pcNewsWire – Delrand Resources Limited (TSX-V: DRN.H) has closed previously announced private placement of 7,593,750 Subscription Receipts at a price of CDN$0.80 per Subscription Receipt for aggregate gross proceeds of CDN $6,075,000. The offering was led by Maison Placements Canada Inc.
Net proceeds will be used to further the business of following completion of the transaction with KuuHubb Oy and for general working capital purposes.
DELRAND ANNOUNCES CLOSING OF CDN$6,075,000 SUBSCRIPTION RECEIPT CONCURRENT FINANCING
NOT FOR DISSEMINATION IN THE UNITED STATES
Toronto, Canada – June 7, 2017 – Delrand Resources Limited (“Delrand” or the “Company”) (DRN.H – NEX) is pleased to announce that in connection with the previously announced transaction with KuuHubb Oy (the “Transaction”), as previously disclosed in the press releases of the Company issued on January 20, 2017, May 24, 2017 and June 2, 2017 (the “Press Releases”), it has completed its previously announced private placement (the “Offering”) of subscription receipts (each, a “Subscription Receipt”) led by Maison Placements Canada Inc. (the “Agent”). Pursuant to the terms of an agency agreement (the “Agency Agreement”) among the Company and the Agent dated June 7, 2017, the Offering included the sale of 7,593,750 Subscription Receipts at a price of CDN$0.80 per Subscription Receipt, for aggregate gross proceeds of to CDN$6,075,000. The gross proceeds of the Offering less certain expenses of the Agent and other commissions (the “Escrowed Proceeds”) will be held in escrow on behalf of the subscribers of the Subscription Receipts by an escrow agent (the “Escrow Agent”) and will be released to the Company upon completion of the escrow release conditions as described below in connection with the Transaction. The Transaction will constitute a Change of Business transaction as defined in the policies of the TSX Venture Exchange (the “Exchange”) and the resulting issuer will be a Tier 2 technology issuer (the “Resulting Issuer”).
Upon satisfaction of the escrow release conditions, each Subscription Receipt will be automatically converted, without additional payment, into one common share of the Resulting Issuer (the “Resulting Issuer Shares”) following completion of the Transaction pursuant to the terms of a subscription receipt agreement (the “Subscription Receipt Agreement”) entered into between the Company, the Agent, KuuHubb Oy and Irwin Lowy LLP. The Subscription Receipt Agreement provides for the exchange of the Subscription Receipts into Resulting Issuer Shares upon the completion of: (i) all conditions precedent to the Transaction, being satisfied, or waived with the prior written consent of the Agent, in accordance with the terms of the Share Exchange Agreement (as defined in the January 20, 2017 Press Release); and (ii) the receipt of all required shareholder, third party and regulatory approvals in connection with the Transaction, including the receipt of conditional approval from the Exchange to list the common shares of the Company on the Exchange, including the Resulting Issuer Shares issuable upon the automatic conversion of the Subscription Receipts. As mentioned in the June 2, 2017 Press Release, the Company has received the conditional approval from the Exchange. The Company expects to close the Transaction the week of June 12, 2017 and will provide a further press release upon closing of the Transaction.
As consideration for the services provided by the Agent and certain other persons in connection with the Offering: (a) the Agent and certain other finders will receive CDN$181,508 cash commissions; and (b) the Agent will receive 200,000 broker warrants (the “Broker Warrants”), upon the closing of the Transaction. Each Broker Warrant shall be exercisable into one common share in the capital of the Resulting Issuer at an exercise price of CDN$0.80 per Broker Warrant at any time until the date which is twenty-four (24) months following the closing of the Transaction. The Subscription Receipts issued pursuant to the Offering will be subject to a regulatory four month hold period. The Resulting Issuer Shares issued in connection with the Transaction and upon the conversion of the Subscription Receipts will not be subject to Exchange resale restrictions, however, certain of the Resulting Issuer Shares held by principals of the Resulting Issuer will be subject to the escrow requirements of the Exchange.
Net proceeds of the Offering will be used by the Resulting Issuer to further the business of the Resulting Issuer following completion of the Transaction and for general working capital
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.
For further information, please contact:
Arnold T. Kondrat, CEO, (416) 366-2221 or 1-800-714-7938.