Toronto, Ontario--(Newsfile Corp. - July 30, 2018) - Platform Eight Capital Corp. (TSXV: PEC.P) (the "Corporation" or "Platform") and GrowForce Holdings Inc. ("GrowForce") are pleased to announce that GrowForce has completed its brokered private placement of subscription receipts ("Subscription Receipts") co-led by Cormark Securities Inc. and Canaccord Genuity Corp., and including Haywood Securities Inc., KES 7 Capital Inc. and Mackie Research Capital Corporation (collectively, the "Agents") for gross proceeds of approximately $25,064,700 (the "Brokered Financing"). Concurrently with the Brokered Financing, GrowForce completed a non-brokered private placement of Subscription Receipts for gross proceeds of approximately $13,169,700 (the "Non-Brokered Financing" and together with the Brokered Financing, the "Offering") resulting in the aggregate gross proceeds of the Offering being approximately $38,234,400. The Offering was completed in connection with the proposed business combination (the "Transaction") between GrowForce and Platform previously announced in press releases of Platform dated April 25, 2018 and July 25, 2018, which transaction is intended to constitute Platform's "Qualifying Transaction" pursuant to Policy 2.4 of the TSX Venture Exchange (the "TSXV").
The Offering
Under the terms of the Brokered Financing and pursuant to an agency agreement (the "Agency Agreement") dated as of the date hereof among GrowForce, Platform and the Agents, GrowForce issued 7,832,716 Subscription Receipts at a price of $3.20 per Subscription Receipt (the "Offering Price") for gross proceeds of approximately $25,064,700. Concurrently, GrowForce completed the Non-Brokered Financing of Subscription Receipts on the same terms as the Brokered Financing by issuing 4,115,521 Subscription Receipts at the Offering Price for gross proceeds of approximately $13,169,700. The net proceeds of the Offering will be used for general corporate and working capital purposes.
Each Subscription Receipt will be automatically exchanged, without payment of any additional consideration, for one common share of GrowForce (each a "GrowForce Share") upon the satisfaction of certain escrow release conditions. Each GrowForce Share will then, without payment of any additional consideration or taking of any action, be exchanged for one common share ("Resulting Issuer Share") of the Corporation (on a post-Transaction basis, the "Resulting Issuer") pursuant to the Transaction. The escrow release conditions include (i) the satisfaction or waiver of all conditions to the completion of the Transaction, and (ii) receipt of all required shareholder approvals, including the approval of the TSXV for the Transaction and the listing of the Resulting Issuer Shares to be issued pursuant to the Transaction.
The gross proceeds of the Offering will be placed in escrow on behalf of the purchasers of Subscription Receipts and the Agents. If the escrow release conditions are not satisfied by 4:00 p.m. (Eastern time) on October 30, 2018, the Subscription Receipts will be cancelled and all proceeds from the sale of Subscription Receipts plus accrued interest will be returned to purchasers. Upon either conversion or cancellation of the Subscription Receipts in accordance with their terms, in connection with the Brokered Financing, the Agents will receive payment of an additional cash commission as more particularly described below, certain expenses, and accrued interest on such amounts.
Pursuant to the Agency Agreement, the Agents received a cash commission of approximately $320,000 on closing of the Brokered Financing. The Agents will receive a further commission of approximately $1,347,000 plus accrued interest upon conversion of the Subscription Receipts; provided that if the Subscription Receipts are not converted and are cancelled in accordance with their terms, the Agents' additional cash commission will be reduced to approximately $513,600 plus accrued interest. The Agents also received 486,969 options ("Compensation Options"), each of which entitles the holder to acquire one GrowForce Share at the Offering Price until July 30, 2021. In connection with the Brokered Financing, GrowForce issued 33,906 Compensation Options to a finder. On closing of the Transaction, the Compensation Options will be exchanged for options to purchase Resulting Issuer Shares having the same exercise price and expiry date as the Compensation Options.
Unless permitted under securities legislation, all securities issued pursuant to the Offering are subject to a hold period ending on the date that is four months and a day after the later of (i) July 30, 2018, and (ii) the date that GrowForce became a reporting issuer in any province or territory.
Filing Statement
In connection with the Transaction and pursuant to TSXV requirements, the Corporation will file a filing statement on SEDAR, which will contain details regarding the Transaction, the Offering, the Corporation, GrowForce and the Resulting Issuer.
About Platform Eight Capital Corp.
The Corporation is incorporated under the Business Corporations Act (Ontario) and is a Capital Pool Company listed on the TSXV. The Corporation has no commercial operations and has no assets other than cash. For further information please see the final prospectus of the Corporation dated January 9, 2018, filed on SEDAR at www.sedar.com.
About GrowForce
GrowForce is a Canadian-based cannabis platform that operates within Health Canada's Access to Cannabis for Medical Purposes Regulations ("ACMPR"). GrowForce owns a majority interest in flagship cannabis facilities operated through Health Canada's ACMPR, with strategic partnerships for turnkey operations, proprietary software and training, and project financing. GrowForce's flagship facilities are intended to be operated by MJardin Group, North America's largest turnkey operator of legal cannabis facilities, and financed by Bridging Finance Inc., Canada's leading provider of private credit. For more information, please visit www.growforce.ca.
For further information, please contact:
John Travaglini
Chief Executive Officer
Platform Eight Capital Corp.
(416) 861-1100
Cautionary Notes
All information provided in this press release relating to GrowForce has been provided by management of GrowForce and has not been independently verified by management of the Corporation.
Completion of the Transaction is subject to a number of conditions, including but not limited to, TSXV acceptance and if applicable pursuant to TSXV requirements, majority of the minority shareholder approval. If applicable, the Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Transaction will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the Transaction, 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 TSXV has in no way passed upon the merits of the proposed Transaction and has neither approved nor disapproved the contents of this press release. Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.
This press release contains statements that constitute "forward-looking information" (collectively, "forward-looking statements") within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release. Any statement that discusses predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as "expects", or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "budget", "scheduled", "forecasts", "estimates", "believes" or "intends" or variations of such words and phrases or stating that certain actions, events or results "may" or "could", "would", "might" or "will" be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements. Forward-looking statements contained in this press release include, without limitation, statements regarding: the terms, conditions, and completion of the Transaction; use of funds; conversion of the Subscription Receipts; and the business and operations of the Resulting Issuer. In making the forward-looking statements contained in this press release, the Corporation has made certain assumptions, including, among others, that: due diligence will be satisfactory; that applicable escrow release conditions will be satisfied; and that all applicable shareholder, and regulatory approvals for the Transaction will be obtained or received. Although the Corporation believes that the expectations reflected in forward-looking statements are reasonable, it can give no assurance that the expectations of any forward-looking statements will prove to be correct. Known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: results of due diligence; availability of financing; delay or failure to receive board, shareholder or regulatory approvals; and general business, economic, competitive, political and social uncertainties. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this press release. Except as required by law, the Corporation disclaims any intention and assumes no obligation to update or revise any forward-looking statements to reflect actual results, whether as a result of new information, future events, changes in assumptions, changes in factors affecting such forward-looking statements or otherwise.
Not for distribution to United States newswire services or for dissemination in the United States. This news release does not constitute an offer to sell or a solicitation of an offer to buy 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.
