Winston Capital Group Inc. Announces Changes in Accordance with New CPC Policy
Winston Capital Group Inc. Announces
Changes in Accordance with New CPC Policy
Calgary, Alberta--(Newsfile Corp. - January 20, 2021) - Winston Capital Group Inc. (TSXV: WNST.P)
(the "
Corporation
") a capital pool Corporation as defined under Policy 2.4 - Capital Pool Companies
("
CPC
") of the TSX Venture Exchange (the "
Exchange
"), announces changes that are in accordance
with the new CPC policy.
Changes in accordance with New CPC Policy
Winston is pleased to announce that due to changes recently announced by the TSX Venture Exchange
(the "
Exchange
") to its Capital Pool Companies program and changes to the Exchange's Policy 2.4 -
Capital Pool Companies, which became effective as at January 1, 2021 (the "
New CPC Policy
"), the
Corporation intends to implement certain amendments to further align its policies with the New CPC
Policy, in addition to its annual and special matters at the Meeting (defined below).
Pursuant to the New CPC Policy, in order for the Corporation to align certain of its policies with the New
CPC Policy it is required to obtain the approval of disinterested shareholders of the Corporation. As a
result, the Corporation will be seeking such approval at its upcoming annual general and special meeting
of shareholders scheduled to be held on February 10, 2021 (the "
Meeting
"), for the following matters: (i)
to amend the Corporation's stock option plan (the "
Option Plan
") to, among other things, become a
"10% rolling" plan prior to the Corporation completing a Qualifying Transaction ("
QT
"); (ii) to remove the
consequences of failing to complete a QT within 24 months of the Corporation's date of listing on the
Exchange (the "
Listing Date
"); and (iii) to amend the escrow release conditions and certain other
provisions of the Corporation's Escrow Agreement (the "
Escrow Agreement
"). These proposed
amendments are described in further detail below.
Amendments to the Option Plan
The amendments to the Option Plan, will (i) allow the total number of common shares of the Corporation
(the "
Common Shares
") reserved for issuance as options not to exceed 10% of the Common Shares
issued and outstanding as at the date of grant, rather than at the closing date of the initial public offering
("
IPO
"), for options issued prior to the QT; (ii) allow the number of Common Shares reserved for
issuance as options to any individual director or senior officer not to exceed 5% of the Common Shares
outstanding as at the date of grant, rather than at the closing date of the IPO, for options issued prior to
the QT; (iii) allow the number of Common Shares reserved for issuance as option to Consultants, as
defined in the Option Plan, not to exceed 2% of the Common Shares outstanding as at the date of grant,
rather than at the closing date of the IPO, for options issued prior to the QT; and (iv) require, prior to the
granting of options, the optionee to first enter into an escrow agreement agreeing to deposit the options,
and the Common Shares acquired pursuant to the exercise of such options, into escrow as described in
the escrow agreement.
Removal of the Consequences of Failing to Complete a QT within 24 Months of the Listing Date
Currently, under the Exchange's Policy 2.4 - Capital Pool Companies (as at June 14, 2010) (the
"
Former Policy
") there are certain consequences if a QT is not completed within 24 months of the
Listing Date. These consequences include a potential for Common Shares to be delisted or suspended,
or, subject to the approval of the majority of the Corporation's shareholders, transferring Common
Shares to list on the NEX and cancelling certain seed shares. The New CPC Policy allows the company
to remove these consequences assuming disinterested shareholder approval is obtained. The
Corporation intends to ask disinterested shareholders to approve the removal of such consequences at
the Meeting, as it believes that it will afford the Corporation greater flexibility to complete a QT that is
beneficial to all interested parties, and will also allow the Corporation to better withstand market volatility.
