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non-binding on the parties and the LOI is expected to be superseded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 efficiencies.
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 TSXV.
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 Transaction.
- 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 approval.
Further Information
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 speculative.
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.
Forward-Looking Information
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 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.