TORONTO, ONTARIO – TheNewswire - July 2, 2021 – MPX International Corporation ("MPX International", "MPXI" or the "Corporation") MPXI MPXI MPXOF, a multinational diversified cannabis company, is pleased to announce that, due to additional investor demand, it has increased the amount of the previously announced non-brokered private placement offering (the "Offering") of units (the "Units") of the Corporation at a price of C$1,360 (US$1,000) per Unit to a maximum amount of C$16,320,000 (US$12,000,000). The Corporation has issued a total of 7,748 Units for aggregate gross proceeds of C$10,537,280 (US$7,748,000) from the closing of all tranches of the Offering broken down as follows: 1st Tranche which closed on June 30, 2020 – 3,348 Units for aggregate gross proceeds of C$4,553,280 (US$3,348,000); 2nd Tranche which closed on July 31, 2020 – 346 Units for aggregate gross proceeds of C$470,560 (US$346,000); 3rd Tranche which closed on September 17, 2020 – 800 Units for aggregate gross proceeds of C$1,088,000 (US$800,000); 4th Tranche which closed on October 20, 2020 – 506 Units for aggregate gross proceeds of C$688,160 (US$506,000); 5th Tranche which closed on December 24, 2020 – 2,229 Units for aggregate gross proceeds of C$3,031,440 (US$2,229,000); 6th Tranche which closed on December 31, 2020 – 146 Units for aggregate proceeds of C$198,560 (US$146,000); 7th Tranche which closed on February 11, 2021 – 125 Units for aggregate gross proceeds of C$170,000 (US$125,000); and 8th Tranche – 248 Units for aggregate gross proceeds of C$337,280 (US$248,000).
In addition, the Corporation has drawn down on further short-term loan financing (the "Bridge Loan") of C$315,434.34 (US$231,937.02) in addition to drawdowns as follows: (a) April 21, 2021 - C$1,312,500 (US$1,050,000); and (b) April 30, 2021 – C$1,262,500 (US$1,010,000). The Corporation expects to the draw down on further funds from the Bridge Loan in due course. To date, lenders advancing funds pursuant to the Bridge Loan have received 25,043,405 common share purchase warrants (the "Bonus Warrants") as a bonus for advancing such funds. Each Bonus Warrant shall be exercisable for a period of sixty (60) months from the date of issuance and enable the holder thereof to purchase one common share in the capital of the Corporation (a "Common Share") at an exercise price equal to C$0.20.
The Corporation will use the proceeds from the loan to fund product and facility development and for general corporate and working capital purposes.
The Bridge Loan will mature 3 months from the date of issuance (the "Maturity Date") and bear interest at a rate of 12% per annum calculated in arrears and payable in cash on the earlier of the Maturity Date or concurrently with the conversion of the Bridge Loan into the Offering pursuant to the debenture indenture dated June 30, 2020 entered into between the Corporation and AST Trust Company (Canada) (the "Debenture Trustee") as amended by the supplemental debenture indenture dated September 16, 2020 and the second supplemental debenture indenture dated December 18, 2020 (as amended, supplemented or otherwise modified from time to time) providing for the issuance of 12% secured convertible dentures of the Corporation (each, an "SCD") in the aggregate principal amount of up to C$10,200,000 (US$7,500,000) (the "Debenture Indenture") the warrant indenture dated June 30, 2020 entered into between the Corporation and AST Trust Company (Canada) (the "Warrant Agent") as amended by the supplemental warrant indenture dated September 16, 2020 and the second supplemental warrant indenture (the "Warrant Indenture") dated December 18, 2020 (as amended, supplemented or otherwise modified from time to time) providing for the issuance of up to 52,500,000 common share purchase warrants (each, an "SCD Warrant").
The principal amount of the Bridge Loan shall automatically convert in the Offering at a conversion premium equal to ten percent (10%) of their principal amount.
Each Unit of the Offering will be issued on the same terms as those previously announced, subject to certain amendments to the Debenture Indenture and Warrant Indenture to be proposed to Debentureholders, at a price of C$1,360 (US$1,000) per Unit with each Unit consists of one SCD in the principal amount of C$1,360 (US$1,000) (the "Principal Amount") convertible at a deemed price of $0.13 per share and 7,000 SCD Warrants.
No finder fees have been paid in connection with the Bridge Loan.
Insider Participation
Eight Tranche of the Offering
The eighth tranche of the Offering can be considered a Related Party Transaction for certain regulatory purposes. The participation by the insiders in the eighth tranche of the Offering is summarized as follows:
|
Name |
Relationship to the Corporation |
Interest in the Offering |
Common Shares directly or indirectly, beneficially owned or control |
Percentage of Common Shares of MPXI |
|
|
Amount C$ |
# of Units |
||||
|
W. Scott Boyes |
Chairman, President, CEO and a director |
$5,440(1) |
4 |
4,655,350 |
3.24% |
|
Alastair Crawford |
Director |
$20,400(2) |
15 |
8,229,051 |
5.72% |
|
TOTALS |
$25,840 |
19 |
12,884,401 |
8.96% |
|
Notes:
-
(1)Mr. Boyes has also participated in previous tranches of the Offering acquiring 105 Units for a subscription amount of C$142,800. In sum, Mr. Boyes has been issued a total of 109 Units for an aggregate subscription amount of C$148,240.
