Plexus Technology Corp. Announces Private Placement of Subscription Receipts

Tickers: XTSX:CSTL.P
Tags: #Business, #CapitalPoolCompany

Calgary, Alberta - TheNewswire - November 5, 2019 - Plexus Technology Corp. ("Plexus" or the "Corporation") is pleased to announce a brokered private placement (the "Offering") of subscription receipts ("Subscription Receipts") led by Industrial Alliance Securities Inc. ("iA Securities"). Pursuant to the Offering, Plexus will issue up to 10,000,000 Subscription Receipts at a price of CAD$0.50 per Subscription Receipt (the "Issue Price") for gross proceeds of up to CAD$5,000,000. iA Securities has been granted an over-allotment option to sell an additional 1,500,000 Subscription Receipts for gross proceeds of $750,000. Each Subscription Receipt shall entitle the holder to receive, upon satisfaction of certain escrow release conditions ("Escrow Release Conditions"), and without payment of additional consideration, one unit in the capital of Plexus (a "Unit"). At the effective time of the completion of Plexus's proposed reverse take-over of CastleCap Capital Inc. (TSVX:CSTL.P) ("CastleCap"), as described in the press releases of CastleCap dated May 22, 2019 and September 17, 2019 (the "Proposed Transaction"), each Unit acquired upon conversion of the Subscription Receipts will be automatically exchanged for one unit (a "Resulting Issuer Unit") in the capital of the reporting issuer resulting from the completion of the Proposed Transaction (the "Resulting Issuer"). Each Resulting Issuer Unit will be comprised of one common share in the capital of the Resulting Issuer (each a "Resulting Issuer Share") and one common share purchase warrant of the Resulting Issuer (each whole common share purchase warrant, a "Resulting Issuer Warrant").

Each Resulting Issuer Warrant shall be exercisable to acquire one Resulting Issuer Share (a "Resulting Issuer Warrant Share") at a price per Resulting Issuer Warrant Share of CAD$0.75 for a period of 24 months from the date the Escrow Release Conditions are satisfied (the "Escrow Release Date"). If, at any time after the Escrow Release Date, the weighted average daily trading price of the Resulting Issuer Shares on the TSX Venture Exchange (the "TSX-V") for 20 consecutive trading days is CAD$1.00 per Resulting Issuer Share or higher, the Resulting Issuer may accelerate the expiry time of the Resulting Issuer Warrants.

The Offering is being led by iA Securities, as exclusive lead agent of the Offering. iA Securities may syndicate the Offering and form a registered selling group, after discussion with the Corporation, to broaden distribution and after-market support. The Offering will be made available in all provinces of Canada and such other jurisdictions as iA Securities and the Corporation may agree.

iA Securities is entitled to receive a cash commission equal to 8.0% of the gross proceeds raised in the Offering (the "Commission") and broker warrants (the "Broker Warrants"), equal to 8% of the number of Subscription Receipts sold pursuant to the Offering. Each Broker Warrant is exercisable to acquire one Resulting Issuer Share, at the Issue Price at any time prior to the date that is 24 months from closing of the Offering (the "Closing Date"). If the Escrow Release Conditions are not satisfied on or before the Escrow Release Date, the Broker Warrants shall be immediately cancelled.

A Securities"rial Alliance Securities Inc. ("

The Closing of the Offering is expected to be on or about December 5, 2019 or such date as the Corporation and iA Securities may agree.

About the Transaction

Further to the CastleCap press releases dated May 22, 2019 and September 17, 2019 regarding the Proposed Transaction, CastleCap and Plexus will complete a "three-cornered" amalgamation under the provisions of the Alberta Business Corporations Act, pursuant to which Plexus will amalgamate with a wholly-owned subsidiary of CastleCap (the "Amalgamation"). The amalgamated entity will be a wholly-owned subsidiary of CastleCap post-Amalgamation.

