|Delayed - 01/18 03:59:06 pm|
Zonetail Inc. Announces Final Closing of Non-Brokered Private Placement for Total Proceeds of $1,295,683
|07/03/2020 | 07:05am|
Toronto, Ontario--(Newsfile Corp. - July 3, 2020) - Zonetail Inc. (TSXV: ZONE) ("Zonetail" or the "Company"), is pleased to announce the closing of the final tranche of its previously announced private placement. The Offering consists of units of the Company (the "Units") being issued at a price of $0.02 per Unit, with each Unit being comprised of one common share (a "Share") and one whole common share purchase warrant (a "Warrant"). Each Warrant will entitle its holder to purchase one (1) additional Share of the Company at an exercise price of $0.05, for a period of twelve (12) months from the issue date.
The Company completed the first tranche of the private placement on June 2, 2020, issuing an aggregate of 23,960,000 Units, for gross proceeds of $479,200. Today, the Company closed an additional 40,814,130 Units for gross proceeds of $816,283. The total private placement closed is 64,774,130 for gross proceeds of $1,295,483, including the acceptance by the Company of a subscription of an insider of the Company for 18,239,130 Units generating aggregate gross proceeds of $364,783 (the "Insider Subscription"). The Company has also paid eligible finders ("Finders"), all of whom are at arm's length to the Company and its insiders within the meaning of Policy 5.1 of the TSX Venture Exchange (the "Exchange"), cash compensation as finders fees of approximately $39,372 in aggregate and has issued an aggregate of 1,968,600 finders warrants of the Company to such eligible finders ("Finders Warrants"). Each Finder Warrant entitles the holder to purchase one Share of the Company at an exercise price of $0.05, for a period of twelve (12) months from the closing date of the Offering. All securities issuable pursuant to the Offering, including the Finders Warrants and the Shares, if any, issuable on their exercise are subject to a four month and one day hold period from the date of issuance in accordance with applicable Canadian securities laws.
As previously disclosed, the issuance of Units to an insider under the Offering is considered a related party transaction within the meaning of Policy 5.9 of the Exchange and Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions ("MI 61-101"). See press releases dated February 19, 2020, April 13, 2020, April 29, 2020 and May 29, 2020 for full details. The Company relied on exemptions from the formal valuation and minority approval requirements of MI 61-101 on the basis of financial hardship. In addition, to comply with the policies of the Exchange in connection with the Insider Subscription with respect to the creation of a new "control person" as a result of the Offering, the Company sought and has obtained the consent to the completion of the Offering and the participation of the Insider by majority approval of the disinterested shareholders of the Company, excluding the votes attaching to the common shares held by the insider and any of their related parties. In connection with the completion of the private placement, Paul Scott acquired Shares representing, together with existing holdings, approximately 16% of the issued and outstanding common shares of the Company. Assuming the exercise of all Warrants held by Paul Scott in full, and no exercise of any other Warrants, that would increase to ownership of approximately 27% of the issued and outstanding common shares of the Company on a fully diluted basis.
The Company also wishes to provide an update on COVID-19 matters and an update on the status of the filing of its financial statements and accompanying management's discussion and analysis, and related CEO and CFO certifications for the three months ended March 31, 2020.
As noted in the Company's press release of April 29, 2020 and May 28, 2020, the COVID-19 pandemic is creating unprecedented challenges to the global economy and stock markets. Zonetail's Board of Directors and Management are continuing to take all necessary precautions to ensure the health of its employees and best manage the short-term challenges to the business.
On March 18, 2020, the Canadian Securities Administrators ("CSA") issued a notice stating that securities regulators will be providing coordinated relief consisting of a 45-day extension for certain periodic filings required to be made on or prior to June 1, 2020 as a result of the COVID-19 pandemic. As such the Ontario Securities Commission ("OSC") has enacted Ontario Instrument 51-502 Temporary Exemption from Certain Corporate Finance Requirements ("OSC 51-502"). Zonetail will be relying on this extension period due to delays experienced as result of the COVID-19 pandemic.
