RYU Apparel Inc. said it has closed the first tranche of its non-brokered private placement financing of up to 71,428,572 units at a price of 7 cents per unit for gross proceeds of up to $5 million.
The first tranche consisted of 25,497,283 Units of the company at a price of $0.07 per Unit for gross proceeds of $1,784,809.81. Each Unit consists of one common share and one transferable common share purchase warrant. Each Warrant entitles the holder to purchase one additional common share at a price of 20 cents per common share for a period of five years from the closing of the Financing. In connection with the First Tranche, the company paid cash finder’s fees of $12,600 and issued 180,000 share purchase warrants to one finder, in accordance with the policies of the TSX Venture Exchange.
The Chief Executive Officer of the company subscribed for a total of 5 million Units under the First Tranche, which is a “related party transaction” within the meaning of Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions (“MI 61-101”). The issuance to the insider is exempt from the valuation requirement of MI 61-101 by virtue of the exemption contained in section 5.5(b) as the company’s shares are not listed on a specified market and from the minority shareholder approval requirements of MI 61-101 by virtue of the exemption contained in section 5.7(a) of MI 61-101 in that the fair market value of the consideration of the shares issued to the related parties did not exceed 25 percent of the company’s market capitalization.
