Vancouver, British Columbia - TheNewswire - September 10, 2021 – Germinate Capital Ltd. (TSXV:GCAP.P) (“Germinate” or the “Company”) is pleased to provide an update on its previously announced qualifying transaction with Beacon Hill Innovations Ltd. ("Target" or “BEACN”). As announced in its news release of July 6, 2021 (the “Initial News Release”), the Company plans to acquire all of the issued and outstanding securities of Target (the "Transaction") as its qualifying transaction pursuant to the policies of the TSX Venture Exchange (the “TSXV”) and raise $2 million in conjunction with the Transaction.  

The $2 million financing is now fully subscribed as outlined below under the heading “Concurrent Offering” and the Company anticipates closing to occur shortly.

The Company and BEACN have settled the material terms of the share exchange agreement to be entered into among the Company, BEACN and the shareholders of BEACN and anticipate that it will be executed shortly.

The Company’s initial submission to the TSXV seeking approval of the Transaction and Concurrent Offering was made on September 7, 2021.  

Concurrent Offering

In connection with the Transaction, Germinate will complete a "best efforts" non-brokered private placement of subscription receipts of the Company (the “Subscription Receipts”) at a price of $0.30 per Subscription Receipt for gross proceeds of up to $1,500,000 (the “Private Placement”), with each Subscription Receipt automatically convertible, for no additional consideration, into one unit of the Company (a “Unit”) upon satisfaction of the Escrow Release Conditions (as defined below).  Each Unit will be comprised of one Share and one-half of one Share purchase warrant (each full warrant, a “Warrant”). Each Warrant will be exercisable to acquire one Share at a price of $0.60 per Share for a period of two years from the date of issuance.

The Subscription Receipts will convert automatically for no additional consideration into Units upon the occurrence of the following events (collectively, the “Escrow Release Conditions”): (i) all conditions to the conditional approval of the TSXV in respect of the Transaction having been satisfied or waived; (ii) all conditions to the TSXV’s conditional approval for the listing of the Shares to be issued pursuant to the Concurrent Offering (as defined below) and the Shares underlying the Warrants having been satisfied or waived; and (iii) the closing of the transactions contemplated by the Share Exchange Agreement.

Germinate expects to pay certain finder’s fee in connection with the Private Placement up to 7% of the gross proceeds raised from the sale of Subscription Receipts to purchasers introduced to the Company by such finders as well as non-transferrable warrants (“Finder Warrants”) up to 7% of the total number of Subscription Receipts sold to purchasers introduced by such finders. Each Finder Warrant will entitle the holder to acquire one Share at a price of $0.30 for a period of two years from closing.

In addition to the Private Placement of Subscription Receipts, Germinate has arranged a $500,000 convertible note (the “Note” together with the Private Placement, the “Concurrent Offering”) which will be issued by BEACN so that the funds are available to BEACN immediately. Upon closing of the Transaction, these Notes will be convertible into the Units of Germinate under the same terms as the Private Placement for a term of 18 months (the “Maturity Date”). Should the Transaction not close for any reason before the Maturity Date, the Notes will be convertible into shares of BEACN at a price equals to BEACN’s most recent financing, or be repaid in full.  

The Company anticipates closing of the Concurrent Offering will close shortly, subject to receipt of approval of the TSXV.

The Private Placement will not be subject to a minimum amount.  The Company intends to issue the Subscription Receipts under the Private Placement: (i) to accredited investors pursuant to the prospectus exemptions set out in National Instrument 45-106 – Prospectus Exemptions; and (ii) to certain subscribers pursuant to the prospectus exemption (the “Investment Dealer Exemption”) set out in B.C. Instrument 45-536 – Exemption from Prospectus Requirement for Certain Distributions Through an Investment Dealer. In accordance with the requirements of the Investment Dealer Exemption, the Company confirms that there is no material fact or material change about the Company that has not been generally disclosed.

Following closing of the Transaction, the Company intends to utilize the proceeds of the Concurrent Offering to fund the commercialization phase of the resulting issuer’s initial products with plans to begin sales through online channels by the fourth quarter of 2021. Additionally, the proceeds will be used to fund inventory purchases for the resulting issuer’s initial products and for research and development. See the Initial News Release for additional information regarding Target’s business and products.

Trading Halt

The Shares are currently halted from trading, and the trading of the Shares is expected to remain halted pending completion of the Transaction.

Cautionary Note

Neither the 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.

Completion of the transaction is subject to a number of conditions, including but not limited to, TSXV acceptance and if applicable pursuant to TSXV Requirements, majority of the minority shareholder approval. Where applicable, the transaction cannot close until the required shareholder approval is 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 Germinate Capital Ltd. 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.

For further information, please contact:

Germinate Capital Ltd.

Mark T. Brown, CEO and Director
Email: mtbrown@pacificopportunity.com
Telephone: (604)-687-3520

Forward Looking Information    

This press release contains forward-looking statements and information that are based on the beliefs of management and reflect Germinate's current expectations. When used in this press 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 press release include information relating to the business plans of Germinate, Target and the resulting issuer, the Concurrent Offering and the use of proceeds thereof and the Transaction.

Such statements and information reflect the current view of Germinate. Risks and uncertainties that may cause actual results to differ materially from those contemplated in those forward-looking statements and information. 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 Concurrent Offering will be completed or as to the actual gross proceeds to be raised in connection with the Concurrent Offering;

  - there is no assurance that Germinate and Target will obtain all requisite approvals for the Transaction, including the approval of the TSXV for the Transaction (which may be conditional upon amendments to the terms of the Transaction);

  - following completion of the Transaction, the resulting issuer 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 resulting issuer;

  - new laws or regulations could adversely affect the resulting issuer’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 resulting issuer’s securities, regardless of its operating performance.

There are a number of important factors that could cause the resulting issuer’s actual results to differ materially from those indicated or implied by forward-looking statements and information. Such factors include, among others: limited business history of Target; the risk that future results of operation of Target do not meet expectations, disruptions or changes in the credit or security markets; results of operation activities; unanticipated costs and expenses, and general market and industry conditions.

Germinate 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. Germinate 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 press release represents the expectations of Germinate as of the date of this press 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 Germinate may elect to, it does not undertake to update this information at any particular time except as required in accordance with applicable laws.