Terra Nova Resources Inc. announces upsizing of private placement financing

Canaccord Genuity and Gravitas engaged to co-lead upsized private placement of up to $9M

October 06, 2020 Vancouver, British Columbia: Terra Nova Resources Inc. (CSE: TENO) (the “Company” or “Terra Nova”), a resource issuer listed on the Canadian Securities Exchange (the “CSE”), is pleased to announce that, due to strong investor demand, it has agreed with Canaccord Genuity Corp. (“Canaccord Genuity”) and Gravitas Securities Inc. (“Gravitas” and together with Canaccord Genuity, the “Co-Lead Agents” or “Agents”), acting as Co-Lead Agents, to increase the size of the previously announced private placement to up to 30,000,000 subscription receipts (the “Newco Subscription Receipts”) of the Company’s wholly-owned subsidiary 1259724 B.C. Ltd. (“Newco”) at a price of C$0.30 per Subscription Receipt (the “Issue Price”) for aggregate gross proceeds of up to C$9,000,000 (the “Concurrent Financing”). A portion of the Concurrent Financing may be completed by the issuance of subscription receipts of Terra Nova on substantially equivalent terms to the Newco Subscription Receipts at the discretion of the Agents, the Company and Terra Nova.

Summary of the Private Placement

As previously announced on September 24, 2020, the Concurrent Financing is being conducted in connection with the Company’s previously announced acquisitions of WellteQ Ltd. (“WellteQ”) and CBDS Health Inc. (“CBDS”, and the proposed acquisitions of WellteQ and CBDS collectively being the “Proposed Transaction”), which will constitute a fundamental change under the rules and policies of the CSE. As previously announced, the Proposed Transaction is expected to involve the acquisition by the Company of all of the outstanding shares of WellteQ by way of an off market takeover effected pursuant to the laws of Australia, and the acquisition by the Company of all of the outstanding shares of CBDS by way of a three cornered amalgamation among the Company, Newco and CBDS, effected pursuant to the laws of British Columbia (the “CBDS Amalgamation”). Prior to completion of the Proposed Transaction, it is expected that the Company will complete a consolidation of its outstanding common shares on the basis of 0.3 post-consolidation shares for every one (1) pre-consolidation common share (the “Consolidation”).

As previously announced, under the terms of the Concurrent Financing, upon satisfaction of the Release Conditions (as defined below), each Newco Subscription Receipt will entitle the holder to receive, without any further action on the part of the holder, and without payment of any further consideration, one (1) unit of Newco (each a “Newco Unit”) upon satisfaction of the Release Conditions (as described below). Each Newco Unit will consist of one common share in the capital of Newco (a “Newco Share”) and one-half of one warrant (each whole warrant being a “Newco Warrant”), with each whole Newco Warrant entitling the holder thereof to purchase one additional Newco Share at a price of $0.45 per Newco Share for a period of 24 months from the date the Release Conditions are satisfied. Upon completion of the CBDS Amalgamation, each Newco Share will be automatically exchanged for one post-Consolidation common share of the Company (each a “Company Share”), and each Newco Warrant will be exchanged for one whole share purchase warrant of the Company (a “Company Warrant”) entitling the holder thereof to purchase one (1) post-Consolidation Company Share on the same terms and conditions as the Newco Warrants. The Agents will have an option (the “Agent’s Option”), exercisable at any time prior to completion of the Concurrent Financing, to increase the size of the offering by up to C$1,000,000 or 3,333,333 Newco Subscription Receipts.

The gross proceeds of the Financing, less 50% of the Agents’ cash commission (as described below) and certain expenses of the Agents, will be deposited in escrow on closing of the Concurrent Financing until the satisfaction of certain release conditions, including that all conditions precedent to the Proposed Transaction have been met (the “Release Conditions”).

In the event that the Release Conditions have not been satisfied prior to 180 days following the closing of the Concurrent Financing, or the Company advises the Co-Lead Agents or announces to the public that it does not intend to satisfy the Release Conditions or that the Proposed Transaction has been terminated, the aggregate issue price of the Newco Subscription Receipts (plus any interest earned thereon) shall be returned to the applicable holders of the Newco Subscription Receipts, and such Newco Subscription Receipts shall be automatically cancelled and be of no further force and effect.

In connection with the Concurrent Financing, the Agents will be entitled to receive a cash fee equal to 8% of the aggregate gross proceeds of the Concurrent Financing (the “Cash Commission”) (provided that the Cash Commission for subscribers on the president’s list will be 4%), and such number of compensation warrants (the “Agent’s Warrants”) equal to 8% of the number of Newco Subscription Receipts issued in connection with the Concurrent Financing (provided that the number of Agent’s Warrants issued to subscribers on the president’s list will be equal to 4% of the number of Newco Subscription Receipts issued). Each Agent’s Warrant will be exercisable for one (1) Newco Unit at an exercise price of $0.30 per Newco Unit for a period of 24 months following the date the Release Conditions are satisfied. Upon the completion of the Proposed Transaction, each Agent’s Warrant will be exchanged for one (1) agent’s warrant of the Company entitling the holder thereof to purchase post-Consolidation Company Shares and warrants to purchase post-Consolidation Company Shares on the same terms and conditions as the Agent’s Warrant.

The Subscription Receipts will be offered in all provinces of Canada and such other jurisdictions as Terra Nova and the Co-Lead Agents may agree where the Concurrent Financing can be offered and sold without the requirement to file a prospectus or similar document. It is expected that the net proceeds from the Concurrent Financing will be used for sales and marketing, software development, recruitment and for general working capital purposes.

This press release does not constitute an offer to sell or solicitation of an offer to sell any of the securities in the United States. The securities being offered under the Concurrent Financing have not been, and will not be registered, under the United States Securities Act of 1933, as amended (the “1933 Act”) or any state securities laws and may not be offered or sold within the United States or to any person in the United States or to U.S. persons unless registered under the 1933 Act and any applicable state securities laws, or exemption from such registration requirements is available.

About wellteq Digital Health Inc.

wellteq Digital Health Inc. is a leading global provider of personalized digital health and wellness
solutions across the continuum of care.

To learn more, visit https://wellteq.co/

Download the wellteq Corporate Presentation:

wellteq Investor Contact:
Glen Akselrod
Bristol Investor Relations
E: glen@bristolir.com
T: (905) 326-1888

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