Concurrent with the conversion of the Debentures, Humble also converted the 10,221,000 outstanding subscription receipts of Humble ("Subscription Receipts"), for no additional consideration, into units of Humble ("Units"), on the basis of one Unit for each one Subscription Receipt, resulting in the issuance of 10,221,000 Humble Shares and 5,110,500 Humble Warrants, a "Humble Warrant" being a common share purchase warrant of Humble exercisable for one (1) Humble Share until June 14, 2024, at a price per Humble Share of $1.40. The Subscription Receipts were issued in connection with a broker private placement of the Company led by Beacon Securities Limited which closed on April 1, 2021 and April 6, 2021.
To complete the RTO, Humble then immediately amalgamated with 10096753 Manitoba Ltd., a wholly owned subsidiary of Canada Iron ("CI Subco") with the resulting amalgamated entity becoming a wholly-owned subsidiary of the Resulting Issuer. Pursuant to an amalgamation agreement (the "Amalgamation Agreement") entered into by Humble, Canada Iron and CI Subco dated the date hereof, each holder of Humble Shares received Resulting Issuer Shares, on a one-for-one basis, in exchange for their Humble Shares, including those shareholders resulting from the conversion of the Debentures, and the Subscription Receipts, all together resulting in the issuance of 102,366,454 Resulting Issuer Shares, for a total issued and outstanding 103,616,454 Resulting Issuer Shares post-RTO. In addition, and pursuant to the terms of the Amalgamation Agreement, the Resulting Issuer also issued 5,194,500 common share purchase warrants ("Resulting Issuer Warrants"), each such Resulting Issuer Warrant exercisable for one (1) Resulting Issuer Share until June 14, 2024, at a price per Resulting Issuer Share of $1.40, in exchange, on a one-for-one basis for the Humble Warrants outstanding immediately prior to the completion of the RTO. The Resulting Issuer also issued 2,245,000 Resulting Issuer options and 1,607,448 Resulting Issuer restricted share units as replacements for such options and restricted share units of Humble, on the same economic terms and on a one-for-one basis. Finally, the Resulting Issuer issued 645,200 Resulting Issuer broker warrants in exchange, on a one-for-one basis, of the outstanding broker warrants of Humble immediately before closing of the RTO. All of the Resulting Issuer securities were issued pursuant to exemptions from the registration and prospectus requirements of applicable securities laws.
In connection with the closing of the RTO described in this press release, Robert Ritchot and Green Acre Capital (together, the "New Insiders"), were issued, directly and indirectly, totals of 15,964,697 Resulting Issuer Shares and 16,373,626 Resulting Issuer Shares, respectively. Following the RTO, Robert Ritchot owns or controls 15,964,697 Resulting Issuer Shares, representing approximately 15.41% of the issued and outstanding Resulting Issuer Shares, on both an undiluted and fully-diluted basis, and Green Acre Capital owns or controls 16,373,626 Resulting Issuer Shares, representing approximately 15.80% of the issued and outstanding Resulting Issuer Shares on both an undiluted and fully-diluted basis. The New Insiders hold their Resulting Issuer Shares for investment purposes, and may evaluate such investment on an ongoing basis and subject to various factors including, without limitation, the Resulting Issuer's financial position, the price levels of the Resulting Issuer Shares, conditions in the securities markets and general economic and industry conditions, the Resulting Issuer's business or financial condition, and other factors and conditions that each New Insider may deem appropriate. Each h New Insider may increase, decrease or change its ownership over the Resulting Issuer Shares or other securities of the Resulting Issuer.
A copy of the Early Warning Report with additional information in respect of the foregoing matters will be filed on www.SEDAR.com under the Resulting Issuer's profile. For further information, including a copy of the early warning report required under applicable Canadian securities laws to be filed by each of the New Insiders as a result of the RTO referred to in this press release, please contact Graeme Norwood at 416-644 9961.
In addition, as a result of the increase in the number of issued and outstanding Resulting Issuer Shares pursuant to the RTO Transaction, L5 Capital Inc. ("L5") and Jason I. Goldman Professional Corporation ("JGPC"; together with L5, the "Outgoing Insiders") announce that their respective ownership of Resulting Issuer Shares decreased to below 10% on an undiluted and partially- diluted basis.
Prior to the closing of the RTO Transaction, each Outgoing Insider held the following securities:
Following the closing of the RTO Transaction, each Outgoing Insider now holds the following securities:
The Resulting Issuer Shares and Resulting Issuer Warrants held by each of the Outgoing Insiders are being held for investment purposes. In the future, each Outgoing Insider may evaluate its investment in the Resulting Issuer from time to time and may, depending on various factors including, without limitation, the Resulting Issuer's financial position, the price levels of the Resulting Issuer Shares, conditions in the securities markets and general economic and industry conditions, the Resulting Issuer's business or financial condition, and other factors and conditions that each Outgoing Insider may deem appropriate, increase, decrease or change its ownership over the Resulting Issuer Shares, Resulting Issuer Warrants or other securities of the Resulting Issuer.
An early warning report prepared pursuant to the requirements of National Instrument 62-103 The Early Warning System and Related Take-Over Bid and Insider Reporting Issues by the Outgoing Insiders will be filed on SEDAR at www.sedar.com under the Resulting Issuer's profile. For further information, including a copy of the early warning report required under applicable Canadian securities laws to be filed by each of the Outgoing Insiders as a result of the RTO referred to in this press release, please contact Grant Duthie at 416-869-1234.
Humble & Fume is one of North America's leading cannabis distribution solution providing customer-centric services and accessories. Humble & Fume works with over 200 leading industry brands and offer more than 10,000 accessories and extract products, and is the only major cannabis industry player to provide a fully integrated cannabis and accessories distribution solution with complete sales, distribution, and trade market support. Servicing more than 3,000 clients continent-wide, we can reach 90% of North American customers within 48 hours. Leveraging decades of North American Cannabis industry experience, we are committed to being a leading partner and brand representative by offering a comprehensive portfolio of leading brands and products to head shops, smoke shops, dispensaries, and consumers.
This news release contains "forward-looking information" within the meaning of applicable securities laws relating to the proposed listing of the Company's common shares on the CSE. Any such forward-looking statements may be identified by words such as "expects", "anticipates", "intends", "contemplates", "believes", "projects", "plans" and similar expressions. Readers are cautioned not to place undue reliance on forward-looking statements. Statements about, among other things, the expected listing and trading on the CSE, is all forward-looking information. These statements should not be read as guarantees of future performance or results. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from those implied by such statements. Although such statements are based on management's reasonable assumptions, there can be no assurance that the listing and trading of the Company's shares on the CSE will occur or that, if they do occur, they will be completed on the terms and timing described above. The Company assumes no responsibility to update or revise forward-looking information to reflect new events or circumstances or actual results unless required by applicable law. Readers are encouraged to refer to the Listing Statement for information as to the risks and other factors which may affect the Company's business objectives and strategic plans.
Edge Communications Group
KCSA Strategic Communications