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VANCOUVER, April 17, 2019 /CNW/ - Creation Capital Corp. (TSX-V: CRN.P) ("Creation Capital" or the "Company"), a capital pool company listed on the TSX Venture Exchange (the "Exchange"), today announced that it has retained Beacon Securities Limited ("Beacon") to lead its previously announced offering of subscription receipts (the "Subscription Receipts") at a price of $0.20 per Subscription Receipt for minimum gross proceeds of $6 million (the "Offering") to enable it to close its previously announced Qualifying Transaction (the "Proposed QT"). If required, Beacon will also act as Creation Capital's sponsor in connection with the Proposed QT.
On closing of the Offering, the gross proceeds will be placed in escrow with a subscription receipt agent. Upon satisfaction of the escrow release conditions, which includes completion of the acquisition of Greenlane (as defined below), each Subscription Receipt will be deemed to be exercised for one special warrant (a "Special Warrant") of the Company, each entitling the holder thereof to receive one common share (a "Common Share") and one half of one (0.5) common share purchase warrant (a "Warrant"). Each full Warrant will be exercisable for one Common Share at a price of $0.26 for a period of two years from the completion of the Proposed QT.
Upon completion of the Proposed QT, Creation Capital will use commercially reasonable efforts to file a prospectus to qualify the issuance of Common Shares upon conversion of the Special Warrants. The prospectus is expected to be effective within 60 days from the completion of the Proposed QT. If the prospectus is not effective by such date, each unexercised Special Warrant will entitle its holder to receive one Common Share and one Warrant (instead of one-half of one Warrant) upon the exercise thereof.
The net proceeds of the Offering will be used to fund the cash consideration to be paid to Pressure Technologies plc pursuant to the Greenlane acquisition under the Proposed QT, expenses incurred in connection with the Offering and Proposed QT, and working capital and general corporate purposes. The Offering is expected to close before the end of April.
Creation Capital has agreed to pay the Agents (as defined below) a cash commission of 7% of the gross proceeds of the Offering (which Beacon may, in its sole discretion, elect to receive all or a portion in the form of Subscription Receipts) and compensation options equal to 7% of the number of Subscription Receipts issued under the Offering, with each compensation option exercisable for one Common Share at a price of $0.20 per share for a period of two years from the completion of the Proposed QT. Creation Capital will also reimburse the Agents for all reasonable expenses and fees incurred with respect to the Offering. Beacon reserves the right to invite one or more investment dealers to form an agency group (the "Agents") to participate in the Offering, provided that Beacon will at all times be the lead agent and sole bookrunner and retain compensation of no less than an 80% economic interest in Offering. In addition, Beacon has the right to invite one or more investment dealers to form a selling group to participate in the soliciting of offers to purchase the Subscription Receipts, and Beacon retains the exclusive right to control all compensation arrangements between the members of the selling group, and all such compensation will come out of the Agents' fee.
The Subscription Receipts will be offered on a private placement basis in each of the provinces of Canada and may be offered in the United States on a private placement basis pursuant to an exemption from registration requirements of the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), and such other jurisdictions as may be agreed upon by the Company and Beacon.
The Subscription Receipts have not been, and will not be, registered under the U.S. Securities Act or any U.S. state securities laws, and may not be offered or sold in the United States or to, or for the account or benefit of, United States persons absent registration or any applicable exemption from the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws. This release shall not constitute an offer to sell or the solicitation of an offer to buy securities in the United States, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.
In addition, Creation Capital announced that Greenlane Biogas North America Ltd., a wholly owned subsidiary of the target of its Qualifying Transaction, PT Biogas Holdings Ltd. ("Greenlane"), has signed a non-binding letter of intent (the "LOI") with a major international energy and services company to jointly pursue, with other partners as required, its new build, own and operate business model with respect to renewable natural gas ("RNG") opportunities. Additionally, Greenlane is in the final stages of negotiating its first build, own and operate project based in North America.
"These two recent initiatives into the build, own and operate space are important steps for Greenlane", said Wade Nesmith, CEO of Creation Capital. "While nothing has been finalized, these steps indicate both the quickly building interest in RNG of major gas traders and distributers and the willingness of very significant gas industry participants to partner with Greenlane, recognized as an experienced leader in the RNG space."
About Creation Capital Corp.
The Company is designated as a Capital Pool Company under Exchange Policy 2.4. The Company has not commenced commercial operations and has no assets other than cash. The Company's objective is to identify and evaluate businesses or assets with a view to completing a Qualifying Transaction. Any proposed Qualifying Transaction must be approved by the TSX Venture Exchange and, in the case of a Non‐Arm's Length Qualifying Transaction, must also receive majority approval of the minority shareholders. Until the completion of a Qualifying Transaction, the Company will not carry on any business other than the identification and evaluation of businesses or assets with a view to completing a proposed Qualifying Transaction.
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.
Completion of the transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and if applicable pursuant to Exchange Requirements, majority of the minority shareholder approval. Where 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 TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.
Beacon Securities Limited, subject to completion of satisfactory due diligence, has agreed to act as sponsor in connection with the transaction. An agreement to sponsor should not be construed as any assurance with respect to the merits of the transaction or the likelihood of completion.
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.
The information in this news release includes certain information and statements about management's view of future events, expectations, plans and prospects that constitute forward looking statements, including statements relating to the completion of the subscription receipt offering, Beacon acting as the lead or agent for the Offering, Beacon acting as the sponsor for the Proposed QT, the completion of the Qualifying Transaction, the filing of a prospectus, the compensation to be paid to Beacon, the use of proceeds from the Offering, the completion date of the Offering, the jurisdictions in which the Subscription Receipts will be offered, the registration of the Subscription Receipts, the "build, own and operate" project and the proposed business of the Resulting Issuer. These statements are based upon assumptions that are subject to significant risks and uncertainties. Because of these risks and uncertainties and as a result of a variety of factors, the actual results, expectations, achievements or performance may differ materially from those anticipated and indicated by these forward looking statements. Any number of factors could cause actual results to differ materially from these forward‐looking statements as well as future results. Although the Company believes that the expectations reflected in forward looking statements are reasonable, it can give no assurances that the expectations of any forward looking statements will prove to be correct. Except as required by law, the Company 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.
SOURCE Creation Capital Corp.
For further information: regarding the Company, please contact Wade Nesmith at [email protected]