Trading symbol: TSX-V-NEX: ENTH.H
VANCOUVER, BC, Feb. 11, 2021 /CNW/ - Entheos Capital Corp. (the
"Company"), announces that it has entered into a binding letter
agreement dated February 7, 2021 with
The BC Bud Co. ("BCBC") whereby the Company will acquire all of the
issued and outstanding securities of BCBC by way of a share
exchange.
Upon the successful completion the proposed acquisition of the
securities of BCBC (the "Transaction"), it is anticipated that the
Company will carry on the business of BCBC (the "Resulting Issuer")
and will seek to delist its common shares from the TSX Venture
Exchange ("TSXV") and list its common shares on the Canadian
Securities Exchange ("CSE") such that on the date of closing, the
common shares of the Resulting Issuer would be listed on the CSE as
a life science issuer in the cannabis industry. The Transaction
constitutes a 'reverse takeover' of the Company.
Related Party Transaction
As two directors of the Company, being CEO Brayden Sutton and Director Josh Taylor are each the holders of 40% of the
issued and outstanding shares of BCBC, the Transaction constitutes
a 'related party transaction' as defined in Multilateral Instrument
61-101 – Protection of Minority Security Holders in Special
Transactions ("MI 61-101"). As a result, the completion of the
Transaction will be subject to the valuation and majority of the
minority shareholder approval requirements of MI 61-101.
Brayden Sutton is a Director,
President and CEO of the Company and currently holds, directly or
indirectly 1,713,333 ENTH Shares, representing approximately 12.55%
of the issued and outstanding ENTH Shares. Josh Taylor is a Director of the Company and
currently holds, directly or indirectly, 127,309 ENTH Shares,
representing less than 1% of the issued and outstanding ENTH
Shares.
Following completion of the Transaction, but prior to completion
of any concurrent financing, Mr. Sutton will hold 12,213,333 ENTH
Shares representing approximately 32.86% of the issued and
outstanding ENTH Shares, prior to the exercise of any options or
warrants held by him, and Josh
Taylor will hold 10,627,309 ENTH Shares, representing
approximately 28.56% of the issued and outstanding ENTH Shares,
prior to the exercise of any warrants held by him.
The Transaction will be reviewed and considered by the Company's
independent director. Malahat Valuation Group has prepared an
initial valuation report dated December 21,
2020 in respect of BCBC which concludes that the fair market
value of BCBC is in the range of $7.9-$8.7
million.
Transaction Summary
Pursuant to the Transaction, the Company will issue common
shares in its capital ("ENTH Shares") to the holders of common
shares in the capital of BCBC ("BCBC Shares") on the basis of
approximately 2.1 ENTH Shares for each BCBC Share. It is
anticipated that approximately 26,250,000 ENTH Shares will be
issued pursuant to the Transaction based on the current capital
structure of BCBC. The Company currently has 13,651,815 ENTH Shares
issued and outstanding.
No advances to be made by the Company to BCBC are contemplated
by the letter agreement and no finder's fees are payable in
connection with the Transaction.
The Transaction is subject to a number of terms and conditions,
including, but not limited to, the parties entering into a
definitive agreement with respect to the Transaction on or before
March 15, 2021 (such agreement
to include representations, warranties, conditions and covenants
typical for a transaction of this nature), the completion of a
private placement by ENTH to raise gross proceeds of at least
$1,000,000 as further described
below, the approval of a majority of the minority shareholders in
the Company, and the approval of the CSE and other applicable
regulatory authorities. Additionally, the delisting of the ENTH
Shares in advance of the listing on the CSE will also require the
approval of a majority of the minority shareholders in the
Company.
All dollar figures referenced herein, unless otherwise
specified, refer to Canadian dollars.
Trading Halt
Trading in the ENTH Shares has been halted and is expected to
remain halted pending the satisfaction of the listing requirements
of the CSE. There can be no assurance that trading of ENTH
shares will resume prior to the completion of the Transaction and
it is not anticipated that trading will resume on the TSXV prior to
delisting. Further details concerning the Transaction (including
additional financial information) and other matters will be
announced if and when a definitive agreement is reached.
Information Concerning BCBC
BCBC is incorporated under the laws of Canada and is an early-stage company pursuing
premium recreational cannabis products in the cannabis industry
through licensing, manufacturing and joint venture agreements with
licensed producers under the Cannabis Act. BCBC is a not a
licensed producer. Its expected branded products will include The
BC Bud Co. flower products, edibles under the brand 'Canna Beans',
concentrates sold as Solventless Solutions, 'Buds' beverages line
and select lifestyle apparel.
