Ironhorse Oil & Gas Inc. and Pond Technologies Inc. announce amendment to financing terms in connection with previously announced business combination transaction

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CALGARY, Dec. 5, 2017 /CNW/ - Ironhorse Oil & Gas Inc. (TSX-V:IOG) ("Ironhorse") and Pond Technologies Inc. ("Pond") jointly announce an amendment to the brokered private placement financing of Pond (the "Financing") to be completed as a condition to closing the previously announced business combination of Ironhorse and Pond by way of a "three-cornered amalgamation" (the "Transaction").

Financing

Concurrently with and as a condition of the Transaction, Pond will complete a brokered private placement (the "Financing") of a minimum of 2,708,333 subscription receipts ("Subscription Receipts") and a maximum of 4,166,666 Subscription Receipts at a price of $2.40 per Subscription Receipt for aggregate gross proceeds of a minimum of $6,500,000 and a maximum of $10,000,000 (subject to the exercise, if any, of an over-allotment option granted to the Agents (as defined below) to issue and sell up to an additional 15% of the aggregate number of Subscription Receipts sold under the Financing, which, if exercised, would result in the issuance of a maximum of up to 4,791,666 Subscription Receipts for aggregate gross proceeds of up to $11,500,000).

Each Subscription Receipt will be now be automatically exchangeable for, without additional payment or further action on the part of the holder thereof, into: (a) one Pond common share (a "Pond Share"); and (b) one Pond Share purchase warrant (a "Pond Warrant"), with each such Pond Warrant entitling the holder thereof to purchase one Pond Share at a price of $3.00 per share and expiring 24 months from the date of grant, upon the completion of the Transaction provided that the date of completion of the Transaction is not later than January 31, 2018, failing which the subscription funds will be returned to the subscribers.  Upon the completion of the Transaction, each Pond Share will be exchanged for one Ironhorse common share (on a post-consolidation basis) and each Pond Warrant will be exchanged for one Ironhorse common share purchase warrant (on a post-consolidation basis), having the same exercise price, expiry date and other terms as the Pond Warrants.

Industrial Alliance Securities Inc. and Hampton Securities Limited (collectively, the "Agents") have been engaged by Pond to complete the Financing on a best-efforts agency basis.  A commission of 8% of the aggregate gross proceeds under the Financing (excluding up to $5,000,000 of proceeds raised, if any, from certain identified potential subscribers) and a work fee in the amount of $35,000 plus HST and any expenses incurred by the Agents is payable to the Agents by Pond.  In addition, Pond will now issue Pond unit purchase warrants ("Pond Agent Units") to the Agents equal to 8% of the aggregate number of Subscription Receipts sold pursuant to the Financing.  Each Pond Agent Unit will entitle the Agents to purchase, at an exercise price of $2.40 per unit at any time prior to the date that is 24 months from the closing date of the Financing, one Pond Share and one Pond Share purchase warrant, exercisable to purchase one Pond Share at a price of $3.00 per Pond Share at any time prior to the date that is 24 months from the closing date of the Financing. The Pond Agent Units and Pond Share purchase warrants issuable upon the exercise thereof, will include adjustment provisions entitling the holder thereof, upon completion of the Transaction, to acquire Ironhorse common shares upon the exercise thereof at the same exercise price.

Upon completion of the Transaction (after giving effect to the consolidation of the outstanding Ironhorse common shares on the basis of 6.9 pre-consolidation Ironhorse common shares for each one post-consolidation Ironhorse common share (the "Consolidation") and assuming minimum aggregate gross proceeds of $6,500,000 received under the Financing), on an undiluted basis, Ironhorse shareholders will own approximately 4,041,423 post-Consolidation Ironhorse shares, which represents ownership of approximately 21.9% of Ironhorse (16.6% on a fully diluted basis, which is lower than the percentage noted in the Circular (as defined below)) and former Pond shareholders will own approximately 14,439,577 post-Consolidation Ironhorse common shares, which represents ownership of approximately 78.1% of Ironhorse (59.4% on a fully diluted basis, which is lower than the percentage noted in the Circular).  As a result of the Transaction, 5,828,006 post-Consolidation Ironhorse common shares will be reserved for issuance to former holders of Pond convertible securities being exchanged for equivalent securities of Ironhorse and holders of certain Pond agent units, including the Pond Agent Units, which is higher than the number noted in the Circular (as defined below).

