Good2GoRTO Corp. and FRX Polymers Inc. Announce Subscription Receipt Private Placement Led by Echelon Wealth Partners
Toronto, October 14, 2021 - Good2GoRTO Corp. (TSXV: GRTO.P) (the "Corporation") and FRX Polymers, Inc. ("FRX"), are pleased to announce further details concerning the concurrent brokered private placement and additional updates on the Corporation's proposed arm's length qualifying transaction (the "Transaction"), which were previously announced on August 3, 2021 following execution by the parties of a non-binding letter of intent with regard to the Transaction on August 3, 2021.
Concurrent Brokered Private Placement
On October 5, 2021, FRX and Finco (as defined below) engaged Echelon Wealth Partners Inc., as lead agent (the "Lead Agent"), on behalf of a syndicate of agents including Eight Capital and Haywood Securities Inc. (collectively with the Lead Agent, the "Agents"), to act as agents on a "best efforts" basis in connection with a private placement offering of a minimum of 13,000,000 subscription receipts (the "Subscription Receipts") of FRX Polymer (Canada) Inc. ("Finco"), a wholly-owned Canadian subsidiary of FRX formed for the purposes of conducting the Offering and the Transaction, at a price of CAD$1.00 per Subscription Receipt (the "Issue Price") for aggregate gross proceeds of a minimum of CAD$13,000,000 (the "Offering").
The Agents have been granted an option (the "Agents' Option") to increase the size of the Offering by up to 15%. The Agents' Option will be exercisable, in whole or in part, at any time up to 48 hours prior to the closing of the Offering (the "Closing Date").
Each Subscription Receipt will be sold at the Issue Price and will be automatically exchanged, for no additional consideration, into one unit of Finco (a "Unit"), on the satisfaction of the Escrow Release Conditions (as defined below). Each Unit will be comprised of one common share in the capital of Finco (a "Common Share") and one-half of one Common Share purchase warrant (a "Warrant"). Each whole Warrant will entitle the holder thereof to acquire one Common Share at an exercise price of CAD$1.30 at any time prior to the first anniversary from the date of issuance.
The Offering is being completed in conjunction with the Transaction, pursuant to which the Common Shares (including the Common Shares issued upon exercise of the Subscription Receipts and the Warrants) and Warrants and other securities of Finco, and the securities of FRX, will be exchanged for common shares or another class of shares, warrants ("Resulting Issuer Shares" and "Resulting Issuer Warrants", respectively), and other securities of the issuer resulting from the Transaction (the "Resulting Issuer"), which exchange will be made and subject to: (i) compliance with Canadian securities laws; (ii) the Resulting Issuer Shares being listed on the TSX Venture Exchange (the "Exchange"); and (iii) the Resulting Issuer being a "foreign private issuer" as such term is defined in Rule 405 promulgated under the U.S. Securities Act (as defined below).
In connection with the Offering, Finco will pay the Agents a cash fee of 7.0% of the aggregate gross proceeds of the Offering (the "Agents' Fee"). One-half of the Agents' Fee will be payable on the Closing Date and the remaining one-half will be payable upon satisfaction of the Escrow Release Conditions. The Agents will also be entitled to compensation warrants from Finco (the "Compensation Warrants") equal to 7.0% of the number of Subscription Receipts sold pursuant to the Offering, issuable on the Closing Date. The Agents have granted Finco a president's list (the "President's List") whereby Finco will pay a reduced commission of 3.0% cash and 3.0% Compensation Warrants on gross proceeds of up to CAD$3,000,000, in respect of subscriptions made by purchasers identified as President's List purchasers.
Provided the Escrow Release Conditions are satisfied, pursuant to the Transaction, each Compensation Warrant will be exchanged for one compensation warrant of the Resulting Issuer (each a "Resulting Issuer Compensation Warrant") upon the satisfaction of the Escrow Release Conditions. Each Resulting Issuer Compensation Warrant shall entitle the holder thereof to subscribe for that number of Resulting Issuer Shares equal to the number of Resulting Issuer Shares issued in exchange for each Common Share pursuant to the Transaction at a price equal to the Issue Price for a period of 24 months from the date of the completion of the Transaction. If the Escrow Release Conditions are not satisfied at or prior to the Escrow Deadline (as defined below), the Compensation Warrants shall be immediately cancelled.
The gross proceeds of the offering, less 50% of the Agents' Fee and all of the Agents' expenses incurred up to the Closing Date, (the "Escrowed Funds") will be held in escrow pending satisfaction of certain release conditions (the "Escrow Release Conditions"), such as the satisfaction or waiver of all conditions precedent to the completion of the Transaction and the receipt of all required shareholder and regulatory approvals related to the Transaction (including, without limitation, conditional approval of the Exchange of the Transaction and the listing of the Resulting Issuer Shares). In the event that the Escrow Release Conditions are not satisfied on or prior to 5:00 PM on the date that is 120 days after the Closing Date (the "Escrow Deadline"), the Escrowed Funds will be returned to the subscribers in accordance with the terms of the subscription receipt agreement governing the Subscription Receipts.
