Califfi Capital Corp. Announces Definitive Agreement for Qualifying Transaction
423 East 10th Street North Vancouver, B.C.
V7L 2E5
Trading Symbol: TSX-V: CFI.P Telephone: 604-619-0225 Fax: 604-980-6264 Email: [email protected]
Califfi Capital Corp. Announces Definitive Agreement for Qualifying Transaction
NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF U.S. SECURITIES LAWS.
October 13, 2020 - Vancouver, British Columbia: Califfi Capital Corp. (the “Corporation” or “Califfi”) (TSXV: CFI.P) is pleased to announce that, further to its news release dated June 18, 2020 (the “Initial NR”), it has entered into a definitive agreement (the “Definitive Agreement”) with Bonanza Mining Corporation (“Bonanza”) and the Bonanza shareholders, pursuant to which Califfi will acquire all of the issued and outstanding shares of Bonanza to complete Califfi’s qualifying transaction (the “Qualifying Transaction”) in accordance with the policies of the TSX Venture Exchange (the “Exchange”). The Definitive Agreement replaces the letter of intent between Califfi and Bonanza with respect to the Qualifying Transaction which was announced in the Initial NR.
Califfi was incorporated on November 24, 2016 under the laws of British Columbia. It is a reporting issuer in the Provinces of British Columbia and Alberta and is a “capital pool company” under the policies of the Exchange. Bonanza is duly incorporated under the laws of British Columbia. In connection with the Qualifying Transaction, the Bonanza shareholders will exchange their Bonanza shares for consideration consisting of two (2) Califfi shares for each one (1) Bonanza share issued and outstanding as at the closing. The consideration for the transfer of the Bonanza shares to Califfi shall be the issuance of a total of 17,071,202 Califfi shares to the Bonanza shareholders at a deemed price of $0.15 per share. Upon completion of the Qualifying Transaction, it is intended that Califfi (the “Resulting Issuer”) will change its name to “Bonanza Mining Corporation” or to such other name as is acceptable to management and to the Exchange. The Resulting Issuer will continue Bonanza’s business of mineral exploration.
The completion of the Qualifying Transaction is subject to the receipt of all necessary regulatory approvals, including the acceptance of the Exchange as well as the satisfaction of conditions to closing as set out in the Definitive Agreement, including:
(i) the completion of the Private Placement (as defined below);
(ii) the representations, warranties and covenants of each of Califfi and Bonanza, as set out in the Definitive Agreement, being true and correct in all material respects at the closing of the Qualifying Transaction;
(iii) the absence of any material adverse effect on Califfi or Bonanza;
(iv) the resignations from certain of the current directors and officers of Califfi;
(v) Califfi having a cash balance of not less than $600,000;
(vi) Bonanza’s satisfaction of the maintenance of Califfi’s listing on the Exchange.
\\garnet.lan\_Folders\yeadon\Documents\Doc\COMPANIES\califfi capital corp\nr\2020\oct\13\califfioct132020nr.docx The Qualifying Transaction will constitute an arm’s-length transaction, and as such, will not require Califfi shareholder approval. There can be no assurance that the Qualifying Transaction will be completed on the terms proposed in the Definitive Agreement or at all.
Private Placement
The terms of the Definitive Agreement include that Califfi and Bonanza shall arrange for the completion of a financing for gross proceeds of $2,010,000 concurrent with the closing of the Qualifying Transaction, to consist of the sale by Califfi of the following securities:
(a) 7,500,000 flow-through shares at a price of $0.20 per share; and
(b) 3,000,000 ordinary common shares at a price of $0.17 per share.
Investment Dealer Exemption
The Private Placement will be made available to certain subscribers pursuant to BC Instrument 45-536 – Exemption from Prospectus Requirement for Certain Distributions Through an Investment Dealer and in similar instruments in other jurisdictions in Canada (the “Investment Dealer Exemption”). In accordance with the requirements of the Investment Dealer Exemption, Califfi confirms that there is no material fact or material change about Califfi that has not been generally disclosed.
The Private Placement will be subject to all necessary regulatory approvals including acceptance from the Exchange. All securities issued in connection with the Private Placement will be subject to a four month and one day hold period from the closing date under applicable Canadian securities laws, in addition to such other restrictions as may apply under applicable securities laws of jurisdictions outside of Canada.
The Resulting Issuer intends to use the proceeds from the Private Placement, as well as Califffi’s and Bonanza’s cash on hand as of the Closing, as follows:
(a) Estimated general and administrative expenses over the 12 months $300,000 following the Closing
(b) Phase 1 exploration on Bonanza’s MC Property $330,730
(c) Repayment of a Bonanza shareholder loan and reserve for cash $232,800 payments to certain property optionors
(d) Reserve for the follow-up Phase 2 drilling program on Bonanza’s MC $520,400 property
(e) Unallocated working capital $1,523,070
Total: $2,907,000
Additional Information
This news release does not constitute an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction. Califfi’s common shares are currently suspended from trading and will remain suspended until further notice. In conneciton with the Qualifying Transaction and pursuant to Exchange requirements, Califfi will file a Filing Statement on SEDAR (www.sedar.com), which will contain details regarding the Qualifying Transaction, Bonanza, the Private Placement and the Resulting Issuer. Further details regarding the Qualifying Transaction are disclosed in the Initial NR. Califfi and Bonanza will provide further details in respect of the Qualifying Transaction in due course once available, by way of news releases.
Completion of the Qualifying Transaction is subject to a number of conditions including, but not limited to, Exchange acceptance and if applicable pursuant to Exchange Requirements, majority of the minority shareholder approval. Where applicable, the Qualifying Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Qualifying Transaction will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the Qualifying Transaction, any information released or received with respect to the Qualifying Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.
The TSX Venture Exchange Inc. has in no way passed upon the merits of the Qualifying Transaction and has neither approved nor disapproved the contents of this news release. Neither the Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Exchange) accepts responsibility for the adequacy or accuracy of this news release.
For further information, please contact:
Califfi Capital Corp. Bonanza Mining Corporation 423 East 10th Street 100 Deermoss Crescent SE North Vancouver, B.C. V7L 2E5 Calgary, Alberta T2J 6P4 Attention: Alfredo De Lucrezia, President, Attention: Andrew Burgess, CFO and Director CEO and Director Tel: (403) 383-8254 Tel: (604) 619-0225 Email: [email protected] Email: [email protected]
This press release contains "forward-looking information" within the meaning of applicable securities laws relating to the proposal to complete the Qualifying Transaction and associated transactions, including statements regarding the terms and conditions of the Qualifying Transaction, the Definitive Agreement, the Private Placement and the use of proceeds of the Private Placement. Readers are cautioned to not place undue reliance on forwardlooking information. Actual results and developments may differ materially from those contemplated by these statements depending on, among other things, the risks that the parties will not proceed with the Qualifying Transaction, the Definitive Agreement, the Private Placement and associated transactions, that the ultimate terms of the Qualifying Transaction, the Definitive Agreement, the Private Placement and associated transactions will differ from those that are currently contemplated, and that the Qualifying Transaction, the Definitive Agreement, the Private Placement and associated transactions will not be successfully completed for any reason (including the failure to obtain the required approvals or clearances from regulatory authorities). The statements in this news release are made as of the date of this news release. Califfi undertakes no obligation to comment on analyses, expectations or statements made by third-parties in respect of Califfi, Bonanza, their securities, or their respective financial or operating results.
This news release does not constitute an offer to sell or a solicitation of an offer to buy any securities in the United States. The securities disclosed herein have not been and will not be registered under the United States Securities Act 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.