IntellaEquity Inc. Announces Execution of Amalgamation Agreement with Canncentral Inc.

Toronto, Ontario--(Newsfile Corp. - July 29, 2019) - IntellaEquity Inc. (CSE: IEQ) (the "Corporation" or "IntellaEquity") is pleased to announce that, further to its news release dated May 27, 2019, the Corporation has entered into a definitive amalgamation agreement (the "Amalgamation Agreement") with CannCentral Inc. ("CannCentral"), a corporation existing under the laws of the Province of Ontario, which outlines the general terms and conditions pursuant to which IntellaEquity and CannCentral would be willing to complete a transaction that will result in a reverse take-over of the Corporation by the shareholders of CannCentral (the "Transaction"). Pursuant to the terms of the Amalgamation Agreement, IntellaEquity, CannCentral and Paragon Blockchain Inc. ("SubCo"), a wholly owned subsidiary of the Corporation will complete a business combination by way of a three-cornered amalgamation under the Business Corporations Act (Ontario). Under the terms of the Amalgamation Agreement CannCentral will amalgamate with SubCo and will carry on the existing business of CannCentral as a wholly owned operating subsidiary of IntellaEquity. The Amalgamation Agreement was negotiated at arm's length and is effective as of July 26, 2019.

The Transaction is subject to requisite regulatory approval, including the approval of the Canadian Stock Exchange (the "CSE") and standard closing conditions, including the completion of due diligence investigations to the satisfaction of each of IntellaEquity and CannCentral, as well as the conditions described below.

Since the Transaction will constitute a reverse take-over of IntellaEquity and a change of business from a "investment issuer" to an "industrial issuer", the Corporation is required to obtain shareholder approval for the Transaction, which it will seek at a special shareholders' meeting on August 27, 2019 (the "Meeting"). At the Meeting, IntellaEquity will also seek shareholder approval for, among other things, the election of new directors of the Corporation, the continuation of the Corporation from the State of Delaware to the Province of Ontario, changing the name of the Corporation from IntellaEquity Inc. to CannCentral Inc., and a sale of certain assets of the Corporation.

Trading in the common shares of the Corporation is presently halted. It is unlikely that the common shares of IntellaEquity will resume trading until the Transaction is completed and approved by the CSE.

Conditions to Transaction

Prior to completion of the Transaction (and as conditions of closing):

  • IntellaEquity and CannCentral will obtain the requisite shareholder approvals for the Transaction and any ancillary matters contemplated in the Amalgamation Agreement.
  • All requisite regulatory approvals relating to the Transaction, including, without limitation, CSE approval, will have been obtained.
  • IntellaEquity shall have obtained the consents and waivers contemplated in the Amalgamation Agreement.
  • There shall not be in force any order or decree restraining or enjoining the consummation of the transactions contemplated by the Amalgamation Agreement.
  • None of the consents, orders, regulations or approvals contemplated in the Amalgamation Agreement shall contain terms or conditions or require undertakings or security deemed unsatisfactory or unacceptable by the parties to the Amalgamation Agreement.

The Proposed Transaction

Pre-Closing Capitalization of IntellaEquity

As of the date hereof, IntellaEquity has 25,629,564 common shares (the "IntellaEquity Shares") issued and outstanding and securities exercisable or exchangeable for, or convertible into, or other rights to acquire, an aggregate of 2,250,000 IntellaEquity Shares at exercise prices ranging from $0.05 per IntellaEquity Share to $1.00 per IntellaEquity Share.

Pre-Closing Capitalization of CannCentral

As of the date hereof, CannCentral has 342,500,000 common shares (the "CannCentral Shares" issued and outstanding and securities exercisable or exchangeable for, or convertible into, or other rights to acquire, an aggregate of 117,500,000 CannCentral Shares at an exercise price of $0.10 per CannCentral Share (the "CannCentral Warrants").

Terms of the Transaction

IntellaEquity proposes to acquire all of the CannCentral Shares pursuant to the terms of the Amalgamation Agreement. It is expected that each shareholder of CannCentral (the "CannCentral Shareholder") will receive one (1) IntellaEquity Share for each CannCentral Share held (the "Exchange Ratio") resulting in the IntellaEquity Shareholders holding approximately 7% of the common shares of the combined entity (the "Resulting Issuer") and the former CannCentral Shareholders holding approximately 93% of the common shares of the Resulting Issuer upon completion of the Transaction (immediately prior to giving effect to the Offering, as such term is defined below). In addition, IntellaEquity will also acquire all of the CannCentral Warrants on the same Exchange Ratio in exchange for the issuance of common share purchase warrants of the Corporation on the same terms and conditions as the CannCentral Warrants.

About CannCentral

CannCentral is an Ontario company. CannCentral seeks to become a leading information platform for the cannabis industry. Using in part its proprietary technology, CannCentral will look to provide cannabis consumers with the information necessary to make informed purchasing and lifestyle decisions with respect to cannabis products. CannCentral seeks to accomplish this through: (1) information of the variety of different cannabis strains and cannabis derivative products; (2) community-driven reviews of the variety of different cannabis strains and cannabis derivative products; (3) information on geographically segmented dispensaries and available product offerings; (4) daily updates to industry information and relevant news. The platform also provides user feedback and reviews on products, and aggregates user data to inform businesses on trends and purchasing decisions. Utilizing consumer traffic and data analytics, CannCentral seeks to generate revenue through a variety of different channels.

