Global SeaFarms Corporation
CNSX : GSF

June 26, 2015 16:00 ET

Global SeaFarms Corporation Announces Conversion of Debentures and a Private Placement of Convertible Debentures

MONTREAL, QUEBEC--(Marketwired - June 26, 2015) -

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 LAWS.

Global SeaFarms Corporation (CSE:GSF) ("GSF" or the "Company") announced today that it has recently concluded Conversion Agreements (the "Conversion Agreements") with most of the holders of the debentures issued by the Company pursuant to a private placement of unsecured convertible debentures for an aggregate amount of $1,300,000 on or about March 19, 2014 which bore interest at an annual rate of 18% (the "$1.3M Convertible Debentures") and the holders of the debentures issued by the Company pursuant to a private placement of convertible debentures for an aggregate amount of $890,500 which closed during a period beginning on July 19, 2011 and ending on or about March 5, 2012 and which bore interest at an annual rate of 10% (the "$890,500 Convertible Debentures" and collectively with the $1.3M Convertible Debentures, the "Convertible Debentures"). The purpose of such Conversion Agreements is to approve, subject to regulatory approval, the conversion of the Convertible Debentures (the "Conversion") and the applicable interest, where applicable, into Class A shares of the Company (the "Class A Shares") at a conversion price of $0.01 (the "Conversion Price").

If the Convertible Debentures are converted, Intrafina Ltd. ("Intrafina") and Palos Merchant Fund ("Palos") will become "Control Block Holders" (as defined in the policies of the Canadian Securities Exchange (the "CSE")) of the Company. Following the Conversion, Intrafina will own 29.35% and Palos 22.92% of the issued and outstanding shares of the Company. Intrafina currently holds no Class A Shares and Palos currently holds 11,022,144 Class A Shares.

Although the Conversion of the Convertible Debenture in the amount of $40,000 held by Société en commandite BENT ("BENT") will represent a "related party transaction" pursuant to National Instrument 61-101 respecting protection of minority security holders in special transactions ("NI 61-101") as BENT currently holds, directly and indirectly, 15.65% of the issued and outstanding Class A Shares, the Company will not have to comply with the valuation and minority approval requirements as a result of exemptions which are available pursuant to NI 61-101. It is anticipated that BENT's holdings in the Company will be diluted to 6.77% following the Conversion.

GSF would also like to announce that it intends to carry out a private placement (the "Private Placement") of secured debentures (the "Secured Debentures") for up to $1,073,150, subject to its right to increase the offering at its sole discretion. Such Secured Debentures follow the expiry of loan agreements in the amount of $751,250 that were mostly scheduled to be reimbursed on May 15, 2015 (the "Loan Agreements") along with a return of 100% of the face value of the original loans (the "Original Loans"). The lenders to the Loan Agreements (the "Lenders") agreed to extend the term of the Original Loans, to terminate the Loan Agreements and to use the Original Loans as consideration for the subscription of new Secured Debentures. Moreover, most of the Lenders have agreed to subscribe an additional amount totalling $321,900 for Secured Debentures. The Secured Debentures will have a maturity date of March 31, 2016 and have a return equal to 100% of their face value. The private placement will be conducted on a non-brokered basis. The net proceeds of the proposed private placement will be used by the Company to mainly fund working capital requirements and operating activities in the Company's Dominican Republic subsidiary, Caribbean SeaFarms SRL, and general corporate expenses of the Company.

Completion of the Private Placement is subject to customary closing conditions for transactions of this nature, including the approval of the CSE.

This news release shall not constitute an offer to sell, nor the solicitation of an offer to buy, nor shall there be any securities of GSF offered in any jurisdiction in which such an offer, solicitation or sale would be unlawful. The Secured Debentures will be offered on a private placement basis and only to "accredited investors", as such term is defined under applicable Canadian securities laws.

THE SECURITIES 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 ABSENT REGISTRATION UNDER OR AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE 1933 ACT.

About Global SeaFarms

GSF is a fully integrated fish farming operation with a commercial hatchery, farm and processing facility in the Dominican Republic. GSF is engaged in the identification and development of high-potential aquaculture projects in the Americas. GSF has two vectors to its growth strategy - warm water opportunities in the region of the Caribbean Sea and cold water opportunities in North America. GSF is currently expanding its warm water platform operation in the Dominican Republic and ramping up production of Florida Pompano for the U.S. seafood market. No regulatory authority has reviewed this press release nor have they approved nor disapproved the contents of this news release.

Forward Looking Statements

Certain statements included in this News Release contain forwardlooking statements, including disclosure concerning possible or assumed future results of operations of the Company. Forwardlooking statements typically are preceded by, followed by or include the words - "believes", " expects", "anticipates", "estimates", "intends", "plans", or similar expressions. Forwardlooking statements are not guarantees of future performance. They involve risks, uncertainties and assumptions, and the Company's results could differ materially from those anticipated in these forwardlooking statements.

Neither CNSX nor its Regulation Services Provider (as that term is defined in the policies of the CNSX) accepts responsibility for the adequacy or accuracy of the release.

Contact Information

  • Robert Boisjoli
    Global SeaFarms Corporation
    514-821-9857