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Hill Street Marketing Inc. and Avanco Capital Corp. Complete Concurrent Financing of C$4.8 Million in Subscription Receipts

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Hill Street Marketing Inc. and Avanco Capital Corp. Complete Concurrent Financing of C$4.8 Million in Subscription Receipts

PR Newswire

TORONTO, July 24, 2018 /PRNewswire/ - Hill Street Marketing Inc. ("Hill Street") and Avanco Capital Corp. ("Avanco") are pleased to announce that in connection with the Qualifying Transaction (as defined below) of Avanco, Avanco and its wholly-owned subsidiary Avanco Hill Street Acquisition Corp. ("Avanco Sub"), completed their previously announced concurrent financing (collectively, the "Offering") of subscription receipts ("Subscription Receipts") for aggregate gross proceeds of approximately $4.8 million dollars.  Each Subscription Receipt will, upon completion of the Qualifying Transaction, and satisfaction of the Escrow Release Conditions (defined below), be automatically converted into one common share and one-half of one common share purchase warrant of the Resulting Issuer (as defined below).  Eight Capital ("Agent") acted as lead agent in the Offering.

Hill Street Marketing Inc. (CNW Group/Hill Street Marketing Inc.)

The gross proceeds of the Offering, net of 50% of the commissions and the reasonable costs and expenses of the Agent and its counsel (the "Net Escrowed Funds"), have been deposited in escrow with Computershare Trust Company of Canada ("Escrow Agent"). The Net Escrowed Funds will be released from escrow immediately prior to the closing of the Qualifying Transaction and the Agent's sole satisfaction of the following conditions (the "Escrow Release Conditions"):

I.  

the completion or irrevocable waiver or satisfaction of all conditions precedent to the Qualifying Transaction;



II.

the receipt of all required shareholder, third party (as applicable) and regulatory approvals including, without limitation, the conditional approval of the Exchange for the Qualifying Transaction and the Offering, if applicable, and the conditional approval of the TSX Venture Exchange ("Exchange") of the listing of the common shares issuable upon conversion of the Subscription Receipts after giving effect to the Qualifying Transaction; and



III. 

Avanco, Avanco Sub and the Agent (on its own behalf and on behalf of the syndicate) having delivered a joint notice to the Escrow Agent confirming that the conditions set forth in (I) and (II) above have been met or waived.

                        

In consideration for its services, Eight Capital together with certain other agents, will receive a cash commission of up to 7% of the aggregate gross proceeds raised under the Offering (subject to certain exclusions) and compensation options (the "Broker Warrants") equal to up to 7% of the aggregate number of Subscription Receipts issued (subject to certain exclusions). In addition, in consideration for advisory services rendered by it in connection with the Offering, Eight Capital will receive a cash commission of $85,000 and 485,714 advisory warrants (the "Advisory Warrants" and, together with the Broker Warrants, the "Compensation Options").

Each Compensation Option is exercisable for a period of 24 months following the completion of the Qualifying Transaction at a price of $0.175 per Compensation Option for one common share in the capital of the Resulting Issuer and a one-half of one common share purchase warrant of the Resulting Issuer (each whole common share purchase warrant, a "Underlying Warrant"). Each Underlying Warrant entitles the holder thereof to acquire one common share in the capital of the Resulting Issuer at a price of $0.35 for a period of 24 months following the completion of the Qualifying Transaction.

All securities issued pursuant to the Offering are subject to a statutory hold period of four months and a day from the closing of the Offering. Upon conversion of the Subscription Receipts, the securities underlying the Subscription Receipts issued and sold by Avanco Sub will no longer be subject to a statutory hold period.

Qualifying Transaction

As previously disclosed, pursuant to a merger agreement dated May 28, 2018 among Avanco, Hill Street and Avanco Sub (the "Definitive Agreement"), Avanco agreed to purchase all the issued and outstanding securities of Hill Street by way of a three-cornered amalgamation pursuant to which Avanco Sub and Hill Street will amalgamate under the terms of the Business Corporations Act (Ontario). Upon amalgamation of Hill Street and Avanco Sub, Avanco will issue shares and other securities in the capital of Avanco to the former securityholders of Avanco Sub and Hill Street. Such transaction intended to constitute the "Qualifying Transaction" of Avanco, as such term is defined in Policy 2.4 of the Exchange.

Following completion of the Qualifying Transaction, the former securityholders of Hill Street will control approximately 37% of the issued and outstanding shares of Avanco, and the directors of Avanco will be replaced by appointees of Hill Street. Upon closing of the Qualifying Transaction Avanco will be renamed "Hill Street Beverage Company Inc." (the "Resulting Issuer").

The proposed closing date for the Qualifying Transaction is currently scheduled for July 24, 2018, with the anticipation that, subject to Exchange approval, the Resulting Issuer shares will be listed and posted for trading on the Exchange, under the ticker symbol BEER on or about July 30, 2018.

CEO Commentary

"Awards have proven that our adult-format, alcohol-free beverages provide great-tasting beer and wine experiences," said Terry Donnelly, CEO of Hill Street. "While we are arguably the best-positioned Canadian pure play in this new segment that is forecast to grow at 19% per year for the next 7 years, we are even more excited about our plans to use our growing stable of alcohol-free adult-format beverages as great-tasting, healthier carriers of liquid cannabis. Completing this financing helps Hill Street begin its journey towards achieving our goals. Over the coming months Hill Street will be building brands and unit volumes in anticipation of Canada's October 2019 legalization of infused edibles."

About Hill Street Marketing Inc.

Founded in 2008, Hill Street Marketing Inc. is the world's most award-winning company exclusively focused on alcohol-free beer, wines and cocktails. Hill Street offers a wide range of products including Vin(Zero) wines, Vintense wines, Hill Street Craft beer, and Designated Draft beer. Hill Street's award-winning products have won the Retail Council of Canada's Grand Prix, and numerous medals and accolades including three Gold Medals, two Silvers and one Bronze at the U.S. Open Beer Championships, and a prestigious Double Gold Medal at the San Francisco International Wine Challenge. It is expected that Hill Street's award-winning, alcohol-free wines and beers will be available in up to 7,000 stores across Canada by the end of 2018. www.hillstreetbevco.com

About Avanco

Avanco is a capital pool company within the meaning of the policies of the Exchange. It was incorporated in British Columbia on April 6, 2016 and was listed on the Exchange on March 22, 2017. Avanco does not have any operations and has no assets other than cash. Avanco's business is to identify and evaluate businesses and assets with a view to completing a Qualifying Transaction.

Forward Looking Statements

This news release contains "forward-looking information" within the meaning of applicable securities laws relating to each of Hill Street and Avanco. Although Hill Street and Avanco believe (in light of the experience of its officers and directors) that current conditions and expected future developments and other factors that have been considered appropriate that the expectations reflected in this forward-looking information are reasonable, undue reliance should not be placed on them because each of Hill Street and Avanco can give no assurance that they will prove to be correct. Actual results and developments may differ materially from those contemplated by these statements. The statements in this press release are made as of the date of this release and Hill Street and Avanco assume no responsibility to update them or revise them to reflect new events or circumstances other than as required by applicable securities laws. Hill Street and Avanco undertake no obligation to comment on analyses, expectations or statements made by third-parties in respect of the companies, their respective subsidiaries, their securities, or their respective financial or operating results (as applicable). 

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 release.

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SOURCE Hill Street Marketing Inc.

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