GreenTec Holdings Ltd. (“GreenTec”) and Black Birch Capital Acquisition III Corp. (TSXV:BBC.H) (“Black Birch”) are pleased to announce that GreenTec has entered into an engagement agreement with PI Financial Corp. (“PI Financial”) to act as sole lead agent on a commercial best-efforts basis with respect to a brokered private placement offering of 8% senior secured convertible debentures units (the “Convertible Debentures Units”) of GreenTec at a price of $1,000 per Convertible Debenture Unit for aggregate gross proceeds to GreenTec of up to $5,000,000 (the “Offering”).
Each Convertible Debenture Unit will consist of $1,000 principal amount of convertible debentures (“Convertible Debentures”) and 222 warrants to purchase common shares of GreenTec (each, a “CD Warrant”). Each CD Warrant will be exercisable to acquire one common share of GreenTec (each a “GreenTec Share”) at an exercise price of $2.50 per GreenTec Share for a period of 24 months following the closing date of the Offering. The Convertible Debentures will be convertible into GreenTec Shares at a conversion price of $1.50 per GreenTec Share.
Following the completion of the previously announced amalgamation transaction between GreenTec and Black Birch, intended to qualify as Black Birch’s “Qualifying Transaction”, as such term is defined in Policy 2.4 of the Corporate Finance Manual of the TSX Venture Exchange (the “Transaction”), the CD Warrants will become exercisable and the Convertible Debentures will become convertible into post-consolidation common shares of Black Birch. For more information on the Transaction see the joint news release of GreenTec and Black Birch dated March 13, 2018.
The Offering is being conducted concurrent with the subscription receipt offering (the “Subscription Receipt Offering”) of GreenTec for gross proceeds of up to $7,800,000 (or $8,970,000 assuming exercise of the over-allotment option), as previously announced in GreenTec and Black Birch’s joint news releases dated February 15, 2018 and March 12, 2018.
The Convertible Debenture Units will be offered and sold in Canadian jurisdictions to “accredited investors” pursuant to the exemption from the prospectus requirement at Section 2.3 of National Instrument 45-106 – Prospectus Exemptions and such other exemptions from the prospectus requirement as may be agreed between the Company and PI Financial.
GreenTec will pay a commission to PI Financial upon closing of the Offering of: (a) 5.0% of the gross proceeds of the Offering in the form of cash; and (b) broker warrants equal to 5.0% of the number of GreenTec Shares issuable upon conversion of the Convertible Debentures (each, a “Broker Warrant”), in each case, on the closing of the Offering. Each Broker Warrant will carry the right to purchase one GreenTec Share at an exercise price of $1.50 per GreenTec Share and will expire on the date that is 24 months following the escrow release date under the Subscription Receipt Offering. The Broker Warrants will be exchanged for equivalent securities of Black Birch in connection with the completion of the Transaction.
Closing of the Offering is subject to a number of conditions, including receipt of all necessary corporate and regulatory approvals.
GreenTec is a private corporation based out of Kelowna, British Columbia. GreenTec’s mission is to identify and consolidate licensed producers of craft cannabis brands, which GreenTec believes will be the purveyor to the retail market in Canada and internationally. The Company currently holds over 23,000,000 square feet of expansion capabilities throughout Canada and holds a 100% interest in each of GreenTec Bio-Pharmaceuticals Corp., Grey Bruce Farms Incorporated, Zenalytic Laboratories Ltd., Falcon Ridge Naturals Ltd., Tumbleweed Farms Corp., and Alberta Craft Cannabis Inc. (formerly Grenex Pharms Inc.). Additional information concerning GreenTec is available on the Company’s website at www.gtec.co.
All information contained in this news release with respect to GreenTec was supplied by GreenTec for inclusion herein, and Black Birch and its directors and officers have relied on GreenTec for any such information.
Completion of the Transaction is subject to a number of conditions, including but not limited to, TSX Venture Exchange acceptance. There can be no assurance that the Transaction, the Subscription Receipt Offering or the Offering will be completed as proposed or at all.
The TSX Venture Exchange has in no way passed upon the merits of the proposed Transaction, the Subscription Receipt Offering or the Offering and has neither approved nor disapproved the contents of this news release.
Neither the 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.
The securities of Black Birch have not been and will not be registered under the United States Securities Act of 1933, as amended and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirement. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION: This news release includes certain “forward-looking statements” under applicable Canadian securities legislation. Forward-looking statements include, but are not limited to, statements with respect to the terms of and the completion of the Transaction, the Subscription Receipt Offering and the Offering. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to 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: general business, economic, competitive, political and social uncertainties; delay or failure to receive board, shareholder or regulatory approvals. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Black Birch disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.