OTTAWA, Jan. 2, 2014 /CNW/ - LW Capital Pool Inc. ("LW CPI") (TSXV: LWI.H) announced today that it has entered into a non-binding
letter of intent with Tweed Inc. ("Tweed") which outlines the general terms and conditions of a proposed
transaction pursuant to which LW CPI proposes to acquire all of the
issued and outstanding securities of Tweed in exchange for securities
of LW CPI (the "Transaction"). The LOI was negotiated at arm's length and is effective as of
January 2, 2014.
LW CPI is a Capital Pool Company listed on the NEX board of the TSX
Venture Exchange (the "TSXV"). LW CPI has not commenced commercial operations and has no assets
other than cash. The Transaction, if completed, will constitute LW
CPI's "Qualifying Transaction", as defined in TSXV policies.
Tweed is a Canadian company established to produce and supply medical
marijuana pursuant to the Marihuana for Medical Purposes Regulations in Smiths Falls, Ontario.
The transaction terms outlined in the LOI are non-binding on the parties
and the LOI is expected to be superseded by a definitive agreement (the
"Definitive Agreement") to be signed between the parties. The Transaction is subject to
regulatory approval, including the approval of the TSXV and standard
closing conditions, including the approval of the Definitive Agreement
by the directors of each of LW CPI and Tweed and completion of due
diligence investigations to the satisfaction of each of LW CPI and
Tweed, as well as the conditions described below. The legal structure
for the Transaction will be determined after the parties have
considered all applicable tax, securities law, and accounting
Trading in the common shares of LW CPI will be halted as a result of
this announcement. It is unlikely that the common shares of LW CPI will
resume trading until the Transaction is completed and approved by the
The Proposed Transaction
As of the date hereof, LW CPI has 7,260,000 common shares outstanding
and has issued options to acquire an aggregate of 723,000 common shares
at an exercise price of $0.10 per common share.
It is expected that LW CPI will issue approximately 135,549,040 LW CPI
common shares in exchange for all of the issued and outstanding shares
of Tweed. Based on the foregoing, it is currently expected that the
current holders of LW CPI common shares will hold approximately 5.08%
of the outstanding common shares of LW CPI post closing depending on
the final ratio agreed to with Tweed, with shareholders of Tweed
holding the balance.
LW CPI will also issue options to purchase common shares of LW CPI in
exchange for outstanding options to purchase shares of Tweed. The
number of options to be issued and the terms of such options are to be
determined and will be announced at a later date.
Conditions to Transaction
Completion of the Transaction is subject to a number of conditions,
including but not limited to acceptance by the TSXV and, if applicable
pursuant to TSXV requirements, majority of the minority shareholder
approval. Where applicable, the Transaction cannot close until the
required shareholder approval is obtained. There can be no assurance
that the Transaction will be completed as proposed or at all. Since the
Transaction is not a non-arm's length transaction, at this point LW CPI
does not anticipate having to obtain shareholder approval for the
Transaction but this remains subject to TSXV confirmation.
Other conditions to completion of the Transaction include:
Negotiation and execution of a Definitive Agreement in respect of the
Completion of a private placement in at least such minimum amount as may
be required to meet TSXV minimum listing requirements, if any.
Preparation and filing of a filing statement outlining the definitive
terms of the Transaction in accordance with the rules of the TSXV.
Receipt of all director, shareholder and requisite regulatory approvals
relating to the Transaction, including, without limitation, TSXV
Further details about the proposed transaction and the combined entity
will be provided in a comprehensive press release when the parties
enter into a Definitive Agreement and in the filing statement to be
prepared and filed in respect of the Transaction.
Investors are cautioned that, except as disclosed in the filing
statement 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. Trading in
the securities of a capital pool company should be considered highly
The TSX Venture Exchange Inc. has in no way passed upon the merits of
the proposed transaction and has neither approved nor disapproved the
contents of this press release.
LW CPI will engage a sponsor in connection with the Transaction if
required in accordance with the requirements of the TSXV.
This press release contains forward-looking information based on current
expectations. Statements about the closing of the Transaction,
expected terms of the Transaction, the number of securities of LW CPI
that may be issued in connection with the Transaction, the ownership
ratio of LW CPI post closing, the requirement to hold shareholder
approval and the parties' ability to satisfy closing conditions and
receive necessary approvals are all forward-looking information. These
statements should not be read as guarantees of future performance or
results. Such statements involve known and unknown risks, uncertainties
and other factors that may cause actual results, performance or
achievements to be materially different from those implied by such
statements. Although such statements are based on management's
reasonable assumptions, there can be no assurance that the Transaction
will occur or that, if the Transaction does occur, it will be completed
on the terms described above. The terms described above are not
binding unless and until a Definitive Agreement is signed. LW CPI
assumes no responsibility to update or revise forward-looking
information to reflect new events or circumstances unless required by
Neither 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.
SOURCE: LW Capital Pool Inc.
For further information:
LW Capital Pool Inc.
(613) 599-9600 ex 202