Amendments to the Escrow Agreement
The Corporation intends to ask disinterested shareholders to approve the Corporation making certain
amendments to the Escrow Agreement, including allowing the Corporation's escrowed securities to be
subject to an 18 month escrow release schedule as detailed in the New CPC Policy, rather than the
current up to 36 month escrow release schedule in the Former Policy. In addition, the Corporation
wishes to amend the Escrow Agreement such that all options granted prior to the date the Exchange
issues a final bulletin for the QT ("
Final QT Exchange Bulletin
") and all Common Shares that were
issued upon exercise of such options prior to the date of the Final QT Exchange Bulletin will be released
from escrow on the date of the Final QT Exchange Bulletin, other than options that(a) were granted prior
to the IPO with an exercise price that is less than the issue price of the Common Shares issued in the
IPO and (b) any Common Shares that were issued pursuant to the exercise of such options issued below
the issue price, which will be released from escrow in accordance with the 18 month escrow release
schedule as detailed in the New CPC Policy.
Other Changes
Under the New CPC Policy, the Corporation is permitted to implement certain other changes from the
Former Policy without obtaining shareholder approval. As a result, the Corporation wishes to have the
option to take advantage of all the changes under the New CPC Policy that do not require shareholder
approval, which became effective on January 1, 2021, including, but not limited to:
i
.
increasing the maximum aggregate gross proceeds to the treasury that the Corporation can raise
from the issuance of Common Shares in the IPO, seed shares and private placement to the new
maximum of $10,000,000, rather than $5,000,000 which was the limit under the Former Policy;
ii
.
removing the restriction which provided that no more than the lesser of 30% of the gross proceeds
from the sale of securities issued by the Corporation and $210,000 may be used for purposes
other than identifying and evaluating assets or businesses and obtaining shareholder approval for
a proposed QT, and implementing the restrictions on the permitted use of proceeds and prohibited
payments under the New CPC Policy, under which reasonable general and administrative
expenses not exceeding $3,000 per month are permitted;
iii
.
removing the restriction on the Corporation issuing new agent's options in connection with a
private placement; and
iv
.
removing the restriction such that now one person has the ability to act as the chief executive
officer, chief financial officer and corporate secretary of the Corporation at the same time.
The Corporation believes that the New CPC Policy is in the best interests of the shareholders as it will
allow the Corporation to have greater flexibility and mechanisms to increase shareholder value.
Clarification on Previously announced Private Placement Offering
In connection with the Corporation's previously announced qualifying transaction ("
Qualifying
Transaction
") with Merida Minerals Inc. ("
Merida
") and pursuant to an amending agreement among the
parties, it is further clarifying and amending the terms of the private placement offering, previously
announced on December 9, 2020. The offering consists of the sale of a minimum of 4,616,840 units of
Merida (the "
Merida Units
") at a price of $0.15 per Merida Unit (the "
Offering Price
") for aggregate
gross proceeds to Merida of a minimum of $692,526. Each Merida Unit shall be comprised of one
common share of Merida (each a "
Merida Common Share
") and one half of one common share
purchase warrant (each a "
Merida Warrant
"), with each whole Merida Warrant entitling the holder
thereof to acquire one Merida Common Share at a price of $0.30 for a period of 24 months from
issuance.
In connection with the Private Placement, Merida, in its discretion, may pay a cash commission of up to
7% of the gross proceeds from the sale of Merida Units and issue such number of broker warrants
("
Merida Broker Warrants
") that is equal to up to 7% of the number of Merida Units sold pursuant to the
Private Placement. Each Merida Broker Warrant will entitle the holder to one (1) Merida Common Share
and is exercisable at a price of $0.30 per Merida Common Share for a period of 24 months from the
date of issuance, subject to the requirements of the TSXV.
It is intended that the net proceeds from the previously announced Private Placement will be used for the
exploration and development of Merida's Puebla de la Reina ("
PBR
") property and general working
capital following completion of the Qualifying Transaction.
This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities in
any jurisdiction.
ABOUT THE CORPORATION
The Corporation is a capital pool Corporation (a "
CPC
") that has not commenced commercial
operations and has no assets other than cash.
Except as specifically contemplated in the Exchange's
CPC Policy, until the completion of its qualifying transaction, the Corporation will not carry on business,
other than the identification and evaluation of businesses or assets with a view to completing a proposed
qualifying transaction.
