OTTAWA, March 18, 2014 /CNW/ - LW Capital Pool Inc. ("LW CPI") (TSXV: LWI.H) and Tweed Inc. ("Tweed") are pleased to announce that as of the date hereof they have entered
into an agreement (the "Definitive Agreement") setting out the terms upon which Tweed will complete a reverse
takeover of LW CPI (the "Transaction"). The signing of the Definitive Agreement follows a previously
announced non-binding letter of intent between the parties dated as of
January 2, 2014.
LW CPI is a Capital Pool Company listed on the NEX board of the TSX
Venture Exchange (the "Exchange"). 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 Exchange policies.
Tweed was incorporated under the Business Corporations Act (Ontario) on January 22, 2010 and became a licensed producer of medical
marijuana on January 27, 2014. The principal activities of Tweed are
the production, storage and sale of marijuana out of its facility in
Smiths Falls, Ontario as regulated by the Marihuana for Medical Purposes Regulations (the "MMPR").
On closing of the Transaction LW CPI will change its name to Tweed
Marijuana Inc. The Transaction will be structured as a three cornered
amalgamation in which Tweed will amalgamate with 2405882 Ontario Inc.,
a wholly owned subsidiary of LW CPI formed solely for the purpose of
facilitating the Transaction. The amalgamated company will be a wholly
owned subsidiary of Tweed Marijuana Inc., will continue to be named
Tweed Inc., will have the same board of directors and officers as Tweed
(unless and until changed in accordance with the requirements of the
MMPR) and will continue to conduct Tweed's operations.
As of the date hereof, LW CPI has 7,260,000 common shares outstanding
and has outstanding options to acquire an aggregate of 723,000 common
shares at an exercise price of $0.10 per common share. Pursuant to the
terms of the Definitive Agreement, LW CPI will complete a consolidation
of its outstanding common shares on a 1 for 5 basis and accordingly the
current holders of common shares of LW CPI will hold 1,452,000 common
shares and LW CPI will then issue a total of 32,042,612 common shares
to the holders of the issued and outstanding shares of Tweed in
exchange for all issued and outstanding shares of Tweed. In addition,
it is expected that 2,980,054 common shares of LW CPI will be reserved
for options and warrants issued to the holders of Tweed options and
warrants and a further 144,600 common shares of LW CPI (as a result of
the consolidation of the 723,000 common shares referred to above) will
be reserved for currently outstanding options to acquire LW CPI
shares. Based on the number of Tweed common shares currently expected
to be outstanding on closing, this provides for an exchange ratio of
213.10 LW CPI common shares for each outstanding Tweed common share.
In the event the Tweed Rights (as described below under the heading
"Tweed Private Placements") convert into common shares, an additional
1,575,567 common shares of LW CPI will be issued in connection with the
Following the Transaction, the current shareholders of Tweed are
expected to hold approximately 95.66% of the outstanding shares of LW
CPI (95.86% if the Tweed Rights convert) with the current LW CPI
shareholders holding the balance.
The founders and controlling shareholders of Tweed are Bruce Linton and
Charles Rifici, each resident in Ottawa, Ontario, who directly and
indirectly hold approximately 11.7% and 25.2% of the outstanding shares
of Tweed, respectively. After closing of the Transaction Messrs.
Linton and Rifici are expected to hold approximately 10.8% and 23.2% of
the outstanding shares of Tweed Marijuana Inc., respectively (or 10.32%
and 22.21%, respectively, if the Tweed Rights convert).
Based on the price at which Tweed common shares were issued in
connection with a private placement completed by Tweed on March 7, 2014
(see below under the heading "Tweed Private Placements"), the
transaction price per LW CPI common share to be issued is $0.89. Such
price gives the LW CPI common shares to be issued on closing an
aggregate value of $28,517,924 (or $29,920,179 if the Tweed Rights
The Transaction does not constitute a Non-Arm's Length Qualifying
Transaction (as such term is defined in the policies of the Exchange).
No Insider, promoter or Control Person (as such terms are defined in
the policies of the Exchange) of LW CPI has any interest in Tweed prior
to giving effect to the Transaction except as follows:
Deborah Weinstein, a director of LW CPI, holds 365 common shares of
Tweed, representing approximately 0.33% of the issued and outstanding
common shares of Tweed, through Deborah Weinstein Professional
Corporation. Ms. Weinstein acquired such shares on February 5, 2014 in
connection with a private placement completed by Tweed on that date.
Andrew Moffat, a director of LW CPI, beneficially holds 146 common
shares of Tweed, representing approximately 0.15% of the issued and
outstanding common shares of Tweed, through his family trust. The
family trust acquired such shares on February 5, 2014 in connection
with a private placement completed by Tweed on that date.
The Transaction is not subject to approval by the shareholders of LW
CPI. However, at a meeting of the shareholders of LW CPI held on
February 20, 2014 the shareholders of LW CPI approved the consolidation
of the outstanding shares of LW CPI on a 1 for 5 basis and approved the
change of name to Tweed Marijuana Inc. on closing of the Transaction.
The Transaction is subject to approval by the shareholders of Tweed
which will be sought at a meeting of the shareholders of Tweed to be
held on March 20, 2014.
Further details about the Transaction and the combined entity will be
provided in the filing statement to be prepared and filed in respect of
Tweed Private Placements
On December 27, 2013 Tweed completed a brokered private placement of
21,900 "Units" at a price of $137.00 per Unit for aggregate gross
proceeds of $3,000,300. On January 30, 2014 Tweed completed a brokered
private placement of 7,297 Units at a price of $137.00 per Unit for
aggregate gross proceeds of $999,689. On February 5, 2014 Tweed
completed a non-brokered private placement of 10,526 Units at a price
of $137.00 per Unit for aggregate gross proceeds of $1,442,062. On
March 7, 2014 Tweed completed a brokered private placement of 34,211
Units at a price of $190.00 per Unit for aggregate gross proceeds of
$6,500,090. GMP Securities LP acted as agent on each of the brokered
Each Unit was comprised of one Tweed common share and one Tweed "Right".
