Snow Eagle to merge with CannaTest Photonics as QT
Snow Eagle Resources Ltd. plans to acquire CannaTest Photonics Ltd., a cannabis technology company, in a reverse takeover as Snow Eagle’s qualifying transaction. The resulting issuer will appoint Danny Dalla-Longa as president and CEO.
SNOW EAGLE Resources Ltd. has signed a non-binding letter of intent with CannaTest Photonics Ltd., a corporation existing under the laws of the province of Alberta, pursuant to which Snow Eagle and CannaTest would complete an arm’slength transaction that will result in a reverse takeover of Snow Eagle by the shareholders of CannaTest. Snow Eagle is a capital pool company and intends for the transaction to constitute its qualifying transaction. As the transaction is not a non-arm’s-length transaction, it will not be subject to shareholder approval.
The LOI is to be superseded by a definitive merger or amalgamation agreement to be signed on or around Sept. 30, 2017. It is currently contemplated that the transaction will be structured as an amalgamation.
Pursuant to the amalgamation, each holder of Snow Eagle common shares will receive one common share of the issuer resulting from the amalgamation for every 4.5 common shares of Snow Eagle held prior to the amalgamation, and each holder of CannaTest common shares will receive one common share of the resulting issuer for every one CannaTest share held prior to the amalgamation at a deemed price of 45 cents per CannaTest share, for a total of 27,532,700 common shares of the resulting issuer and a total purchase price of $12,389,715.
In connection with the proposed transaction, CannaTest will complete a financing for gross proceeds of up to $5-million with an overallotment option for up to an additional $1.5-million or 3,333,333 units. It is anticipated that this financing will be undertaken as a best-efforts brokered private placement by way of offering memorandum of up to 11,111,111 units (or 14,444,444 units if the option is exercised in full) of CannaTest at a price of 45 cents per unit, and that it will close immediately prior to the closing of the amalgamation. Each unit will comprise one CannaTest share and one-half of one warrant. Each warrant entitles the holder to purchase one CannaTest share at a price of 70 cents per CannaTest share for a period of 24 months following closing of the CannaTest financing, and will contain an acceleration provision. PI Financial Inc. is the lead agent and will be paid a cash commission of 8.5 per cent of the gross proceeds of the CannaTest financing. The agent will also be entitled to receive such number of options as is equal to 8.5 per cent of the aggregate number of units sold under the CannaTest financing. Each broker option will entitle the agent to acquire one CannaTest share at a price of 50 cents for a period of 36 months following the completion of the CannaTest financing. Proceeds from the CannaTest financing will be used for research and development, sales and marketing, and general corporate purposes.
Board of directors and senior management of the resulting issuer
The board of directors of the resulting issuer shall be composed of five members and which shal l in clude Danny Dalla-Longa, Dr. Elmar Prenner, Richard Hanson and such other nominees as will be provided to Snow Eagle prior to the closing of the transaction. Senior management of the resulting issuer will include: Danny Dalla-Longa, president and chief executive officer; Dr. Elmar Prenner, chief technical officer; and Gary Jones, chief financial officer.
About CannaTest Photonics Ltd.
CannaTest is a technology and marketing company whose core business is focused on the commercialization of a new spectroscopy-based technology in the cannabis and hemp industries. Using the technology, CannaTest has developed a two-part solution comprising an instrument called the Optic-Q and consumable testing kits. The Optic-Q is a portable and customizable device that will assist producers in the medical cannabis industry in optimizing and tracking the quality and safety of their products.
CannaTest currently has not commenced commercial operations. If it receives sufficient funds under the CannaTest financing, CannaTest plans to complete the final phase of development of its proprietary platform technology and begin production of its market-ready product.
Snow Eagle corporate update
The previously announced arrangement agreement with Bukit Energy Inc. has expired in accordance with its terms. Rod Kirkham has resigned from the board of directors of Snow Eagle. Snow Eagle is in the process of appointing an additional director.
We seek Safe Harbor.
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