PP
Loyalist completes $9.77-million private placement
2015-03-17 16:39 ET - News Release
Mr. David McAdam reports
LOYALIST GROUP LIMITED COMPLETES OFFERING OF COMMON SHARES
Loyalist Group Ltd. has completed its previously announced private placement of common shares pursuant to which the company issued 24,437,500 shares at a price per share of 40 cents for aggregate gross proceeds to the company of $9,775,000. The offering was led by Paradigm Capital Inc. and Cormark Securities Inc., and included Canaccord Genuity Corp., Haywood Securities Inc. and Mackie Research Capital Corp. The issued shares included 3,665,625 shares issued pursuant to an option granted to the agents.
In connection with the offering, the company paid the agents and certain arm's-length finders an aggregate cash commission of $700,500. As additional compensation for their services, the agents and the finders received non-transferable compensation options exercisable for 24 months following the closing of the offering to purchase an aggregate of 1,696,875 common shares at a price per share equal to the issue price.
The company anticipates that the proceeds of the offering will be used for general working capital purposes and the financing of potential acquisitions.
Pursuant to applicable Canadian securities laws, the issued shares and any common shares issued upon exercise of the compensation options will be subject to a hold period until July 18, 2015.
Certain directors, officers and insiders subscribed for an aggregate of 3,719,000 issued shares under the offering. The participation of these parties in the offering constitutes a related-party transaction within the meaning of Multilateral Instrument 61-101 and the policies of the TSX Venture Exchange. The company is relying upon the exemptions from the formal valuation and minority shareholder approval requirements pursuant to sections 5.5(b) and 5.7(1)(a), respectively, of MI 61-101 on the basis that the company is not listed on a specified stock exchange and at the time the offering was agreed to, neither the fair market value of the subject matter of, nor the fair market value of the consideration for the transaction insofar as it involves interested parties (within the meaning of MI 61-101) in the offering exceeds 25 per cent of the company's market capitalization calculated in accordance with MI 61-101.
The company was not in a position to file a material change report more than 21 days in advance of the closing of the offering as the details of participation of the interested parties were not known at such time.
The offering is subject to certain conditions, including, but not limited to, the receipt of all necessary approvals, including the final approval of the TSX-V.
We seek Safe Harbor.