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TSX: PNP     Last: 2.18     Change: 0.23
TSX: PNP     Last: 2.18     Change: 0.23

Pinetree Capital Ltd Announces Rights Offering

NOT FOR DISTRIBUTION TO ANY UNITED STATES NEWSWIRE SERVICES
OR OTHERWISE FOR DISTRIBUTION IN THE UNITED STATES

TORONTO, ONTARIO (March 29, 2021) – Pinetree Capital Ltd. (TSX:PNP) (“Pinetree”, “our” or “we”) today announced that it will be issuing rights to holders of its common shares (the “Common Shares”) of record as at the close of business on April 6, 2021 (the “Record Date”). Each holder of Common Shares as at the Record Date and who is a resident of a province or territory of Canada (the “Eligible Holders”) will receive one transferable right (a “Right”) for each Common Share held. Each Right will entitle the holder to subscribe for one Common Share at a price of C$1.85 per Common Share (the “Subscription Price”) during the exercise period (the “Basic Subscription Privilege”).

The Subscription Price is approximately equal to a 26% discount to the volume weighted average price of the Common Shares on the Toronto Stock Exchange (the “TSX”) for the previous five trading days ending March 29, 2021. Pinetree’s book value per common share as at December 31, 2020 was $2.11.  The Subscription Price represents a discount of approximately 12% to the book value per common share as at December 31, 2020. A maximum of 9,420,198 Common Shares will be issued pursuant to the Rights Offering, representing 100% of the currently issued and outstanding Common Shares as of the date hereof.

The Rights will be listed for trading on the TSX on a “when issued” basis under the symbol PNP.RT commencing at the opening of business on April 13, 2021. Trading of the Rights will cease at 12:00 p.m. (Toronto time) on May 13, 2021 (the “Expiry Date”) and the Rights will be exercisable until 5:00 p.m. (Toronto time) on such date. After such time, any unexercised Rights will be void and of no value. Holders who fully exercise their Rights under the Basic Subscription Privilege will be entitled to subscribe for additional Common Shares (the “Additional Subscription Privilege”), if available as a result of any unexercised Rights on the Expiry Date, subject to certain limitations set out in Pinetree’s rights offering circular.

There is no standby commitment in respect of the rights offering and the completion of the rights offering is not subject to Pinetree receiving any minimum amount of subscriptions from holders.

Certain insiders have advised Pinetree of their intention to participate in the rights offering: (1) L6 Holdings Inc. (“L6”), a family holding company owned indirectly by Damien Leonard, Pinetree’s President, and certain of his siblings, (2) Peter Tolnai, one of Pinetree’s independent directors, and (3) Shezad Okhai, who will be joining Pinetree as an Investment Manager starting on April 19, 2021, each intend to participate in the Right Offering. L6, Peter Tolnai and Shezad Okhai each presently own 3,113,951, 702,223 and 375,000 common shares, respectively, or approximately 33.1%, 7.5% and 4%, respectively, of the issued and outstanding common shares prior to giving effect to the rights offering. Each of these shareholders has advised Pinetree that it intends to participate in the Rights Offering through the Basic Subscription Privilege and, to the extent applicable, the Additional Subscription Privilege. Accordingly, each of these shareholders’ respective ownership interests in Pinetree may therefore increase if the Basic Subscription Privilege is not fully subscribed by all holders of Common Shares. We have been advised by L6 that the number of Common Shares that it intends to subscribe for through the Basic Subscription Privilege and, to the extent applicable, the Additional Subscription Privilege will not result in L6 beneficially owning more than 45% of our issued and outstanding Common Shares upon closing of the rights offering. In addition, we have been advised by Messrs. Tolnai and Okhai that they intend to subscribe for 1,097,777 (in the case of Mr. Tolnai) and between 675,000 and 700,000 (in the case of Mr. Okhai) Common Shares, respectively, through the Basic Subscription Privilege and, to the extent applicable, the Additional Subscription Privilege.

