
AND, ACCORDINGLY, IS SUBJECT TO CHANGE AFTER SUCH DATE.
READERS SHOULD NOT PLACE UNDUE IMPORTANCE ON FORWARD- LOOKING
INFORMATION AND SHOULD NOT RELY UPON THIS INFORMATION AS OF ANY
OTHER DATE. WHILE AVANCO MAY ELECT TO, IT DOES NOT UNDERTAKE TO
UPDATE THIS INFORMATION AT ANY PARTICULAR TIME EXCEPT AS REQUIRED
IN ACCORDANCE WITH APPLICABLE LAWS.
SOURCE Hill Street Marketing Inc.