Timeless and Cannaverde Announce Letter of Intent for Proposed Qualifying Transaction
Vancouver, British Columbia--(Newsfile Corp. - June 20, 2019) - Timeless Capital Corp. (TSXV: TLCP) ("Timeless"), a capital pool company listed on the TSX Venture Exchange (the "Exchange"), and Cannaverde Pharma Inc. ("CannaVerde"), a private British Columbia corporation with operations in the Colombian cannabis market, are pleased to announce that they have signed an arm's length non-binding letter of intent dated June 19, 2019 (the "Letter of Intent") in respect of a proposed business combination (the "Proposed Transaction") that would result in the reverse takeover of Timeless by CannaVerde. It is anticipated that the Proposed Transaction will constitute Timeless' "Qualifying Transaction" pursuant to Policy 2.4 of the Exchange. Following the completion of the Proposed Transaction, the resulting entity (the "Resulting Issuer") will hold all of the assets and continue the business of CannaVerde.
CannaVerde was incorporated under the provisions of the Business Corporations Act (British Columbia) on November 9, 2017 and currently has 11,117,680 common shares (the "CannaVerde Shares") issued and outstanding.
CannaVerde's goal is to become a low cost, high quality producer of medical cannabis extracts, with a further focus on product formulation and development. Through its wholly-owned subsidiary, Green Health Colombia S.A.S, it holds licenses to cultivate, extract, produce, manufacture and export both CBD (cannabidiol) and THC (tetrahydrocannabinol) medical extracts.
CannaVerde intends to build greenhouses and extraction facilities on its 7-hectare property located in Bucaramanga, Colombia and has access to an additional 100 hectares of land. The company recognizes the significant role that Colombia's ideal climate, infrastructure and workforce will play in building a sustainable business at a fraction of the cost in other jurisdictions. Furthermore, the ideal location of Colombia gives the company access to approximately 640 million potential customers in Latin America. The directors and executives at CannaVerde have built a business plan focused on delivering cannabis-based extracts and products in Colombia and the international marketplace.
Summary of Proposed Transaction
The Letter of Intent provides that Timeless and CannaVerde will negotiate and enter into a definitive agreement in respect of the Proposed Transaction on or before July 15, 2019 (the "Definitive Agreement"), to be completed by way of a three-cornered amalgamation under the laws of British Columbia, whereby a newly formed wholly-owned British Columbia subsidiary of Timeless will amalgamate with CannaVerde and the shareholders of CannaVerde will receive common shares of Timeless (the "Timeless Shares") in exchange for their CannaVerde Shares, resulting in a reverse takeover of Timeless by CannaVerde.
In connection with the Proposed Transaction, Timeless will continue out of Alberta and become a British Columbia corporation (the "Continuation"). Prior to completing the Proposed Transaction, Timeless will also consolidate the Timeless Shares on the basis of one (1) new Timeless Common Share for each six and a half (6.5) old Timeless Shares (the "Consolidation").
It is anticipated that the Resulting Issuer will continue the business of CannaVerde under the name "CannaVerde Pharma Inc.", or such other name as agreed by the parties (the "Name Change").
Certain common shares of the Resulting Issuer to be issued pursuant to the Proposed Transaction are expected to be subject to restrictions on resale or escrow under the policies of the Exchange, including the securities to be issued to "Principals" (as defined under Exchange policies), which will subject to the escrow requirements of the Exchange.
The Proposed Transaction is subject to, among other things, the negotiation and execution of the Definitive Agreement, each of CannaVerde and Timeless being satisfied with the results of its due diligence review of the other party, completion of the Concurrent Financing (as described below) for gross proceeds of a minimum $2.5 million, receipt of CannaVerde and Timeless board approval of Proposed Transaction, receipt of CannaVerde shareholder approval for the Proposed Transaction, receipt of Timeless shareholder approval of the Continuation, the Consolidation and the Name Change, Timeless and CannaVerde obtaining all necessary consents, orders and regulatory approvals, including the conditional approval of the Exchange, and other standard closing conditions.
CannaVerde is currently undertaking a non-brokered private placement of convertible debentures (the "Convertible Debentures") for anticipated gross proceeds of a minimum $4.5 million (the "Concurrent Financing"). The first tranche of the Concurrent Financing for gross proceeds of approximately $2.5 million is expected to be completed shortly. The Convertible Debentures will be unsecured and bear interest at a rate of 10% per annum, payable on maturity. Upon satisfaction or waiver of all conditions precedent to the Proposed Transaction, the principal amount of the Convertible Debentures will automatically convert into CannaVerde Shares at a conversion price of $1.00 per share, and such CannaVerde Shares will then be exchanged for Timeless Shares pursuant to the Proposed Transaction. The proceeds of the Concurrent Financing will be used primarily to fund the expansion of CannaVerde's cannabis operations in Colombia and for general working capital.
