Harbour Star and EastWest Announce Completion of the Qualifying Transaction

Harbour Star Capital Inc. “TSXV:HSC.P” (to become “EAST”) (“Harbour Star” or the “Company”) and 1011705 B.C. Ltd. doing business as EastWest Science (“Eastwest”) are pleased to announce that they have closed the  previously announced Qualifying Transaction.

EastWest’s shareholders approved the amalgamation of EastWest with 1129971 B.C. Ltd., a wholly owned subsidiary of Harbour Star, at the annual and special meeting of EastWest shareholders on June 29, 2018. The amalgamation was completed on July 16, 2018 (the “Closing”), and as a result, EastWest became a wholly owned subsidiary of the Company and the Company will carry on the business under the name the “EastWest Bioscience Group” until such time as the name change can be approved by the shareholders of Harbour Star.

The following individuals comprise the directors and officers of the Compnay:  Rodney Gelineau (President, Chief Executive Officer and a Director); Richard Shatto (Vice President, Marketing and Administration), Geoffrey Balderson (Chief Financial Officer), Scott Reeves (Chairman and a Director), Mohammad Fazil (Director), John MacPhail (Director), and Douglas Horne (Director).  Detailed profiles of the individuals that have been appointed officers and directors of the Company are included in the Filing Statement of the Company which has been filed on SEDAR under the Company’s profile at www.sedar.com.  In addition, the profile of Scott Reeves is provided here:  Scott Reeves (LL.B (Hons.’95), B.Comm (Hons. ’91)) is a partner at TingleMerrett LLP, a Calgary-based corporate and securities boutique focused on securities, corporate finance and commercial transactions for emerging and growth companies, joint ventures and partnerships. He has advised numerous private and public corporations (including registered dealers) in a wide range of business matters including access to capital markets, corporate governance and operational issues both nationally and internationally. He acts for a large number of TSX, TSX Venture Exchange and CSE-listed companies in a wide range of industries, including cannabis, oil and gas, mining, technology, biotechnology and industrial issuers. He has extensive experience in financing options, private equity and public offerings, public listings and exchange matters, corporate acquisitions, share and asset acquisitions and dispositions, restructurings, securities regulatory requirements for issuers and dealers and other related business transactions. He also acts a director and/or corporate secretary for many public and private companies, providing detailed corporate governance and continuous disclosure advice to his clients. He is a member of the advisory boards of both the TSX Venture Exchange and CSE, has acted as a lead instructor for the Masters degree program in eBusiness from Osgoode Hall Law School and has taught advanced corporate finance and corporations law at the University of Alberta’s Faculty of Law.

The TSX Venture Exchange (the “Exchange”) has previously granted conditional acceptance in respect of the listing of the common shares of the Company resulting from the Qualifying Transaction (the “Common Shares”), subject to receipt of final submission documents, which have now been delivered to the Exchange. Pending satisfactory review of such final materials by the Exchange, it is expected that the Company will be listed on the Exchange as a Tier 2 issuer and that trading of the Common Shares under the new symbol, “EAST” will commence at the opening of markets on or about Wednesday, July 25, 2018.

In connection with the Closing, Harbour Star issued an aggregate of 67,470,707 Common Shares to former holders of common shares of EastWest and an aggregate of 2,375,000 options to the current directors, officers and employees of the Company to acquire Common Shares at a price of $0.15 per share for a period of 5 years. Compensation warrants that were previously issued by EastWest to eligible parties in connection with private placements conducted by EastWest, have been exchanged for an equivalent right to purchase an aggregate of 327,850 shares of Harbour Star at a price of either $0.10 or $0.15 per share for a period of 12 months from the original date of issue. In addition, the founding group of shareholders of Harbour Star as a CPC sold an aggregate of 1,200,000 Common Shares to Rodney Gelineau and John MacPhail (as to 600,000 each) at a price of Cdn$0.075 per share. All of such shares will be transferred within escrow and are subject to the Company’s CPC Escrow Agreement.

As a result of the foregoing, the outstanding capital of the Company upon completion of the Qualifying Transaction consists of 75,118,207 Common Shares; options to acquire 2,375,000 Common Shares (comprised of the newly granted options noted above and the existing options granted by the Company as a CPC), and compensation warrants to purchase 1,134,417 Common Shares.

