- A non-brokered private placement of subscription receipts (the “Non-Brokered Subscription Receipts”) for gross proceeds of a minimum of $8,000,000. Each Non-Brokered Subscription Receipt will be sold at a price of $1.15 per Non-Brokered Subscription Receipt (the “Offering Price”) and will be exchanged for a unit of the Company (a “Unit”). Each Unit will consist of one common share of the Company (a “Common Share”) and one-half of one common share purchase warrant of the Company (each whole warrant being a “Warrant”). Each Warrant is exercisable into one Common Share (the “Warrant Shares”) at the exercise price of $1.75 per share for a period of 3 years from the closing date of the Qualifying Transaction (the “Closing Date”). It is intended that the Warrants will be transferable and will be subject to acceleration in the event that the volume weighted average price of the Common Shares is equal to or greater than $3.00 over a period of ten consecutive days. The Warrant Shares will be subject to a twelve-month contractual escrow period from the Closing Date (the “Non-Brokered Placement”). Subject to certain approvals, the Company intends to obtain a listing for trading of the Warrants on the Exchange;
- A brokered private placement of subscription receipts (the “Brokered Subscription Receipts”) for gross proceeds of a minimum of $8,000,000. Each Brokered Subscription Receipt will be sold at a price of $1.15 per Brokered Subscription Receipt and will be exchanged for a unit of the Company (a “Brokered Unit”). The Broker Units will have the same terms as the Units (the “Brokered Placement”). The Company will pay a commission of 8.0% of the gross proceeds of the Brokered Placement on the closing of the offering to the Agent (as defined below). The Agent will receive units (the “Commission Units”) of the Company at a deemed price equal to the Offering Price. The Commission Units will have the same terms as the Broker Units;
- A brokered offering of units for gross proceeds of up to $2,000,000 by way of a TSX Venture Exchange (“TSX-V”) Short Form Offering Document (the “SFOD”). The terms of the SFOD will be determined in the context of the market and will be announced in due course; and
- A brokered offering of 2 year secured notes of Emblem for aggregate gross proceeds of $5,500,000 at a price of $1,000 per note (the “Secured Notes”). The Secured Notes will carry an interest rate of 8.00% per annum payable semi-annually on April 30 and October 31 each year commencing April 30, 2017 and will mature on October 31, 2018. Emblem will issue 1,571,429 Warrants to the purchasers of the Secured Notes which will have the same terms as the Warrants. It is intended that the warrants will be transferable and will be subject to acceleration in the event that the underlying common shares trade at a price of $3.00 or more for 10 consecutive days. The underlying common shares will have a 12 month hold from closing date of the Qualifying Transaction. The Secured Notes will not be subject to early redemption until October 31, 2017 at the earliest.
In connection with the Brokered Placement, the SFOD, and the offering of Secured Notes, the Company and Emblem have engaged PI Financial Corp. (the “Agent”) to act as lead agent.
All securities issued in connection with the Brokered Placement, the Non-Brokered Placement and the Secured Notes will be subject to statutory hold periods of four months plus a day plus the additional hold periods described above. Securities issued in connection with the SFOD will not be subject to any resale restrictions other than those relating to the Warrants as described above.
The Company will also make the Non Brokered Placement available to certain subscribers pursuant to BC Instrument 45-536 – Exemption from prospectus requirement for certain distributions through an investment dealer (the “Investment Dealer Exemption”). In accordance with the requirements of the Investment Dealer Exemption, the Company confirms that there is no material fact or material change about the Company that has not been generally disclosed.
All of the proceeds from the Financings will be released to the Company at closing of the Qualifying Transaction which is anticipated to occur in November 2016. The net proceeds from the Financings will be used as working capital and to execute Emblem’s Phase 3, 9,500kg facility expansion.
Emblem has achieved a number of important business milestones during Q3, and continuing into Q4, including:
- Receipt of our distribution license from Health Canada allowing Emblem to sell cannabis products to the public;
- Developing a number of premium strains of cannabis that will allow Emblem to offer a wide range of high quality choices to patients as Emblem ramps up its production capacity;
- Establishing a development plan for Emblem’s entire campus in Paris, Ontario based upon pre-engineered buildings and pre-fabricated growing rooms (in clean room format) that will allow very rapid expansion of production capacity to meet increasing demand from both the medical market and the anticipated recreational market; and
- Launching Emblem’s first major expansion of its production facility to over 9,500kgs for phase 3, bringing its total production capacity to 11,600kg. In addition to Phase 3, Emblem has plans for phase 4 which will bring its total production capacity to over 21,100kgs.
About PI Financial Corp.
PI Financial is a full service investment firm providing services to over 50,000 individual, corporate and institutional investors. We are a leading Canadian investment bank for small to mid-cap companies with expertise in the resource, energy, technology, industrial products, transportation, and consumer sectors. PI’s Capital Markets Group covers over 400 institutional accounts throughout North America and Europe and includes 30 experienced professionals in research, investment banking, sales and trading offices in Vancouver, Toronto and Calgary.
Emblem is licensed under the Marihuana for Medical Purposes Regulations (the “MMPR”) to cultivate and sell medical marihuana. Emblem carries out its principal activities producing marijuana from its facilities in Paris, Ontario pursuant to the provisions of the MMPR and the Controlled Drugs and Substances Act (Canada) and its regulations.
Saber was incorporated under the Business Corporations Act (British Columbia) and is a Capital Pool Company listed on the NEX board of the TSX-V. Saber has no commercial operations and has no assets other than cash.
Danny Brody, Corporate Development Emblem Corp., is attending the Newwest Summit and can be reached at: firstname.lastname@example.org.
The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed financings and has neither approved nor 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.
This news release contains forward-looking information, which involves known and unknown risks, uncertainties and other factors that may cause actual events to differ materially from current expectation. Important factors — including the availability of funds, the results of financing efforts and the parties’ due diligence reviews, and general market conditions — that could cause actual results to differ materially from the Company’s expectations are disclosed in the Company’s documents filed from time to time on SEDAR (see www.sedar.com). Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The company disclaims any intention or obligation, except to the extent required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
President, Chief Executive Officer and a Director
Saber Capital Corp.
Sole Book Runner
Emblem Holdings Limited
SABER CAPITAL CORP.
67 East 5th Avenue
Vancouver, British Columbia, V5T 1G7
Telephone: (604) 315-1237
Fax: (604) 273-1497