Emblem Corp EMMBF

Just Out - Emblem to Trade On Grey Market

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Emblem is excited to announce that a portion of our common shares are now eligible to be traded via the TSX Private Markets system! TSX Private Markets facilitates trading in securities that are subject to “hold periods” via prospectus exempt trades. A purchaser who acquires securities under the TSX Private Market system “inherits” the hold period applicable to that security. As a result, securities traded through the TSX Private Market generally trade at a discount to the current trading price of free-trading stock on the main TSXV exchange. The TSX Private Market system therefore allows:

1. Purchasers with a positive view on the future trading price of Emblem stock to buy stock at a discount to the current market trading price; and
2. Existing Emblem shareholders holding “hold period” stock an opportunity to monetize a portion of their investment prior to the “free trading date” for their stock. 

This system is sometimes referred to in the investment community as the “grey” market.
 
Emblem is committed to supporting the investors who have supported us. As such we are striving to provide unique options for our shareholders. In pursuit of these objectives we have come to an agreement with both the TSX and several brokerage firms to create a market for some of our restricted securities, under the TSX Private Market system.
 
As you may be aware, Emblem completed three private placement financings, all of which were completed prior to October 2016 (the “Private Placements”). Emblem also completed an offering of subscription receipts in November 2016, which converted into common shares concurrent with our “going public transaction” in December 2016 (the “Concurrent Offering”). All shares issued under the Private Placements and the Concurrent Offering are subject to “hold periods”. We intend to use our best efforts to list all “hold period” shares issued under the Private Placements and the Concurrent Offering under the TSX Private Market system. However, the legal requirements for listing the shares issued under the Private Placements are different from the legal requirements for listing the shares issued under the Concurrent Offering. As a result, we are currently listing the shares issued under the Concurrent Offering. If and when the legal requirements for listing the shares issued under the Private Placements have been fully satisfied, we will advise you.
 
The Common Shares issued under the Concurrent Offering were issued pursuant to Subscription Receipts (common share + ½ warrant) having a Unit price of $1.15. The common shares so issued are subject to a regulatory “hold period” that ends on March 11, 2017. The effect of the “hold period” is that those common shares cannot be traded over the facilities of the main TSXV until March 11, 2017. The arrangements we have made will allow these common shares to trade on the TSX Private Market system so long as an applicable prospectus exemption is available for the trade (e.g. the purchaser is an accredited investor).
 
If you would like to participate in the trading in Emblem common shares in the TSX Private Market system, either as a purchaser or vendor, you must have a brokerage account with a Canadian brokerage firm.
 
The basic elements of the process to participate are:

1. Participation will be through your Canadian broker and your Canadian brokerage account (limited US dealers may be able to participate)
2. If you are planning to sell shares, your broker must return your physical share certificate to Computershare and ask that the shares be dematerialized and deposited electronically under a new restricted CUSIP
3. An order is placed specifying whether you would like to buy or sell Emblem shares
4. The order specifies number of shares (bid and ask) and price per share

Please understand, this market does not offer the same transparency as an electronically quoted market such as the TSXV. Firms will provide over the phone quotes of the bid/ask and at the end of the trading day, the TSX Private Markets will post the trades from that day.
 
https://tsxprivatemarkets.com
 
We strongly advise that, if you choose to use this market and do not have experience with it, you consult your Investment Advisor. Please make sure he/she checks quotes from several market makers.
 
Additionally, it is important to reiterate that these shares are expected to trade at a discount to the current market price of EMC.V, as the trading of those shares on the TSXV will still be restricted until March 11, 2017. It is not possible for us to predict the extent of that discount at any particular time between now and March 11, 2017 as that will be a function of the bid and ask parameters of buyers and sellers. However, we fully expect that the closer the trade date is to March 11, 2017, the lower the discount will be.
 
In order to facilitate trading in Emblem common shares under the TSX Private Market system, Emblem has made arrangements with PI Financial Corp. and Canaccord Genuity Corp. to “make a market” in these shares. We expect that other brokerage firms will join the market making effort and we will advise you of such additional brokerage firms if, as and when such additional brokerage firms agree to make such markets.
 
If you would like to participate as either a purchaser or a vendor in trading in Emblem common shares under the TSX Private Market system, please have your Investment Advisor contact PI Financial Corp. or Canaccord Genuity Corp.
 
PI Financial: Joel Kitsul - [e-mail]
Canaccord: Cary Pinkowski - [e-mail]
 
The listing of Emblem’s “hold period” stock on the TSX Private Markets system serves the interests of all shareholders of the company. The qualification for trading on the TSXV of a significant number of shares on a free trading date (in this case March 11, 2017) may create volatility in our share price. Facilitating trading in our common shares over the TSX Private Markets system is highly likely to reduce the level of volatility in our share price in the period prior to and after March 11, 2017.
 
We are working diligently to finalize arrangements to create a similar market under TSX Private Market system for the common shares issued in the various Private Placements (the stock issued in our various offerings completed prior to October 2016). We will advise you if and when these arrangements have been finalized.

Lastly, please find attached here a FAQ sheet on the TSX Private Markets. 
 
As always, we appreciate your continued support as we drive forward with our business plan. Please feel free to reach out to our Investor Relations Department (Danny Brody or Ali Mahdavi) with any questions.
 
Best regards,
Danny

Danny Brody
Director, Investor Relations