Vancouver, British Columbia--(Newsfile Corp. - May 26, 2025) - Further to its news release dated March 17, 2025, Penbar Capital Ltd. (TSXV: PEM.P) ("Penbar") has amended a number of the terms of the amalgamation agreement dated March 14, 2024, with Eastport Ventures Inc. ("Eastport"), including the terms of the related financing for subscription receipts of Eastport, in connection with Penbar's proposed qualifying transaction (the "Transaction").
The Transaction will be carried out pursuant to the terms of an amended and restated amalgamation agreement, a copy of which has been filed on Penbar's SEDAR+ profile. The below summary of certain updated terms of the Transaction is qualified in its entirety by reference to the full text of the amended and restated amalgamation agreement.
Updates to the terms of the Transaction
Penbar's wholly owned subsidiary, 1001160772 Ontario Inc. (Subco), will on closing of the Transaction continue to amalgamate with Eastport, the amalgamated entity (Amalco) will continue as a wholly owned subsidiary of Penbar, and Penbar will be renamed "Eastport Ventures Inc.", or such other similar name as may be accepted by the relevant regulatory authorities and approved by Eastport and Penbar.
In connection with the proposed Transaction, Penbar will effect a consolidation of its outstanding common shares on the basis of seven (7) pre-consolidation common shares for every one (1) (the "Consolidation Ratio") post-consolidation common share. Previously the Consolidation Ratio was three (3) pre-consolidation common shares for every one (1) post-consolidation common share.
In accordance with the terms of the amended and restated amalgamation agreement, each holder of shares of Eastport will exchange the holder's shares for common shares in the capital of the resulting issuer on the basis of 0.2941 (the "Exchange Ratio") fully paid and non-assessable resulting issuer common shares for every one Eastport share held, at an updated deemed price of approximately $0.61 per Eastport share. Previously the Exchange Ratio was 0.7143 resulting issuer common share for every one Eastport common share.
The Transaction itself is not subject to Penbar shareholder approval. Eastport will hold a shareholder meeting or seek written shareholder consent in connection with the proposed Transaction as are set out in the previous press release.
Updates to the terms of the financing of subscription receipts of Eastport
Prior to the completion of the Transaction, before applying the Exchange Ratio, Eastport is expected to complete a non-brokered private placement financing of 18,055,556 subscription receipts for minimum gross proceeds of $3,250,000 and 27,777,778 subscription receipt for maximum gross proceeds of $5,000,000. Each subscription receipt will be issued at a price of $0.18 per subscription receipt.
The subscription receipts will be created and issued pursuant to the terms of a subscription receipt agreement to be entered into among Olympia Trust Company, as subscription receipt agent, Eastport, and Penbar.
Each subscription receipt will be automatically converted, without payment of additional consideration or further action by the holder thereof, into one unit consisting of one Eastport share and one-half of one "A" warrant and one-half of one "B" warrant, subject to adjustment in certain events, immediately before the completion of the Transaction upon the satisfaction or waiver of the escrow release conditions (as to be defined in the subscription receipt agreement). Each whole "A" warrant will entitle the holder thereof to acquire one Eastport share at a price of $0.25 per share for a period of 12 months following the listing of the resulting issuer shares on the TSX Venture Exchange ("TSXV"). Each whole "B" warrant will entitle the holder thereof to acquire one Eastport share at a price of $0.50 per share for a period of 24 months following the listing of the resulting issuer shares on the TSXV.
In connection with the financing, Eastport may pay a finder's fee of up to 6% of the gross proceeds from the financing introduced by the finder and up to such number of finder's warrants equal to 6% of the subscription receipts issued pursuant to the financing as introduced to Eastport by the finder, each finder's warrant exercisable into one common share of Eastport at a price of $0.18 for a period of 12 months following the listing of the resulting issuer shares on the TSXV. As part of the amalgamation, the finder's warrants will be exchanged for resulting issuer finder's warrants at the Exchange Ratio.
Resulting Issuer
It is anticipated that immediately following completion of the foregoing steps, and assuming the minimum subscription receipt financing, an aggregate of approximately 26,522,696 resulting issuer shares will be issued and outstanding on an undiluted basis, and: (a) former Penbar shareholders will hold 571,429 resulting issuer shares, representing approximately 2.15% of the issued and outstanding resulting issuer shares; (b) former Eastport shareholders will hold 20,641,129 resulting issuer shares, representing approximately 77.82% of the issued and outstanding resulting issuer shares; and (c) former holders of subscription receipts will hold 5,310,139 subscription receipts that, upon the closing of the Transaction, will represent 20.02% of the issued and outstanding resulting issuer shares.
Assuming the maximum subscription receipt financing, an aggregate of approximately 29,382,002 resulting issuer shares will be issued and outstanding on an undiluted basis, and: (a) former Penbar shareholders will hold 571,429 resulting issuer shares, representing approximately 1.94% of the issued and outstanding resulting issuer shares; (b) former Eastport shareholders will hold 20,641,129 resulting issuer shares, representing approximately 70.25% of the issued and outstanding resulting issuer shares; and (c) former holders of subscription receipts will hold 8,169,444 subscription receipts that, upon closing of the Transaction, will represent 27.80% of the issued and outstanding resulting issuer shares.
Cautionary Statements
Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.
Completion of the Transaction is subject to a number of conditions including, but not limited to, TSXV acceptance and if applicable, disinterested shareholder approval. Where applicable, the Transaction cannot close until the required shareholder and TSXV approvals are 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 Penbar should be considered highly speculative.
The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.
All information contained in this press release with respect to Penbar and Eastport was supplied by the parties respectively, 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.
This press release does not constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of any of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful, including any of the securities in the United States of America. The securities have not been and will not be registered under the United States Securities Act of 1933 (the "1933 Act") or any state securities laws and may not be offered or sold within the United States or to, or for account or benefit of, U.S. persons (as defined in Regulation S under the 1933 Act) unless registered under the 1933 Act and applicable state securities laws, or an exemption from such registration requirements is available.
On Behalf of the Board of Directors of Penbar Capital Ltd.
Penbar Capital Ltd.
David Eaton
President, Chief Executive Officer, Director
604-688-9588
Forward-Looking Information
This press release includes "forward-looking information" that is subject to assumptions, risks and uncertainties, many of which are beyond the control of Penbar. Statements in this news release which are not purely historical are forward-looking, including without limitation any statements concerning the expected results of the Transaction, the completion of the transactions contemplated by the amended and restated amalgamation agreement, the anticipated timing thereof, completion of the subscription receipt financing and the expected use of proceeds therefrom. Although Penbar believes that any forward-looking statements in this news release are reasonable, there can be no assurance that any such forward-looking statements will prove to be accurate. Penbar cautions readers that all forward-looking statements, are based on assumptions none of which can be assured and are subject to certain risks and uncertainties that could cause actual events or results to differ materially from those indicated in the forward-looking statements. Such forward-looking statements represent management's best judgment based on information currently available. Readers are advised to rely on their own evaluation of such risks and uncertainties and should not place undue reliance on forward-looking statements.
The forward-looking statements and information contained in this news release are made as of the date hereof and no undertaking is given to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws or the TSXV. The forward-looking statements or information contained in this news release are expressly qualified by this cautionary statement.
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SOURCE: Penbar Capital Ltd.
