AMW.P Amwolf Capital Corp

VANCOUVER, BC, Aug. 14, 2020 /CNW/ - AmWolf Capital Corp. ("AmWolf" or the "Company") (TSXV: AMW.P) a capital pool company ("CPC") as defined under Policy 2.4 – Capital Pool Companies ("Policy 2.4") of the TSX Venture Exchange (the "Exchange"), is pleased to announce that, further to its news release dated November 21, 2019, AmWolf, 1253044 B.C. Ltd., a wholly-owned subsidiary of AmWolf ("NewCo"), and Pontus Water Lentils Ltd. ("Pontus"), a private company incorporated under the Canada Business Corporations Act, have entered into an amalgamation agreement dated July 28, 2020 (the "Amalgamation Agreement"), pursuant to which AmWolf will acquire all of the issued and outstanding common shares (each, a "Pontus Share") of Pontus (the "Transaction").

The Transaction is subject to the approval of the Exchange, and is intended to constitute the Company's Qualifying Transaction (as defined in Policy 2.4). The combined company that will result from the completion of the Transaction (the "Resulting Issuer") will be renamed "Pontus Water Lentils Ltd." or such other name as agreed to by AmWolf and Pontus. Subject to Exchange approval, the common shares of the Resulting Issuer will trade on the Exchange, under the symbol "HULK", and the business of the Resulting Issuer will be the business of Pontus. It is expected that the Resulting Issuer will be listed on the Exchange as a Tier 2 Industrial issuer.

Pontus Water Lentils Ltd.

Pontus was founded in 2018, and is a British Columbia-based agri-tech company whose primary objective is to deliver new sources of organic plant-based protein products. Pontus specializes in aquaponic farming through the employment of its proprietary Closed Environment Vertical Aquaponics System™ or CEVAS™ system, a network of automated bio-secure indoor aquaponic farms utilizing AI, to produce a sustainable, non-GMO, organic plant-based protein product called "Pontus Protein Power+". Pontus' Protein Power+ protein powder is a 42.1% pure plant protein produced from water lentils, high in antioxidants, essential vitamins and minerals, grown without the use of solvents, chemicals, dyes, additives, preservatives or pesticides.

To facilitate the production and processing of its Pontus Protein Power+ protein powder, Pontus intends to construct a 10,000 sq/ft. processing farm in Delta, British Columbia (the "Pilot Farm"), where the facility will utilize Pontus' proprietary CEVAS™. Pontus' Pilot Farm will utilize the CEVAS™ technology and equipment, an advanced aquaponics system proprietary to Pontus utilized for the production of its organic and sustainable water lentils and water lentil protein powder, Pontus Protein Power+. Following the closing of the Transaction (the "Closing"), the business of the Resulting Issuer will be the business of Pontus.

The following table provides select financial information for Pontus:

Additional financial information with respect to Pontus will be provided in the filing statement to be filed with the Exchange in connection with the Transaction.

Summary of the Transaction

The Amalgamation Agreement provides that AmWolf will acquire all of the issued and outstanding Pontus Shares by way of a "three-cornered" amalgamation whereby NewCo and Pontus will amalgamate to form a new amalgamated entity ("AmalCo"), and Amalco will be a wholly-owned subsidiary of AmWolf. On the Closing, each of the Pontus Shares will be cancelled and, in consideration for such Pontus Shares, each Pontus shareholder (collectively, the "Pontus Shareholders") will receive one (1) common share in the capital of AmWolf (each, an "AmWolf Share") at a deemed price of $0.15 per AmWolf Share for each one (1) Pontus Share held by such shareholder.

It is expected that, immediately prior to the Closing, there will be 29,999,999 Pontus Shares issued and outstanding (assuming completion of the minimum amount of the Pontus Private Placement (as defined below)) and, accordingly, an aggregate of 29,999,999 AmWolf Shares (each, a "Consideration Share") are expected to be issued at a deemed price of $0.15 per Consideration Share. AmWolf intends to rely on Section 2.11 of National Instrument 45-106 – Prospectus Exemptions for an exemption from the prospectus requirements for the issuance of the Consideration Shares to the Pontus Shareholders. The aggregate deemed value of the Consideration Shares to be issued to the Pontus Shareholders is $4,500,000.

Assuming the completion of the Transaction, the minimum subscription of the Concurrent Financings (as defined below), and that no convertible securities of AmWolf or Pontus are exercised, a minimum of 47,050,000 common shares of the Resulting Issuer (each, a "Resulting Issuer Share") are expected to be issued and outstanding on the Closing, of which approximately 63.76% will be held by the former Pontus Shareholders.

