BRAINGRID LIMITED ANNOUNCES DEBT SETTLEMENT AGREEMENT WITH EUROPEAN HIGH GROWTH OPPORTUNITIES SECURITIZATION FUND

TORONTO, April 09, 2020 (GLOBE NEWSWIRE) -- Braingrid Limited (CSE: BGRD) (“Braingrid” or the “Company”), and European High Growth Opportunities Securitization Fund (“EHGOSF”) have entered into a shares for debt settlement agreement (the “Agreement”), pursuant to which EHGOSF has agreed, subject to the Canadian Securities Exchange (“CSE”) approval, to accept 78,300,000 common shares of the Company (the “Shares”), at a deemed issued price of $0.01 per Share, in full settlement of $783,000 of indebtedness owing to EHGOSF by the Company (the “Transaction”).  

Prior to entering into the Agreement, EHGOSF beneficially owned and controlled 14,875,000 warrants convertible into Shares (the “Warrants”), representing, on a partially diluted basis, approximately 19.72% of the Shares then issued and outstanding. Upon closing the Transaction, EHGOSF will beneficially own and control an aggregate of 78,300,000 Shares and 14,875,000 Warrants, representing, on a partially diluted basis, approximately 60.62% of the outstanding Shares.

As EHGOSF is an “insider” of the Company, the Transaction is a “related party transaction” within the meaning of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”).  The Company is exempt from the formal valuation requirements of MI 61-101 pursuant to Subsection 5.5(b) of MI 61-101, as no securities of the Company are listed on a specified market for purposes of MI 61-101. The Company is exempt from the minority shareholder approval requirements of MI 61-101 pursuant to Subsection 5.7(1)(b) of MI 61-101 as neither the fair market value of the securities to be distributed in the Transaction nor the consideration to be received for those securities, exceeds $2,500,000, the Company has one or more independent directors in respect of the Transaction who are not employees of the Company and at least two-thirds of the independent directors approve the Transaction.

Also in connection with the Transaction, Andrew Parks and Ron McKenna are appointed to the Company’s board of directors to fill the vacancies left by the earlier departures of David Posner and Sanford Liu. Mr. Parks is currently the CEO and a director of Fountain Asset Corp, a TSXV-listed merchant bank. He is also a director of The BRN Group, which provides total brand management services and expertise to the global cannabis industry. Prior to joining Fountain Asset Corp., Mr. Parks was a partner and registered portfolio manager at a successful Toronto based asset manager. Mr. Parks is a Chartered Financial Analyst and holds an Honours Bachelor of Business Administration from Wilfrid Laurier University. Mr. McKenna is a barrister & solicitor who provides general corporate/commercial law advice to clients and has extensive expertise advising start-ups and growth-stage companies in negotiating and implementing commercial transactions including corporate finance structures, shareholder arrangements, acquisitions, dispositions, mergers, and reorganizations.