In the event that the Transaction, or an alternative liquidity event
that provides the holder of such Tweed Right with freely tradable
securities, does not occur prior to 5:00 p.m. on March 31, 2014, the
Tweed Rights entitle the holder to receive, for no additional
consideration, the number of additional Tweed common shares that is
equal to 10% of the total number of Tweed common shares subscribed for
in the private placements described above by such holder (provided that
no fractional shares will be issued).
The following individuals are currently proposed to be insiders of Tweed
Marijuana Inc. after closing of the Transaction:
Bruce Linton is Chairman of Tweed and is proposed to serve as Chairman
and a director of Tweed Marijuana Inc. Mr. Linton has had experience as
a director and officer of publicly listed companies. Mr. Linton is 47
years old and holds an honours BPA degree from Carleton University.
Charles Rifici is the President and CEO of Tweed and is proposed to
serve as President, CEO and a director of Tweed Marijuana Inc. Mr.
Rifici has experience as an officer of publicly listed companies. Mr.
Rifici is 39 years old and holds a Baccalaureate in Applied Science,
Computer Engineering from the University of Ottawa and a Masters of
Business Administration from Queen's University. Mr. Rifici is a
Certified Management Accountant.
Mark Zekulin is the VP Community Engagement and General Counsel of Tweed
and is proposed to hold the same role with Tweed Marijuana Inc. Mr.
Zekulin has practiced law and held government policy positions in the
past. Mr. Zekulin is 34 years old and holds a Bachelor of Mathematics
from the University of Waterloo, a Bachelor of Laws from the University
of Ottawa and a Master in Law from the University of Cambridge. Mr.
Zekulin is called to the bar of Ontario as a member of the Law Society
of Upper Canada.
Gerald Leahy is proposed to be the Chief Financial Officer of Tweed
Marijuana Inc. Mr. Leahy has served in similar positions with other
publicly listed companies. Mr. Leahy is 57 and holds a B. Comm from
Carleton University. Mr. Leahy is a Certified Management Accountant.
Chris Schnarr is proposed to be a director of Tweed Marijuana Inc. Mr.
Schnarr is Managing Director of Lorian Group Inc and has experience as
a director and officer of publicly listed companies. Mr. Schnarr is 47
years old and holds a BBA from Wilfred Laurier University and an MBA
from the University of British Columbia.
Andrew Moffat is a director of LW CPI and is proposed to continue as a
director of Tweed Marijuana Inc. Mr. Moffat is CEO of Keshet
Productions Inc., is age 61 and holds a B. Admin from University of
Larry Poirier is the CEO and a director of LW CPI and is proposed to
continue as a director of Tweed Marijuana Inc. Mr. Poirier is President
of TUC Brands, is age 48 and holds an MBA from Queen's University.
Deborah Weinstein is a director of LW CPI and is proposed to be the
Secretary of Tweed Marijuana Inc. Ms. Weinstein is a partner with
LaBarge Weinstein LLP and has experience as a director and officer of
publicly listed companies. Ms. Weinstein is 54 and holds a law degree
from Osgoode Hall Law School at York University. Ms. Weinstein is
called to the bar of Ontario as a member of the Law Society of Upper
Tweed Financial Information
During its financial year ended December 31, 2013 Tweed had no sales and
a net loss of $932,925. As at December 31, 2013 Tweed had total assets
of $5,153,439 and total long term liabilities of $35,099. The
foregoing financial information is unaudited.
It is expected that pursuant to the policies of the Exchange the
Transaction will be exempt from the requirement to engage a sponsor to
provide a Sponsor Report to the Exchange due to the fact that Tweed
completed a private placement on March 7, 2014 (as described above) in
contemplation of the Transaction, being a concurrent brokered financing
of at least $500,000, and GMP Securities LP, which acted as agent in
such private placement, will provide the Exchange with confirmation
that it has completed appropriate due diligence on both the Transaction
and the filing statement that is generally in compliance with the
relevant policies of the Exchange.
Trading in the Shares of LW CPI
Trading in the common shares of LW CPI was halted as of January 2, 2014
and will remain halted until the Transaction is completed and approved
by the Exchange. Following closing of the Transaction, Tweed Marijuana
Inc. is expected to trade on the Exchange under the symbol "TWD".
Conditions to Transaction
Completion of the Transaction is subject to a number of conditions,
including but not limited to acceptance by the Exchange and, if
applicable pursuant to Exchange 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.
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.
Other conditions to completion of the Transaction include:
Preparation and filing of a filing statement outlining the definitive
terms of the Transaction in accordance with the rules of the Exchange.
Receipt of all director, shareholder and requisite regulatory approvals
relating to the Transaction, including, without limitation, Exchange
Any person who will be a post-closing shareholder of Tweed Marijuana
Inc. which is required by the Exchange to sign an escrow agreement in
accordance with the policies of the Exchange shall have signed and
delivered such agreement.
Each of LW CPI and Tweed shall have executed, delivered and performed
all covenants on its part to be performed under the Definitive
Agreement and all representations and warranties of each party
contained in the Definitive Agreement shall be true and correct at the
time of closing.
At the time of closing the Transaction, Tweed's license to produce and
sell medical marijuana must be in effect and in good standing.
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. LW CPI and Tweed assume no responsibility
to update or revise forward-looking information to reflect new events
or circumstances unless required by law.
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