Solegear Bioplastic Technologies Inc has obtained a public listing on the TSX Venture Exchange following the close of a previously announced qualifying transaction with Rodeo Capital III Corp, now known as SBTI. SBTI will now be listed as a Tier 2 exchange issuer. Solegear, a Vancouver-based maker of high-performance bioplastics products, said it also raised $4.2 million in a private placement financing and debt conversion. Canadian venture capital firm Yaletown Venture Partners, which led the company’s Series A round in 2012, subscribed for units valued at $300,000. Also backed by Best Buy Capital and angel investors, Solegear secured a venture debt facility from Comerica last October.
Solegear Bioplastic Technologies Inc. Announces Stock Exchange Listing (TSX.V:SGB), Closing of Qualifying Transaction and $4.2M Private Placement
VANCOUVER, BRITISH COLUMBIA–(Marketwired – March 26, 2015) –
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
(TSX VENTURE:SGB) Solegear Bioplastic Technologies Inc.*(“SBTI” – *previously named RODEO CAPITAL III CORP.) announced that it has obtained a public listing for its securities on the TSX Venture Exchange (the “TSX-V”) following closing of the Qualifying Transaction (as such term is defined in TSX-V Policy 2.4) between Solegear Bioplastics Inc. (“Solegear”) and SBTI (formerly, Rodeo Capital III Corp.). As a result, SBTI will be listed as a Tier 2 issuer on the TSX-V. In conjunction with the Qualifying Transaction, Solegear raised a total of approximately $4.2 million in a private placement financing and debt conversion.
“This is a major milestone in Solegear’s growth plans. Obtaining a listing on the TSX-V provides a strong foundation for access to future capital and top talent,” said Toby Reid, Founder & CEO. “The funds raised will go to support the Company’s product development work, sales, marketing and product delivery for the coming year. We are excited as a team, and look forward to changing the way that we make products and packaging made out of plastic.”
The Qualifying Transaction involved the acquisition of all of the issued and outstanding common shares, all of the issued and outstanding Class A preferred shares and certain warrants of Solegear by SBTI. In consideration for the acquisition of such securities, SBTI issued an aggregate of 38,961,956 common shares and 8,664,650 warrants (“Warrants”) to the former securityholders of Solegear, inclusive of the units issued in the private placement described below. All references in this news release to numbers of securities are made on a post-consolidation basis (see Related Changes in Corporate Structure, below).
Concurrently with the closing of the Qualifying Transaction, Solegear issued 8,292,600 units (each a “Unit”) on a private placement basis at a price of $0.25 per Unit for gross proceeds of $2,073,150. Each Unit consisted of one Solegear common share and one half of one common share purchase warrant, with each whole warrant entitling the holder to purchase one additional common share at an exercise price of $0.35 until March 26, 2018 (subject to accelerated expiry in certain circumstances). $1.95 million of the Units were sold on a “best efforts” basis by Euro Pacific Canada Inc. (the “Agent”) and members of its selling group pursuant to the agency agreement dated December 8, 2014, as amended February 10, 2015 and February 23, 2015 between Rodeo, Solegear, and the Agent. Yaletown Venture Partners subscribed for Units in the aggregate amount of $300,000.
In addition, certain holders of an aggregate of $2,140,970 in convertible debt instruments issued by Solegear converted their debt into an aggregate of 9,036,700 Units at the closing of the Qualifying Transaction, including 7,145,413 Units at $0.25 per Unit and 1,891,287 Units at $0.1875 per Unit.
As a result of the foregoing, SBTI has an aggregate of 41,819,102 common shares, 9,798,345 warrants, and 4,335,003 stock options outstanding (inclusive of Agent’s options issued in the financing and the stock options described under “Stock Options”, below).
Trading in SBTI’s Shares is expected to commence under the symbol “SGB” following the issuance of the final exchange bulletin by TSX-V in respect of the Qualifying Transaction, likely on or about March 30 or 31, 2015.
Related Changes in Corporate Structure
Prior to closing of the Qualifying Transaction, the common shares of former Rodeo shareholders were consolidated on a 1.75 (old) to 1 (new) basis. As such, the 5,000,000 shares of Rodeo now represent 2,857,143 shares of SBTI, the entity resulting from the closing of the Qualifying Transaction. Of this amount, 1,714,286 shares, or 60%, are currently subject to escrow requirements. At closing, an aggregate of 1,074,287 of these escrowed shares were transferred, within escrow, to Yaletown Venture Partners, a major investor in Solegear. As a result, Yaletown Venture Partners directly or indirectly holds an aggregate of 20,968,988 shares (50.14%) of the outstanding SBTI common shares.