In connection with the Transaction, the Company intends to issue up to an aggregate of 1,550,000 AmWolf Shares (each, a "Finder's Share") at a deemed price of $0.15 per Finder's Share to certain eligible finders, both of whom are arm's length parties to the Company, as a transaction finder's fee payable in connection with the Transaction concurrent to the Closing. Excluding those Pontus Shares issued under the Pontus Private Placement, the measurable benefit of the Transaction to the Company is based on the anticipated 26,666,666 Consideration Shares to be issued to the Pontus Shareholders at a deemed price of $0.15 per Consideration Share for an aggregate total of $4,000,000.

The completion of the Transaction is subject to the satisfaction of various conditions standard for a transaction of this nature, including but not limited to: (i) the Company having had the reasonable opportunity to perform searches and other due diligence, and being satisfied with the results of such due diligence; (ii) receipt of all necessary regulatory, shareholder and third party consents, waivers and approvals, including the Exchange; (iii) the absence of any material adverse change in the business, affairs or operations of AmWolf or Pontus, as applicable; and (iv) completion of the Concurrent Financings.

The Transaction is an arm's length transaction and therefore will not require the approval of the shareholders of AmWolf under Policy 2.4.

AmWolf Private Placement and Pontus Private Placement

In connection with the Transaction, the Company anticipates completing a non-brokered private placement of at least 10,000,000 units (each, an "AmWolf Unit"), up to a maximum of 26,666,666 AmWolf Units, at a price of $0.15 per AmWolf Unit to raise gross proceeds of $1,500,000 to $4,000,000 (the "AmWolf Private Placement"). Each AmWolf Unit will consist of one common share of the Company (each, an "AmWolf Share") and one AmWolf Share purchase warrant of the Company (each, an "AmWolf Warrant"). Each AmWolf Warrant will entitle the holder thereof to purchase one additional common share of the Company (each, an "AmWolf Warrant Share") at an exercise price of $0.30 per AmWolf Warrant Share for a period of two years from the date of closing, subject to the Acceleration Provision (as defined below).

The AmWolf Private Placement is subject to certain conditions including, but not limited to, the receipt of all necessary approvals including the approval of the Exchange.  The Company may pay finder's fees on a portion of the AmWolf Private Placement of up to 8% in cash and, for those applicable, finder's warrants equal to 8% of such AmWolf Units placed by the finder, each finder's warrant exercisable for one AmWolf Share for a term of 2 years at a price of $0.30. The finder's fees shall be paid in accordance with applicable securities laws and the policies of the Exchange. The securities to be issued under the AmWolf Private Placement will have a hold period of four months and one day from the closing.

Pontus also anticipates completing a non-brokered private placement (the "Pontus Private Placement") of at least 3,333,333 units (each, a "Pontus Unit"), up to a maximum of 6,666,666 Pontus Units, at a price of $0.15 per Pontus Unit to raise gross proceeds of at least $500,000 to $1,000,000. Each Pontus Unit will consist of one Pontus Share and one Pontus Share purchase warrant of Pontus (each, a "Pontus Warrant"). Each Pontus Warrant will entitle the holder thereof to purchase one additional common share of Pontus (each, a "Pontus Warrant Share") at an exercise price of $0.30 per Pontus Warrant Share for a period of two years from the date of closing, subject to the Acceleration Provision. Both Pontus and the Company anticipate completing their respective private placements prior to, or concurrently with, the Closing (together, the "Concurrent Financings").

Both the AmWolf Warrants and Pontus Warrants are subject to the acceleration provision, whereby the expiry of warrants issued in connection with the Concurrent Financings may be accelerated in the event the daily trading price of the AmWolf Shares or Resulting Issuer Shares, as applicable, equals or exceeds $0.50 on the Exchange (or such other exchange on which the AmWolf Shares or Resulting Issuer Shares, as applicable, may be traded) for 20 consecutive trading days after the date that is four months and one day from the closing of each respective Concurrent Financing, whereby AmWolf or the Resulting Issuer, as applicable, may accelerate the expiry date of the warrants by giving notice via news release to the holders thereof and, in such case, the warrants will expire on the 30th day after the date on which the news release is disseminated by AmWolf or the Resulting Issuer, as applicable (the "Acceleration Provision").

