Canada Iron Announces Reverse Takeover Transaction with Humble & Fume and Subcription Receipt Financing
Toronto, Ontario--(Newsfile Corp. - February 23, 2021) - Canada Iron Inc. ("Canada Iron" or the "Company") is pleased to announce that it has entered into a binding letter agreement (the "Letter Agreement") dated February 23, 2021 with Humble & Fume Inc. ("Humble") to complete a business combination by way of a transaction that will constitute a reverse takeover of the Company by Humble (the "Transaction"). The resulting issuer from the Transaction (the "Resulting Issuer") will carry on the current business of Humble. In addition, Canada Iron is pleased to announce that Humble intends to complete a private placement of subscription receipts to raise aggregate gross proceeds of a minimum of $10,000,000 (the "Humble Financing").
Description of Humble and its Business
Humble is uniquely positioned as the largest integrated cannabis distribution solution for retailers, licensed producers, multi-state operators, and cannabis customers. Humble's business revolves around three key pillars: (1) distribution of cannabis accessories across North America; (2) extraction & formulation through its wholly-owned subsidiary Fume Labs, which is the designer and operator for all concentrates created; and (3) HumbleCannabis Solutions, Humble's wholly owned subsidiary which provides the only sales force in Canada able to offer a complete solution of cannabis brands and accessories to retailers.
Learn more at www.humbleandfume.com.
The Letter Agreement
Under the terms of the Letter Agreement, it is currently anticipated that the Transaction will be effected by way of a three-cornered amalgamation, share exchange, merger, amalgamation, arrangement or other similar form of transaction as is acceptable to the parties. In connection with the Transaction, Canada Iron will reconstitute its board of directors and change its name to a name requested by Humble (the "Name Change") and the Resulting Issuer will conduct its business under the new name.
The Letter Agreement includes a number of conditions to the closing of the Transaction, including but not limited to, requisite shareholder approvals including the approval of the shareholders of Humble and Canada Iron, the consolidation (the "Consolidation") of Canada Iron Shares (as defined below), including those issued in the Canada Iron Financing and Canada Iron Debt Settlement (each as defined below), on a basis that results in the shareholders receiving shares that have a value of $1.25M based on the Issue Price (as defined below), approvals of all regulatory bodies having jurisdiction in connection with the Transaction, the completion of the Humble Financing, Canada Iron Financing, Canada Iron Debt Settlement, and other closing conditions customary to transactions of the nature of the Transaction. Canada Iron intends to call an annual general and special meeting of its shareholders (the "Meeting") in due course, and its shareholders will be asked to approve the following matters, among others, at the Meeting: the reconstitution of Canada Iron's board of directors, the Name Change, the Consolidation, and, if requested, the adoption of an omnibus equity compensation plan (collectively, the "Canada Iron Meeting Matters").
Canada Iron is a reporting issuer under the securities laws of the Provinces of British Columbia and Alberta whose common shares have never been posted for trading on any marketplace. Canada Iron intends to apply to list its common shares on the Canadian Securities Exchange (the "CSE") and, if and upon the satisfaction of the CSE's initial listing requirements, the common shares of the Resulting Issuer (the "Resulting Issuer Shares") are expected to begin trading on the CSE following the closing of the Transaction.
In connection with the Transaction, Humble intends to complete a private placement offering of a minimum of 10,000,000 subscription receipts (each, a "Subscription Receipt") of Humble at a price of $1.00 per Subscription Receipt (the "Issue Price") for aggregate gross proceeds of a minimum of $10,000,000. Upon the satisfaction or waiver of, among other things, all of the condition precedents to the completion of the Transaction, each Subscription Receipt will convert into one unit of Humble (a "Humble Unit") with each Humble Unit being comprised of one (1) common share of Humble (a "Humble Share") and one-half of one (1/2) common share purchase warrant of Humble (each whole warrant, a "Humble Warrant"). Each Humble Warrant will be exercisable for one Humble Share at an exercise price of $1.40 for a period of 36 months following the closing of the Transaction. Final terms and structure of the Humble Financing shall be determined in the context of the market and shall be agreed to between Humble and the Humble Financing agents. Upon closing of the Transaction, the Humble Shares and the Humble Warrants will be exchanged for Resulting Issuer Shares and Resulting Issuer warrants ("Resulting Issuer Warrants") on economically equivalent terms on a 1:1 basis. Humble may issue broker warrants and pay finder's fees in connection with the Humble Financing upon terms to be determined.