Following the closing of the Qualifying Transaction, SBTI continued under the Business Corporations Act (British Columbia) and changed its name to Solegear Bioplastic Technologies Inc.
Solegear is now a wholly-owned subsidiary of SBTI. SBTI’s year-end, which was previously June 30, has been changed to February 28 (being Solegear’s year-end). For the first financial year after the Qualifying Transaction, the periods of the interim financial reports for SBTI will be the three months ended May 31, 2015, the three and six months ended August 31, 2015, the three and nine months ended November 30, 2015, and the annual financial statements will be for the year ended February 28, 2016. Audited annual financial statements for Solegear for the year ended February 28, 2015 will also be filed on SBTI’s SEDAR profile at www.sedar.com.
Holders of Warrants should refer to the Warrant Indenture dated March 26, 2015, which is to be filed on SBTI’s SEDAR profile at www.sedar.com as a material contract, for details of the terms and conditions governing the Warrants.
At closing, Toby Reid, Chief Executive Officer and Director, was issued an option to purchase 1,410,000 Shares representing 2.5% of the fully diluted Shares of SBTI at the closing of the Transaction, and Dan Holmes, Chief Financial Officer and Secretary, was issued an option to purchase 1,355,000 Shares representing 2.4% of the fully diluted Shares of SBTI at the closing of the Transaction. Both the options have an exercise price per share of $0.25 and an expiry date of March 26, 2025.
In the aggregate, a total of 18,064,819 common shares are subject to escrow, with 16,350,533 shares subject to Tier 2 Value Escrow Agreements and 1,714,286 shares remaining subject to SBTI’s IPO Escrow Agreement; each escrow agreement provides for a graduated release of escrowed shares over a 3 year period following the issuance of the final exchange bulletin in respect of the Qualifying Transaction.
Change of Auditor
Upon closing, KPMG LLP, being Solegear’s auditor, was appointed as SBTI’s auditor. MNP LLP, SBTI’s former auditor, resigned as auditor of SBTI upon closing.
For more details on the Qualifying Transaction, please refer to the filing statement dated March 3, 2015 and the press releases dated February 11, 2015 and March 3, 2015, which are available on SBTI’s SEDAR profile at www.sedar.com.
On behalf of the Board of Directors,
Toby Reid, Chief Executive Officer and Director
Solegear Bioplastic Technologies Inc.
#300-110 West Hastings Street
Vancouver, BC V6B 1G8
The TSX Venture Exchange has neither approved nor disapproved the contents of this press release.
Disclaimer for Forward-Looking Information
This press release contains forward-looking statements and information that are based on the beliefs of management and reflect SBTI’s current expectations. When used in this press release, the words “estimate”, “project”, “belief”, “anticipate”, “intend”, “expect”, “plan”, “predict”, “may” or “should” and the negative of these words or such variations thereon or comparable terminology are intended to identify forward-looking statements and information. The forward-looking statements and information in this press release include information relating to the anticipated commencement date of trading of SBTI’s Shares on the TSX-V. Such statements and information reflect the current view of SBTI. Risks and uncertainties that may cause actual results to differ materially from those contemplated in those forward-looking statements and information.
By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.
Such factors include, among others, the following risk:
•That the TSX-V may not issue the final exchange bulletin in time to permit SBTI’s shares to commence trading on the TSX-V on the date stated above.
When relying on SBTI’s forward-looking statements and information to make decisions, investors and others should carefully consider the foregoing factor and other uncertainties and potential events. SBTI has assumed that the material factors referred to in the previous paragraph will not cause such forward-looking statements and information to differ materially from actual results or events. However, there can be no assurance that such assumptions will reflect the actual outcome of such items or factors.
THE FORWARD-LOOKING INFORMATION CONTAINED IN THIS PRESS RELEASE REPRESENTS THE EXPECTATIONS OF THE COMPANY AS OF THE DATE OF THIS PRESS RELEASE AND, ACCORDINGLY, IS SUBJECT TO CHANGE AFTER SUCH DATE. READERS SHOULD NOT PLACE UNDUE IMPORTANCE ON FORWARD-LOOKING INFORMATION AND SHOULD NOT RELY UPON THIS INFORMATION AS OF ANY OTHER DATE. WHILE THE COMPANY MAY ELECT TO, IT DOES NOT UNDERTAKE TO UPDATE THIS INFORMATION AT ANY PARTICULAR TIME EXCEPT AS REQUIRED IN ACCORDANCE WITH APPLICABLE LAWS.
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