/NOT FOR DISTRIBUTION IN THE U.S. OR OVER U.S.
NEWSWIRES/
TORONTO, Feb. 12, 2019 /CNW/ - Pele Mountain Resources
Inc. (TSXV: GEM) ("Pele" or the "Company") announces
that, further to its November 9, 2018
announcement regarding the business combination pursuant to which,
among other things, Pele will complete a reverse take-over of Bhang
Corporation ("Bhang"), a privately-held Nevada corporation (the "RTO
Transaction"), Bhang Canada Inc. ("BCI"), a special
purpose vehicle, completed a private placement financing of
subscription receipts (the "Subscription Receipts") for
gross proceeds of $5,905,010.50 (the
"Offering").
Under the Offering, BCI issued an aggregate of 11,810,021
Subscription Receipts at a price of $0.50 per Subscription Receipt for gross proceeds
of $5,905,010.50. The Offering was
comprised of a brokered offering of Subscription Receipts (the
"Brokered Offering"), which was led by AltaCorp Capital
Inc., as lead agent and sole bookrunner, and included Echelon
Wealth Partners Inc., Eight Capital and Industrial Alliance
Securities Inc. (collectively, the "Agents"), and a
non-brokered offering of Subscription Receipts (the
"Non-Brokered Offering").
Each Subscription Receipt is convertible, without additional
consideration, into a unit of BCI (a "BCI Unit") consisting
of one common share of BCI (a "BCI Share") and one half of
one common share purchase warrant of BCI (each whole warrant, a
"BCI Warrant"). Each BCI Warrant entitles the holder to
purchase one BCI Share at a price of $0.65 per share until 24 months after the
completion of the RTO Transaction, subject to acceleration in the
event that the volume weighted average price of the shares of Pele
(as the resulting issuer) upon the completion of the RTO
Transaction (the "Resulting Issuer") on the Canadian
Securities Exchange (the "CSE") is equal to or greater than
$1.00 over a period of 10 consecutive
trading days. The Subscription Receipts will convert into BCI Units
upon satisfaction of the escrow release conditions (the "Escrow
Release Conditions") set out in the agency agreement entered
into among the Agents, BCI, Pele and Bhang on the date
hereof. The BCI Units and the Compensation Options (as
defined below) will be exchanged for corresponding securities,
respectively, in the Resulting Issuer upon completion of the RTO
Transaction.
The net proceeds raised in connection with the Offering, after
fees and expenses incurred, and less 50% of the Agents' Fee (as
defined below), have been deposited with Capital Transfer Agency
ULC ("Capital Transfer"), as subscription receipt agent. The
escrowed proceeds will be held by Capital Transfer until the Escrow
Release Conditions have been satisfied.
In connection with the Offering, the Agents are entitled to
receive (i) a cash commission equal to 6% of the aggregate proceeds
of the portion of the Brokered Offering sold to subscribers sourced
by the Agents, (ii) a cash commission equal to 3% of the aggregate
proceeds from all other subscribers participating in the Brokered
Offering and (iii) a corporate finance fee, which cash commissions
and corporate finance fee totaled $215,550 (collectively, the "Agents'
Fee"). The Agents have received an aggregate number of
compensation options (the "Compensation Options") equal to
6% of the number of Subscription Receipts issued to subscribers
sourced by the Agents, and an aggregate number of Compensation
Options equal to 3% of the number of Subscription Receipts issued
to certain subscribers on a president's list participating in the
Offering. Each Compensation Option entitles the holder to purchase
one BCI Unit at a price of $0.50 per
BCI Unit until 24 months after completing the RTO Transaction. 50%
of the Agents' Fee was paid on closing of the Offering with the
remainder to be paid on closing of the RTO Transaction upon
satisfaction of the Escrow Release Conditions.
About Bhang Corporation
Founded by professional chef and master chocolatier,
Scott Van Rixel, Bhang Corporation,
headquartered in Miami, Florida,
has been formulating and producing award-winning THC and
CBD-infused products since 2010. What began as a cannabis-infused
dark chocolate bar has now expanded to a widely-recognized and
awarded cannabis brand. Bhang's chocolate products expanded to
include a premium collection of vapes, gums, mouth sprays and
Bhang-branded merchandise. Through its licensees across the US
& around the globe, from public companies to platinum recording
artists and organic food companies, Bhang has mastered the art of
harnessing mutually beneficial partnerships to put its products in
consumers' hands. The winner of 9 Cannabis Cups for best edible,
Bhang continues to develop and enhance its IP. From its first win
in 2010 to its win for best edible in the world in Jamaica in 2014 to its "Best of Burque" win in
2018, Bhang continues to expand its industry dominance by bringing
consistent, safe, and delicious products to the world. Find out
more about Bhang, by visiting www.bhangchocolate.com.
