FinCanna Capital Corp. (“
FinCanna”) and Astar
Minerals Ltd. (“
Astar”) (TSX.V:TAR) are pleased to
announce that the previously announced brokered private placement
(the “
Brokered Offering”) of subscription receipts
of FinCanna (the “
Subscription Receipts”) closed
on November 21, 2017. Pursuant to the Brokered Offering, FinCanna
issued 6,000,000 Subscription Receipts at a price of C$0.50 per
Subscription Receipt (the “
Issue Price”) for
aggregate gross proceeds of C$3,000,000. FinCanna is further
pleased to announce the concurrent closing of a non-brokered
private placement (the “
Non-Brokered Offering”,
and together with the Brokered Offering, the
“
Offerings”) of 6,373,580 Subscription Receipts at
the Issue Price for aggregate gross proceeds of C$3,186,790, for
total aggregate gross proceeds under the Offerings of C$6,186,790.
The Brokered Offering was led by Canaccord Genuity Corp. (the
“
Lead Agent”) and consisted of a consortium of
agents including the Lead Agent, Industrial Alliance Securities
Inc. and Sprott Capital Partners (collectively, the
“
Agents”).
Subscription Receipt
Offerings
Each Subscription Receipt issued pursuant to the
Offerings will be automatically converted, immediately before the
completion of the acquisition of FinCanna by Astar by way of a plan
of arrangement (the “Transaction”), as announced
on July 13, 2017, into a unit (a “Unit”) of
FinCanna, each Unit consisting of one common share of FinCanna (a
“Common Share”) and one-half of a common share
purchase warrant (each full warrant, a “Warrant”)
each Warrant being exercisable into a Common Share (a
“Warrant Share”), for a period of two years from
the earlier of the closing of the Transaction and December 31,
2017, at an exercise price of C$0.75 per Warrant Share, without
further payment or action on the part of the holder upon
satisfaction of the escrow release conditions, which include,
amongst other things, that all conditions precedent to the
completion of the Transaction, other than the release of the
escrowed funds raised pursuant to the Offerings, shall have been
satisfied to the satisfaction of the Agents or waived by the
Agents, including the receipt of all governmental, stock exchange
and shareholder approvals. Pursuant to the terms of the
Transaction, the Common Shares will be exchanged for common shares
of Astar, as the “Resulting Issuer” upon
completion of the Transaction, on a one for one basis and the
Resulting Issuer’s common shares shall be listed and posted for
trading on the Canadian Securities Exchange (the
“CSE”). Each Warrant will become exercisable to
acquire one common share of the Resulting Issuer at the exercise
price of C$0.75 per share.
In connection with the Brokered Offering, the
Agents received a cash commission equal to 7.0% of the gross
proceeds raised under the Brokered Offering. In addition, the Lead
Agent received a corporate finance fee of C$150,000, which was
satisfied by the issuance of 150,000 Common Shares at the Issue
Price and the payment of $75,000 in cash. FinCanna will also issue
to the Agents, upon satisfaction of the escrow release conditions,
agents’ warrants (the “Agents’ Warrants”) equal to
7.0% of the Subscription Receipts sold pursuant to the Brokered
Offering, with the Agents’ Warrants entitling the holder thereof to
purchase one Common Share at the Issue Price for a period of 12
months from the date of satisfaction of the escrow release
conditions.
The gross proceeds of the Brokered Offering,
less the Agent’s commissions, fees and expenses, and the
Non-Brokered Offering have been deposited in escrow and will be
released therefrom to FinCanna immediately prior to the effective
time of the Transaction, upon satisfaction of certain escrow
release conditions. Should the escrow release conditions not be
satisfied by December 31, 2017, the escrowed funds, together with
accrued interest earned thereon shall be returned to the holders of
the Subscription Receipts and the Subscription Receipts shall be
cancelled.
The Resulting Issuer intends to use the net
proceeds of the Offerings for financing the development of the
medical cannabis facility in Coachella, California as well as to
pursue new potential investment opportunities in the medical
cannabis industry and for working capital and general corporate
purposes.
Debenture Offering
FinCanna is further pleased to announce that the
previously announced non-brokered private placement of unsecured
convertible debentures (a “Debenture”) closed on
November 4, 2017 (the “Debenture Offering”) for a
principal amount of C$945,443 in the aggregate, and for total
aggregate gross proceeds under the Debenture Offering and the
Offerings totalling C$7,132,233.
