Lagayan
Subject: Dragonfly Capital Corp. News Release
PLAIN TEXT:
DRAGONFLY CAPITAL CORP.
Suite #905-1030 West Georgia St.
Vancouver, BC Canada V6E 2Y3
Phone (604) 689-2646
Fax (604) 689-1289
Trading Symbol: TSXV - DRC.H
March 24, 2017
DRAGONFLY CAPITAL CORP. ENTERS INTO A NEW LETTER OF INTENT TO ACQUIRE
OLEAVICIN, LLC
Dragonfly Capital Corp. (the "Company" or "Dragonfly") (listed on the NEX
Board of the TSX Venture Exchange ("NEX")) announces that on March 22, 2017,
it has entered into a new Letter of Intent (the "New LOI") to acquire all of
the membership interests in Oleavicin, LLC ("Oleavicin"), a privately-held
California-based manufacturer and distributor of 100% all natural treatments
for skin ailments, including cold sores, canker sores, fever blisters,
psoriasis, shingles and dry itchy skin (the "Transaction"). The New LOI
supersedes and replaces the letter of intent entered into in respect of the
Transaction on July 1, 2015 (the "Initial LOI").
Dragonfly's proposed acquisition of Oleavicin is intended to serve as the
basis for Dragonfly's "Qualifying Transaction" under the policies of the TSX
Venture Exchange (the "TSXV" or the "Exchange") and is subject to TSXV
acceptance. The resulting issuer will be classified as a Tier 2 Issuer in
accordance with TSXV policies, in the biotech/pharmaceutical sector.
There are currently 970,000 membership units issued in Oleavicin, of which
Craig and Cindy Makela (the founders of Oleavicin), through The Makela
Living Trust, a US resident trust, control 460,530 membership units,
representing 47.48% of the issued membership units in Oleavicin. Since the
date of the Initial LOI, Harry Chew, the President, CEO, CFO and a director
of Dragonfly, has acquired 307,020 membership units through private
agreements, representing 31.65% of the issued membership units in Oleavicin.
All other holders of Oleavicin membership units are residents of the United
States. Given Mr. Chew's holdings of membership units, the Transaction is
now a Non-Arm's Length Qualifying Transaction and will require majority of
the minority shareholder approval in accordance with the policies of the
TSXV.
About Oleavicin
Oleavicin's business was founded in 2012 by Craig and Cindy Makela and is
headquartered in Goleta, California. Oleavicin is the first brand to deliver
a 100 percent all-natural olive leaf botanical gel in a patented proprietary
formula to instantly treat cold sores, canker sores, fever blisters and a
variety of other painful and unsightly skin conditions. Since the date of
the Initial LOI, Oleavicin has added a medicinal lip balm and plans on
extending its product line to include caplets, shingles kit, eczema cream,
shampoos and conditioner and other related products incorporating its
patented formula. Oleavicin has received FDA approval to sell its product
in the United States and has recently received its NPN license number to
sell its product in Canada. The gel and lip balm are currently available
for purchase online and in approximately 1,000 grocery, natural products and
independent stores in the United States.
When the Company first entered into the Initial LOI in July, 2015, Oleavicin
was in the initial marketing stage with distribution of its products in only
100 stores. Since then, Oleavicin has now increased its national
distribution to over 1,000 locations with 2 product lines currently
available. More products are currently being developed and Oleavicin
expects new products to be ready for distribution before the end of 2017.
Given these developments, the parties are of the view that Oleavicin's
enterprise value has significantly increased from the date of the Initial
LOI, and therefore the parties have agreed to amend the terms of the
Transaction.
