Vancouver, British Columbia, July 12, 2018
Chemistree Technology Inc. (Canadian Securities Exchange: CHM) (US OTCQB: CHMJF) (the “Company” or “Chemistree”) is pleased to announce that effective July 11, 2018, it has closed the final tranche of the non-brokered private placement as announced May 11, and as amended June 22, and July 10, 2018, for gross proceeds of $1,949,365. Gross proceeds from the two closings aggregate $4,509,184, which has been added to general working capital. The July 11, 2018, final tranche was comprised of 5,569,613 units, issued at $0.35 per unit. Each unit consists of one common share and one common share purchase warrant; each warrant will entitle the holder to acquire one additional common share for $0.50 cents for a period of 24 months after closing of the private placement.
The warrants are subject to an acceleration provision whereby if the closing market price of the common shares of the Company on the Canadian Securities Exchange (the “CSE”) is greater than $0.60 per common share for a period of 10 consecutive trading days, then the Company may deliver a notice to the holders of warrants notifying the holders that the warrants must be exercised within 30 calendar days from the date of the acceleration notice, otherwise the warrants will expire at 4:00 p.m. PT on the 30th calendar day after the date of the acceleration notice.
The Company also issued 257,748 Finder’s Warrants in connection with the final tranche, and the warrants will have the same terms as the common share purchase warrants included in the placement units. Securities issued under the placement are subject to a four-month hold period, which will expire four months from the date of closing. Immediately following this private placement issuance, the Company has 34,222,589 common shares issued and outstanding. The units, common shares and Warrants 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 U.S. state securities laws and may not be offered or sold in the United States absent registration or an available exemption from the registration requirement of the U.S. Securities Act and applicable U.S. state securities laws. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the units, common shares or Warrants, in any jurisdiction in which such offer, solicitation or sale would be unlawful.
Change of Business Filing On June 27, 2018,
Chemistree received conditional approval from the CSE for its change of business from a Technology Issuer to an Investment Issuer, which was deemed a fundamental change under CSE Policy 8. With the completion of the private placement financing, the Company has met all the conditions setout by the CSE. In due course following submission and acceptance of the final documentation required by the CSE, the Company expects that the CSE will reinstate trading in the Company’s common shares. Following final approval by the CSE, the Company expects to issue a further news release announcing final approval by the CSE and the reinstatement of trading. P.O. Box 10322, Pacific Centre Suite 810 – 609 Granville Street Vancouver, BC V7Y 1G5 Tel: 604 678 8941 Fax: 604 689 7442 About Chemistree Technology Inc.
Chemistree Technology Inc. is an investment company dedicated to the U.S. cannabis sector, providing turn key solutions for the U.S. regulated cannabis industry. The Company’s corporate strategy is to acquire and develop vertically integrated U.S. cannabis assets, leveraging management’s decades of expertise in the cannabis industry and corporate finance to own and operate licensed cultivation, processing, distribution and retail facilities throughout the U.S. The Company currently owns assets in Washington State used to operate the Sugarleaf brand and has a robust pipeline of assets to grow its base of business across the U.S. For more information,
visit www.chemistree.ca. Advisory The Company wishes to inform shareholders that there are significant legal restrictions and regulations that govern the cannabis industry in both Canada and the United States. Cannabis-related Practices or Activities are Illegal Under U.S. Federal Laws The concepts of “medical cannabis” and “recreational cannabis” do not exist under U.S. federal law.
The Federal Controlled Substances Act classifies “marihuana” as a Schedule I drug. Under U.S. federal law, a Schedule I drug or substance has a high potential for abuse, no accepted medical use in the United States, and a lack of safety for the use of the drug under medical supervision. As such, cannabis related practices or activities, including without limitation, the manufacture, importation, possession, use or distribution of cannabis are illegal under U.S. federal law. Strict compliance with state laws with respect to cannabis will neither absolve the Company of liability under U.S. federal law, nor will it provide a defense to any federal proceeding which may be brought against the Company.
Enforcement of U.S. federal laws will be a significant risk to the business of the Company following the completion of the acquisitions, and any such proceedings brought against the Company may adversely affect the Company’s operations and financial performance. Further information regarding the legal status of cannabis related activities and associated risk factors, including, but not limited to, risk of enforcement actions, risks that third party service providers, such as banking or financial institutions cease providing services to the Company, and the risk that Company may not be able to distribute profits, if any, from U.S. operations up to the Company, will be included in the Form 2A listing statement to be filed with the CSE.
For further information please contact:
Chemistree Technology Inc.
Karl Kottmeier, President
For investor relations please contact:
Contact Financial Corp.
Adelaide Capital Markets Inc.
Neither the Canadian Securities Exchange nor its Market Regulator (as that term is defined in the
policies of the Canadian Securities Exchange) accepts responsibility for the adequacy or accuracy of
this news release.
Information set forth in this news release may involve forward-looking statements under applicable securities laws. Forward-looking statements are statements that relate to future, not past, events. In this context, forward-looking statements often address expected future business and financial performance, and often contain words such as “anticipate”, “believe”, “plan”, “estimate”, “expect”, “budget”, “scheduled” and “intend”, statements that an action or event “may”, “might”, “could”, “should”, or “will” be taken or occur, or other similar expressions. All statements, other than statements of historical fact, included herein including, without limitation, statements about adding clients, building on the Company’s initial product offerings, receipt of final CSE approval for the change of business, the use of proceeds from the private placement, and the reinstatement of trading on the CSE of the Company’s common shares. By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the 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 risks identified in the Company’s reports and filings with the applicable Canadian securities regulators, failure to obtain final CSE approval for the change of business, the Strategic Partner may fail to obtain WSLCB approval when expected or at all or may fail to acquire the Sugarleaf License on the terms and timing expected or at all, the Company may fail to enter into agreements with the Strategic Partner on the terms and timing and for the services expected or at all and changes to U.S. federal law or Washington State law or enforcement practices relating to cannabis. Forward-looking statements are made based on management’s beliefs, estimates and opinions on the date that statements are made and the respective companies undertakes no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change, except as required by applicable securities laws. Investors are cautioned against attributing undue certainty to forward-looking statements. The Company assumes no responsibility to update or revise forward-looking information to reflect new events or circumstances unless required by applicable law.