Solegear Bioplastics Inc.
TSX VENTURE : SGB

Solegear Bioplastics Inc.

September 22, 2016 09:00 ET

Solegear Announces Brokered Private Placement

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Sept. 22, 2016) -

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

Solegear Bioplastic Technologies Inc. (TSX VENTURE:SGB) ("Solegear" or the "Company") is pleased to announce that it has engaged Mackie Research Capital Corporation (the "Agent") as agent on a best-efforts, fully marketed basis for a private placement of up to 30,000,000 units ("Units") at a price of $0.15 per Unit for a total of up to $4.5 million (the "Offering"). Each Unit is comprised of one common share of the Company and one common share purchase warrant. Each warrant entitles its holder to acquire one additional common share of the Company at a price of $0.20 per share within the 24-month period following the closing of the Offering, subject to the acceleration right described below. In addition, the Agent has been granted an over-allotment option exercisable up to 48 hours prior to the closing of the Offering to increase the size of the offering by up to 15% (4,500,000 Units).

The closing of the Offering will occur on or about October 19, 2016. Closing is subject to a number of prescribed conditions, including, without limitations, approval of the TSX Venture Exchange.

The net proceeds of the private placement will be used to fill customer orders that are pending and for general corporate purposes.

Acceleration Right

The expiry date of the warrants will be subject to an acceleration right in favour of the Company that is exercisable if the common shares of the Company trade at or above a volume-weighted average trading price of $0.30 on the TSX Venture Exchange on any 20 non-consecutive trading days, following the expiry of the 4-month statutory hold period beginning on the closing date of the Offering. If the acceleration right is exercised by the Company, the warrants will expire on the 20th business day following the date that notice of acceleration is sent to the warrant holders.

Deemed Exercise of Special Warrants

The closing of the private placement will trigger the deemed exercise of the special warrants issued by the Company on June 28, 2016. The deemed exercise of the special warrants will result in an aggregate of approximately 2,633,532 Units being issued to the current holders of the special warrants, based on the closing occurring on or about October 19, 2016. The closing of the private placement is subject to a minimum subscription of $1,000,000.

Offering Jurisdictions

The Offering will take place by way of a private placement to qualified investors in such provinces of Canada as the Agent may designate, and otherwise in those jurisdictions where the Offering can lawfully be made under applicable private placement exemptions.

Agent's Compensation

On the Closing of the Offering, the Company has agreed to pay to the Agent, subject to certain exclusions, a commission equal to 6.0% of the gross proceeds arising from the Offering, an advisory fee equal to 2.0% of the gross proceeds arising from the Offering, a work fee of $25,000 plus HST, and an arrangement fee equal to 2.0% of the gross proceeds arising from the Offering from registered brokers other than the Agent. At the closing of the Offering, the Company will issue to the Agent non-transferable options exercisable at any time up to 24 months from closing, to acquire Units from treasury in an amount equal to 6.0% of the Units issued pursuant to the Offering, including the exercise of the over-allotment option (if applicable), plus an additional 2.0% in options based on the number of Units issued to subscribers that participate in the Offering via registered brokers other than the Agent. All such options will have an exercise price equal to the offering price of the Units. Additionally, on a case by case basis, the Company may also pay commission and issue options to other brokers who assist in marketing the offering.

Assuming completion of the Offering, the Company and the Agent have agreed to enter into a financial advisory agreement related to future financings.

About Solegear Bioplastic Technologies Inc.

Solegear Bioplastic Technologies Inc. (TSX VENTURE:SGB) is an innovator in the field of next generation bioplastics made from annually renewable plant-based sources. Committed to the principles of Green Chemistry, Solegear is driven by its mission to create healthier, safer and stronger communities by fundamentally changing the way plastics are made.

Solegear's proprietary bioplastic formulations are designed to meet today's social and corporate requirements to lower carbon emissions, reduce waste and remove toxicity typically associated with traditional petroleum-based plastics. Together with its partners, Solegear custom engineers, produces and distributes its high-performance bioplastics as resin, sheets and finished goods with some of the highest percentages of renewable, plant-based materials currently available in the industry. For more information: www.solegear.ca

On behalf of the Company:

"Paul Antoniadis"
Chief Executive Officer and Director
Contact: 604-998-4058

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibilities for the adequacy or accuracy of this release.

Cautionary Statement Regarding Forward-Looking Information

Information regarding the Offering contained in this news release constitutes forward-looking information within the meaning of securities laws.

Implicit in this information, particularly in respect of the projected terms and closing date of the Offering, are assumptions regarding the marketability of the Offering which will be ultimately determined in part by market conditions and by the ability of the Company and the Agent to negotiate and execute a mutually acceptable agency agreement. Specifically, we have assumed that market conditions will support an offering on substantially the terms disclosed in this press release and that the Company and the Agent will be able to negotiate an agency agreement on mutually acceptable terms. These assumptions, although considered reasonable by the Company at the time of preparation, may prove to be incorrect. Readers are cautioned that the closing of the Offering is subject to a number of risks and uncertainties, including risks relating to general economic, market and business conditions and could differ materially from what is currently expected as set out above.

Other than as required under securities laws, we do not undertake to update this information at any particular time.

Forward-looking information contained in this news release is based on our current estimates, expectations and projections, which we believe are reasonable as of the current date. The reader should not place undue importance on forward-looking information and should not rely upon this information as of any other date. All forward-looking information contained in this news release is expressly qualified in its entirety by this cautionary statement.

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