Zonetail is or has relying on the temporary exemption pursuant to BCI 51-515 in respect to the following provisions:
- the requirement to file audited financial statements for the year ended December 31, 2019 (the "Annual Financial Statements") within 120 days of Zonetail's financial year end as required by section 4.2(b) of NI 51-102 (filed on June 15, 2020);
- the requirement to file interim financial statements for the 3-month period ended March 31, 2020 (the "Interim Financial Statements") within 60 days of Zonetail's first quarter as required by section 4.4(b) of NI 51-102
- the requirement to file management discussion and analysis (the "Annual MD&A") for the period covered by the Annual Financial Statements within 120 days of Zonetail's financial year end as required by section 5.1(2) of NI 51-102 (filed on June 15, 2020);
- the requirement to file management discussion and analysis (the "Interim MD&A") for the period covered by the Interim Financial Statements within 60 days of Zonetail's first quarter as required by section 5.1(2) of NI 51-102;
- the requirement to file certifications of the Annual Financial Statements (the "Certificates" and together with the Annual Financial Statements, the "Annual Filings") pursuant to section 4.1 of National Instrument 52-109.Section 4.2(b) [filing deadline for annual financial statements] National Instrument 51-102 (filed on June 15, 2020; and,
- the requirement to file certifications of the Interim Financial Statements (the "Certificates" and together with the Interim Financial Statements, the "Interim Filings") pursuant to section 5.1 of National Instrument 52-109. Section 4.2(b) [filing deadline for interim financial statements] National Instrument 51-102.
Zonetail is continuing to work diligently and expeditiously to file the Interim Filings on or before July 15, 2020. In the interim, management and other insiders of Zonetail are subject to a trading black-out policy as described, in principle, in section 9 of National Policy 11-207, Failure to File Cease Trade Orders and Revocations in Multiple Jurisdictions. Zonetail confirms that since the filing of its audited consolidated financial statements for the period ended December 31, 2019, there have been no material business developments other than those disclosed through news releases.
Zonetail is a mobile platform for hotels and condominiums providing guests and residents access and interaction with building amenities and services as well as neighboring restaurants, stores, services, and attractions.
Zonetail is partnered with AAHOA, the largest association of hoteliers in the world, representing over 25,000 hotels and 50% of the US market. Zonetail is also partnered with Shiftsuite, one of the largest property management system software providers to the condo industry in Canada, with approximately 2,000 condo buildings, representing an estimated 400,000 units. Zonetail has offices in Toronto, Ontario and San Dimas, California.
For more information, please visit https://www.zonetail.com.
For further information, please contact:
Phone: (416) 583-3773 x 228
ANY SECURITIES REFERRED TO HEREIN WILL NOT BE REGISTERED UNDER THE US. SECURITIES ACT OF 1933 (THE "1933 ACT") AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OR TO A U.S. PERSON IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE 1933 ACT.
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 securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.
Forward Looking Statements
This release includes forward-looking statements regarding Zonetail and its business. Such statements are based on the current expectations and views of future events of Zonetail's management. In some cases the forward-looking statements can be identified by words or phrases such as "may", "will", "expect", "plan", "anticipate", "intend", "potential", "estimate", "believe" or the negative of these terms, or other similar expressions intended to identify forward-looking statements. The forward-looking events and circumstances discussed in this release may not occur and could differ materially as a result of the failure to complete the rights offering, known and unknown risk factors and uncertainties affecting Zonetail, including risks regarding economic factors and the equity markets generally and many other factors beyond the control of Zonetail. No forward-looking statement can be guaranteed. Forward-looking statements and information by their nature are based on assumptions and involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statement or information. Accordingly, readers should not place undue reliance on any forward-looking statements or information. Forward-looking statements speak only as of the date on which they are made and Zonetail undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, except as required by applicable securities laws.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
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