NOT ONLY IS THE COMPANY RAISING SIGNIFICANT SUMS OF MONEY TO EXPAND PRODUCTION OF MARIJUANA, BUT MANAGEMENT IS TAKING SIGNIFICANT POSITIONS IN THE PP. ALWAYS AN ENCOURAGING SIGN!
"MPX International Corp., due to additional investor demand, has increased the amount of the previously announced non-brokered private placement offering of units of the corporation at a price of $1,360 ($1,000 (U.S.)) per unit to a maximum amount of $10.2-million ($7.5-million (U.S.)).
The corporation has issued a total of 5,000 units for aggregate gross proceeds of $10.03-million ($7,375,000 (U.S.)) from the closing of all tranches of the offering broken down as follows: first tranche which closed on June 30, 2020: 3,348 units for aggregate gross proceeds of $4,553,280 ($3,348,000 (U.S.)); second tranche which closed on July 31, 2020: 346 units for aggregate gross proceeds of $470,560 ($346,000 (U.S.)); third tranche which closed on Sept. 17, 2020: 800 units for aggregate gross proceeds of $1,088,000 ($800,000 (U.S.)); fourth tranche which closed on Oct. 20, 2020: 506 units for aggregate gross proceeds of $688,160 ($506,000 (U.S.)); fifth tranche which closed on Dec. 24, 2020: 2,229 units for aggregate gross proceeds of $3,031,440 ($2,229,000 (U.S.)); and sixth tranche which closed on Dec. 31, 2020: 146 units for aggregate proceeds of $198,560 ($146,000 (U.S.)). The corporation expects the remaining $170,000 ($125,000 (U.S.)) will close in early January, 2021.
The corporation intends to use the proceeds from the offering to finance product and facility development as well as for working capital and other general corporate purposes.
The units will be issued on the same terms as those previously announced at a price of $1,360 ($1,000 (U.S.)) per unit, with each unit consisting of one 12 per cent secured convertible debenture of the corporation in the principal amount of $1,360 ($1,000 (U.S.)) and 7,000 common share purchase warrants.
Each debenture shall bear interest at a rate of 12 per cent per annum from the date of issue, payable quarterly in arrears on the last day of March, June, September and December in each year. The amount of interest that becomes payable on the initial coupon date will represent accrued interest for the period from the applicable closing date to such initial coupon date. All accrued but unpaid interest as of each coupon date shall be payable by the corporation in cash and shall accrue interest at a rate of 12 per cent per annum. The principal amount shall be convertible, for no additional consideration, into common shares of the corporation at the option of the holder at any time prior to the earlier of: (i) 6 p.m. EST on the maturity date; or (ii) the business day immediately preceding the date specified by MPXI for redemption of the debentures at a conversion price equal to 12 cents per common share.
Each warrant entitles the holder thereof to purchase one common share at an exercise price of 20 cents for a period of 24 months from the closing date.
Insider participation
The fifth and sixth tranches of the offering can be considered a related party transaction for certain regulatory purposes. The participation by the insiders in the fifth and sixth tranches of the offering is summarized in the attached table.
Name Relationship to the Interest in the offering Common shares directly or Percentage of
corporation Amount $ Number of units indirectly, beneficially common shares of
owned or controlled MPXI
W. Scott Boyes Chairman, $6,800 (1) 5 4,655,350 3.28%
president, chief
executive officer
and a director
Alastair Director $282,880 (2) 208 8,134,472 5.73%
Crawford
Total $289,680 213 12,789,822 9.01%
(1) Mr. Boyes also participated in the second tranche of the offering acquiring 100 units for a subscription amount
of $136,000. In sum, Mr. Boyes has been issued a total of 105 units for an aggregate subscription amount
of $142,800.
(2) Mr. Crawford's participation in the fifth tranche of the offering was as follows: (a) 200 units issued to
Puddles 7 Ltd., a company in which Mr. Crawford holds a majority interest.
Mr. Crawford's participation in the sixth tranche of the offering is broken down as follows: (a) seven units issued to Mr. Crawford; and (b) one unit issued to Puddles 7. Mr. Crawford also participated in the second tranche of the offering acquiring 112 units for a subscription amount of $153,320 and the fourth tranche of the offering acquiring 136 units broken down as follows: (a) 86 units issued to Mr. Crawford; and (b) 50 units issued to Puddles 7. In sum, Mr. Crawford has been issued a total of 456 units for an aggregate subscription amount of $622,880.
It is important to note that the offering is exempt from valuation and minority approval requirements which might otherwise result from the participation by insiders due to: (1) the corporation, as a Canadian Securities Exchange issuer, not being listed on a designated market; and (2) the fair market value of the offering, insofar as the offering involves such interested parties, is less than $2.5-million.
To the knowledge of the corporation, after reasonable inquiry, none of the related parties have knowledge of any material information concerning the corporation or its securities that has not been generally disclosed.
A special committee of independent directors reviewed the offering, and determined that as a CSE issuer MPXI is not listed on a specified market and the fair market value of the offering, insofar as it involves related parties, is not more than $2.5-million. The special committee unanimously recommended that the board of directors of the corporation approve the offering. Accordingly, the offering is exempt from minority shareholder approval and formal valuation requirements of MI 61-101.
The offering is closing in less than 21 days due to the limited number of subscribers to the offering, all subscription agreements being properly completed and received, and all subscription proceeds having been forwarded, which shorter period is reasonable in the circumstances. MI 61-101 requires, if a material change report is filed less than 21 days before the expected date of the closing of the transaction, an explanation to be provided why the shorter period is reasonable or necessary in the circumstances.
The securities issued pursuant to the offering and the private placement have not been, and will not be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons absent registration or an applicable exemption from the registration requirements.
About MPX International Corp.
MPX International is a multinational diversified cannabis company focused on developing and operating assets across the international cannabis industry with an emphasis on cultivating, manufacturing and marketing products which include cannabinoids as their primary active ingredient. With current operations spanning four continents in Canada, Switzerland, South Africa, Malta and Australia as well as evolving partnership and distribution opportunities in other jurisdictions, MPXI continues to position itself as an emergent global participant in the cannabis industry."