For further information, please contact:
Bruce Bent
Chief Executive Officer
Winston Capital Group Inc.
Telephone:
+ 1 (905) 567-3431
Email:
Norman Brewster
Chief Executive Officer
Merida Minerals Inc.
Telephone: +1 (416) 970-3223
Email:
www.meridaminerals.com
ANY SECURITIES REFERRED TO HEREIN WILL NOT BE REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933 (THE "1933 ACT") AND MAY NOT BE OFFERED OR SOLD IN THE
UNITED STATES OR TO A U.S. PERSON IN THE ABSENCE OF SUCH REGISTRATION OR AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE 1933 ACT.
NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE
UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A
VIOLATION OF U.S. SECURITIES LAW.
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. The Exchange has in no way passed upon the merits of the Transaction and has neither
approved nor disapproved the content of this press release.
The information contained or referred to in this press release relating to Merida has been furnished by
Merida. Although Winston has no knowledge that would indicate that any statement contained herein
concerning Merida is untrue or incomplete, neither Winston nor any of its respective directors or
officers assumes any responsibility for the accuracy or completeness of such information.
Completion of the Qualifying Transaction is subject to a number of conditions, including but not
limited to, Exchange acceptance, receipt of requisite regulatory approvals, completion of the
Amended Private Placement and if applicable pursuant to Exchange requirements, majority of the
minority shareholder approval. Where applicable, the Transaction cannot close until the required
shareholder approvals, and any ancillary matters thereto, 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 a capital pool Corporation should be considered highly speculative.
This forward-looking information in respect of Winston and Merida reflects Merida's or Winston's, as
the case may be, current beliefs and is based on information currently available to Winston and
Merida, respectively, and on assumptions Winston and Merida, as the case may be, believes are
reasonable. These assumptions include, but are not limited to, management's assumptions about the
Exchange approval for the Transaction, closing of the Private Placement, closing of the business
combination announced above and Merida's assumptions regarding its business objectives.
Forward-Looking Information Cautionary Statement
This release includes forward-looking statements regarding Winston, Subco, Amalco, Merida, the
Resulting Issuer and their respective businesses, which may include, but is not limited to, statements with
respect to the completion of the Transaction and the Private Placement, the terms and timing on which
the Transaction and the Private Placement are intended to be completed, the use of the net proceeds
from the Private Placements, the ability to obtain regulatory and shareholder approvals, the proposed
business plan of the Resulting Issuer and other factors. Often, but not always, Forward-looking
statements can be identified by the use of words such as "plans", "is expected", "expects", "scheduled",
"intends", "contemplates", "anticipates", "believes", "proposes", "estimates" or variations of such words
and phrases, or state that certain actions, events or results "may", "could", "would", "might" or "will" be
taken, occur or be achieved. Such statements are based on the current expectations of the management
of each entity. The forward-looking events and circumstances discussed in this release, including
completion of the Transaction and the Private Placement, may not occur by certain specified dates or at
all and could differ materially as a result of known and unknown risk factors and uncertainties affecting
the companies, including the risk that Merida and Winston may not obtain all requisite approvals for the
Transaction, including the approval of the Exchange for the Transaction (which may be conditional upon
amendments to the terms of the Transaction), risks of the resource industry, failure to obtain regulatory or
shareholder approvals, economic factors, any estimated amounts, timing of the Private Placement, the
equity markets generally and risks associated with growth, exploration and development. Although
Winston and Merida have attempted to identify important factors that could cause actual actions, events
or results to differ materially from those described in forward-looking statements, there may be other
factors that cause actions, events or results to differ from those anticipated, estimated or intended. No
forward-looking statement can be guaranteed. Except as required by applicable securities laws,
forward-looking statements speak only as of the date on which they are made and Winston and Merida
undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of
new information, future events, or otherwise.
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 news release.
NOT FOR DISTRIBUTION TO THE U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN
THE UNITED STATES
To view the source version of this press release, please visit
https://www.newsfilecorp.com/release/72367