VANCOUVER, BC, Oct. 22, 2020 /CNW/ - Itasca Capital Ltd. (TSXV:
ICL) ("Itasca" or "Company") is pleased to announce
that it has closed its previously announced non-brokered
private placement financing (the "Private Placement") of
2,000,000 units (the "Units") at a purchase price of
$0.50 per Unit and of 4,000
convertible debentures (the "Convertible Debentures") at a
purchase price of $1,000 per
Convertible Debenture, for aggregate gross proceeds of $5,000,000. Concurrently with the closing of the
Private Placement, each of Mr. Paul
Rivett and Rick Doman were
appointed to Itasca's Board. The Company has also issued 160,000
stock options ("Stock Options") to certain directors of the
Company to purchase up to an aggregate of 160,000 common shares of
Itasca (a "Common Share") pursuant to the Company's stock
option plan. The Stock Options are exercisable for a period of
seven years from the date of grant at an exercise price of
$0.48 per Common Share. All of the
Stock Options vested immediately upon being granted. All amounts in
this press release are in Canadian dollars unless indicated
otherwise.
Each Unit is comprised of one Common Share and one Common Share
purchase warrant of Itasca (a "Warrant"). Each Warrant
entitles the holder thereof to purchase one Common Share at a
purchase price of $0.60 (increased
from the previously announced $0.535)
until the date that is five years after the date that the Warrant
is issued. Each Unit is immediately separable into one Common Share
and one Warrant upon issuance.
Each Convertible Debenture is secured, and has a maturity date
of two years from the date of issuance. The Convertible Debentures
bear interest at a rate of 4% per annum until the completion of a
Qualified Investment (as defined below) and 2% per annum
thereafter; provided that, if the Requisite Approval (as
defined below) is not obtained on or before December 31, 2020, the interest rate shall be
increased by ten percentage points in each case, to 14% and 12%,
respectively. If, prior to the maturity date, Itasca closes an
investment in excess of $25,000,000
(a "Qualified Investment") the principal amount of
each Convertible Debenture will, subject to the limitations
described below, automatically convert at maturity into Units at a
price of $0.50 per Unit (provided
that the term of any Warrant issued in connection therewith will be
limited to 5 years from the date of issuance of the Convertible
Debenture). Accrued but unpaid interest on the Convertible
Debentures will also automatically convert at maturity into Units
upon a Qualified Investment in accordance with the policies of the
TSX Venture Exchange (the "TSXV") and subject to TSXV
approval. Unless and until shareholders of Itasca approve the
issuance of the Convertible Debentures in accordance with the
policies of the TSXV (the "Requisite Approval"), the
Convertible Debentures will only be convertible to the extent that
the issuance of the Common Shares issuable on conversion of the
Convertible Debentures and exercise of the associated Warrants do
not result in the holder thereof holding 20% or more of issued and
outstanding Common Shares of Itasca. If the Corporation fails to
complete a Qualified Investment prior to the date that is 6 months
following the issuance of the Convertible Debenture, the holder
thereof may require Itasca to redeem and repurchase the Convertible
Debenture for their face amount plus all accrued and unpaid
interest.
The securities issued pursuant to the Private Placement will be
subject to a statutory hold period, which will expire four months
plus a day from the date of issuance.
No finders' fees were paid in connection with the Private
Placement.
Early Warning Reports
As part of the Private Placement: (i) Mr. Rivett, through his
wholly-owned corporation Rivett Capital Syndicate Inc. (1
Yonge Street, 4th Floor,
Toronto, Ontario, M5G 1E6),
invested $2,000,000 to acquire
800,000 Units and 1,600 Convertible Debentures; and (ii) Mr. Doman,
through his wholly-owned corporation Timber Country Investment
Corporation (3000, 700 - 9th Avenue SW Calgary, Alberta, T2P
3V4), invested $2,500,000 to acquire
1,000,000 Units and 2,000 Convertible Debentures. Prior to the
purchases pursuant to the Private Placement neither Mr. Rivett nor
Mr. Doman beneficially owned or controlled any Common Shares.