Pontus may pay finder's fees on a portion of the Pontus Private Placement of up to 7.5% in cash and, for those applicable, finder's warrants equal to 7% of such Pontus Units placed by the finder, each finder's warrant exercisable for one Pontus Share for a term of 5 years at a price of $0.30. The finder's fees shall be paid in accordance with applicable securities laws. The securities to be issued under the Pontus Private Placement will have a hold period expiring on the later of (i) four months and one day from the closing or (ii) the date on which Pontus becomes a reporting issuer in any province of territory of Canada. Upon consummation of the Transaction, all AmWolf Shares issued in exchange for those Pontus Shares issued under the Pontus Private Placement will be free trading. Conversely, it is anticipated that following Closing an aggregate of 11,099,999 Consideration Shares to be issued to 41 Pontus Shareholders will be subject to certain seed share resale restrictions as set forth in Section 10 of TSXV Policy 5.4 – Escrow, Vendor Consideration and Resale Restrictions and an aggregate of 13,719,001 Consideration Shares held by Principals (as defined in TSXV Policy 1.1 – Interpretation) of the Resulting Issuer will be held in escrow pursuant to a value security escrow agreement based on TSXV Form 5D – Escrow Agreement.

Proceeds from the Concurrent Financings will be used (i) to advance the Resulting Issuer's Pilot Farm, (ii) to make payments related to the completion of the Transaction, (iii) for general and administrative expenses, and (iv) to contribute to working capital.

The securities described herein have not been, and will not be, registered under the United States Securities Act of 1933, as amended, or any state securities laws, and accordingly, may not be offered or sold within the United States absent an exemption from registration.

Directors, Officers and Insiders of the Resulting Issuer

Following the Closing, it is expected that the following individuals will be appointed as management of the Resulting Issuer:

Connor Yuen, Chief Executive Officer and Director

Prior to his appointment as Chief Executive Officer ("CEO") of Pontus, Connor Yuen climbed to the top 1% of executives representing Amway Corporation, where he maintained that position for 7 years. Following his time with Amway Corporation, Mr. Yuen has taken his sales aptitude and shifted his focus to understanding the securities and capital markets industry. Mr. Yuen was also Co-Founder of Planet Preservation Vancouver, a not-for-profit organization that provided free pick-up services of recyclable items in Vancouver's lower mainland.

Steve McArthur, Chief Technology Officer and Director

Steve McArthur is experienced with aquaponic systems design and facility operations, and has dedicated himself to the future of farming through this technology. Mr. McArthur co-founded Pontus, Garden City Aquaponics Inc., and Green Oasis, and is currently working towards a degree in engineering at the University of Victoria. Mr. McArthur has also attended aquaponic training with Nelson & Pade, Inc., NOA Fisheries, Green'n Aquaponic Farms, You Grow Food, helped develop Metchosin Acquaponics, and taken informative tours at Perfect Plants (Netherlands), Taste of BC Farms, Sunshine Coast Aquaponics, Raincoast Aquaponics, Devon Nurseries, and Mason St. Farms.

Jeremy Wright – Chief Financial Officer, Corporate Secretary and Director

Jeremy Wright has been the Chief Financial Officer ("CFO"), Corporate Secretary and a Director of the Company since April 2018. Mr. Wright has broad experience working with senior management developing strategies and solutions to business issues mainly related to corporate finance, cost and risk management, and governance which will serve invaluable in his role as a director of the Resulting Issuer. Mr. Wright is a Chartered Professional Accountant (Certified Management Accountant), currently serves as President and CEO of Seatrend Strategy Group and as a director for several public and private companies including: Centurion Minerals Ltd., Demetra Minerals Inc. and Freeform Capital Partners Inc. Mr. Wright previously served as a Director of Pacific Community Resources Society and the Canadian Freestyle Ski Association. In addition, Mr. Wright also serves as the CFO for several public and private companies including: Portofino Resources Inc., Centurion Minerals Ltd., and Freeform Capital Partners Inc. He was previously the CFO for GTEC Holdings, a vertically integrated ultra-premium cannabis producer having 3 operating licensed producers across Canada. Mr. Wright holds a Bachelor of Arts, with honours in Environmental Economics from Brock University.

Sean Kingsley – Director

Sean Kingsley specializes in corporate development, strategic marketing, investor relations, advising & raising capital. Mr. Kingsley has a firm understanding of the financial markets and experience in utilizing diverse methods for public engagement. Mr. Kingsley has 13 years of capital markets experience with a focus on creating corporate profiles, identity and cultures, awareness, education tools, creating long-term shareholders/stakeholders along with being a strong public ambassador, advocate, speaker and avid volunteer. At the Association for Mineral Exploration BC, Mr. Kingsley served as Chairman of its Communications and Marketing Committee from 2014 to 2018 and remains as Chair to its Mineral Exploration Editorial Committee. Mr. Kingsley sits on the Executive, Advisory Council & Finance Committee for the Centre of Training Excellence in Mining. Mr. Kingsley is currently the Director of Communications of Crystal Lake Mining Corporation, a Director of The Wonderfilm Media Corporation, and Interim CEO and Corporate Secretary of Dunbar Capital Corp.

