POCML 2 Inc.

TSX VENTURE : PCC.P


April 23, 2014 16:46 ET

POCML 2 Inc. Announces $10.2 Million Financing in Connection With Qualifying Transaction

TORONTO, ONTARIO--(Marketwired - April 23, 2014) -

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

POCML 2 Inc. ("POCML 2" or the "Corporation") (TSX VENTURE:PCC.P), a capital pool company (as defined in Policy 2.4 (the "CPC Policy") of the TSX Venture Exchange Inc. (the "Exchange")), and Bedrocan Canada Inc. ("Bedrocan") are pleased to announce the terms of a subscription receipt financing (the "Financing") to be completed in connection with the Corporation's qualifying transaction (the "Transaction"). Bedrocan has entered into an engagement letter (the "Engagement Letter") with Dundee Capital Markets ("Dundee") and PowerOne Capital Markets Limited, on behalf of a syndicate of agents, pursuant to which it proposes to complete the Financing.

Pursuant to the Financing, Bedrocan will issue up to 13,500,000 subscription receipts (the "Subscription Receipts") at a price of $0.85 per Subscription Receipt to raise gross proceeds of up to $11,475,000. Each Subscription Receipt will automatically convert on the satisfaction or waiver of all conditions precedent to the Transaction and certain other ancillary conditions (the "Release Conditions") into units (the "Units") of Bedrocan without any further consideration on the part of the purchaser immediately prior to effecting the Transaction. Each Unit shall consist of one common share and one-half of one common share purchase warrant (each whole such common share purchase warrant, a "Warrant") of Bedrocan. Each whole Warrant will entitle the holder thereof to purchase one common share of Bedrocan at a price of $1.20 at any time prior to the date that is 18 months from the closing date of the Financing, provided, however, that if the publicly quoted price of the common shares of Bedrocan (or POCML, following the Transaction) at the close of trading is a minimum of $2.05 per share for 15 consecutive trading days, Bedrocan will be able to accelerate the expiry date of the Warrants to a date that is 30 days after notice is provided to the Warrant holders announcing the new expiry date.

The gross proceeds from the Financing will be held in escrow pending the satisfaction of the Release Conditions, whereupon the Units of Bedrocan will be issued to the purchasers and the gross proceeds of the Financing will be paid to Bedrocan. In the event the Transaction does not occur on or before September 19, 2014, the gross proceeds of the Financing shall be returned to the purchasers pro rata without any deduction or interest and the Subscription Receipts that have not been previously exercised shall be automatically cancelled.

Subject to the approval of the Exchange, the Transaction will constitute the Corporation's "Qualifying Transaction", as defined in the CPC Policy.

Pursuant to the Engagement Letter, Bedrocan has agreed to pay to Dundee, on behalf of itself and any syndicate of dealers formed in connection with the Financing (collectively, the "Agents"), along with the reasonable expenses of the Agents, a cash commission equal to eight percent (8%) of the gross proceeds raised in the Financing, which shall be payable upon satisfaction of the Release Conditions. In addition, the Agents will receive compensation options ("Compensation Options") entitling them to subscribe for the number of Units as is equal to seven percent (7%) of the aggregate number of Subscription Receipts sold pursuant to the Financing, which shall be issued upon satisfaction of the Release Conditions. Each Compensation Option shall be exercisable at a price of $0.85 per Unit for a period of 18 months from the closing date of the Financing provided that if the price of the common shares of Bedrocan (or, following the Transaction, the common shares of POCML) closes at a minimum of $2.05 for a period of 15 consecutive trading days, Bedrocan may accelerate the expiry date to the date which is 30 days following the date upon which notice of the accelerated expiry date is provided to the holders of the Compensation Options.

In addition, Bedrocan has also agreed to pay to the Agents a cash fee equal to three percent (3%) of the aggregate gross proceeds raised pursuant to the exercise of the Warrants, payable upon each such exercise (other than with respect to any Warrants underlying the Compensation Options).

In connection with the Financing, Bedrocan will cause its management, officers and directors, their associates and affiliates, and the holders of more than 10% of its issued and outstanding common shares to enter into lock up agreements pursuant to which they will agree not to dispose of, any securities of Bedrocan or the Corporation until the date which is nine (9) months following the satisfaction of the Release Conditions, without the prior written consent of Dundee.
It is intended that the proceeds raised pursuant to the Financing will be used for working capital and for general corporate purposes. The Financing is anticipated to close on or about May 15, 2014.

Further Information

Further details about the proposed Transaction and the resulting issuer will be provided in a comprehensive press release when the parties enter into a Definitive Agreement and in the disclosure document to be prepared and filed in respect of the Transaction. Investors are cautioned that, except as disclosed in the disclosure document 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 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.

Forward-Looking Information

This press release contains forward-looking information based on current expectations. Statements about the closing of the Transaction and Financing, expected terms of the Transaction and Financing, the number of securities that may be issued in connection with the Financing and the parties' ability to satisfy closing conditions and receive necessary approvals are all forward-looking information. These statements should not be read as guarantees of future performance or results. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from those implied by such statements. Although such statements are based on management's reasonable assumptions, there can be no assurance that the Transaction or Financing will occur or that, if the Transaction and/or Financing does occur, it will be completed on the terms described above. POCML 2 assumes no responsibility to update or revise forward-looking information to reflect new events or circumstances unless required by law.

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.

Contact Information

  • POCML 2 Inc.
    David D'Onofrio, Chief Executive Officer,
    Chief Financial Officer, Secretary and Director
    (416) 643-3880

    Bedrocan Canada Inc.
    Marc Wayne
    President and Director
    (416) 943-5800