Amended Terms of the Transaction
The amended terms of the Transaction, as set out in the New LOI, are as
follows:
1. Dragonfly is to issue to Oleavicin's members an
aggregate of 25,000,000 common shares (increased from 15,000,000) of
Dragonfly (the "Exchanged Shares") in exchange for all of the membership
interests of Oleavicin;
2. Dragonfly is to raise additional funds by way of a
private placement of a minimum of 4,000,000 units (the "Units") of the
Company, and a maximum of 7,000,000 Units, at a price of $0.15 per Unit (the
"Concurrent Financing"), each Unit consisting of one common share of
Dragonfly and one share purchase warrant (a "Warrant"). Each Warrant is to
entitle the holder to purchase an additional common share of Dragonfly at a
price of $0.20 per common share for a period of two years from the date of
issuance. The Concurrent Financing will close concurrently with the closing
of the Transaction (the "Closing"). On Closing, the members of Oleavicin
will together hold approximately 71% of the total issued and outstanding
common shares of Dragonfly assuming completion of the minimum amount of the
Concurrent Financing.
3. Upon completion of the Transaction the new five person
Board of Directors of Dragonfly is to be comprised of Harry Chew, Sonny
Chew, Trent Hunter, Craig Makela and Cindy Makela. Before co-founding
Oleavicin, Craig and Cindy Makela started Santa Barbara Olive Company and
ran the business for 28 years from a local startup to a world recognized
national brand, when it was eventually sold to a large international food
company in 2009. Craig Makela has held a number of high profile leadership
positions within the specialty food and natural products marketplace
including founder of the California Specialty Food Group, founder and board
member of the South California Culinary Guild, and committee member with the
American Institute of Wine and Food. Cindy Makela was a founder of the Bank
of Santa Barbara and the California Specialty Trade Association. Cindy's
deep knowledge and passion for natural and gourmet products led her to the
role of founder of the Santa Barbara Vintners' Association and as one of the
first members of the American Institute of Wine and Food. The parties
intend that the senior officers of Dragonfly upon completion of the
Transaction will be Craig Makela, President and CEO; Harry Chew, CFO; Cindy
Makela, Vice-President, Marketing; and Sonny Chew, Secretary.
Harry Chew and Pacific Paragon, a private company controlled by Mr. Chew
(collectively "Paragon") have loaned the sum of US$150,000 to Oleavicin in
connection with the Transaction. Paragon intends to seek repayment of the
loan from the proceeds the Concurrent Financing or through the conversion of
the outstanding loan amount into common shares of the resulting issuer.
The Transaction is subject to the approval ("Regulatory Approval") of the
TSXV. The parties are to negotiate a definitive share exchange agreement to
reflect the terms of the New LOI (the "Share Exchange Agreement").
Conditions for Closing
The closing of the Transaction with Oleavicin will be subject to a number of
conditions, including but not limited to the following:
(a) completion by Dragonfly of its due diligence reviews of
Oleavicin prior to April 30, 2017;
(b) receipt of historical audited financial statements of
Oleavicin and such other valuations or assessments reasonably required to
establish the value of the Oleavicin interests, and the number of Exchanged
Shares to be issued in exchange therefore, all in a form satisfactory to
Dragonfly;
(c) execution of the Share Exchange Agreement;
(d) receipt of Regulatory Approval, including acceptance of
the Share Exchange Agreement by the NEX and TSXV and Dragonfly establishing
to the TSXV that it will meet all required minimum listing requirements of
the TSXV as a Tier 2 issuer, post-Closing;
(e) shareholder approval of Dragonfly, if required by the
TSXV;
(f) closing of the Concurrent Financing of a minimum of
$600,000; and
(g) the entering into employment and management agreements,
including non-competition terms, with Craig Makela, Cindy Makela and Harry
Chew.
Sponsorship
Sponsorship of a Qualifying Transaction of a Capital Pool Company is
required by the TSXV unless an exemption from the sponsorship requirement is
available. Dragonfly intends to either engage a member firm to act as the
sponsor for this Qualifying Transaction or rely upon an exemption from the
sponsorship requirement, if available.
Trading Halt
As required by the policies of the TSXV and NEX, trading of Dragonfly's
common shares has been halted in connection with the announcement of the
Qualifying Transaction. Trading will remain halted pending the satisfaction
of the TSXV's initial filing requirements in respect of the Qualifying
Transaction and the TSXV's initial assessment of the Transaction and related
matters. Shareholders are advised that trading may remain halted until the
TSXV provides its final acceptance to the Qualifying Transaction.