An aggregate of 19,840,000 Common Shares will be subject to 36-month escrow restrictions, with five percent (5%) being releasable upon receipt of final Exchange approval; a further five percent (5%) releasable in six (6) months; a further ten percent (10%) releasable on each of twelve (12) and eighteen (18) months; a further fifteen percent (15%) releasable on each of twenty-four (24) and thirty (30) months and the final forty percent (40%) releasable on thirty-six (36) months. An aggregate of 10,330,000 Common Shares (including the original 2,080,000 Common Shares under the CPC Escrow Agreement) will be subject to 36-month escrow restrictions, with ten percent (10%) of such escrowed shares being releasable upon receipt of final Exchange approval and a further fifteen percent (15%) being releasable on each of the six-month, twelve-month, eighteen-month, twenty-four month, thirty month and thirty-six month anniversaries of such approval.

For further details regarding the Qualifying Transaction are contained in Filing Statement of the Company that was filed on July 4, 2018 and is available under the Company’s profile at www.sedar.com. Readers are encouraged to make reference to the Filing Statement of the Company.

About EastWest

EastWest is a health and consumer products group of companies that is strategically positioned to enter mainstream consumer markets with holistic natural products. To date, EastWest has developed distribution channels into mainstream stores and markets in Canada. EastWest is also interested in markets in the USA and strategic international markets in Asia and Europe. The Company’s long term strategy is to complete a vertical integration, seed-to-sale strategy forming a strategic alliance with an open-field hemp growing and hemp seed processing company to facilitate the provision of Health Canada-approved hemp products for use in Health Canada-approved health and consumer products. EastWest’s current product are divided into four brands: (1) “Natural Advancement” – a line of Health Canada-approved natural health products; (2) “Earth’s Menu” – a line of foods; (3) “Natural Pet Science” – a line of pet food and pet supplement products; and (4) “ChanvreHemp” – a line of natural cosmetics and skin care products.

For further information, please contact:
Mohammad Fazil
Director of Harbour Star Capital Inc.
Telephone: (403) 613-7310

For further information about EastWest, please contact:

Darrell Woronchak

Investor Relations

Telephone: (800) 409-1930, Ext 200

Early Warning Reports

In connection with the completion of the Qualifying Transaction, Rodney Gelineau (President, Chief Executive Officer and a Director of the Company) acquired ownership of 14,600,000 Common Shares and options to acquire 250,000 Common Shares, representing approximately 19.4% of the issued and outstanding Common Shares (undiluted) (19.6% including exercise of the options).  The Common Shares acquired by Mr. Gelineau were acquired for investment purposes.  In the future, Mr. Gelineau may acquire additional securities of the Company, subject to escrow provisions, dispose of some or all of the securities he now holds, or may continue to hold his current position.  Mr. Gelineau entered into a Surplus Security Escrow Agreement dated July 16, 2018 (in respect of 14,000,000 Common Shares) and agreed to be bound by a previously existing CPC Escrow Agreement (in respect of 600,000 Common Shares).  Each of the foregoing agreements imposes 36-month escrow restrictions on the Common Shares held by Mr. Gelineau, with different release terms. The CPC Escrow Agreement provides for ten percent (10%) of such escrowed shares being releasable upon receipt of final Exchange approval and a further fifteen percent (15%) being releasable on each of the six-month, twelve-month, eighteen-month, twenty-four month, thirty month and thirty-six month anniversaries of such approval. The Surplus Escrow provides for five percent (5%) being releasable upon receipt of final Exchange approval; a further five percent (5%) releasable in six (6) months; a further ten percent (10%) releasable on each of twelve (12) and eighteen (18) months; a further fifteen percent (15%) releasable on each of twenty-four (24) and thirty (30) months and the final forty percent (40%) releasable on thirty-six (36) months. An early warning report will be filed by Mr. Gelineau in accordance with applicable securities laws. To obtain a copy of the early warning report, please refer to the Company’s SEDAR profile at www.sedar.com.

Reader Advisory

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 the release.

Except for statements of historical fact relating to the Company, the information contained herein constitutes forward-looking statements.  Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements.  Except as required by applicable securities requirements, the Company undertakes no obligation to update forward-looking statements if circumstances or management’s estimates or opinions should change.  The reader is cautioned not to place undue reliance on forward-looking statements.

Source: www.fscwire.com