As of December 31, 2020 (unaudited
information), BCBC had approximately $1,000,000 in assets comprised of $640,000 in intangible properties and
$360,000 in cash and cash
equivalents, as well as liabilities of approximately $100,000.
Each of Brayden Sutton, the Chief
Executive Officer of BCBC, and Josh
Taylor, the President of BCBC, both directors of the
Company, holds 5,000,000 BCBC Shares, representing 40.00% of the
outstanding BCBC Shares. L5 Capital Corp, owned and controlled by
Marc Lustig, holds 2,500,000 BCBC
Shares, representing 20.00% of the outstanding BCBC Shares.
Management and Board of Directors of Resulting
Issuer
Upon completion of the Transaction, Corey Larricq will resign as a Director of the
Company and Samantha Shorter will
resign as Chief Financial Officer of the Company. Brayden Sutton will remain as CEO and a Director
and Josh Taylor will remain as a
Director and be appointed as President. BCBC will appoint two new
Directors of the Company to be determined and a new Chief Financial
Officer and Corporate Secretary.
Brayden Sutton
Mr. Sutton has over 17 years of medical cannabis experience in
Canada. He is the co-founder of
Supreme Cannabis, 1933 Industries, CannabisHealth.com and has a
rich history of activism, investment, and valuable product creation
and offerings in both Canada and
the United States.
Josh Taylor
Mr. Taylor has over a decade of experience in the cannabis
industry, including CPG and pharmaceutical roles. Josh co-founded
The Rosin Factory, which was awarded two High Times Cannabis Cups
in 2017 for Solventless flower rosin products. Prior to founding
The BC Bud Co, Josh was the Director of Business Development at
1933 Industries.
Private Placement
Pursuant to the letter agreement, it is a condition of the
Transaction that the Company complete a private placement for
aggregate gross proceeds to BCBC of at least $1,000,000 on terms to be determined. Additional
details concerning the terms of the private placement will be
provided in a subsequent press release.
BCBC intends to use the net proceeds of the private placement to
fund the Transaction, to develop its business and for working
capital.
This news release does not constitute an offer to sell and is
not a solicitation of an offer to buy any securities in
the United States. The securities
of the Company and BCBC have not been and will not be registered
under the United States Securities Act of 1933, as amended (the
"U.S. Securities Act") or any state securities laws and may not be
offered or sold within the United
States or to U.S. Persons unless registered under the U.S.
Securities Act and applicable state securities laws unless pursuant
to an exemption from such registration.
Shareholder Meeting
Approval for the Transaction will be sought from the Company's
shareholders on a date to be determined.
Name Change
Upon completion of the Transaction, the Company intends to
change its name to "The BC Bud Co" and the parties expect that the
CSE will assign a new trading symbol for the Resulting Issuer.
Forward-Looking Statements
This news release contains certain "forward looking statements"
including, for example, statements relating to the completion of
the Transaction and Private Placement and the Resulting Issuer's
anticipated share capital. Such forward-looking statements
involve risks and uncertainties, both known and unknown. The
results or events depicted in these forward-looking statements may
differ materially from actual results or events. In addition
to other factors and assumptions which may be identified herein,
assumptions have been made regarding and are implicit in, among
other things: receipt of regulatory approvals, the Company's
ability to complete the Transaction and Private Placement, the
state of the capital markets, the impact of the COVID-19 pandemic,
the ability of the Resulting Issuer to successfully manage the
risks inherent in pursuing business opportunities in the cannabis
industry, and the ability of the Resulting Issuer to obtain
qualified staff, equipment and services in a timely and cost
efficient manner to develop its business. Any forward-looking
statement reflects information available to the Company as of the
date of this news release and, except as may be required by
applicable securities laws, the Company disclaims any intent or
obligation to update any forward-looking statement, whether as a
result of new information, future events or results or
otherwise.
Entheos Capital Corp.
"Brayden R.
Sutton"
_______________________________________
Brayden
R. Sutton, Chief Executive Officer
Neither the 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.
Completion of the Transaction is subject to a number of
conditions, including stock exchange acceptance and majority of the
minority Shareholder approval. 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
Information Circular and Listing 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 the Company should be considered highly speculative. The TSX
Venture Exchange has in no way passed upon the merits of the
proposed transaction and has neither approved nor disapproved the
contents of this press release.
SOURCE Entheos Capital Corp.