Black Springs Capital Inc. announces proposed Qualifying Transaction with Cold Water Fisheries Inc.
BLACK SPRINGS CAPITAL CORP.
Suite 1328-885 West Georgia Street, Vancouver, BC Canada V6C 3E8 News Release TSXV: BSG.H
NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES
Black Springs Capital Inc. announces proposed Qualifying Transaction with Cold Water Fisheries Inc.
Vancouver, British Columbia (April 13, 2016): Black Springs Capital Inc. (TSXV :BSG.H) (“Black Springs” or the “CPC”) announces that it has entered into a definitive binding letter of intent on April 11, 2016 (the “LOI”) with Cold Water Fisheries Inc. (“CWF”), a corporation incorporated under the Ontario Business Corporations Act, whereby Black Springs and CWF will complete a reverse take-over (the “Transaction”), which will constitute Black Springs’s qualifying transaction (the “Qualifying Transaction”), as per Policy 2.4 of the TSX Venture Exchange (the “Exchange” or “TSX-V”).
About the Transaction
Pursuant to the terms of the LOI, subject to execution of a definitive share exchange agreement (“Share Exchange Agreement”) and receipt of applicable regulatory and Exchange approvals, Black Springs, will complete a reverse take-over or similar transaction and will issue to CWF 25,000,000 common shares of the CPC (after completion of a reverse split of its common shares) in exchange for all the common shares of CWF. The LOI is intended to be binding upon the Parties until execution of the definitive Share Exchange Agreement.
There are currently 6,150,000 common shares of the CPC issued and outstanding, as well as 400,000 stock options (save and except for the stock options held by the President of Black Springs, as more fully outlined below) which entitle the holders, certain officers and directors of Black Springs to acquire an aggregate of 400,000 common shares of the CPC at a price of $0.10 per share at any time up to March 21st, 2017.
Prior to closing of the transaction, Black Springs will complete a reverse split of its common shares on the basis of two (2) old shares for one (1) new share resulting in an aggregate number of 3,075,000 common shares.
The Transaction is not a “Non-Arm’s Length Transaction” under the Exchange’s policies.
Financing
Leading up to the Qualifying Transaction, CWF intends to complete a private placement of up to $5M in unsecured convertible debentures on a brokered and non-brokered basis. The debentures will carry a coupon of 12% and will be convertible into shares of the resulting issuer at a 20% discount to the share price implied in the Qualifying Transaction. CWF has engaged national independent investment dealer Leede Jones Gable Inc. to assist in the private placement financing.
Significant Closing Conditions
Closing and final acceptance of the Transaction are subject to the satisfaction of certain conditions, including the completion of a satisfactory due diligence, the execution of the Share Exchange Agreement, obtaining required approval by shareholders, third party and regulatory authorities and completion of the Private Placement. There are no guarantees that the Qualifying Transaction will be completed as proposed or at all.
About Cold Water Fisheries Inc.
CWF is one of Canada’s leading aquaculture companies with operations in Ontario, Nova Scotia, Prince Edward Island and Newfoundland. The company specializes in the production of premium rainbow and steelhead trout for markets in Canada and the United States.
Aquaculture is the fastest growing protein production sector in the world. It is a $135B global industry producing an estimated half of all seafood consumed worldwide. Canada is a leading aquaculture producer supplying over $1 B in high quality farmed product annually. Proximity to the U.S market is a key Canadian competitive advantage as the U.S. is one of the world’s leading consumers of fisheries products running seafood trade deficits in excess of $10B annually.
CWF maintains a fully vertically integrated operating platform. The company’s production infrastructure encompasses everything from hatchery facilities and farm sites to certified processing facilities that produce fresh whole and fileted trout for leading retailers and distributors.
Trout is a highly regarded salmonid fish with nutritional and taste profiles similar to salmon. The North American trout market is restricted by available supply and offers strong growth potential for producers.
CWF is planning to invest in inventory development and expansion of its operating platform in order to meet demand from its Canadian customers and to broaden its market presence in the United States.
Based on CWF’s April 30, 2015 unaudited financial statement CWF had 13.7$ million in revenues and a net profit of $503k.
The common shares of Black Springs are currently halted from trading and will remain so until such time as the Exchange provides its authorization to resume trading.
Completion of the transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and if applicable pursuant to Exchange Requirements, majority of the minority 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 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 TSX-V has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release. Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
For further Information, please Contact:
Hani Zabaneh, President at:
Suite 1328-885 West Georgia Street, Vancouver, BC Canada V6C 3E8, Tel: 604-288-8968
Cameron McDonald [email protected] Tel : (514) 825-0007