Financial Information Concerning CannCentral

For the year ended May 31, 2019, CannCentral had total assets of $2,240,077 and total liabilities of $41,727. As of May 31, 2019, CannCentral had working capital of $2,198,350.

CannCentral Private Placement

Prior to the closing of the Transaction, CannCentral intends to raise capital through a private placement of up to 50 million units (the "CannCentral Units") at an price of $0.05 per CannCentral Unit aggregate proceeds of $2,500,000 (the "CannCentral Private Placement"). Each CannCentral Unit shall be comprised of one (1) CannCentral Share and one (1) common share purchase warrant (a "CannCentral Warrant").

Each CannCentral Warrant shall entitle the holder thereof to purchase one additional CannCentral Share at an exercise price of $0.30 at any time up to 36 months from date of issuance. The securities issuable pursuant to the CannCentral Private Placement will be exchanged into IntellaEquity Shares and common share purchase warrants on the same Exchange Ratio.

The net proceeds of the CannCentral Private Placement will be used for general operating purposes.

Insiders, Officers and Board of Directors of the Resulting Issuer

Upon completion of the Transaction, it is anticipated that the board of directors of the Resulting Issuer shall be comprised of: Brian Kalish, Larry Latowsky, Gil Steinfield and Dr. Scott Wilson. It is anticipated that additional directors will be added to the board of directors of the Resulting Issuer. In addition, it is expected that the officers of the Resulting Issuer shall be Brian Kalish (Chief Executive Officer), Stephen Gledhill (Chief Financial Officer), IgorKostioutchenko (Controller), Anton Tikhonirov (Senior Vice President, Technology and Architecture) and Jessica Martin (Vice President, Investor Relations and Communications).

The following sets outs the names and backgrounds of all persons who are expected to be considered insiders of the Resulting Issuer.

Brian Kalish, Chief Executive Officer and Director

In 1999, Mr. Kalish founded the first interactive point of purchase retail media. He later went on to co-direct the acquisition and re-development of the Toronto Argonauts Football Club of the Canadian Football League in 2003. Mr. Kalish was a Director and the CEO of Gemoscan Canada, Inc. a vertically integrated healthcare company which he reorganized and led through a series of capitalizations and public listings. Gemoscan was the first company to have commercialized a naturopathic service at retail pharmacy in North America. Earlier, Mr. Kalish was a member of the turn-around team at KIK Corporation (now KIK Custom Products) a leading private label CPG producer. Most recently, he was a founder, Director and President of specialty finance companies focusing on Factoring and Asset Based Lending.

Larry Latowsky, Director

Mr. Latowsky brings decades of experience in the worlds of retail, technology and media to CannCentral. He is currently the Chairman and CEO of Top Drug Corp and Epic Sales Limited. Prior to this Mr. Latowsky was the Interim CEO and Chairman of the Board of Well.ca before its sale to McKesson Corporation. Well.ca focuses on delivering over 40,000-curated health and beauty care products, thousands of peer reviews, and Canada's largest assortment of green and natural brands to consumers. Before directing Well.ca, Mr. Latowsky was the CEO of Katz Group Canada/Rexall Pharmaplus from 2010-2014 and Drug Trading Company from 2004-2014, which provides independent or franchise pharmacy banner programs for IDA, Guardian, and Medicine Shoppe drug stores. Drug Trading Company also incorporated the businesses of ProPharm Technology and DC Labs. Mr. LatowskyLatowsky received his Bachelor of Arts from York University and is a graduate of the University of Toronto's Rotman School of Business and Institute of Corporate Directors. He previously served on the board of the Retail Council of Canada, Electronic Commerce Council of Canada, and the Canadian Association of Chain Drug Stores.

Gil Steinfeld, Director

Mr. Steinfeld has over 20 years' experience as a marketing executive and online marketing consultant to the top online gaming brands. Mr. Steinfeld oversaw top level Canadian and U.S marketing strategies for PartyGaming Plc, and World Poker tour in the areas of online and traditional media. He was the founding Director of Marketing at Microgaming where he helped grow the company from 20 to over 1000 employees.

Dr. Scott Wilson, Director

Dr. Wilson is a passionate clinician, a serial healthcare entrepreneur, and a board-certified Doctor of Chiropractic in both Canada and the USA with over 25 years of experience treating patients. Dr. Wilson is the Founder & Chairman of PhysiomedTM, one of Canada's largest franchised networks of interdisciplinary healthcare clinics, with over 30 clinics in Ontario and British Columbia. He has also founded or supported numerous other healthcare focused companies. Dr. Wilson has had speaking engagements alongside Tony Robbins and is widely acknowledged to be a subject matter expert in the North American healthcare sector.

