VANCOUVER, British Columbia, June 10, 2019 (GLOBE NEWSWIRE) — PRESS RELEASE — CROP Infrastructure Corp. has announced that it intends to conduct a non-brokered private placement offering of senior secured convertible debentures at an original issue discount of 20 percent with aggregate face value of up to $1,250,000, for gross aggregate proceeds of up to $1,000,000.

The terms of the debentures include:

  • a maturity date of one year from the date of closing of the offering and will bear interest at a rate of 10 percent per annum, payable quarterly in cash;
  • subject to adjustment, the holders of the debentures, at any time, may convert all or any part of the principal amount outstanding under the debentures into common shares of the company at a conversion price of $0.30 per conversion share and with which any accrued and unpaid interest may be converted into conversion shares at a conversion price of $0.30 per conversion share; and
  • the company may elect to repay, in cash, the outstanding principal amount of the debentures, including any accrued and unpaid Interest, upon 30 days written notice any time following the initial 4 months from the date of closing.

Each subscriber to the offering shall receive one share purchase warrant for each $0.30 of principal amount with each warrant entitling the holder thereof to acquire one common share of the company at an exercise price of $0.50 per warrant share (the “Exercise Price”) for a period of 3 years from closing.

If the company undertakes an equity financing at a price per common share less than 95 percent of the closing market price per share while the debentures are outstanding, the conversion price, subject to Canadian Securities Exchange (CSE) approval, will be adjusted so that it will equal the price determined by multiplying the conversion price by a fraction, of which the numerator will be the total number of shares outstanding on such date plus a number equal to the number determined by dividing the aggregate purchase price of the additional shares offered for subscription or purchase by the closing market price per share on the day immediately preceding such date, and of which the denominator will be the total number of shares outstanding on such record date plus the number of the additional shares.

If during the term of the warrants, the company issues warrants with an exercise price below the exercise price, the company will, subject to CSE approval, adjust the exercise price downward to the to the greater of (a) the price of such issuance, and (b) the closing market price of the shares on the CSE on the trading day prior to public dissemination of the news release disclosing the issuance of the debentures, less the maximum discount permitted by CSE policies. Further, if during the term of the warrants, the company issues warrants with an exercise price below the exercise price, the company will, subject to prior approval from the CSE, issue to the warrant holder special warrants at the reduced exercise price equal to the number of Warrants that would have been issued if the reduced exercise price was used to calculate the number of warrants issued.

The debentures will be collaterally secured by: (a) an amended general security agreement constituting a charge and security interest in all of the personal property of the company; and (b) an unlimited guarantee of certain U.S. based entities of which the company holds an equity interest consisting of DVG LLC, Elite Ventures Group LLC, Humboldt Holdings, LLC, Ocean Green Management LLC, Wheeler Corridor Business Park LLC, and Wheeler Park Properties, LLC and collaterally secured by security agreements issued by each Guarantor; (c) a pledge of equity interest from the company relating to the equity interests of each of the guarantors; and (d) a first priority deed of trust lien on the real property of the guarantors located in California, Washington and Nevada. The enforcement of the security is subject to the terms and conditions of the certificates representing the debentures and to an Amended Agency and Interlender Agreement to be entered into among the holders of the debenture certificates, the company, each of the guarantors, and an agent.

The proceeds of the cffering are expected to be used to continue to grow the company’s United States operations and for general working capital purposes.

None of the securities issued in connection with the offering will be registered under the United States Securities Act of 1933, as amended (the “1933 Act”), and none of them may be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the 1933 Act. This press release shall not constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of the securities in any state where such offer, solicitation, or sale would be unlawful.