TORONTO, May 28, 2019 /CNW/ - 22 Capital Corp. (TSXV:
LFC.P) ("22 Capital") and Trichome Financial Corp.
("Trichome") are pleased to announce that 22 Capital and
Trichome have received conditional approval from the TSX Venture
Exchange (the "Exchange") for their announced amalgamation
under the provisions of the Business Corporations Act
(Ontario) that will result in a
reverse take-over of 22 Capital by the shareholders of Trichome
(the "Transaction"). The Transaction, if completed, will
constitute 22 Capital's "Qualifying Transaction" as such term is
defined in Policy 2.4 of the Exchange. Currently a subsidiary of
CannaRoyalty Corp. d/b/a Origin House (CSE: OH) (OTCQX: ORHOF)
("Origin House"), Trichome is a private corporation. Each of
Trichome and Origin House exists under the laws of the Province of
Ontario.
The Transaction is being undertaken pursuant to the terms and
conditions of the amalgamation agreement between 22 Capital and
Trichome dated November 13, 2018, as
amended January 30, 2019,
April 5, 2019 and May 27, 2019 (the "Amalgamation
Agreement"). The recent amendment clarified the terms of the
consolidation of the 22 Capital common shares contemplated by the
Amalgamation Agreement due to an exercise of broker warrants in 22
Capital.
Shareholder Meetings and Approvals
22 Capital and Trichome will seek approval of various matters in
connection with the Transaction at meetings of the common
shareholders of 22 Capital (the "22 Capital Shareholders")
and the common and preferred shareholders of Trichome (the
"Trichome Shareholders" and, together with the 22 Capital
Shareholders, the "Shareholders"), each as more particularly
described in the joint management information circular of 22
Capital and Trichome to be mailed to the Shareholders. The meetings
of Shareholders are expected to occur on July 4, 2019 or such other date as 22 Capital and
Trichome may agree and in accordance with applicable laws.
At the 22 Capital Shareholder meeting, 22 Capital will be
seeking the approval of, among other things, (i) a resolution
electing directors of 22 Capital for the ensuing year (who will
resign upon completion of the Transaction); (ii) a resolution
appointing the auditors of 22 Capital for the ensuing year (subject
to change upon completion of the Transaction); (iii) an ordinary
resolution confirming the existing stock option plan of 22 Capital;
(iv) a special resolution authorizing and approving a consolidation
(the "Consolidation") of 22 Capital's issued and outstanding
common shares (the "22 Capital Common Shares") on the basis
of one post-Consolidation 22 Capital Share for every 14.24347
pre-Consolidation 22 Capital Common Shares (the "Consolidation
Resolution"); (v) a special resolution approving the
Transaction; (vi) a resolution of disinterested 22 Capital
Shareholders authorizing the transfer of the listing of 22 Capital
to the NEX Board of the Exchange in the event that 22 Capital does
not complete a "Qualifying Transaction" by August 15, 2019; (vii) a resolution of
disinterested 22 Capital Shareholders authorizing the cancellation
of certain seed shares of 22 Capital; and (viii) an ordinary
resolution approving the proposed incentive plans of the
amalgamated entity. The record date for the 22 Capital Shareholder
meeting is May 28, 2019.
At the Trichome Shareholder meetings, Trichome will be seeking
approval of, among other things, (i) a special resolution approving
the Transaction; (ii) a special resolution approving an immediate
share split of every issued and outstanding common shares of
Trichome (the "Trichome Common Shares") into three Trichome
Common Shares; (iii) a special resolution approving a share split
of every Class A Preference, Series 1 Share of Trichome (the
"Trichome Preferred Shares") into three Trichome Preferred
Shares; and (iv) an ordinary resolution approving the new incentive
plans of the amalgamated entity.
Closing & Trading
The closing of the Transaction is expected to take place on or
around July 5, 2019 or such other
date as 22 Capital and Trichome may agree, subject to a number of
conditions, including satisfaction of the escrow release conditions
of the private placement of subscription receipts completed by
Trichome as well as other customary closing conditions for a
transaction of a similar nature, including, but not limited to: (i)
receipt of all necessary shareholder approvals, (ii) all necessary
regulatory, corporate and third party approvals, (ii) confirmation
of the representations and warranties of each party to the
Amalgamation Agreement, and (iii) delivery of customary closing
documentation.
The trading of 22 Capital's common shares will remain halted
until 22 Capital receives the Exchange's final acceptance of the
Transaction. Following closing of the Transaction, and upon
receipt of the Exchange's final acceptance, the common shares of
the resulting issuer are expected to be listed on Tier 1 of the
Exchange under the symbol "TFC".
About 22 Capital
22 Capital is a Capital Pool Company listed on the Exchange. 22
Capital currently has no commercial operations and has no
significant assets other than cash. The principal purpose of 22
Capital, as a Capital Pool Company, is the identification,
evaluation and acquisition of assets, properties or business with a
view to complete a Qualifying Transaction.
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 CNNRF. On April 1,
2019, Origin House announced an agreement pursuant to which,
subject to the approval of the shareholders of Origin House and
other conditions to closing, it will be acquired by Cresco Labs
Inc. (CSE: CL).
Further Information
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, shareholder approvals and
final TSXV acceptance. 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 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 receipt of applicable approvals in
respect of the proposed Transaction and related matters.
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 Origin House