Both parties have agreed to amend the Amalgamation agreement such that the consolidation ratio of the CastleCap common shares ("CastleCap Shares") shall be one new CastleCap Share for each 2.25 CastleCap Shares presently outstanding. This will reduce the number of outstanding CastleCap Shares outstanding prior to the Amalgamation from 4,000,000 shares to approximately 1,777,778 post-consolidated shares on a non-dilutive basis. No fractional shares will be issued with any fraction of a share rounded up to the nearest whole number if 0.5 or greater and down to the nearest whole number if less than 0.5 of a share.

In addition, prior to the Closing Date, the outstanding Plexus common shares ("Plexus Shares") will be split on the basis of 1.2 Plexus Shares for each Plexus Share currently outstanding (the "Share Split").

Pursuant to the Amalgamation, a total of 16,290,986 Resulting Issuer Shares will be issued to Plexus shareholders, at a deemed price of $0.50 per Resulting Issuer Share.

Pursuant to the agreement with iA Securities, all currently outstanding class A common share purchase warrants of Plexus (the "Plexus Warrants") shall be repriced such that, following the Share Split, each whole outstanding Plexus Warrant will be exercisable into one whole Plexus Share at a price of $0.50 per Plexus Share (the "Warrant Repricing"). The Corporation shall obtain any and all consents from the holders of the Plexus Warrants necessary to give effect to the Warrant Repricing. Following the Warrant Repricing and prior to the closing of the Amalgamation, there will be 16,290,986 Plexus Warrants outstanding.

Management, directors and any shareholders of Plexus or the Resulting Issuer, as applicable, holding an equity interest equal to or greater than 10% of Plexus or the Resulting Issuer, respectively, will be required to enter into lock-up agreements. The Resulting Issuer Shares subject to the lock-up agreements shall be released over a 24 month period, with 50%, 25% and 25% released from lock-up 12, 18 and 24 months from the Escrow Release Date, respectively.

The net proceeds of the Offering are expected to be used to fund growth of the Resulting Issuer's power and technology business in Alberta, for general working capital and corporate purposes, and may also be used to pay for expenses incurred in connection with the Amalgamation and for future acquisition opportunities.

Directors and Officers of the Resulting Issuer

Upon completion of the transaction, it is anticipated that the board of directors of the Resulting Issuer will be comprised of seven individuals. As of the date of this news release, the following persons are anticipated to be the directors, officers and insiders of the Resulting Issuer following completion of the Amalgamation:

Damon Umsheid, Director

Mr. Umscheid has over 15 years experience as a business entrepreneur with companies in the optometry, real estate, investment, and technology sectors. With experience in business strategy, branding, growth, and acquisitions, he brings a wealth of knowledge on building companies from inception. Damon holds his Doctor of Optometry and was previously recognized in the Top 40 Under 40 in Optometry. Mr. Umscheid also sits on a number of professional committees.

Cameron MacDonald, Chief Executive Officer and Director

Mr. MacDonald brings over 15 years of experience in the capital markets and finance, including 12 years as founder of a Canadian capital markets advisory firm. Mr. MacDonald has advised on over 80 public and private enterprises undertaking various M&A, debt and equity financings aggregating over $200 million.

Archie Craig, President

Mr. Craig has over 15 years experience of increasing responsibilities in the construction industry. He has previously managed an underground construction and heavy civil contracting business operating in western Canada which provides project and business management services for projects ranging in size from $1-30 million.

Charles Chebry, Chief Financial Officer and Director

Mr. Chebry is a Chartered Professional Accountant with over 30 years of senior management and executive experience in the public markets sector. Mr. Chebry's strengths include finance, accounting, strategic vision and corporate governance. He has extensive experience working in a variety of senior executive roles in both the financial and natural resource sectors, including Chief Financial Officer of Olympia Trust Company and Olympia Financial Group Inc.

Scott Reeves, Corporate Secretary and Director

Mr. Reeves brings over 25 years as a Canadian corporate securities lawyer focused on securities, corporate finance, M&A, and commercial transactions, currently as a senior partner at the Calgary-based corporate law firm of TingleMerrett LLP. He acts for a large number of TSX, TSX-V and CSE-listed companies in a wide range of industries. In addition to serving on several TSX and TSX-V listed companies across multiple industries, he sits as a director and/or corporate secretary for many public and private companies, providing detailed corporate governance and continuous disclosure advice to his clients. He is a member of the advisory boards of both the TSX-V and CSE, has acted as a lead instructor for the Masters degree program in eBusiness from Osgoode Hall Law School and has taught advanced corporate finance and corporations law at the University of Alberta's Faculty of Law.

