P Squared Renewables Inc. Announces The Completion Of Qualifying Transaction And The Prior Closing Of $6 Million Subscription Receipt Financing
Calgary, Alberta – P Squared Renewables Inc. (TSXV: PSQ.P) (“PSQ”) is pleased to announce completion of PSQ’s Qualifying Transaction, as such term is defined under Policy 2.3 of the Corporate Finance Manual of the TSX Venture Exchange (the “Transaction”). The three main components of the Transaction involved the closing of a $6 million concurrent financing (the “Offering”), the acquisition of the Kelburn Clinic, and the Amalgamation of PSQ and UI.
The closing of the Transaction and the Offering remains subject to the completion of filings with the TSX Venture Exchange (“TSXV”) and final approval thereof.
Amalgamation of PSQ and UI
Pursuant to the Transaction, on August 31, 2021, PSQ completed a three-cornered amalgamation (the “Amalgamation”) among PSQ, 1266855 B.C. Ltd. (“Subco”, a wholly owned subsidiary of PSQ), and Universal Ibogaine Inc. (“UI”).
The continuing entity, (the “Resulting Issuer”) shall complete a formal name change to “Universal Ibogaine Inc.” or such other name as determined by UI and PSQ. The Resulting Issuer shall carry on the business of UI as the continuing entity under the Amalgamation.
Pursuant to the terms and conditions set forth in the amalgamation agreement dated October 7, 2020 and amended August 23, 2021 (the “Amalgamation Agreement”), the holders of the securities of UI (including common shares, share purchase warrants, and stock options) will receive equivalent securities of PSQ / the Resulting Issuer on a one-for-one basis.
Closing of $6 million Concurrent Financing (the “Offering”)
PSQ also announces the closing of a fully subscribed non-brokered private placement (as previously announced – see news release of July 5, 2021) of subscription receipts (“Subscription Receipts”) by Subco.
Pursuant to the Offering, Subco issued 24,000,000 Subscription Receipts at a price of $0.25 per Subscription Receipt for aggregate gross proceeds of $6,000,000. The Offering was a “Concurrent Financing” to the QT, as that term is defined in the TSXV Policy 2.4 – Capital Pool Companies.
The Subscription Receipts were offered at a price of $0.25 per Subscription Receipt and entitle the holders thereof to automatically receive, upon the completion of the Transaction, without any further action required by such holder and without payment of any additional consideration, one unit in Subco (“Subco Unit”), all in accordance with the terms of a subscription receipt agreement between PSQ, Subco, and Odyssey Trust Company (the “Subscription Receipt Agreement”).
As a part of the Transaction, each of the Subco Units were exchanged for units in the Resulting Issuer (“Resulting Issuer Units”) on a one-for-one basis. As such, pursuant to the Subscription Receipt Agreement and the Amalgamation Agreement, the subscribers to the Offering received Resulting Issuer Units after the completion of the Transaction.
Each Resulting Issuer Unit will be comprised of one common share in the capital of the resulting issuer (each a “Resulting Issuer Share”) and one resulting issuer warrant (each a “Resulting Issuer Warrant”). Each Resulting Issuer Warrant will entitle the holder thereof to purchase one Resulting Issuer Share for a period of five (5) years from the date of issuance at an escalating annual exercise price as follows: (a) $0.50 per common share if exercised in the first year from the date of issuance; (b) $0.75 per common share if exercised in year two; (c) $1.00 per common share if exercised in year three; (d) $1.25 per common share if exercised in year four; and (e) $1.50 per common share if exercised in year five from the date of issuance.
The Financing was made in reliance on exemptions from the prospectus requirement contained in National Instrument 45-106 – Prospectus and Registration Exemptions.
Finders’ fees of $1,600 cash and 6,400 warrants (8% cash plus 8% broker warrants, with an exercise price of $0.25 per share and term of 2 years to expiry) were payable on $20,000 of subscription agreements which were included in the Offering.
Subject to TSXV approval, the Resulting Issuer will issue 4,000,000 common share purchase warrants pursuant to an advisory agreement which UI has with a third party, whereby entitlement to the warrants vested upon completion of a minimum $5 million financing. These warrants will entitle the holder to acquire one common share for each warrant at an exercise price of $0.25 per common share, and have an expiry date of December 31, 2024.
Closing of the Acquisition of the Kelburn Clinic
As part of the completion of the Transaction, a portion of the proceeds of the Offering were used to complete the final $375,000 balance of the cash portion of consideration payable under UI’s acquisition of a private company which for approximately 7 years has operated the Kelburn Mental Health & Addiction Recovery Centre (the “Kelburn Clinic”).
Consideration paid by UI for the acquisition of the Kelburn Clinic and its related property consisted of:
– $1.5 million for the purchase of the operations of the Kelburn Clinic, consisting of $1 million cash and $500,000 payable in the form of 2,000,000 share Units issued by UI (as further described below), and
– $3.5 million for the purchase of the land (50 acres) and buildings utilized by the Kelburn Clinic (the “Kelburn Property”), and consisting of approximately $1.63 million payable in cash and the balance of approximately $1.86 million payable in the form of 7,448,745 share Units issued by UI. The cash consideration payable on the final closing of the acquisition of the Kelburn Property will be funded by a mortgage financing which is in process of being advanced.
The share Units issued by UI have the same terms as the Resulting Issuer Units that were issued under the terms of the Offering.
Dr. Rami Batal, Chief Executive Officer of UI, noted “we are grateful for the prior support of the shareholders of UI and PSQ and our new shareholders who were subscribers to the Offering, as well as the owners of the Kelburn Clinic. We are excited to be nearing completion of the Transaction process, and look forward to kicking off our strategic plans related to the Kelburn Clinic, and commencing a clinical trials application for the use of ibogaine for the treatment of opioid use disorders.”
The Resulting Issuer
Subject to final TSXV approval, it is intended that the Board of Directors and the Officers of the Resulting Issuer will be:
Position With the Resulting Issuer
Dr. Rami Batal
Chief Executive Officer
Chief Financial Officer and Corporate Secretary
Chairman and Director
Marilyn Loewen Mauritz
Dr. Alberto Solá Agulló
Final TSXV Approval and Resumption of Trading
The ultimate listing of the common shares of the Resulting Issuer is subject to final approval by the TSXV, and resumption of trading of the common shares (under the intended trading symbol “IBO”) is subject to TSXV conditions which PSQ and UI are in process of completing, prior to the expected issuance of the ultimate Final Exchange Bulletin by the TSXV.