Orletto Capital II Provides an Update on Its Qualifying Transaction and Announces a Private Placement of Subscription Receipts of MiMedia
THIS NEWS RELEASE IS NOT FOR DISTRIBUTION TO U.S. WIRE NEWS SERVICES OR FOR DISSEMINATION IN THE UNITED STATES
QUEBEC CITY, Jan. 28, 2020 (GLOBE NEWSWIRE) -- ORLETTO CAPITAL II INC. (the “Corporation”), a capital pool company, provides updates on its previously announced agreement in principle with respect to a qualifying transaction with MiMedia Inc. (“MiMedia”) on July 30, 2019. The negotiations have been proceeding well and the Corporation is encouraged by the progress in recent months. As announced on July 30, 2019, the Corporation entered into an agreement in principle (the “Agreement”) with MiMedia for the realization of a qualifying transaction, as per Policy 2.4 of the TSX Venture Exchange (the “Exchange”). The outside date upon which the Corporation and MiMedia have initially agreed to achieve certain milestones pursuant to the Agreement have now been extended with the closing of the proposed business combination by way of the acquisition of all of the issued and outstanding shares of MiMedia to take place on or prior to June 30, 2020. The Exchange has not considered the merits of the contemplated qualifying transaction. A more detailed press release will be subsequently published in order to provide additional details on the contemplated qualifying transaction. Consequently, trading in the common shares of Orletto will remain halted up until the publication of a press release announcing that trading in the common shares is resumed.
Private Placement of Subscription Receipts of MiMedia
As part of the proposed business combination, Orletto is pleased to announce that MiMedia has entered into a letter of engagement with Leede Jones Gable Inc. (the “Agent”) under which the Agent has agreed to offer for sale, on a “best effort” private placement basis, subject to all required regulatory approvals, subscription receipts of MiMedia (the “Subscription Receipts”), at a price of $0.30 per Subscription Receipt (the “Subscription Price”), for a minimum of 7,000,000 Subscription Receipts and a maximum of 17,000,000 Subscription Receipts for respective gross proceeds of $2,100,000 and $5,100,000 (the “Offering”).
Upon the completion of the qualifying transaction and upon the satisfaction or waiver (to the extent such waiver is permitted) of certain closing conditions at or before 5:00 p.m. (Toronto time) on June 30, 2020, the Subscription Receipts will be exchanged, for no further consideration or action to be taken, at the ratio of one Subscription Receipt for one unit of the resulting issuer (the “Units”), with each Unit consisting of one common share in the capital of the resulting issuer (a “Unit Share”) and one common share purchase warrant (each whole common share purchase warrant, a “Warrant”). Each Warrant shall entitle the holder thereof to acquire one common share in the capital of the resulting issuer (a “Warrant Share”) at a price of $0.45 until the date which is 24 months following the closing of the qualifying transaction, provided, however, that the expiry date may be accelerated in certain circumstances.
MiMedia has granted the Agent an over-allotment option to offer for sale up to an additional 15% of the Subscription Receipt at the Subscription Price, exercisable in whole or in part, at any time on or prior to 48 hours prior to the closing of the Offering.
As part of the Offering, the Agent will receive a cash commission in an amount equal to 10% of the gross proceeds of the Offering. As additional consideration, the Agent will also receive that number of warrants (the “Agent’s Warrants”) equal to 10% of the number of Subscription Receipts issued pursuant to the Offering. Each Agent’s Warrant will entitle the holder thereof to acquire one common share of the Resulting Issuer (an “Agent’s Share”) at the Subscription Price for a period of 36 months following the closing of the Offering. One half of the cash commission will be paid at the closing of the Offering and the remaining portion of the cash commission shall be deposited in escrow with an escrow agent and released at the closing of the qualifying transaction of the Corporation. The Agent’s Warrants will be issued at the closing of the qualifying transaction.
MiMedia have also granted the Agent a right of first refusal for any further financing which MiMedia may require or propose to obtain for a period of twelve (12) months following the closing of the Offering .
This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any State in which such offer, solicitation or sale would be unlawful. The securities being offered have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the United States Securities Act of 1933, as amended, and applicable state securities laws.
Except for historical information, this press release may contain “forward-looking statements” and “forward-looking information” within the meaning of applicable securities laws that reflect the Corporation’s current expectation regarding future events, including, without limitation, the execution of the definitive agreements. Forward-looking statements contained in this press release involve known and unknown risks, uncertainties and other factors that may cause actual results, performance and achievements of the Corporation, as the case may be, to be materially different from any future results, performance or achievements expressed or implied by the said forward-looking statements. The Corporation expressly disclaims any intention to update or revise any forward-looking statements and information whether as a result of new information, future events or otherwise, other than as required by law.Completion of the transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and if applicable pursuant to Exchange Requirements, majority of the minority shareholder approval. Where applicable, the transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all. Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the transaction, any information released or received with respect to the transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.
The TSX Venture Exchange has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accept responsibility for the adequacy or accuracy of this press release
For further information, please contact:
Mr. Benoit Chotard
ORLETTO CAPITAL II INC.
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