The net proceeds of the Offering will be used for sales, marketing, capital expenditures, costs associated with the Transaction, and general working capital purposes.
The Subscription Receipts will be offered for sale to purchasers in: (i) all of the Provinces of Canada as agreed upon between Finco and the Lead Agent, pursuant to available private placement exemptions; (ii) the United States on a private placement basis pursuant to available exemptions from the registration requirements under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"); and (iii) offshore jurisdictions agreed upon between Finco and the Lead Agent pursuant to available prospectus or registration exemptions in accordance with applicable laws. The Common Shares to be issued under the Offering will be subject to an indefinite hold period under applicable securities laws. Upon completion of the Transaction, the Resulting Issuer Shares will not be subject to any statutory hold periods under applicable securities laws. The listing of the Resulting Issuer Shares remains subject to approval by the Exchange.
FRX is a private company that was incorporated under the laws of the State of Delaware, USA that manufactures environmentally sustainable flame-retardant products. FRX is led by a team of highly experienced business professionals and engineers and is positioned to be a leader in the rapidly growing flame retardant plastics and additives market.
FRX products trade named Nofia® are produced at its full-scale manufacturing site on the Port of Antwerp Belgium, one of the world's largest chemicals producing clusters. Nofia phosphonates are produced using sustainable green chemistry principles such as a solvent-free production process, no waste by-products, and near 100% atom efficiency. FRX Polymers' portfolio includes an extensive patent estate. The company has been the recipient of numerous awards, including the EPA's Environmental Merit Award, the Belgium Business Award for the Environment, and the Flanders Investment of the Year Award. FRX Polymers was also recognized six times on the Global Cleantech 100 list.
For more information on FRX, visit https://www.frxpolymers.com.
About the Corporation
The Corporation's principal business is the identification and evaluation of assets or businesses with a view to completing a Qualifying Transaction (as such term is defined in the policies of the Exchange). Investors are cautioned that trading in the securities of a capital pool company should be considered highly speculative.
For further information:
Sandra Hall, Director
FRX Polymers Inc.
Marc-Andre Lebel, President & Chief Executive Officer
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
All information contained in this press release with respect to the Corporation and FRX was supplied by the respective party for inclusion herein, without independent review by the other party, and each party and its directors and officers have relied on the other party for any information concerning the other party.
Completion of the Transaction is subject to a number of conditions, including but not limited to, acceptance of the Exchange and if applicable pursuant to the requirements of the Exchange, majority of the minority 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 filing 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 a capital pool company should be considered highly speculative.
The Exchange has in no way passed upon the merits of the proposed Transaction and has neither approved nor disapproved the contents of this press release.
This press 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 have not been and will not be registered under the U.S. Securities Act or any state securities laws and may not be offered or sold within the United States or to or for the account or benefit of U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.
Notice on Forward-Looking Information
This press release contains forward-looking statements and forward-looking information (collectively, "forward-looking statements") within the meaning of applicable securities laws. Any statements that are contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are often identified by terms such as "may", "should", "anticipate", "will", "estimates", "believes", "intends" "expects" and similar expressions which are intended to identify forward-looking statements. More particularly and without limitation, this press release contains forward-looking statements concerning the Transaction, the Offering, the expected use of proceeds, the satisfaction of the Escrow Release Conditions, the exchange of Common Shares and Warrants into Resulting Issuer Shares and Resulting Issuer Warrants, respectively, the exchange of Compensation Warrants into Resulting Issuer Compensation Warrants, the exchange of other securities of Finco and FRX into securities of the Resulting Issuer, and the ability of the Corporation and FRX to meet the conditions of the Transaction in the required timeframes.
The Corporation cautions that all forward-looking statements are inherently uncertain, and that actual performance may be affected by a number of material factors, assumptions and expectations, many of which are beyond the control of the Corporation and FRX, including that the Offering will be completed on currently anticipated terms or at all, that the Transaction will be completed on currently anticipated terms or at all, and that all applicable shareholder and regulatory approvals for the Transaction will be received, as well as other risks and uncertainties, including those described in the Corporation's final prospectus dated April 7, 2021 filed with the British Columbia Securities Commission, the Alberta Securities Commission and the Ontario Securities Commission and available on SEDAR at www.sedar.com. The reader is cautioned that assumptions used in the preparation of any forward-looking statements may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted as a result of numerous known and unknown risks, uncertainties and other factors, many of which are beyond the control of the Corporation. The reader is cautioned not to place undue reliance on any forward-looking statements. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this press release are expressly qualified by this cautionary statement.
The forward-looking statements contained in this press release are made as of the date of this press release, and the Corporation does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by securities law.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction.
Not for distribution to U.S. news wire services or for dissemination in the United States.
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