/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR
DISSEMINATION IN THE UNITED
STATES/
TORONTO, March 9, 2016 /CNW/ - Pinetree Capital
Ltd. (TSX: "PNP") announces that it will be offering
rights to holders of its common shares at the close of business on
the record date of March 23, 2016, on
the basis of one right for each common share held. Each right will
entitle the holder to subscribe for one common share of Pinetree
upon payment of the subscription price of $0.025 per common share. The rights
offering will be conducted in Canada only.
The rights will trade on the Toronto Stock Exchange under the
symbol PNP.RT commencing on March 21,
2016 and until noon on April 22,
2016 and the rights will expire at 4:00 p.m. (Toronto time) on April
22, 2016 (the "Expiry Time"), after which time
unexercised rights will be void and of no value. Shareholders
who fully exercise their rights will be entitled to subscribe for
additional common shares, if available as a result of unexercised
rights prior to the Expiry Time, subject to certain limitations set
out in Pinetree's rights offering circular.
Details of the rights offering will be set out in the rights
offering notice and rights offering circular which will be
available under Pinetree's profile at www.sedar.com. The
rights offering notice and accompanying rights certificate will be
mailed to each eligible shareholder of Pinetree as at the record
date. Registered shareholders who wish to exercise their rights
must forward the completed rights certificate, together with the
applicable funds, to the rights agent, Equity Trust Financial
Company, on or before the Expiry Time. Shareholders who own
their common shares through an intermediary, such as a bank, trust
company, securities dealer or broker, will receive materials and
instructions from their intermediary.
There are currently 226,130,510 common shares of Pinetree
outstanding. If all of the rights issued under the rights
offering are validly exercised (or if the Standby Commitment
described below is fulfilled), the offering will raise gross
proceeds of approximately $5.65
million, the net proceeds of which will be allocated to the
payment of the outstanding principal amount and accrued interest on
Pinetree's convertible debentures at maturity on May 31, 2016.
Standby Commitment
In connection with the rights offering, Pinetree has entered
into a standby purchase agreement (the "Standby Agreement")
with 2507492 Ontario Ltd. (the "Standby Purchaser"), a
private company controlled by Peter
Tolnai, pursuant to which the Standby Purchaser has agreed
to purchase (the "Standby Commitment") all of the common
shares that are not otherwise purchased by holders of the rights
under the rights offering, subject to a minimum of 135,678,306
common shares (60% of the common shares issuable under the rights
offering) and a maximum of 225,678,249 common shares (99.8% of the
common shares issuable under the rights offering).
Accordingly, if more than 40% of the rights are validly exercised
under the rights offering, the Standby Purchaser will not be
obligated to subscribe for any common shares pursuant to the
Standby Commitment. If the Standby Commitment is fulfilled,
the Standby Purchaser will own between 30% and 49.9% of Pinetree's
outstanding common shares upon completion of the rights
offering.
Completion of the Standby Commitment is subject to other
conditions, in addition to the minimum and maximum number of common
shares to be purchased, including:
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(i)
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the appointment of
Peter Tolnai as Pinetree's Chief Executive Officer and as a
director on closing;
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(ii)
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the resignations on
closing of those existing directors of Pinetree, if any, requested
by the Standby Purchaser;
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(iii)
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the submission of a
1-for-100 share consolidation to shareholders for approval at the
Shareholder Meeting (described below); and
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(iv)
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the waiver of the
application of Pinetree's shareholder rights plan to the rights
offering and the acquisition of common shares by the Standby
Purchaser pursuant to the Standby Commitment, which will also be
submitted for approval at the Shareholder Meeting described
below.
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Pinetree will pay a standby fee of $250,000 in cash to the Standby Purchaser on
closing of the rights offering out of the proceeds of the rights
offering, on the termination of the Standby Commitment by Pinetree
if it accepts a "superior offer" or under other circumstances where
the Standby Purchaser terminates the Standby Commitment, including
if the minimum Standby Commitment is not met or the requisite
shareholder consent is not received.
Special Shareholders' Meeting
At a special meeting of Pinetree's shareholders (the
"Shareholder Meeting") to be held on April 22, 2016, shareholders will be asked to
approve a 1-for-100 share consolidation (which is also subject to
the approval of the Toronto Stock Exchange) and the waiver of the
application of Pinetree's shareholder rights plan. Details of
the special business will be contained in the management
information circular to be prepared in respect of the Shareholder
Meeting which will be available on Pinetree's profile at
www.sedar.com at a later date.
About Pinetree
Pinetree is a diversified investment and merchant banking firm
focused on the small cap market, with early stage investments in
resource, biotechnology and technology companies. Pinetree's
shares are listed on the Toronto Stock Exchange under the symbol
"PNP".
This press release contains forward-looking information based on
current expectations, including but not limited to our expectations
in connection with the rights offering and standby commitment,
including the use of proceeds and events which are proposed to
occur on closing. Forward-looking information is often, but
not always, identified by the use of the words "contemplate",
"estimate", "expect" and "anticipate" and statements that an event
or result "may", "will", "should", "could" or "might" occur and any
similar expressions or negative variations thereof.
In providing forward-looking information in this press release,
we have made numerous assumptions regarding the rights offering and
standby commitment, which we believe to be reasonable, including
assumptions relating to: (i) the satisfaction or waiver of all
conditions to the completion of the rights offering and standby
commitment; (ii) the expected actions of third parties; and (iii)
the outcome of the rights offering and related transactions,
including the expected use of proceeds. Forward-looking information
entails various risks and uncertainties however that could cause
actual results to differ materially from those reflected in the
forward-looking information. Specific risks that could cause actual
results to differ materially from those anticipated or disclosed in
this press release include, but are not limited to: (i) failure to
satisfy the conditions to complete the rights offering and standby
commitment, including failure to receive required approvals; (ii)
the occurrence of any event, change or other circumstance that
could give rise to the termination of the standby agreement; (iii)
the delay of completion or failure to complete the rights offering
or standby commitment for any other reason; (iv) the amount of
costs, fees and other expenses incurred in connection with the
rights offering and standby commitment; (v) the anticipated timing
of the shareholders' meeting; and (vi) the risk that the
anticipated effects of the rights offering and standby commitment,
if completed, may not result in the outcomes expected by us. In
addition, general risks relating to capital markets, economic
conditions, regulatory changes, as well as the operations of our
business may also cause actual results to differ materially from
those anticipated or disclosed in this press release.
Forward-looking information are not guarantees of future
performance, and management's assumptions upon which such
forward-looking information are based may prove to be
incorrect.
Accordingly, there can be no assurance that actual events or
results will be consistent with the forward-looking information
disclosed herein. In light of the significant uncertainties
inherent in forward-looking information, any such forward-looking
information should not be regarded as representations by us that
our objectives or plans relating to the rights offering or standby
commitment or otherwise will be achieved. Investors are cautioned
not to place undue reliance on any forward-looking information
contained herein and that such forward-looking information are
provided solely for the purpose of providing information about our
current expectations and plans relating to the future. Readers are
cautioned that such information may not be appropriate for other
purposes. In addition, forward-looking information relates to the
date on which they are made.
We disclaim any intention or obligation to update or revise any
forward-looking information contained in this press release,
whether as a result of new information, future events or otherwise,
except to the extent required by law.
SOURCE Pinetree Capital Ltd.
