22 Capital Corp. announces completion of concurrent financing in connection with proposed qualifying transaction

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TORONTO, Sept. 12, 2017 /CNW/ - Further to its news release dated July 25, 2017, 22 Capital Corp. (TSXV: LFC.P) ("22 Capital") has completed its previously announced non-brokered private placement of subscription receipts (the "Subscription Receipts") whereby 22 Capital issued 2,666,667 Subscription Receipts at a price of $0.1875 (the "Issue Price") per Subscription Receipt for aggregate gross proceeds of $500,000 (the "Offering").

The gross proceeds from the Offering (the "Escrowed Funds") will be held in escrow pending satisfaction of the following conditions: (i) satisfaction or waiver of all conditions precedent to the completion of 22 Capital's qualifying transaction (the "Transaction") with nDivision Inc., including, without limitation, the conditional approval of the TSX Venture Exchange ("TSXV") for the Transaction; and (ii) 22 Capital having delivered a direction to the escrow agent to the Offering confirming that the conditions set forth above in item (i) have been met or waived (the "Escrow Release Conditions"). Upon satisfaction of the Escrow Release Conditions, each Subscription Receipt will automatically convert, without any further consideration or action on the part of the holder thereof, into 0.416666667 of a common share of 22 Capital.

If the Escrow Release Conditions are not satisfied by 5:00 p.m. (Toronto time) on November 30, 2017, each Subscription Receipt shall be automatically terminated and cancelled without any further action on the part of the holder, and the Escrowed Funds shall be returned to the holders of Subscription Receipts on a pro rata basis. To the extent that the Escrowed Funds are not sufficient to refund the aggregate Issue Price paid by the holders of the Subscription Receipts, 22 Capital will be responsible and liable to contribute such amounts as are necessary to satisfy any shortfall.

Assuming the Escrow Release Conditions are satisfied, the net proceeds from the Offering will be used for working capital and for general corporate purposes.

Three insiders of 22 Capital participated in the Offering, thereby making the Offering a "related party transaction" as defined under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions ("MI 61-101"). Messrs. Steven Mintz, Marc Lustig and Jay Goldman, each a director of 22 Capital (collectively, the "Insiders"), or companies wholly-owned by such persons, purchased 160,000, 156,669 and 240,000 Subscription Receipts, respectively, representing, in the aggregate, 25% of the outstanding Subscription Receipts sold pursuant to the Offering. 22 Capital was exempt from the requirements to obtain a formal valuation or minority shareholder approval in connection with the Insiders' participation in the Offering in reliance of sections 5.5(b) and 5.7(a) of MI 61-101. 22 Capital did not file a material change report more than 21 days before the closing of the Offering, as the details of the Insiders' participation had not been confirmed at that time.

The securities issued pursuant to the Offering are subject to a statutory four month and one day hold period.

Trading Halt

The common shares of 22 Capital are currently halted from trading and are to remain halted from trading until resumption of trading is approved by the TSXV.

Further Information

Further details regarding the Transaction will be provided in a filing statement (the "Filing Statement") prepared and filed by 22 Capital in accordance with the rules and policies of the TSXV and filed under 22 Capital's issuer profile on SEDAR at www.sedar.com. 22 Capital expects to complete and file the Filing Statement in October, 2017. The Transaction is expected to close shortly thereafter.

Completion of the Transaction is subject to a number of conditions, including but not limited to, TSXV acceptance. There can be no assurance that the Transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the Filing Statement to be prepared in connection with the Transaction, any information released or received with respect to the Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.

The TSXV has in no way passed upon the merits of the proposed Transaction and has neither approved nor disapproved the contents of this press release.

NEITHER THE TSXV NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSXV) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION:

This news release contains "forward-looking information" and "forward-looking statements" (collectively, "forward-looking statements") within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as "expects", or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "budget", "scheduled", "forecasts", "estimates", "believes" or "intends" or variations of such words and phrases or stating that certain actions, events or results "may" or "could", "would", "might" or "will" be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements. In this news release, forward-looking statements relate, among other things, to: certain terms and conditions of the proposed Transaction; risks relating to the failure to satisfy the Escrow Release Conditions and use of funds. 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 the delay or failure to receive board, shareholder or regulatory approvals. There can be no assurance 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 the forward-looking statements and information contained in this news release. Except as required by law, 22 Capital assumes no obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change, except as required by law.

SOURCE 22 Capital Corp.

For further information regarding the Transaction, please contact: Steven Mintz, President and Chief Executive Officer, 22 Capital Corp., Telephone: [phone], Email: [email protected]; Alan Hixon, Chief Executive Officer, nDivision, Telephone: [phone], Email: [email protected]