SOURCE: SG Spirit Gold Inc.

March 29, 2017 17:07 ET

SG Spirit Gold Launches Financing Related to Acquisition of ACMPR License Applicant Northern Lights Marijuana Company

VANCOUVER, BC--(Marketwired - March 29, 2017) -

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SG Spirit Gold Inc. (TSX VENTURE: SG) ("SG Spirit Gold" or the "Company") is pleased to announce that it has appointed a syndicate of agents led by Mackie Research Capital Corporation (the "Lead Agent") and including Canaccord Genuity Corp. and Eight Capital (together with the Lead Agent, the "Agents") to sell by way of private placement up to 13,333,333 subscription receipts of the Company (the "Subscription Receipts") at a price of $0.75 per Subscription Receipt for aggregate gross proceeds of up to $10,000,000 (the "Offering").

Concurrent with the closing of the Transaction (as defined below), each Subscription Receipt shall be exchanged automatically, for no additional consideration, into units of the Company (the "Units"). Each Unit shall consist of one (1) common share of the Company (an "SG Share") and one-half of one common share purchase warrant (each whole warrant, a "Warrant"). Each Warrant shall entitle the holder to acquire one (1) additional Common Shares at an exercise price of $1.25 for a period of 24 months from the date of issuance. Subscribers identified by the Company will be entitled to participate for up to $5 million of the Offering (the "President's List").

In accordance with the terms and conditions of an amalgamation agreement between the Company, NLMCO Acquisition Corp. ("Acquireco") and Northern Lights Marijuana Company Limited ("DOJA") dated February 10, 2017 (the "Amalgamation Agreement"), the Company has agreed, subject to the receipt of all necessary approvals, to complete a business combination with DOJA. Pursuant to the terms of the Amalgamation Agreement, each holder of DOJA shares (the "DOJA Shares") will transfer their DOJA Shares to the Company in exchange for SG Shares on the basis 1.8 SG Shares for each DOJA Share transferred. Concurrently, DOJA and Acquireco, a wholly-owned subsidiary of SG Spirit, will amalgamate to form a new entity wholly-owned by the Company (the "Transaction"). In connection with the Transaction, it is anticipated that the Company will apply to listing the SG Shares on the Canadian Securities Exchange, and voluntarily delist the SG Shares from the TSX Venture Exchange. It is also anticipated that the Company will change its name to "DOJA Cannabis Company Limited".

It is anticipated that the net proceeds of the Offering will be used to (i) fund a $8,000,000 Phase II expansion at DOJA's West Kelowna facility, (ii) fund a land acquisition to secure Phase III expansion plans in the Okanagan, and (iii) for working capital and general corporate purposes.

The Subscription Receipts will be offered in all provinces of Canada and such other jurisdictions as the Company and the Agents may agree and where the Offering can be sold without the requirement to file a prospectus or similar document.

In consideration for the Agents' services in connection with the Offering, the Company has agreed to pay the Agents a cash commission equal to 7.0% (3.0% in the case of President's List) of the aggregate gross proceeds arising from the Offering. In addition, the Company has agreed to issue the Agents options equal in number to up to 7.0% (3.0% in the case of President's List) of the number Subscription Receipts sold under the Offering. Closing of the Offering is expected to occur on or about April 24, 2017.

About DOJA
DOJA is a privately-owned company based in Canada's picturesque Okanagan Valley that is committed to becoming a licensed producer of marijuana under the Access to Cannabis for Medical Purposes Regulations ("ACMPR") and building a fast growing lifestyle brand that offers the highest quality handcrafted cannabis strains in Canada.

DOJA was founded in 2013 by the same team that founded and built SAXX Underwear into an internationally recognizable brand. The DOJA team plans to build upon their past success in the consumer packaged goods industry and their mutual interest in, and appreciation for, cannabis culture and grow DOJA into a market leading brand in the cannabis industry.

DOJA has completed the build-out of its state-of-the-art-facility, capable of producing more than 650 kilograms of marijuana annually, and has notified Health Canada's Office of Medical Cannabis that DOJA's proposed site is ready for Health Canada to conduct a Pre-License Inspection. The issuance of a license under the ACMPR is, in part, dependent upon the completion of a satisfactory Pre-License Inspection by Health Canada.

For further information please contact Richard Grayston, Chief Executive Officer of the Company at rwgrayston@telus.net or Jeff Barber, Chief Financial Officer of DOJA at investors@dojamj.com or visit DOJA's website at www.dojamj.com for further information.

On behalf of the Board,

SG Spirit Gold Inc.

Richard Grayston, Chief Executive Officer

Forward-Looking Information
This news release contains forward-looking statements and information that are based on the beliefs of management and reflect the Company's current expectations. When used in this news release, the words "estimate", "project", "belief", "anticipate", "intend", "expect", "plan", "predict", "may" or "should" and the negative of these words or such variations thereon or comparable terminology are intended to identify forward-looking statements and information. The forward-looking statements and information in this news release include information relating to the business plans of the Company and DOJA, the Offering and the Transaction. Such statements and information reflect the current views of the Company.

By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the following risks:

  • there is no assurance that the Company and DOJA will obtain all requisite approvals for the
    Transaction;
  • following completion of the Transaction, the Company may require additional financing from
    time to time in order to continue its operations; financing may not be available when needed or on
    terms and conditions acceptable to the Company;
  • new laws or regulations could adversely affect the Company's business and results of operations;
    and
  • the stock markets have experienced volatility that often has been unrelated to the performance of
    companies. These fluctuations may adversely affect the price of the Company's securities,
    regardless of its operating performance.

The Company cautions that the foregoing list of material factors is not exhaustive. When relying on the Company's forward-looking statements and information to make decisions, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. The Company has assumed that the material factors referred to in the previous paragraph will not cause such forward-looking statements and information to differ materially from actual results or events. However, the list of these factors is not exhaustive and is subject to change and there can be no assurance that such assumptions will reflect the actual outcome of such items or factors.

THE FORWARD-LOOKING INFORMATION CONTAINED IN THIS NEWS RELEASE REPRESENTS THE EXPECTATIONS OF THE COMPANY AS OF THE DATE OF THIS NEWS RELEASE AND, ACCORDINGLY, IS SUBJECT TO CHANGE AFTER SUCH DATE. READERS SHOULD NOT PLACE UNDUE IMPORTANCE ON FORWARD-LOOKING INFORMATION AND SHOULD NOT RELY UPON THIS INFORMATION AS OF ANY OTHER DATE. WHILE THE COMPANY MAY ELECT TO, IT DOES NOT UNDERTAKE TO UPDATE THIS INFORMATION AT ANY PARTICULAR TIME EXCEPT AS REQUIRED IN ACCORDANCE WITH APPLICABLE LAWS.

Readers are cautioned that closing of the Transaction remains subject to a number of conditions, including receipt of any required shareholder, regulatory and third-party consents, the Canadian Securities Exchange having conditionally accepted the listing of the Company's common shares, the TSX Venture Exchange having consented to the voluntarily delisting of the Company's common shares, and the satisfaction of other customary closing conditions. The Transaction cannot close until the required approvals are obtained, and the Company's common shares have been delisted from the TSX Venture Exchange. There can be no assurance that the Transaction will be completed as proposed or at all, or that the Company's common shares will be listed and posted for trading on any stock exchange.

Neither the TSX Venture Exchange, nor the Canadian Securities Exchange, has in any way passed upon the merits of the proposed Transaction and has neither approved nor disapproved the contents of this news release. Neither the 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.

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