Cautionary Notes
Investors are cautioned that, except as disclosed in the CSE
listing statement to be prepared in connection with the RTO
Transaction, any information released or received with respect to
the definitive agreement between Pele, Pele Acquisition Corp.,
Bhang and BCI dated November 8, 2018,
as amended (the "Definitive Agreement") (as filed under the
Company's corporate profile at www.sedar.com) or RTO Transaction
may not be accurate or complete and should not be relied upon.
No stock exchange, securities commission or other regulatory
authority has in any way passed upon the merits of the RTO
Transaction or approved or disapproved the contents of this press
release.
Trading in the common shares of Pele has been halted pursuant to
the policies of the TSXV and the Company expects that trading will
remain halted pending the earlier of the delisting of Pele's shares
from the TSXV and termination of the Definitive Agreement. There
can be no assurance that the conditions in the Definitive Agreement
will be satisfied or that the RTO Transaction will be completed as
contemplated therein or at all.
About Pele Mountain Resources Inc.
The common shares of Pele Mountain Resources Inc. are listed on
the TSXV under the symbol "GEM" which are subject to a TSXV
halt in trading as cautioned above. Pele is focused on the
development of renewable energy projects in Northern Ontario and also holds mineral
resource interests in Northern Ontario. Management continues
to seek new strategic opportunities to enhance shareholder
value.
About Bhang Corporation
For more information on Bhang Corporation, please contact
Scott Van Rixel, CEO, Bhang
Corporation, Email: info@bhangchocolate.com.
Forward Looking Information, Disclaimer and Reader
Advisory
This news release contains certain forward-looking information
and statements that reflect the current view and/or expectations of
management of each of the parties based on information currently
available to the parties with respect to performance, business and
future events, including, but not limited to, express or implied
statements and assumptions regarding the parties' mutual intention
to complete the RTO Transaction and regarding the terms and
conditions relating thereto. The use of any of the words
"may", "could", "would", "might", "intend", "plan", "expect",
"believe", "contemplate", "anticipate", "will", "projected",
"estimated" and similar expressions and statements and variations
thereof relating to matters that are not historical facts are
intended to identify forward-looking information and statements and
are based on the then-current expectations, beliefs, assumptions,
estimates and forecasts about the business and the industry and
markets in which each party operates and as to the outcome and
timing of any such future events. Forward-looking statements are
not guarantees of future performance and involve known and unknown
risks, uncertainties and other factors which are difficult to
predict and actual future results and outcomes may differ
materially. In particular, there is no guarantee that the parties
will successfully complete the RTO Transaction contemplated herein,
or that the due diligence of either party will be satisfactory or
that the parties will obtain any required corporate, board, member,
shareholder, third-party and/or regulatory or other governmental
approvals, if any. Accordingly, the reader should not place undue
reliance on forward-looking statements and information, which are
qualified in their entirety by this cautionary statement. The
Company does not undertake any obligations to release publicly any
revisions for updating any voluntary forward-looking information or
statements, except as required by applicable securities law.
This press release does not constitute an offer to sell or a
solicitation of an offer to buy any of the securities in
the United States. The securities
have not been and will not be registered under the United States
Securities Act of 1933, as amended (the "U.S. Securities Act") or
any state securities laws and may not be offered or sold within
the United States or to U.S.
Persons unless registered under the U.S. Securities Act and
applicable state securities laws or an exemption from such
registration is available. Not for distribution to U.S. Newswire
Services or for dissemination in the
United States. Any failure to comply with this restriction
may constitute a violation of U.S. Securities laws.
All information contained in this press release with respect
to Bhang, its business and operations was supplied by Bhang for
inclusion herein. Pele has not conducted due diligence on the
information provided and does not assume any responsibility for the
accuracy or completeness of such information.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) has in any way passed on the merits of the
Transaction and neither of the forgoing entities accepts
responsibility for the adequacy or accuracy of this release or has
in any way approved or disapproved of the contents of this
release.
SOURCE Pele Mountain Resources Inc.