TORONTO, Feb. 19, 2019 (GLOBE NEWSWIRE) — Canada House Wellness Group Inc. (CSE: CHV) (“Canada House” or the “Company”) announces that it intends to proceed with a financing of units (“Units”) for total gross proceeds to the Company of $2,000,000 to $3,000,000 (the “Offering”).
Each Unit will be offered at a price of $0.12 per Unit and is comprised of: (i) one common share (each a “Common Share”); and (ii) and one detachable common share purchase warrant of the Company (each, a “Warrant”).
Each Warrant shall be exercisable into one Common Share at an exercise price of $0.30 for a period of 12 months; at an exercise price of $0.40 from 12 months to 24 months; at an exercise price of $0.60 from 24 months to 36 months; and at an exercise price of $0.80 from 36 months to 48 months following the closing date of the Offering.
The Company may pay to an appropriately registered entity a cash commission of up to 6.0% of the aggregate gross proceeds from subscriptions from investors introduced to the Company by such finder and, subject to regulatory approval (where any such approval is required), warrants having terms substantially similar to the Warrants, to acquire from treasury an amount of Common Shares equal to up to 6.0% of the number of Units issued pursuant to subscriptions introduced to the Company by such finder.
The Units will be sold subject to the minimum subscription amount of $2,000,000 and, subject to the payment of a finder’s fee as described herein, on a non-brokered basis. The Units will be sold on a private placement basis, to persons who qualify for prospectus exemptions under applicable securities legislation in Canada and other jurisdictions determined by the Company, including the “accredited investor” exemption.
Closing of the Offering is expected to occur on or about March 15, 2019, or such other date or dates as determined by the Company.
The net proceeds from the financing are expected to be used to provide clinic expansion capital for Canada House Clinics; Acquisition and developments costs for the Issuer’s Vegreville and Pickering facilities; R&D capital for its Knalysis Technologies division, and support of Canada House Clinics’ new client acquisition program implementation, and for general working capital purposes.
“This fundraising strengthens our balance sheet and sets us up to pursue the next phase of growth initiatives which include materially expanding our production capacity and buildout of our extraction lab in partnership with Nutritional High which we expect will result in oils and extracts coming to market this calendar year,” said Chris Churchill-Smith, CEO of Canada House.
Closing of the Offering is subject to the Company obtaining all necessary regulatory and stock exchange approvals. The Common Shares and Warrants issued pursuant to the Offering, and any Common Shares issued on the exercise of the Warrants will be subject to a statutory hold period in Canada of four months and one day following the closing of the Offering in accordance with applicable securities laws. Additional resale restriction may be applicable under the laws of other jurisdictions, if any.
Certain subscribers under the Offering may be “related parties” to the Company and, accordingly, the Offering may be deemed to be a “related party transaction” as defined under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”).
Other than subscription agreements between such related parties and the Company relating to the issuance of the Units pursuant to the Offering, the Company has not entered into any agreement with an interested party or a joint actor with an interested party in connection with the Offering.
The Company expects that the Offering will be exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 (pursuant to subsections 5.5(a) and 5.7(1)(a)) as the fair market value of the related party transactions are not expected to be more than 25% of the market capitalization of the Company.
This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities described herein, and these securities will not be offered or sold in any jurisdiction in which their offer or sale would be unlawful. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “1933 Act”), or any state securities laws of the United States. Accordingly, these securities will not be offered or sold to persons within the United States unless an exemption from the registration requirements of the 1933 Act and applicable state securities laws is available.