Each Debenture issued pursuant to the Debenture
Offering is convertible into a unit of FinCanna (a
“Debenture Unit”) at a conversion
price of C$0.50 per Debenture Unit, at any time at the option of
the holder of such Debenture prior to the one year anniversary of
the issuance of the Debenture (the “Maturity
Date”), or automatically immediately prior to the closing
of the Transaction. Each Debenture bears no interest. Each
Debenture Unit consists of one Common Share and one-half of one
Warrant. Each Warrant will become exercisable to acquire one common
share of the Resulting Issuer at the exercise price of C$0.75
share.
FinCanna intends to use the net proceeds of the
Debenture Offering for facilitating FinCanna’s ability to
immediately capitalize on additional investment opportunities
within the cannabis sector and to assist in closing of the
Transaction and for working capital and general corporate
purposes.
General
Astar is a reporting issuer in the Provinces of
British Columbia, Ontario and Alberta and its common shares are
currently listed on the TSX Venture Exchange under the symbol
TAR.
All of the Subscription Receipts sold pursuant
to the Offerings are subject to a four month hold period, which
will expire four months and a day after the date FinCanna becomes a
reporting issuer in any province or territory of Canada. Upon
completion of the Transaction, the Common Shares and Warrants
issued upon conversion of the Subscription Receipts will be free
trading and not subject to any hold period.
All of the securities sold pursuant to the
Debenture Offering are subject to a four month hold period, which
will expire four months and a day after the date FinCanna becomes a
reporting issuer in any province or territory of Canada. Upon
completion of the Transaction, the Common Shares and Warrants
issued upon conversion of the Debenture Offering will be free
trading and not subject to any hold period.
About FinCanna Capital
Corp.
FinCanna is a royalty company for licensed
medical cannabis, with a focus on California. FinCanna, led by a
team of finance and industry experts is building its portfolio of
investments in scalable, best-in-class projects. FinCanna’s
flagship investment is with Cultivation Technologies Inc. (“CTI”)
to provide funding for its fully-entitled, large-scale indoor
medical cannabis facility to be developed in Coachella, Southern
California. This Coachella Campus will be a state-of-the-art
facility that will include cultivation, extraction, manufacturing,
testing and distribution. For additional information visit
www.fincannacapital.com
FinCanna Capital Corp. Andriyko Herchak,
CEO & Directoraherchak@fincannacapital.com
Astar Minerals Ltd. Stephen
Stanley, CEO & Director
Investor Relations: Caleb Jeffries Kin
Communications 1-866-684-6730 CALI@kincommunications.com
Neither the TSX Venture Exchange or the CSE in
any way passed upon the merits of the Debenture Offering and the
Offerings, the Transaction or the listing of the common shares of
the Resulting Issuer (the “Resulting Issuer Shares”), and has
neither approved nor disapproved the contents of this news release.
Approval of the CSE for the listing of the Resulting Issuer Shares
will be subject to, among other things, the Resulting Issuer
satisfying the listing requirements of the CSE. There can be no
assurance that the approval of the CSE regarding the listing of the
Resulting Issuer Shares will be obtained.
This news release does not constitute an offer
to sell or a solicitation of an offer to sell any of the securities
in the United States. The securities have not been and will not be
registered under the United States Securities Act of 1933, as
amended (the “U.S. Securities Act”) or any state securities laws
and may not be offered or sold within the United States or to U.S.
Persons unless registered under the U.S. Securities Act and
applicable state securities laws or an exemption from such
registration is available.
All information contained in this news release
with respect to Astar and FinCanna was supplied by the parties,
respectively, for inclusion herein, and each parties’ directors and
officers have relied on the other party for any information
concerning such party.
Forward-Looking Information
This news release contains forward-looking
information based on current expectations. Statements about, among
other things, the closing of the Transaction, expected terms and
conditions of the Transaction, future developments and the business
and operations of the Resulting Issuer, the use of proceeds of the
Debenture Offering and the Offerings and listing on the CSE are all
forward-looking information. These statements should not be read as
guarantees of future performance or results. Such statements
involve known and unknown risks, uncertainties and other factors
that may cause actual results, performance or achievements to be
materially different from those implied by such statements. Such
factors include, but are not limited to: the parties’ ability to
satisfy various closing conditions of the Transaction, including
receipt of all regulatory and shareholder approvals. Although such
statements are based on management’s reasonable assumptions at the
date such statements are made, there can be no assurance that the
Transaction will occur or that, if the Transaction does occur, that
it will be completed on the terms described above and that such
forward-looking information will prove to be accurate, as actual
results and future events could differ materially from those
anticipated in such forward-looking information. Accordingly,
readers should not place undue reliance on the forward-looking
information. Astar and FinCanna assume no responsibility to update
or revise forward-looking information to reflect new events or
circumstances unless required by applicable law.