The net proceeds from the Humble Financing will be used by the Resulting Issuer for working capital and general corporate purposes.
Canada Iron Financing and Debt Settlement
In connection with the Transaction, Canada Iron also intends to complete a private placement offering (the "Canada Iron Financing") of 13,974,122 units (each, a "Canada Iron Unit") of Canada Iron at a price of $0.0042937 per unit for aggregate gross proceeds of $60,000. Each Canada Iron Unit will be comprised of one common share (each, a "Canada Iron Share") and one-half of one (1/2) common share purchase warrant (each whole warrant, a "Canada Iron Warrant"), with each Canada Iron Warrant being exercisable at a price of $0.0064405 into one Canada Iron Share for a period of 36 months following the completion of the Transaction. Further, Canada Iron intends to settle outstanding indebtedness in the aggregate amount of $108,000 by issuing the creditors thereof Canada Iron Units at a deemed price of $0.0042937 per unit (the "Canada Iron Debt Settlement"). After adjusting for the Consolidation, the effective price of the Canada Iron Units and exercise price of the Canada Iron Warrants will be $1.00 and $1.50, respectively, such that the recipients thereof will acquire an interest in the Resulting Issuer on the same economic terms as the investors in the Humble Financing.
Listing Statement and Comprehensive News Release
In connection with the Transaction and pursuant to the requirements of the CSE, the Company intends to file a listing statement on its issuer profile on SEDAR (www.sedar.com), which will contain details regarding the Transaction, Canada Iron, Humble and the Resulting Issuer. Investors are cautioned that, except as disclosed in the listing statement, any information released or received with respect to the Transaction may not be accurate or complete and should not be relied upon. There can be no assurance that the Transaction will be completed as proposed or at all.
The parties will issue a comprehensive news release regarding the Transaction in due course.
Investors are cautioned that any information released or received with respect to the Transaction in this news release may not be complete and should not be relied upon.
This news 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 to be issued in connection with the Transaction 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.
Completion of the Transaction is subject to a number of conditions, including but not limited to, CSE acceptance and if applicable, disinterested 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 listing 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 Canada Iron should be considered highly speculative.
The CSE has in no way passed upon the merits of the Transaction and has neither approved nor disapproved the contents of this news release.
About Canada Iron Inc.
Canada Iron Inc. is a mineral exploration company with no current activities or operations.
Cautionary Statements Regarding Forward-Looking Information
This news release contains "forward-looking information" within the meaning of applicable securities laws relating to the proposal to complete the Transaction and associated transactions. Any such forward-looking statements may be identified by words such as "expects", "anticipates", "believes", "projects", "plans" and similar expressions. Readers are cautioned not to place undue reliance on forward-looking statements. Statements about, among other things, the listing of the Canada Iron Shares on the CSE, the expected terms of the Transaction, the number of securities of Canada Iron that may be issued in connection with the Transaction, the Humble Financing, the Canada Iron Financing, the Canada Iron Debt Settlement, shareholder approval, Humble's strategic plans and the parties' ability to satisfy closing conditions and receive necessary approvals are all forward-looking information. These statements should not be read as guarantees of future performance or results. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from those implied by such statements. Although such statements are based on management's reasonable assumptions, there can be no assurance that the Transaction will occur or that, if the Transaction does occur, it will be completed on the terms described above. Canada Iron and Humble assume no responsibility to update or revise forward-looking information to reflect new events or circumstances unless required by applicable law.
For more information, please contact:
Canada Iron Inc.
Michael Lerner, CEO & Director
Humble & Fume Inc.
NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES
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