Proposed Directors and Officers
It is anticipated that all of the current directors and officers of Timeless will resign from their respective positions with Timeless. The board and management of the Resulting Issuer shall be comprised of CannaVerde nominees, and is expected to include Michael Nistorescu (CEO and director), Paul Robertson (CFO and director) and additional directors and officers to be confirmed in due course. The following are brief descriptions of the currently proposed directors and officers of the Resulting Issuer:
Michael Nistorescu - CEO and Director
Mr. Nistorescu started his career as an analyst at Gluskin Sheff + Associates and went on to become the Investments Director at Infinite Potential Management. He then co-founded a boutique private equity firm where he served as CEO and Investments Director. Mr. Nistorescu earned a degree in Economics and International Studies from York University, and has passed all three levels of the CFA Program. Mr. Nistorescu has significant experience in business strategy, asset allocation and company management.
Paul Robertson - CFO and Director
Paul Robertson is a Chartered Professional Accountant with extensive experience in the mining sector. He is the managing partner of Quantum Advisory Partners LLP, which assists public companies with financial reporting, taxation, and regulatory requirements. Mr. Robertson was previously the CFO of Grayd Resource Corporation (acquired by Agnico Eagle). He holds a B.A. from Western University and brings significant expertise in financial reporting.
Additional information on the proposed board and management of the Resulting Issuer will be provided once available.
Sponsorship of the Proposed Transaction is required by the Exchange unless an exemption or waiver from this requirement is obtained in accordance with the policies of the Exchange. Timeless has not yet engaged a sponsor in connection with the Proposed Transaction. Additional information on sponsorship arrangements will be provided once available.
Additional information concerning the Proposed Transaction, Timeless, CannaVerde and the Resulting Issuer, including financial information of CannaVerde, will be provided in subsequent news releases and in Timeless' Filing Statement to be filed in connection with the Proposed Transaction, which will be available under Timeless' SEDAR profile at www.sedar.com.
Upon closing of the Proposed Transaction, the Resulting Issuer expects to list as a Tier 2 Life Sciences Issuer on the Exchange.
The Proposed Transaction will not constitute a "Non-Arm's Length Qualifying Transaction" (as such term is defined in the policies of the Exchange). Accordingly, it is not anticipated that the Proposed Transaction will be subject to the approval of Timeless shareholders.
In accordance with the policies of the Exchange, Timeless Shares are currently halted from trading and will remain so until such time as the Exchange determines, which, depending on the policies of the Exchange, may not occur until completion of the Proposed Transaction.
None of the securities to be issued pursuant to the Proposed Transaction have been or will be registered under the United States Securities Act of 1933, as amended, or any state securities laws, and any securities issued pursuant to the Proposed Transaction are anticipated to be issued in reliance upon available exemptions from such registration requirements. This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities.
Timeless is a capital pool company formed under the Exchange capital pool company program.
Timeless currently has issued and outstanding 7,000,000 Timeless Shares, 300,000 common share purchase warrants to acquire 300,000 Timeless Shares at an exercise price of $0.10 per share and 266,666 incentive stock options to acquire 266,666 Timeless Shares at a price of $0.10 per share.
For further information:
Timeless Capital Corp.
Fadim Gadallah, CEO
CannaVerde Pharma Inc.
Michael Nistorescu, CEO
Phone : 416-882-9006
Neither TSX Venture 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.
Completion of the Proposed Transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and obtaining all required shareholder approvals. There can be no assurance that the Proposed Transaction will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the Proposed Transaction, 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 a capital pool company should be considered highly speculative.
The Exchange has in no way passed upon the merits of the Proposed Transaction and has neither approved nor disapproved the contents of this press release.
All information contained in this news release with respect to Timeless, CannaVerde, and the Resulting Issuer was supplied by the parties, respectively, for inclusion herein, and Timeless and its directors and officers have relied on CannaVerde for any information concerning such party.
This news release contains forward-looking statements relating to the timing and completion of the Proposed Transaction and related transactions, the future operations of the Timeless, CannaVerde, and the Resulting Issuer and other statements that are not historical facts. Forward-looking statements are often identified by terms such as "will", "may", "should", "anticipate", "expects" and similar expressions. All statements, other than statements of historical fact, included in this release are forward-looking statements that involve risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from Timeless' and CannaVerde's expectations include the failure to satisfy the conditions to completion of the Proposed Transaction set forth above and other risks detailed from time to time in the filings made by Timeless, CannaVerde, and the Resulting Issuer with securities regulators.
The reader is cautioned that assumptions used in the preparation of any forward-looking information may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted, as a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of Timeless, CannaVerde, and the Resulting Issuer. As a result, Timeless, CannaVerde, and the Resulting Issuer cannot guarantee that the Proposed Transaction will be completed on the terms and within the time disclosed herein or at all. The reader is cautioned not to place undue reliance on any forward-looking information. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this news release are expressly qualified by this cautionary statement. The forward-looking statements contained in this news release are made as of the date of this news release and Timeless, CannaVerde, and the Resulting Issuer will only update or revise publicly any of the included forward-looking statements as expressly required by Canadian securities law.
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