Vancouver, British Columbia, December 19, 2017 – 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.
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.
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 & Director
Astar Minerals Ltd.
Stephen Stanley, CEO & Director
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.
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.