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This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.
TORONTO, Nov. 14, 2018 /CNW/ - 22 Capital Corp. (TSXV: LFC.P) ("22 Capital") and Trichome Financial Corp. ("Trichome") are pleased to announce, further to the press release dated October 3, 2018 announcing the letter of intent dated October 2, 2018, that they have entered into a definitive amalgamation agreement, which sets forth the terms and conditions pursuant to which the parties will complete the previously announced proposed business combination (the "Transaction"). The Transaction was negotiated at arm's length by independent members of the management of Trichome and independent members of the board of directors of 22 Capital and will constitute 22 Capital's "Qualifying Transaction" as such term is defined in Policy 2.4 of the TSX Venture Exchange ("TSXV"). It is anticipated that the resulting issuer will be listed as a Tier 1 Investment issuer on the TSXV. Currently a subsidiary of Origin House ("Origin House") (CSE: OH), formerly known as CannaRoyalty Corp., Trichome is a private corporation. Each of Trichome and Origin House exists under the laws of the Province of Ontario.
Terms of the Transaction
Prior to the completion of the Transaction, Trichome intends to complete a brokered private placement (the "Offering") of subscription receipts ("Subscription Receipts"). The amount of the Offering and the price of the Subscription Receipts (the "Offering Price") will be determined in the context of the market in consultation with the underwriters for the Offering. Each Subscription Receipt will be automatically converted into one common share of Trichome ("Trichome Share") immediately prior to completion of the Transaction. Trichome expects to launch the Offering in the near term and will provide further details at such time.
In connection with the Transaction, 22 Capital will effect a consolidation (the "Consolidation") of its common shares (the "Pre-Consolidation Shares") into such number of common shares ("Post-Consolidation Shares") as is equal to the quotient obtained by dividing 1,495,000 by the Offering Price. 22 Capital and Trichome will then amalgamate to form an amalgamated entity ("Amalco") and all of the issued and outstanding Trichome Shares and Post-Consolidation Shares shall be exchanged for common shares of Amalco ("Amalco Shares") on a 1:1 basis.
The net proceeds from the Offering will be used to fund specialty finance solutions to Trichome's growing pipeline of opportunities in the cannabis sector and for general working capital. Further details regarding the Offering will be included in a subsequent news release.
About Trichome Financial Corp.
Trichome was incorporated on September 18, 2017 and is a specialty finance company focused on providing flexible and creative capital solutions to the global legal cannabis market. It was created to address the lack of credit availability in the large, growing and increasingly complex cannabis market. Founded by industry leaders Origin House, Stoic Advisory, and Sprott Inc. (TSX: SII), Trichome's experienced management team has a unique edge to capitalize on proprietary deal flow and insight while developing a first mover advantage as a global cannabis focused specialty finance company. Trichome provides customized financing solutions across the industry value chain to support growth, capital expenditures, M&A, working capital and other needs. Transactions are typically structured to earn attractive rates of contractual cash flows, retain optionality on value creation and ensure return of capital. Leveraging the combined resources and knowledge of its founders and management, it is able to offer significant value-added financial, product, market and operational support to its partner companies. Trichome's current assets are all based in Canada and it has no operations or assets in the United States.
About Origin House
Origin House is a North American cannabis consumer product company currently focused on building a leading distribution business in California, the world's largest regulated cannabis market. By building a world-class logistics platform and supporting contract manufacturing assets, Origin House intends to support the growth of new and established cannabis brands. Origin House believes California, home to some of the world's most discerning consumers and a nexus of information and trends, will be the point of inception for the global cannabis brands of the future. Origin House has developed a diversified portfolio of assets within the cannabis sector, including research, infrastructure and intellectual property to support our existing brands, partner products and distribution networks. The company's leadership and staff combines passion and a hands-on understanding of the cannabis industry, with proven financial and legal expertise. Origin House's shares trade on the Canadian Stock Exchange (CSE) under the symbol OH and in the US on the OTCQX under the symbol ORHOF.
About 22 Capital
22 Capital was incorporated under the provisions of the Business Corporations Act (Ontario) with its registered and head office in Toronto, Ontario. It is a capital pool company and intends for the Transaction to constitute its "Qualifying Transaction" as such term is defined in the policies of the TSXV. 22 Capital is a "reporting issuer" within the meaning of the Securities Act (Ontario), Securities Act (British Columbia) and Securities Act (Alberta).
Trading in the Pre-Consolidation Shares of 22 Capital is halted at present. It is unlikely that the Pre-Consolidation Shares of 22 Capital will resume trading until the Transaction is completed and approved by the TSXV.
22 Capital will request an exemption from the requirement to obtain a sponsor in respect of the proposed Transaction, in accordance with the policies of the TSXV. Any such exemption will be subject to the approval of the TSXV.
All information contained in this news release with respect to 22 Capital and Trichome 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.
Completion of the Transaction is subject to a number of conditions, including but not limited to, TSXV acceptance and if applicable pursuant to the requirements of the TSXV, 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 management information circular or 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 speculative.
The TSXV has in no way passed upon the merits of the proposed Transaction and has neither approved nor disapproved the contents of this press release.
NEITHER THE TSXV NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSXV) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION:
This news release contains "forward-looking information" and "forward-looking statements" (collectively, "forward-looking statements") within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as "expects", or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "budget", "scheduled", "forecasts", "estimates", "believes" or "intends" or variations of such words and phrases or stating that certain actions, events or results "may" or "could", "would", "might" or "will" be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements. In this news release, forward-looking statements relate, among other things, to: the terms and conditions of the proposed Transaction and the terms and conditions of the proposed Offering. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: general business, economic, competitive, political and social uncertainties; and the delay or failure to receive board, shareholder or regulatory approvals. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this news release. Except as required by law, 22 Capital and Trichome assume no obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change.
SOURCE Trichome Financial Corp.
For further information: For further information regarding the Transaction, please contact: Steve Mintz, President and Chief Executive Officer, 22 Capital Corp., Telephone: (416) 864-0578, Email: [email protected]; Michael Ruscetta, Chief Executive officer, Trichome Financial Corp., Telephone: (416) 561-2541, Email: [email protected]