Upon completion of the Transaction (after giving effect to the Consolidation and assuming maximum aggregate gross proceeds of $10,000,000 received under the Financing), on an undiluted basis, Ironhorse shareholders will own approximately 4,041,423 post-Consolidation Ironhorse shares, which represents ownership of approximately 20.3% of Ironhorse (14.7% on a fully diluted basis, which is lower than the percentage noted in the Circular) and former Pond shareholders will own approximately 15,897,910 post-Consolidation Ironhorse common shares, which represents ownership of approximately 79.7% of Ironhorse (57.9% on a fully diluted basis, which is lower than the percentage noted in the Circular).  As a result of the Transaction, 7,519,672 post-Consolidation Ironhorse common shares will be reserved for issuance to former holders of Pond convertible securities being exchanged for equivalent securities of Ironhorse and holders of certain Pond agent units, including the Pond Agent Units, which is higher than the number noted in the Circular.

An addendum to the joint management information circular of Ironhorse and Pond dated November 17, 2017 (the "Circular") in connection with the annual and special meeting of Ironhorse shareholders to be held on December 18, 2017 and the special meeting of Pond shareholders to be held on December 15, 2017 is being mailed to the shareholders of Ironhorse and Pond which updates the disclosure in the Circular to reflect the above amendments to the Financing.  A copy of the addendum may be found on Ironhorse's SEDAR profile at www.sedar.com.

About Ironhorse and Pond

Ironhorse is a Calgary-based junior oil and natural gas production company trading on the TSXV under the symbol "IOG".  Ironhorse owns a working interest in a producing oil and gas property in Alberta. 

Located in Markham, Ontario, and continued under the laws of the province of Ontario, Pond is a private company that has developed a proprietary system to transform carbon dioxide into bio-products.  Pond works with the cement, steel, oil and gas and power generation industries to reduce greenhouse gas emissions.  Pond has pilot installations in Ontario and has granted and pending patents in the USA, Europe, China and Taiwan and patents pending in other jurisdictions including Canada. 

Pond's platform technology also includes algae superfoods for the nutraceutical and food additive markets.  Pond's productive system can grow many species of algae, including strains that produce anti-oxidants, omega-3 fatty acids, and protein for human and animal consumption. 

Reader Advisory

The TSXV conditionally accepted the Transaction on November 16, 2017.  Completion of the Transaction is subject to a number of conditions, including but not limited to, disinterested shareholder approval and completion of the Financing.  Where applicable, the Transaction cannot close until the required shareholder approvals are obtained.  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 Circular, 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 Ironhorse should be considered highly speculative.

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

Forward-Looking Statements

This press release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "objective", "ongoing", "may", "will", "project", "should", "believe", "plans", "intends" and similar expressions are intended to identify forward-looking information or statements. More particularly and without limitation, this press release contains forward looking statements and information concerning the Transaction, the Financing and the timing and ability of Ironhorse and Pond to satisfy the conditions to the completion of the Transaction and the Financing.

The forward-looking statements and information are based on certain key expectations and assumptions made by Ironhorse and Pond, including expectations and assumptions concerning the parties to the Transaction, the Transaction, the Financing, the timely receipt of all required shareholder approvals and the satisfaction of conditions to the completion of the Transaction and the Financing. Although Ironhorse and Pond believe that the expectations and assumptions on which such forward-looking statements and information are based are reasonable, undue reliance should not be placed on the forward-looking statements and information because Ironhorse and Pond can give no assurance that they will prove to be correct. By its nature, such forward-looking information is subject to various risks and uncertainties, which could cause the actual results and expectations to differ materially from the anticipated results or expectations expressed. These risks and uncertainties, include, but are not limited to, risks related to the following: the Transaction or the Financing may not be completed as currently proposed or at all; the gross proceeds to be raised in connection with the Financing; satisfaction or waiver of all applicable conditions to closing of the Transaction (including receipt of all necessary shareholder approvals, and the absence of material changes with respect to the parties and their respective businesses, all as more particularly set forth in the amalgamation agreement giving effect to the Transaction, as amended) and the Financing; the anticipated benefits expected from the Transaction not being realized; delays in the timing of the Transaction and the Financing; fluctuations in general macroeconomic conditions; fluctuations in securities markets and the market price of Ironhorse common shares; fluctuations in currency markets (such as the Canadian dollar to United States dollar exchange rate); change in national and local government, legislation, taxation, controls, regulations and political or economic developments; and availability of financing.  Readers are cautioned not to place undue reliance on this forward-looking information, which is given as of the date hereof, and to not use such forward-looking information for anything other than its intended purpose. Neither Ironhorse nor Pond undertake any obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. No stock exchange, securities commission or other regulatory authority has approved or disapproved of the information contained herein.

SOURCE Ironhorse Oil & Gas Inc.

Larry J. Parks, President and CEO, Ironhorse Oil & Gas Inc., (403)-237-9600; Steve Martin, Chief Executive Officer, Pond Technologies Inc., [phone]

Related Links

www.ihorse.ca