Following the Private Placement, 23,810,626 Common Shares will
be outstanding, of which: (i) Mr. Rivett has acquired, and
have ownership and control over 800,000 Common Shares, representing
approximately 3.4% of the outstanding Common Shares (or 8,000,000
Common Shares, representing approximately 19.1% of the outstanding
Common Shares on a partially diluted basis, assuming only the
conversion of the Convertible Debentures and the exercise of the
Warrants (including the Warrants underlying the Convertible
Debentures) held by him); and (ii) Mr. Doman has acquired, and have
ownership and control over 1,000,000 Common Shares, representing
approximately 4.2% of the outstanding Common Shares (or 10,000,000
Common Shares, representing approximately 23.9% of the outstanding
Common Shares on a partially diluted basis, assuming only the
conversion of the Convertible Debentures and the exercise of the
Warrants (including the Warrants underlying the Convertible
Debentures) held by him). As referenced above, each of Messrs.
Rivett and Doman have undertaken not to convert any Convertible
Debentures if such conversion would result in owning 20% or more of
the voting securities of the Company, unless and until shareholders
of Itasca approve the issuance of the Convertible Debentures in
accordance with the policies of the TSXV.
The Units and Convertible Debentures are being acquired by
Messrs. Rivett and Doman, in each case, for investment purposes,
and in the future, each of Messrs. Rivett and Doman may discuss
with management and/or the board of directors of the Company any of
the transactions listed in clauses (a) to (k) of item 5 of Form F1
of National Instrument 62-103 – The Early Warning System and
Related Take-over Bid and Insider Reporting Issues and may further
purchase, hold, vote, trade, dispose or otherwise deal in the
securities of the Company, in such manner as deemed advisable to
benefit from changes in market prices of the Company's securities,
publicly disclosed changes in the operations of the Company, its
business strategy or prospects or from a material transaction of
the Company.
Early warning reports will be filed by each of Messrs. Rivett
and Doman in accordance with applicable securities laws and will be
available on SEDAR at www.sedar.com or may be obtained directly
from Itasca upon request at 847-791-6817 (Attention: Hassan Baqar) or mailing the Company at its head
office: Itasca Capital Ltd., 1800 – 510 West Georgia Street,
Vancouver, British Columbia, V6B
0M3.
Forward Looking Information
Certain information in this news release constitutes
forward-looking statements under applicable securities laws. Any
statements that are contained in this news release that are not
statements of historical fact are forward-looking statements.
Forward looking statements are often identified by terms such as
"may", "should", "anticipate", "expect", "potential", "believe",
"intend", "estimate" or the negative of these terms and similar
expressions. Forward-looking statements in this news release
include, but are not limited to statements with respect to the
Private Placement (including the terms of the securities issued
thereunder, the use of net proceeds, the anticipated shareholdings
of Messrs. Rivett and Doman and related filings).
Forward-looking statements are based on assumptions, including
expectations and assumptions concerning: interest and foreign
exchange rates; capital efficiencies, the lumber industry (and its
growth and growth rates) in North
America, the anticipated benefits resulting from the Private
Placement and the Company's future plans and ability to complete
future investments. While the Company considers these assumptions
to be reasonable, based on information currently available, they
may prove to be incorrect. Readers are cautioned not to place undue
reliance on forward-looking statements. In addition,
forward-looking statements necessarily involve known and unknown
risks, including, without limitation, risks associated with general
economic conditions; adverse industry events; future legislative,
tax and regulatory developments. Readers are cautioned that the
foregoing list is not exhaustive and other risks are set out in the
Company's public disclosure record filed under the Company's
profile on www.sedar.com. Readers are further cautioned not to
place undue reliance on forward-looking statements as there can be
no assurance that the plans, intentions or expectations upon which
they are placed will occur. Such information, although considered
reasonable by management at the time of preparation, may prove to
be incorrect and actual results may differ materially from those
anticipated. Forward-looking statements contained in this news
release are expressly qualified by this cautionary statement and
reflect our expectations as of the date hereof, and thus are
subject to change thereafter. The Company disclaims any intention
or obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise,
except as required by law.
Neither TSXV nor its Regulation Services Provider (as that term
is defined in policies of the TSXV) accepts responsibility for the
adequacy or accuracy of this news release.
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SOURCE Itasca Capital Ltd.