Stephen Gledhill, Chief Financial Officer

Mr. Gledhill is the founding member of Keshill Consulting Associates Inc., a boutique management consulting practice specializing in accounting, administrative and corporate secretarial services. Mr. Gledhill is also the Managing Director and founding member of RG Management services Inc. Mr. Gledhill has over 25 years of financial-control experience acting as CFO and Corporate Secretary for multiple publicly-traded companies, several of which he was instrumental in scaling-up and taking public. He currently serves as the CFO of Caracara Silver Inc, DelphX Capital Markets Inc and CO2 GRO Inc. Prior to RGMS, Mr. Gledhill served as SVP and CFO of Borealis Capital Corporation, and VP Finance of OMERS Realty Corporation. He is a Chartered Public Accountant and a Certified Management Accountant and holds a Bachelor of Math Degree from the University of Waterloo.

Igor Kostioutchenko, Controller

Mr. Kostioutchenko has extensive experience providing controllership services, applying IFRS, ASPE and U.S. GAAP frameworks, advising on restructuring, mergers, acquisitions and public market offerings, and conducting accounting investigations. Mr. Kostioutchenko graduated with distinction from the University of Toronto's Rotman School of Management. He began his public accounting career with Deloitte LLP, he later moved to lead audit and special engagements with Collins Barrow Toronto LLP, now RSM Canada LLP. Subsequent to his tenure at Collins Barrow Toronto LLP, Mr. Kostioutchenko co-founded Kostioutchenko & Patel, CPAs, Professional Corporation, an affiliate under Abacus Group, where he now serves as Partner in the assurance and advisory practice.

Anton Tikhomirov, Senior Vice President, Technology and Architecture

Mr. Tikhomirov has over fifteen years of experience in digital technologies, with a specialization in e-Commerce constructs. His unique approach to systems allowed him to establish a chain of e-Commerce platforms in 2008 which, within two years generated over 1 million unique visitors per month. Mr. Tikhomirov's ability to develop strategic plans and execute against them allowed him to open a full-service digital agency in 2016 which currently serves nearly 40 clients across Canada and the US.

Jessica Martin, Vice President Investor Relations and Communications

Ms. Martin is a seasoned communications expert with nearly 20 years of investor, government and media relations expertise. Most recently, as VP of Public Relations and Regulatory Affairs for Invictus MD, she negotiated some of the first government contracts for licensed cannabis producers. Previously Ms. Martin was a spokesperson for Toronto Hydro, Press Secretary and Senior Communications Advisor to the Premier of Ontario and Ontario's Minister of Finance. Earlier she worked as a research analyst at Queen's Park and as a Floor Director at CityTV in Toronto. She is a graduate of the McMaster-Syracuse Master of Communications Management (MCM) program.

Additional Information

All information contained in this news release with respect to IntellaEquity and CannCentral was supplied by the parties respectively, for inclusion herein, and each party and its directors and officers have relied on the other party for any information concerning the other party.

Investors are cautioned that, except as disclosed in the management information circular 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.

For further information please contact:

CannCentral Inc.:

Brian Kalish, CEO
Email: briank@canncentral.com

IntellaEquity Inc.:

Allen Lone, President and CEO
Email: atlone@intellaequity.com

The CSE has not, in any way, passed upon the merits of the Transaction and associated transactions and has not, in any way, approved or disapproved of the contents of this press release.

The CSE has not reviewed and does not accept responsibility for the adequacy or accuracy of this release

.

Cautionary Statements

This news release contains "forward-looking information" within the meaning of applicable securities laws relating to the proposal to complete the Transaction and associated transactions, including statements regarding the terms and conditions of the Transaction, the Share Exchange Agreement, the IntellaEquity and CannCentral Private Placements, and the use of proceeds of the Private Placements. The information about CannCentral contained in the press release has not been independently verified by the Corporation. Although the Corporation believes in light of the experience of its officers and directors, current conditions and expected future developments and other factors that have been considered appropriate that the expectations reflected in this forward-looking information are reasonable, undue reliance should not be placed on them because the Corporation can give no assurance that they will prove to be correct. Readers are cautioned to not place undue reliance on forward-looking information. Actual results and developments may differ materially from those contemplated by these statements depending on, among other things, the risks that the parties will not proceed with the Transaction, the Share Exchange Agreement, the Private Placements and associated transactions, that the ultimate terms of the Transaction, the Share Exchange Agreement, the Private Placements, and associated transactions will differ from those that currently are contemplated, and that the Transaction, the Share Exchange Agreement, the Private Placements and associated transactions will not be successfully completed for any reason (including the failure to obtain the required approvals or clearances from regulatory authorities). The terms and conditions of the Transaction may change based on the Corporation's due diligence and the receipt of tax, corporate and securities law advice for both IntellaEquity and CannCentral. The statements in this press release are made as of the date of this release. The Corporation undertakes no obligation to comment on analyses, expectations or statements made by third-parties in respect of the Corporation, IntellaEquity, their securities, or their respective financial or operating results (as applicable).

The securities of IntellaEquity and CannCentral have not been and will not be registered under the United States Securities Act of 1933, as amended and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirement. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

Not for distribution to U.S. Newswire Services or for dissemination in the United States of America. Any failure to comply with this restriction may constitute a violation of U.S. Securities laws.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/46591

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