Spencer Smyl – Director

Spencer Smyl has over 8 years of capital markets and entrepreneur experience with his focus on building and financing start-ups in the technology, cannabis, video game, esports, entertainment, heath care, and health & wellness industries of which he has helped raise over $30 million CAD. In that time, he has gained over 7 years of corporate director and management experience with both private and public companies. He is also the founder and CEO of Final Stage Entertainment Inc., a content production company with an academy nominated management team with over 100+ years of experience in media and entertainment. The company focuses on original content creation for the Millennial and Generation Z demographics. Prior to the capital markets, he spent 2 years working at the Senate of Canada under the Honorable Senator Larry Campbell.

Following the Closing, it is expected that each of Connor Yuen and Alson Niu will hold, both directly and indirectly, more than 10% of the Resulting Issuer Shares issued and outstanding and that Jeremy Wright will hold an aggregate of 201,667 Resulting Issuer Shares (including 1,667 Resulting Issuer Shares issued in exchange for Pontus Shares purchased in connection with the Pontus Private Placement). Alson Niu is a business consultant with several years of experience specializing in marketing, branding, and private equity. Mr. Nui co-founded Tracer Digital, a Vancouver marketing solutions company and acts as the director of corporate communications for Evolve Branding. More recently, Mr. Niu has applied his broad-based consulting experience to disrupt the venture capital and private equity arena as Managing Partner of Vancouver-based Conquest Capital.  Aside from the 1,667 Pontus Shares currently held by Jeremy Wright, there are no other non-arm's length parties to AmWolf that hold a direct or indirect beneficial interest in, or are otherwise insiders of, Pontus.  Except as disclosed herein, there is no relationship between or among the non-arm's length parties to AmWolf and the non-arm's length parties to the Qualifying Transaction. 

Sponsorship

Sponsorship of a Qualifying Transaction of a CPC is required by the Exchange unless an exemption from the sponsorship requirement is available. The Company intends to apply for a waiver from the sponsorship requirements. There is no assurance that the Company will be able to obtain such a waiver.

About AmWolf Capital Corp.

AmWolf Capital Corp. is a CPC as defined by the policies of the Exchange. The Company's principal business activity is to identify and evaluate opportunities for acquisition of assets or business. The Company is headquartered in Vancouver, British Columbia.

About Pontus Water Lentils Ltd.

Pontus Water Lentils Ltd. was founded in 2018, and is a British Columbia-based agri-tech company. Pontus specializes in aquaponic farming through Closed Environment Vertical Aquaponics System™ or CEVAS™ system to create a sustainable, non-GMO plant-based protein product: "Pontus Protein Power+". For more information, visit www.pontuswaterlentils.com.

Additional Information

All information contained in this news release with respect to AmWolf and Pontus (each, a "Party" and together, the "Parties") was supplied, for inclusion herein, by each respective Party 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, Exchange acceptance 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 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 CPC 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.

Disclaimer for Forward-Looking Information

Certain statements in this news release are forward-looking statements, which reflect the expectations of management regarding the Company's completion of the Transaction and related transactions. Forward-looking statements consist of statements that are not purely historical, including any statements regarding beliefs, plans, expectations or intentions regarding the future, including but not limited to, the Company completing the Transaction on the terms and conditions of the Amalgamation Agreement, or at all, the completion of the Concurrent Financings, the construction of the proposed Pilot Farm by Pontus, the proposed directors and officers of the Resulting Issuer and the conditions to be satisfied for completion of the Transaction. Such statements are subject to risks and uncertainties that may cause actual results, performance or developments to differ materially from those contained in the statements, including risks related to factors beyond the control of the Company. The risks include the following: the requisite corporate approvals of the directors and shareholders of the Parties may not be obtained; the Exchange may not approve the Transaction; sufficient funds may not be raised pursuant to the Concurrent Financings; and other risks that are customary to transactions of this nature. No assurance can be given that any of the events anticipated by the forward-looking statements will occur or, if they do occur, what benefits the Company will obtain from them.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE AmWolf Capital Corp.