Joanne Hruska, Independent Nominee Director

Ms. Hruska bring over 20 years experience as CFA charterholder and her expertise is in the Canadian energy sector as a portfolio manager, research analyst, and investment advisor. Mr. Hruska joined Integral Wealth in 2017 in their investment banking group. For 10 years Ms. Hrusak worked as a portfolio manager with Aston Hill, where she ran the Aston Hill and Catapult energy mandates. She has been a frequent contributor to both national and international televised and print media. Ms. Hrusak graduated from the University of Calgary with a Bachelor of Commerce degree with a major in Finance.

Rex Kary , Independent Nominee Director

Mr. Kary brings 38 years of marketing and financing experience with early stage companies. Mr. Kary is currently the Chief Operating Officer at FluroTech Ltd. (TSXV: TEST) and Chief Executive Officer of Moneta Royalty Corp. From 2003 to 2006, Mr. Kary was the Co-Founder and Managing Partner of Moneta Capital Partners Ltd. investing in the oil & gas and technology sector across western Canada and the U.S. From 1989 to 1995, Mr. Kary was the President of Continental Energy Marketing which was sold to PanEnergy Marketing Services Canada, where he served as President of its Canadian subsidiary focusing on all Canadian natural gas marketing and trading from 1995 to 1997.

Further Information

In accordance with the policies of the TSX-V, a complete description of Plexus' business will be contained in a filing statement of CastleCap containing further details about the Proposed Transaction and the Resulting Issuer (as defined herein) (the "Filing Statement"). The Filing Statement will be filed by CastleCap on SEDAR at upon acceptance by the TSX-V.

Investors are cautioned that, except as disclosed in the disclosure document to be prepared in connection with the Proposed Transaction, any information released or received with respect to the Proposed Transaction may not be accurate or complete and should not be relied upon.

For further information, please contact:

Charles Chebry, President and Chief Executive Officer of CastleCap Capital Inc.
Phone: (403) 680-8511

Cameron MacDonald, Chief Executive Officer of Plexus Technology Corp.
Phone: (403) 585-9875

All information contained in this press release with respect to CastleCap and Plexus was supplied by the parties, respectively, for inclusion herein, and CastleCap and its directors and officers have relied on Plexus for any information concerning such party.

Completion of the Proposed Transaction is subject to a number of conditions, including but not limited to, TSX-V acceptance and, if applicable, pursuant to the requirements of the TSX-V, majority of the minority shareholder approval. Where applicable, the Proposed Transaction cannot close until the required shareholder and regulatory approval is obtained. There can be no assurance that the Proposed 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 Proposed Transaction, any information released or received with respect to the Proposed Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of the Corporation should be considered highly speculative.

This press release is not an offer of securities for sale in the United States. The securities described in this press release have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons (as defined in Regulation S under the U.S. Securities Act of 1933, as amended) absent registration or an exemption from registration. This press release shall not constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction where such offer, solicitation, or sale would be unlawful.

The TSX Venture Exchange Inc. has in no way passed upon the merits of the Proposed Transaction and has neither approved nor disapproved the contents of this press release.


CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION: This news release includes certain "forward-looking statements" under applicable Canadian securities legislation. Forward-looking statements include, but are not limited to, statements with respect to: the terms and conditions of the Proposed Transaction; the terms and conditions of the proposed Financing; future developments and the business and operations of the "Resulting Issuer" after the Proposed Transaction. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: general business, economic, competitive, political and social uncertainties; and delay or failure to receive board, shareholder or regulatory approvals. There can be no assurance that the Proposed Transaction will proceed and that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The Corporation and Plexus disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Copyright (c) 2019 TheNewswire - All rights reserved.

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