SG Spirit Gold Launches Financing Related to Acquisition of ACMPR License Applicant Northern Lights Marijuana Company
VANCOUVER, BC–(Marketwired – March 29, 2017) –
SG Spirit Gold Inc. (TSX VENTURE: SG) (“SG Spirit Gold” or the “Company”) is pleased to announce that it has appointed a syndicate of agents led by Mackie Research Capital Corporation (the “Lead Agent”) and including Canaccord Genuity Corp. and Eight Capital (together with the Lead Agent, the “Agents”) to sell by way of private placement up to 13,333,333 subscription receipts of the Company (the “Subscription Receipts”) at a price of $0.75 per Subscription Receipt for aggregate gross proceeds of up to $10,000,000 (the “Offering”).
Concurrent with the closing of the Transaction (as defined below), each Subscription Receipt shall be exchanged automatically, for no additional consideration, into units of the Company (the “Units”). Each Unit shall consist of one (1) common share of the Company (an “SG Share”) and one-half of one common share purchase warrant (each whole warrant, a “Warrant”). Each Warrant shall entitle the holder to acquire one (1) additional Common Shares at an exercise price of $1.25 for a period of 24 months from the date of issuance. Subscribers identified by the Company will be entitled to participate for up to $5 million of the Offering (the “President’s List”).
In accordance with the terms and conditions of an amalgamation agreement between the Company, NLMCO Acquisition Corp. (“Acquireco”) and Northern Lights Marijuana Company Limited (“DOJA”) dated February 10, 2017 (the “Amalgamation Agreement”), the Company has agreed, subject to the receipt of all necessary approvals, to complete a business combination with DOJA. Pursuant to the terms of the Amalgamation Agreement, each holder of DOJA shares (the “DOJA Shares”) will transfer their DOJA Shares to the Company in exchange for SG Shares on the basis 1.8 SG Shares for each DOJA Share transferred. Concurrently, DOJA and Acquireco, a wholly-owned subsidiary of SG Spirit, will amalgamate to form a new entity wholly-owned by the Company (the “Transaction”). In connection with the Transaction, it is anticipated that the Company will apply to listing the SG Shares on the Canadian Securities Exchange, and voluntarily delist the SG Shares from the TSX Venture Exchange. It is also anticipated that the Company will change its name to “DOJA Cannabis Company Limited”.
It is anticipated that the net proceeds of the Offering will be used to (i) fund a $8,000,000 Phase II expansion at DOJA’s West Kelowna facility, (ii) fund a land acquisition to secure Phase III expansion plans in the Okanagan, and (iii) for working capital and general corporate purposes.
The Subscription Receipts will be offered in all provinces of Canada and such other jurisdictions as the Company and the Agents may agree and where the Offering can be sold without the requirement to file a prospectus or similar document.
In consideration for the Agents’ services in connection with the Offering, the Company has agreed to pay the Agents a cash commission equal to 7.0% (3.0% in the case of President’s List) of the aggregate gross proceeds arising from the Offering. In addition, the Company has agreed to issue the Agents options equal in number to up to 7.0% (3.0% in the case of President’s List) of the number Subscription Receipts sold under the Offering. Closing of the Offering is expected to occur on or about April 24, 2017.
DOJA is a privately-owned company based in Canada’s picturesque Okanagan Valley that is committed to becoming a licensed producer of marijuana under the Access to Cannabis for Medical Purposes Regulations (“ACMPR”) and building a fast growing lifestyle brand that offers the highest quality handcrafted cannabis strains in Canada.
DOJA was founded in 2013 by the same team that founded and built SAXX Underwear into an internationally recognizable brand. The DOJA team plans to build upon their past success in the consumer packaged goods industry and their mutual interest in, and appreciation for, cannabis culture and grow DOJA into a market leading brand in the cannabis industry.
DOJA has completed the build-out of its state-of-the-art-facility, capable of producing more than 650 kilograms of marijuana annually, and has notified Health Canada’s Office of Medical Cannabis that DOJA’s proposed site is ready for Health Canada to conduct a Pre-License Inspection. The issuance of a license under the ACMPR is, in part, dependent upon the completion of a satisfactory Pre-License Inspection by Health Canada.
For further information please contact Richard Grayston, Chief Executive Officer of the Company at email@example.com or Jeff Barber, Chief Financial Officer of DOJA at firstname.lastname@example.org or visit DOJA’s website at www.dojamj.com for further information.
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