Province Brands of Canada Announces Reverse Takeover of Colson Capital Corporation

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CALGARY, June 5, 2018 /CNW/ - Colson Capital Corporation ("Colson" or the "Corporation") (TSXV: COLS.P) and Honest Inc., dba Province Brands of Canada ("Province Brands"), announce the signing of a Letter of Intent ("LOI") to acquire all of the issued and outstanding common shares in the capital of Province Brands in exchange for common shares in the capital of Colson (the "Acquisition"), a TSX Venture Exchange ("TSXV") listed Capital Pool Corporation.

General Information on Colson and Province Brands

Colson is incorporated under the laws of the Province of Alberta and has a head office in Calgary, Alberta. The Corporation is a "capital pool company" under the policies of the TSXV and it is intended that the Acquisition will constitute the "Qualifying Transaction" of the Corporation, as such term is defined in TSXV Policy 2.4 – Capital Pool Companies. The Corporation is a reporting issuer in the provinces of British Columbia, Alberta, Saskatchewan and Ontario.

Province Brands, a company incorporated under the laws of Canada, is an early stage, Toronto-based, disruptive premium adult beverage company founded by veteran entrepreneurs with extensive experience in the premium alcohol and legal medical and recreational cannabis industries. Province Brands' patent-pending process has created the world's first beer brewed using cannabis. Alcohol-free yet intoxicating, and with a dose-response curve similar to that of alcohol, Province Brands' cannabis-powered beers and spirits will challenge the alcohol industry by offering a safer and healthier alternative that is also low in calories and sugar.  Province Brands is also developing additional premium spirits and beverages in anticipation of legalization of the use of cannabis-based products in Canada, which is anticipated to occur in the early fall of 2019 ("Potential Legislative Changes").

"Province Brands' mission is to create safer and healthier alternatives to alcohol through a portfolio of products that intoxicate using cannabis, including beer brewed from the cannabis plant rather than barley. We're starting an entirely new brewing tradition and we are excited to partner with the public in doing so," said Dooma Wendschuh, Co-Founder and CEO of Province Brands.

General Information Regarding the LOI

Province Brands and Colson entered into the LOI on April 27, 2018, which sets out the basic terms and conditions for the Acquisition. The Acquisition is expected to be structured as a reverse takeover ("RTO") under the rules and policies of the TSXV. Upon completion of the Acquisition, the combined entity (the "Resulting Issuer") will continue to carry on the business of Province Brands. It is expected that upon completion of the Acquisition, the Resulting Issuer will meet the Initial Listing Requirements for a Tier 1 Life Sciences issuer under the policies of the TSXV.

The transaction terms outlined in the LOI are non-binding, and the Acquisition is subject to the parties successfully entering into a definitive agreement (the "Definitive Agreement") in respect of the Acquisition on or before August 31, 2018 or such other date as Colson and Province Brands may mutually agree. The LOI also contemplates other material conditions precedent to the closing of the Acquisition (the "Closing"), including the completion by Province Brands of a concurrent financing to raise aggregate gross proceeds of minimum CDN $5,000,000 (the "Concurrent Financing"), customary due diligence, compliance with all applicable regulatory requirements and receipt of all necessary regulatory, corporate, third-party, board and shareholder approvals being obtained.

Province Brands expects to complete a private placement of Series A unsecured, 8% convertible notes for gross proceeds of up to $11,500,000 (the "Convertible Note Financing"). 

Trading Halt

The common shares of Colson are currently halted from trading, and the trading of common shares of Colson is expected to remain halted pending completion of the Acquisition.

Additional Information

If and when a Definitive Agreement between the Corporation and Province Brands is executed, the Corporation will issue a subsequent press release in accordance with the policies of the TSXV containing the details of the Definitive Agreement and additional terms of the Acquisition including information relating to sponsorship, summary financial information in respect of Province Brands, and additional information with respect to the Concurrent Financing, Convertible Note Financing, history of Province Brands and the proposed directors, officers, and insiders of the Resulting Issuer upon completion of the Acquisition.

Completion of the Acquisition is subject to a number of conditions including, but not limited to, completion of the Convertible Note Financing, completion of the Concurrent Financing, the satisfaction of the Corporation and Province Brands in respect of the due diligence investigations to be undertaken by each party, the completion of a Definitive Agreement in respect of the Acquisition, closing conditions customary to transactions of the nature of the Acquisition, approvals of all regulatory bodies having jurisdiction in connection with the Acquisition, TSXV acceptance of the Acquisition as the Qualifying Transaction of Colson and, if required by the TSXV policies, majority of the minority shareholder approval. Where applicable, the Acquisition cannot close until the required shareholder approvals are obtained and there can be no assurance that the Acquisition 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 Acquisition, any information released or received with respect to the Acquisition 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.

Cautionary Statements

This news release contains "forward-looking information" within the meaning of applicable securities laws relating to the proposal to complete the Acquisition and associated transactions, including statements regarding the terms and conditions of the Acquisition, the Concurrent Financing, the Convertible Note Financing and Potential Legislative Changes. The information about Province Brands contained in the press release has not been independently verified by the Corporation. Although the Corporation believes in light of the experience of its officers and directors, current conditions and expected future developments and other factors that have been considered appropriate that the expectations reflected in this forward-looking information are reasonable, undue reliance should not be placed on them because the Corporation can give no assurance that they will prove to be correct. Readers are cautioned to not place undue reliance on forward-looking information. Actual results and developments may differ materially from those contemplated by these statements depending on, among other things, the risks that the parties will not proceed with the Acquisition, the Concurrent Financing, and the Convertible Note Financing that the ultimate terms of the  Acquisition, Concurrent Financing, the Convertible Note Financing, any Potential Legislative Changes and associated transactions will differ from those that currently are contemplated, and that the Acquisition, the Concurrent Financing, the Convertible Note Financing, any Potential Legislative Changes and associated transactions will not be successfully completed for any reason (including the failure to obtain the required approvals or clearances from regulatory authorities). The terms and conditions of the Acquisition may change based on the Corporation's due diligence and the receipt of tax, corporate and securities law advice for both Colson and Province Brands. The statements in this press release are made as of the date of this release. The Corporation undertakes no obligation to comment on analyses, expectations or statements made by third-parties in respect of the Corporation, Province Brands, their securities, or their respective financial or operating results (as applicable).

Neither the TSX Venture Exchange, Inc. nor its Regulation Services Provider (as that term is defined in the polices of the TSX Venture Exchange) has in any way passed upon the merits of the Acquisition and associated transactions and neither of the foregoing entities accepts responsibility for the adequacy or accuracy of this release or has in any way approved or disapproved of the contents of this press release.

The common shares have not been and will not be registered under the United States Securities Act of 1933, as amended and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirement. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

SOURCE Province Brands of Canada

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