-
(2)Mr. Crawford has also participated in previous tranches of the Offering acquiring 456 Units for an aggregate subscription amount of C$622,880 broken down as follows: (a) 205 Units issued to Mr. Crawford; and (b) 251 Units issued to Puddles 7 Limited ("Puddles 7"), a company in which Mr. Crawford holds a majority interest. In sum, Mr. Crawford has been issued a total of 471 Units for an aggregate subscription amount of C$640,560 broken down as follows: (a) 212 Units issued to Mr. Crawford; and (b) 259 Units issued to Puddles 7.
Bridge Loan
The current draw down of the Bridge Loan can be considered a Related Party Transaction for certain regulatory purposes. The participation by certain insiders in the current draw down of the Bridge Loan is summarized as follows:
|
Name |
Relationship to the Corporation |
Interest in the Bridge Loan |
Common Shares directly or indirectly, beneficially owned or control |
Percentage of Common Shares of MPXI |
|
W. Scott Boyes |
Chairman, President, CEO and a Director |
C$4,400.56 |
4,655,350 |
3.24% |
|
Alastair Crawford |
Director |
C$19,849.32(1) |
8,147,312 |
5.65% |
|
TOTALS |
C$24,249.88 |
12,802,662 |
8.89% |
Note:
-
(1)Mr. Crawford's advance is broken down as follows: C$8,590.29 by Mr. Crawford; and (b) C$11,259.03 by Puddles 7.
It is important to note that the Offering and the Bridge Loan are exempt from valuation and minority approval requirements which might otherwise result from the participation by insiders due to: (1) the Corporation, as a CSE issuer, not being listed on a designated market; and (2) the fair market value of the Offering and the Bridge Loan, insofar as the Offering and the Bridge Loan involve such interested parties, is less than $2,500,000.
To the knowledge of the Corporation, after reasonable inquiry, none of the related parties have knowledge of any material information concerning the Corporation or its securities that has not been generally disclosed.
A special committee of independent directors (the "Special Committee") reviewed the Offering and Bridge Loan and determined that as a CSE issuer MPXI is not listed on a specified market and the fair market value of the Bridge Loan and Offering, individually and taken together, in so far as it involves related parties, is not more than $2,500,000. The Special Committee unanimously recommended that the board of directors of the Corporation (the "Board") approve the Bridge Loan and the Offering. Accordingly, both the Offering and the Bridge Loan are exempt from minority shareholder approval and formal valuation requirements of MI 61-101.
The Offering and the Bridge Loan are closing in less than 21 days due to the limited number of subscribers to the Offering and Bridge Loan, all agreements being properly completed and received, and all subscription proceeds having been forwarded, which shorter period is reasonable in the circumstances. MI 61-101 requires if a material change report is filed less than 21 days before the expected date of the closing of the transaction, an explanation is to be provided why the shorter period is reasonable or necessary in the circumstances.
The securities issued pursuant to the Offering and the Bridge Loan 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 or to, or for the account or benefit of, U.S. persons absent registration or an applicable exemption from the registration requirements. This news release will not constitute an offer to sell or the solicitation of an offer to buy nor will there be any sale of the securities in any State in which such offer, solicitation or sale would be unlawful.
About MPX International Corporation
MPX International Corporation is a multinational diversified cannabis company focused on developing and operating assets across the international cannabis industry with an emphasis on cultivating, manufacturing and marketing products which include cannabinoids as their primary active ingredient. With current operations spanning four continents in Canada, Switzerland, South Africa, Malta, Australia and Thailand as well as evolving partnership and distribution opportunities in other jurisdictions, MPXI continues to position itself as an emergent global participant in the cannabis industry.
Cautionary Statement Regarding Forward-Looking Information
This news release includes certain "forward-looking statements" under applicable Canadian securities legislation that are not historical facts. Forward-looking statements involve risks, uncertainties, and other factors that could cause actual results, performance, prospects, and opportunities to differ materially from those expressed or implied by such forward-looking statements. Forward-looking statements in this news release include, but are not limited to, MPX International's objectives and intentions. Forward-looking statements are necessarily based on a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties and other factors which may cause 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 and social uncertainties; litigation, legislative, environmental and other judicial, regulatory, political and competitive developments; delay or failure to receive board, shareholder or regulatory approvals; the Corporation's ability to effectively deal with the restrictions, limitations and health issues presented by the COVID-19 pandemic; future cannabis pricing; cannabis cultivation yields; costs of inputs; its ability to market products successfully to its anticipated clients; reliance on key personnel and contracted relationships with third parties; the regulatory environment in Australia, Canada, Malta, South Africa, Switzerland and other international jurisdictions; the ability to complete any future potential transactions and the terms and conditions thereof; the application of federal, state, provincial, county and municipal laws; and the impact of increasing competition; those additional risks set out in MPX International's public documents filed on SEDAR at www.sedar.com, including its audited annual consolidated financial statements for the financial years ended September 30, 2020 and 2019, and the corresponding management's discussion and analysis; and other matters discussed in this news release. Although MPX International believes that the assumptions and factors used in preparing the forward-looking statements are reasonable, undue reliance should not be placed on these statements, which only apply as of the date of this news release, and no assurance can be given that such events will occur in the disclosed time frames or at all. Except where required by law, MPX International disclaims any intention or obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.
NOT FOR DISTRIBUTION TO NEWSWIRE SERVICES IN THE UNITED STATES OR FOR DISSEMINATION IN THE UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF UNITED STATES SECURITIES LAWS.
For further information about MPXI, please contact:
MPX International Corporation
W. Scott Boyes, Chairman, President and CEO
T: +1-416-840-4703
info@mpxinternationalcorp.com
or visit one our websites:
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