Century Financial Capital Group Inc. (“Century” or the “Company”) and FV Pharma Inc. (“FV Pharma”) are pleased to announce that they have entered into an arm’s-length non-binding letter of intent dated January 12, 2018 (the “Letter of Intent”) pursuant to which Century and FV Pharma propose to complete a business combination by way of three-cornered amalgamation (the “Proposed Transaction”).
The Letter of Intent provides that Century and FV Pharma will negotiate and enter into a definitive agreement in respect of the Proposed Transaction in February 2018 (the “Definitive Agreement”), to be completed by way of a share exchange, amalgamation, arrangement, share purchase, or other form of transaction which would result in FV Pharma becoming a wholly-owned subsidiary of Century or otherwise combine its corporate existence with a wholly-owned subsidiary of Century. Once the Proposed Transaction structure is determined, the Letter of Intent will be superseded by the Definitive Agreement.
There are a number of conditions precedent to the completion of the Proposed Transaction for both Century and FV Pharma, including, but not limited to: completion of the Definitive Agreement; completion of the FV Pharma Financing (as defined herein), completion of satisfactory due diligence; shareholder approval of the articles of amendment of Century and the Proposed Transaction (if required); and receipt of all necessary regulatory approvals.
Prior to consummation of the Proposed Transaction, it is anticipated that, (A) Century will, subject to the approval of Century Shareholders, file articles of amendment to amend its authorized shares as follows: (i) amend and designate the current Century common shares as Class B subordinate voting shares (“Century Class B Shares”), with terms and conditions similar to the existing Class “B” Common Shares of FV Pharma (“FV Pharma Class B Shares”); and (ii) create a new class of Class A multiple voting shares (“Century Class A Shares”) with terms and conditions similar to the existing Class “A” Common Shares of FV Pharma (“FV Pharma Class A Shares”); (B) FV Pharma will complete a brokered private placement of subscription receipts for a minimum aggregate gross proceeds of C$14,000,000 (the “FV Pharma Financing”), for which First Republic Capital Corporation will act as exclusive lead agent; and (C) the Resulting Issuer will change its name to “Cannabis ConneXion Corp.”, or such other name as the parties may agree.
Pursuant to the Proposed Transaction, Century will purchase all of the FV Pharma Class B Shares in exchange for Century Class B Shares issued from treasury, and all of the FV Pharma Class A Shares in exchange for Century Class A Shares issued from treasury. Holders of FV Pharma Class B Shares will receive one Century Class B Share for each one FV Pharma Class B Share held, resulting in the issuance of approximately 763,562,145 Century Class B Shares at a deemed issued price of $0.09 per Century Class B Share, and holders of FV Pharma Class A Shares will receive one Century Class A Share for each one FV Pharma Class A Share held, resulting in the issuance of 15,000 Century Class A Shares, all for aggregate ascribed value of approximately $70 million.
Following the completion of the Proposed Transaction, the resulting issuer is expected to carry on the business of FV Pharma which is described below.
FV Pharma and Century intend on applying to the Canadian Securities Exchange (“CSE”) to qualify the listing of the Resulting Issuer Class B Shares on the CSE. There is no assurance the CSE will provide conditional or final approval of the application to list the Resulting Issuer Class B Shares on the CSE. The CSE has not reviewed or provided comments on the Proposed Transaction. The CSE’s final approvals remain subject to fulfilling all of the requirements of the CSE. It is currently contemplated that the Resulting Issuer will trade under the stock ticker “HUGE”.
About FV Pharma
FV Pharma is a licensed producer of marijuana under the Access to Cannabis for Medical Purposes Regulations (ACMPR) having received its cultivation license on October 13, 2017. Headquartered at the former Kraft plant in Cobourg, Ontario, approximately an hour’s drive from Toronto, FV Pharma management’s mission is to transform the facility into the largest hydroponic indoor cannabis facility in the world. FV Pharma intends to target all legal aspects of the cannabis industry, including cultivation, processing, manufacturing, extracts and research and development.
Additional information regarding Century is available on SEDAR.
Additional information regarding the Proposed Transaction and FV Pharma, including the proposed management team and board of directors of the Resulting Issuer, will be made publicly available by Century and FV Pharma in accordance with applicable securities laws.
ON BEHALF OF CENTURY:
Yaron Conforti, Chief Executive Officer
Toronto Office: (416) 716-8181
ON BEHALF OF FV PHARMA:
Thomas Fairfull, Chief Executive Officer
Toronto Office: (905) 686-7079
ON BEHALF OF FIRST REPUBLIC:
Anthony Durkacz, Executive Vice President, First Republic Capital Corporation
Phone: (416) 720-4360
This press release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. The use of any of the words “expect”, “anticipate”, “continue”, “estimate”, “objective”, “ongoing”, “may”, “will”, “project”, “should”, “believe”, “plans”, “intends” and similar expressions are intended to identify forward-looking information or statements. More particularly and without limitation, this press release contains forward looking statements and information concerning the Proposed Transaction, the expected business of the Resulting Issuer, the negotiation and execution of the Definitive Agreement and the timing thereof. The forward-looking statements and information are based on certain key expectations and assumptions made by Century, including expectations and assumptions concerning Century, FV Pharma, the Resulting Issuer, and the Proposed Transaction, the timely receipt of all required securityholder, and regulatory approvals and the satisfaction of other closing conditions in accordance with the terms of the Definitive Agreement. Although Century believes that the expectations and assumptions on which such forward-looking statements and information are based are reasonable, undue reliance should not be placed on the forward-looking statements and information because Century can give no assurance that they will prove to be correct. By its nature, such forward-looking information is subject to various risks and uncertainties, which could cause the actual results and expectations to differ materially from the anticipated results or expectations expressed. These risks and uncertainties, include, but are not limited to, the results of the due diligence review on either Century or FV Pharma by the other are less than satisfactory, or the parties are unable to obtain the required shareholder approvals. Readers are cautioned not to place undue reliance on this forward-looking information, which is given as of the date hereof, and to not use such forward- looking information for anything other than its intended purpose. Century undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law.