VANCOUVER, March 10, 2017 /CNW/ - Hadley Mining Inc. (CSE: HM) (the "Company") is pleased to announce that it has entered into a letter agreement (the "LOI") with 1102496 BC Ltd. ("Numberco") for the assignment of a letter agreement dated January 3, 2017, as amended (the "Underlying LOI") pursuant to which Numberco is entitled to acquire 100% of the issued and outstanding securities of a private entity ("Seventails") in consideration of the issuance of common shares of the Company (the "Transaction"). The Company will have until March 17, 2017 to negotiate the terms of a definitive agreement in order to complete the Transaction (the "Definitive Agreement").
Seventails is a privately held British Columbia company that has submitted an application for a license to produce under the Access to Cannabis for Medical Purposes Regulations (Canada).
Seventails is committed to becoming a licensed producer under the access to cannabis for medical purposes regulations (ACMPR) and has successfully advanced past the security clearance stage and is currently in the review stage of the licencing process.
Seventails currently has plans for a 20,000 square-foot production facility to produce its medical-grade marijuana.
Pursuant to the terms of the Underlying LOI, the Company will make an aggregate cash payment of $300,000 and issue an aggregate of 16 million common shares to the shareholders of Seventails in exchange for 100% ownership of all of the issued and outstanding shares of Seventails.
Upon completion of the Transaction, Nancy Kinney, the co-founder, President and sole director of Seventails shall be appointed to the Board of Directors of the Company and as its President and CEO. It is anticipated that Quinn Field-Dyte will resign as CEO and from the Board of Directors. The remaining director and officers of the Company are expected to remain unchanged.
Private Placement Financing
The Transaction is subject to the Company completing an equity financing (the "Concurrent Financing") by way of a non-brokered private placement of units (the "Units") to raise a minimum $5,000,000 and up to a maximum $7,000,000 at an intended price of $0.50 per Unit. Each Unit will consist of one common share and one half of one common share purchase warrant. Each full warrant will entitle the holder to purchase an additional common share at the price of $1.00 per share for a period of twelve months from the closing of the Transaction. In the event that Company's share prices closes at a price of $1.50 per share for a period of 10 consecutive trading dates, the Company will have the option to provide notice to the warrant holders in writing or via press release to accelerate the term of the warrants to a period of 30 days following such notice. The Company may pay finder fees in connection with the Concurrent Financing. The net proceeds from the Concurrent Financing will be used for the development of the business and general working capital purposes.
Conditions of the Proposed Transaction
The Transaction is subject to a number of conditions precedent referenced below (collectively, the "Conditions Precedent"). Unless all of such conditions are satisfied or waived by the party for whose benefit such conditions exist, to the extent they may be capable of waiver, the Transaction will not proceed. There is no assurance that the conditions will be satisfied or waived on a timely basis, or at all. The closing of the Transaction (the "Closing") is subject to the satisfaction or waiver of the following closing conditions, which are for the benefit of both parties:
all necessary regulatory approvals with respect to the Transaction and the Concurrent Financing having been obtained, including but not limited to the approval of the CSE and the other applicable securities regulatory authorities;
the execution of the Definitive Agreement;
completion of the Concurrent Financing;
a secured lender to Seventails shall have converted its debt into shares of Seventails (which shall be exchanged for common shares of the Company and which are included in the aggregate total of shares issuable above);
the License shall not have been denied, revoked or otherwise terminated;
other customary conditions for a transaction similar in nature to the Transaction.
The Definitive Agreement will incorporate the principal terms of the Transaction described herein, and in addition, such other terms and provisions of a more detailed structure and nature as the parties may agree upon after receiving further tax, legal and financial advice from their respective advisers. However, there is no assurance that the Definitive Agreement will be successfully negotiated or entered into.
Further details regarding the proposed Transaction and the combined entity will be provided in a comprehensive press release if and when the parties enter into a Definitive Agreement.
For further information regarding the Company, see the Company's disclosure documents on SEDAR at www.sedar.com.
ON BEHALF OF HADLEY MINING INC.
(signed) "Quinn Field-Dyte" Chief Executive Officer
Forward Looking Statements
Not for distribution to United States wire services or dissemination in the United States. This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.
Certain statements included in this press release constitute forward-looking information or statements (collectively, "forward-looking statements"), including those identified by the expressions "anticipate", "believe", "plan", "estimate", "expect", "intend", "may", "should" and similar expressions to the extent they relate to the Company or its management. The forward-looking statements are not historical facts but reflect current expectations regarding future results or events. This press release contains forward looking statements. These forward-looking statements are based on current expectations and various estimates, factors and assumptions and involve known and unknown risks, uncertainties and other factors.
Statements about the execution of a Definitive Agreement, closing of the Transaction, expected terms of the Transaction, the number of securities of the Company that may be issued in connection with the Transaction, the ownership of the Company, the terms of and the completion of the Concurrent Financing, and the parties' ability to satisfy any and all other closing conditions, and receive necessary regulatory and CSE approvals in connection therewith, are all forward-looking information.
Forward-looking statements are not guarantees of future performance and involve risks, uncertainties and assumptions which are difficult to predict. Factors that could cause the actual results to differ materially from those in forward-looking statements include failure to obtain regulatory approval, the continued availability of capital and financing, and general economic, market or business conditions. Forward-looking statements contained in this press release are expressly qualified by this cautionary statement. 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 will occur or that, if the Transaction does occur, it will be completed on the terms described above. The Company assumes no responsibility to update or revise forward-looking information to reflect new events or circumstances unless required by law. Readers should not place undue reliance on the Company's forward-looking statements.
Neither the Canadian Securities Exchange (the "CSE") nor its Regulation Services Provider (as that term is defined in the policies of the CSE) accepts responsibility for the adequacy or accuracy of this release.