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TORONTO, Nov. 9, 2018 /CNW/ - Xanthic Biopharma Inc. (formerly Aurquest Resources Inc.) ("Xanthic") (CSE: xTHC) and Green Growth Brands Inc. ("GGB") are pleased to announce that they have completed the previously announced Business Combination (defined below) between Xanthic and GGB (see The Business Combination below). Following closing, Xanthic will continue under the corporate name "Xanthic Biopharma Inc." until the first quarter of 2019, following which time it is expected to change its corporate name to "Green Growth Brands Ltd." (the combined entity, following completion of the Business Combination is referred to as "we", the "Company" or the "Resulting Issuer"). Until such time the Company will operate in Ontario under the business name "Green Growth Brands".
It is anticipated that the common shares of the Company will resume trading on the facilities of the Canadian Securities Exchange under the ticker symbol "GGB" on November 13, 2018 (see Conditional Listing Approval below).
"The completion of the business combination gives retail and institutional investors a chance to participate in our growth story as we build a premium North American retailer of cannabis, THC and CBD products," said Peter Horvath, CEO of the Company's operating entity. "We have built and led industry-leading retail organizations before, and we will do it again by keeping the consumer at the center of everything we do."
About the Company:
The combined Company is a lifestyle oriented, consumer products company that celebrates health, wellness and happiness. We are in the business of cultivation, processing and retailing of cannabis, tetrahydrocannabidol ("THC"), cannabidiol ("CBD") and cannabis-infused consumer products. Over the next 12 months, the Company intends to expand its retail and wholesale cannabis businesses as well as its CBD consumer products business through a combination of strategic partnerships, merger and acquisition activity, and organic license capture. The Company's objectives are to establish retail cannabis locations, or otherwise apply for such licenses, in various states within that timeframe, pursuant to state laws. Such activity will focus on those certain states where cannabis has been legalized for medical and/or recreational use at the state level.
Conditional Listing Approval
Xanthic received conditional approval of the Business Combination from the Canadian Securities Exchange (the "CSE" or the "Exchange") on November 7, 2018. The Business Combination remains subject to the final approval of the CSE, which is expected to be received on or about November 9, 2018. It is currently anticipated that trading of the common shares of the Resulting Issuer will commence on the CSE on or about November 13, 2018 under the ticker symbol "GGB". There is no assurance that the Resulting Issuer will ultimately be able to satisfy the listing requirements of the CSE.
Summary of the Shareholder Meetings:
On October 29, 2018, GGB held a special meeting of shareholders of GGB (the "GGB Shareholders"), where the GGB Shareholders approved, among other things, the Business Combination.
As previously announced, on November 2, 2018, Xanthic held an annual and special meeting of shareholders of Xanthic (the "Xanthic Shareholders"), where Xanthic Shareholders approved, among other things, a name change, the Business Combination, an amendment to Xanthic's articles of incorporation to create a new class of proportionate voting shares and the consolidation of the common shares of Xanthic immediately following closing of the Business Combination.
Further details on the Business Combination are set out in the management information circular of Xanthic dated October 12, 2018, which is available on SEDAR at www.sedar.com.
The Business Combination
On July 13, 2018, GGB and Xanthic entered into an arm's length business combination agreement (the "Definitive Agreement"), which was subsequently amended and restated on October 30, 2018. Pursuant to the Definitive Agreement, Xanthic completed the business combination with GGB by way of a three-cornered amalgamation pursuant to which GGB amalgamated with a wholly-owned subsidiary of Xanthic to form one company as a wholly-owned subsidiary of Xanthic (the "Business Combination"). As previously announced, GGB completed a brokered and non-brokered private placement of 12.00% unsecured convertible debentures of GGB (the "Convertible Debentures") pursuant to the terms of a debenture indenture dated August 30, 2018 among GGB and Capital Transfer Agency ULC (the "Debenture Indenture"). Pursuant to the terms of the Debenture Indenture, the Convertible Debentures automatically converted on the closing date of the Business Combination into that number of common shares of GGB and common share purchase warrant of GGB as results from the application of the conversion formula as provided in the Debenture Indenture. GGB has elected to satisfy all interest that has accrued on the Convertible Debentures in cash as permitted by the terms of the Debenture Indenture.
In addition, GGB issued 12.00% unsecured convertible debentures of GGB (the "PVS Debentures") in consideration for the purchase for cancellation of certain Convertible Debentures, which pursuant to the terms of the PVS Debentures, converted on the closing date of the Business Combination into that number of proportionate voting shares of GGB and proportionate voting share purchase warrants of GGB as results from the application of the conversion formula as provided in the certificate evidencing the PVS Debentures. GGB has elected to satisfy all interest that has accrued on the PVS Debentures in cash as permitted by the terms of the certificate evidencing the PVS Debentures.
As part of the Business Combination, each of the common shares, proportionate voting shares, common share purchase warrants and proportionate voting share warrants of GGB (collectively, the "GGB Securities") will be cancelled and former GGB securityholders will receive 3.43522878 common shares, proportionate voting shares, common share purchase warrants, and proportionate voting share warrants of Xanthic, as applicable, for each GGB Security so cancelled (collectively, the "Consideration Securities"). The common shares of Xanthic (including the Consideration Securities) have also been consolidated on the basis of four (4) pre-consolidation shares for one (1) post-consolidation Resulting Issuer common share.
Certain information in this news release constitutes forward-looking statements under applicable securities law. Any statements that are contained in this news release that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are often identified by terms such as "may", "should", "anticipate", "expect", "intend" and similar expressions. Forward-looking statements in this news release include, but are not limited to, statements with respect to the Resulting Issuer's intended focus after closing of the Business Combination, the intended name change of the Resulting Issuer and the receipt of final approval of the Business Combination from the CSE. Forward-looking statements necessarily involve known and unknown risks, including, without limitation, risks associated with general economic conditions; adverse industry events; marketing costs; loss of markets; future legislative and regulatory developments involving medical and recreational marijuana; inability to access sufficient capital from internal and external sources, and/or inability to access sufficient capital on favourable terms; the marijuana industry in the United States, income tax and regulatory matters; the ability of the Resulting Issuer to implement its business strategies; competition; currency and interest rate fluctuations and other risks.
Readers are cautioned that the foregoing list is not exhaustive. Readers are further cautioned not to place undue reliance on forward-looking statements as there can be no assurance that the plans, intentions or expectations upon which they are placed will occur. 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. The forward-looking statements contained in this release is made as of the date hereof and the Resulting Issuer is not obligated to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable securities laws. Forward-looking statements contained in this news release are expressly qualified by this cautionary statement.
This announcement does not constitute an offer, invitation or recommendation to subscribe for or purchase any securities and neither this announcement nor anything contained in it shall form the basis of any contract or commitment. In particular, this announcement does not constitute an offer to sell, or a solicitation of an offer to buy, securities in the United States, or in any other jurisdiction in which such an offer would be illegal.
The securities referred to herein have not been and will not be registered under the Securities Act of 1933, as amended (the "Securities Act"), or under the securities laws of any state or other jurisdiction of the United States and may not be offered or sold, directly or indirectly, within the United States, unless the securities have been registered under the Securities Act or an exemption from the registration requirements of the Securities Act is available.
SOURCE Xanthic BioPharma
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