SEATTLE — Jones Soda Co. announced Tuesday that it completed the previously announced acquisition of all the issued and outstanding common shares of Pinestar Gold Inc. by way of a plan of arrangement under the Business Corporations Act.
As part of the arrangement, the obligations in respect of each share purchase warrant of Pinestar were assumed by Jones, and each remaining warrant became exercisable into one share of Jones common stock at a price of $0.06 Canadian per share.
Pinestar also completed an offering for subscription receipts for aggregate gross proceeds of $8 million at a price per subscription receipt equal to $0.50. Each subscription receipt automatically converted into one Pinestar share and one new common share purchase warrant of Pinestar, which were then immediately exchanged for shares of Jones common stock and share purchase special warrants of Jones, respectively, in accordance with a 1:1 exchange ratio.
Each Jones special warrant is exercisable into one Jones share at a price of $0.625 per Jones share for a period of 24 months from the date of issuance, conditional upon Jones increasing its authorized capital to an amount to cover the Jones shares. Further, the closing resulted in the automatic conversion of $2 million unsecured convertible debenture Jones previously issued to SOL Verano Blocker 1 LLC into an aggregate of 4,025,035 Jones shares and 4,025,035 Jones special warrants.
“By completing the arrangement and concurrent financing, we have taken a significant step towards the implementation of the company’s planned expansion into the cannabis sector,” said Jones President and CEO Mark Murray. “The proceeds from the concurrent financing will be used towards the development of the company’s planned cannabis-infused beverages and edibles business line, and the acquisition of Pinestar has enabled us to become a public reporting company in Canada.”
The Canadian Securities Exchange has conditionally approved the listing of the Jones shares on the CSE. Final approval for listing of the Jones shares on the CSE will be subject to Jones fulfilling certain standard conditions of the CSE set out in its conditional acceptance letter.
“The listing of the company’s shares of common stock on the CSE would not only increase the liquidity of our shares but would also enable the company to appeal to potential investors in Canada as well as the United States as the company’s share of common stock would have an active trading market on both sides of the border,” Murray said.
In connection with the closing, the company announced that Alex Spiro and Chad Bronstein were appointed by the company’s board of directors to serve as directors until the company’s next annual meeting. Jeffrey Anderson and Michael Fleming also gave notice to the board of their intention to resign, pursuant to the terms of the arrangement.
“We are excited to have both Alex and Chad join the board, and believe that their diverse backgrounds and experiences will further support our strategy to deliver value to our shareholders through good corporate governance and the continued growth and diversification of our business. We wish to thank both Jeff and Michael for their invaluable service and contributions to the company over the years and wish them all the best in future endeavors,” said Jamie Colbourne, the chairman of the board.
Jones also completed an offering of $3 million in aggregate principal amount of 3% unsecured convertible debentures due Feb. 9, 2023.