Pinetree also understands that (1) certain of Pinetree’s independent directors and (2) John Bouffard, Pinetree’s Chief Financial Officer may acquire in the aggregate, up to 1% of Pinetree’s issued and outstanding Common Shares pursuant to the rights offering.

There are currently 9,420,198 outstanding Common Shares. If all of the Rights issued under this rights offering are validly exercised, the rights offering will raise gross proceeds of approximately C$17.4 million, the net proceeds of which will be used by Pinetree for general corporate purposes, including to make additional investments.

Pinetree currently plans to release its results for the quarter ended March 31, 2021 on May 3, 2021, which is during the rights exercise period. Holders of rights may wish to wait until May 3, 2021 to decide whether to exercise their rights in light of those financial results, which will include Pinetree’s updated book value per common share as at March 31, 2021.

At its 2021 annual and special meeting of shareholders, Pinetree intends to seek shareholder approval for a 100 to 1 consolidation of the Common Shares, followed immediately by a 1 to 50 share split by way of distribution. Shareholders who hold less than 100 Common Shares at the time the consolidation transaction is effected (less than one common share on a post-consolidation basis) will generally receive a cash payment from Pinetree in exchange for such fractional consolidated common share and will no longer be a shareholder of Pinetree. The management information circular with respect to our 2021 annual and special meeting will contain full details regarding the proposed consolidation/split transaction. However, shareholders who currently hold less than 100 Common Shares and who wish to continue to be shareholders following the consolidation transaction may consider participating in the rights offering as a way to bring their share holdings above 100 Common Shares.

Details of the rights offering are described in Pinetree’s rights offering notice and rights offering circular which are available under Pinetree’s profile at www.sedar.com. The rights offering notice and accompanying rights certificate will be mailed to each registered Eligible Holder as soon as practicable following the Record Date. Registered Holders who wish to exercise their Rights must forward the completed rights certificate, together with the applicable funds, to the rights agent, TSX Trust Company, on or before the Expiry Date. Beneficial Eligible Holders who own their Common Shares through an intermediary, such as a bank, trust company, securities dealer or broker, will be mailed the rights offering notice and other instructions are available in the rights offering circular.

Rights will not be issued by Pinetree to holders of Common Shares who are not Eligible Holders. Instead, Rights otherwise issuable to such ineligible holders will be issued to and held by TSX Trust Company, as agent, which will use its best efforts to sell the Rights on behalf of all such ineligible holders prior to the Expiry Date and then forward the net proceeds pro rata to such ineligible holders.

The securities offered have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), or the securities laws of any state of the “United States” (as defined in Regulation S under the U.S. Securities Act). This press release does not constitute an offer to sell or a solicitation of an offer to buy any securities within the United States, and the securities offered may not be offered or sold in or into the United States unless registered under the U.S. Securities Act and applicable state securities laws, or pursuant to an exemption from such registration requirements as described herein.

Forward-Looking Statements

Certain statements herein may be “forward looking” statements that involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Pinetree or the industry to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved. A number of factors could cause actual results to vary significantly from the expectations discussed in the forward-looking statements. These forward-looking statements reflect current assumptions and expectations regarding future events and are made as of the date hereof and Pinetree assumes no obligation, except as required by law, to update any forward-looking statements to reflect new events or circumstances. Accordingly, when relying on forward-looking statements to make decisions, Pinetree cautions readers not to place undue reliance on these statements, as forward-looking statements involve significant risks and uncertainties. Some of the specific forward-looking statements in this news release include, but are not limited to, statements with respect to closing of the Rights Offering, the intended use of proceeds therefrom, timing of the release of Pinetree’s first quarter results and the intention to undertake a consolidation/split transaction.

About Pinetree Capital Ltd.

Pinetree is a value-oriented investment and merchant banking company focused on the technology sector.  Pinetree’s common shares are listed on the TSX under the symbol “PNP”.

For further information:
John Bouffard
Chief Financial Officer
416-941-9600 x 200
jbouffard@pinetreecapital.com
www.pinetreecapital.com

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