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 capital pool company 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.
For further information, please contact:
Harry Chew, President, CEO and CFO
Phone: (604) 689-2646
ON BEHALF OF THE BOARD OF DIRECTORS
"Harry Chew"
Harry Chew
President, CEO and CFO
NEITHER 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.
Forward-looking Information
The information in this news release includes certain information and
statements about management's view of future events, expectations, plans and
prospects that constitute forward looking information under applicable
Canadian securities laws ("forward-looking statements"). These
forward-looking statements are based upon assumptions and subject to a
number of conditions, including, without limitation: the completion of
satisfactory due diligence; negotiation and execution of the Share Exchange
Agreement; receipt of regulatory approvals and, if required by the TSXV,
shareholder approvals; acceptance of the Proposed Transaction as Dragonfly's
Qualifying Transaction by the TSXV; receipt of approval for the listing of
the common shares of the Resulting Issuer (as this term is defined under the
TSXV Policies); the completion of the share exchange; the closing of the
Concurrent Financing; and the entering into employment and management
agreements, including non-competition terms, with proposed senior
management, all of which are subject to significant risks and uncertainties.
Because of these risks and uncertainties and as a result of a variety of
factors, the actual results, expectations, achievements or performance may
differ materially from those anticipated and indicated by these forward
looking statements. Although Dragonfly believes that the expectations
reflected in forward-looking statements are reasonable, it can give no
assurances that the expectations of any forward-looking statements will
prove to be correct or that the Proposed Transaction will be completed as
proposed or at all. Except as required by law, Dragonfly disclaims any
intention and assumes no obligation to update or revise any forward-looking
statements to reflect actual results, whether as a result of new
information, future events, changes in assumptions, changes in factors
affecting such forward-looking statements or otherwise.
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--->ormal style='text-align:justify'><b><span style='font-size:13.0pt;font-family:"Calibri","sans-serif";letter-spacing:-.
--->15pt'>DRAGONFLY CAPITAL CORP.<o:p></o:p></span></b></p><p class=MsoNormal style='text-align:justify'><b><span style='f
--->ont-size:11.0pt;font-family:"Calibri","sans-serif";letter-spacing:-.15pt'>Suite #905-1030 West Georgia St.<o:p></o:p><
--->/span></b></p><p class=MsoNormal style='text-align:justify'><b><span style='font-size:11.0pt;font-family:"Calibri","sa
--->ns-serif";letter-spacing:-.15pt'>Vancouver, BC Canada V6E 2Y3<o:p></o:p></span></b></p><p class=MsoNormal style='text-
--->align:justify'><b><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";letter-spacing:-.15pt'>Phone (604)
--->689-2646<o:p></o:p></span></b></p><p class=MsoNormal style='text-align:justify'><b><span style='font-size:11.0pt;font-
--->family:"Calibri","sans-serif";letter-spacing:-.15pt'>Fax (604) 689-1289<o:p></o:p></span></b></p><p class=MsoNormal st
--->yle='text-align:justify'><b><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";letter-spacing:-.15pt'>Tr
--->ading Symbol: TSXV - DRC.H<o:p></o:p></span></b></p><p class=MsoNormal style='text-align:justify'><span style='font-si
--->ze:11.0pt;font-family:"Calibri","sans-serif";letter-spacing:-.15pt'><o:p> </o:p></span></p><p class=MsoNormal sty
--->le='text-align:justify'><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";letter-spacing:-.15pt'><o:p>&
--->nbsp;</o:p></span></p><p class=MsoNormal style='text-align:justify'><span style='font-size:11.0pt;font-family:"Calibri
--->","sans-serif";letter-spacing:-.15pt'>March 24, 2017<o:p></o:p></span></p><p class=MsoNormal align=center style='text-
--->align:center'><b><u><span style='font-size:11.0pt;font-family:"Calibri","sans-serif"'><o:p><span style='text-decoratio
--->n:none'> </span></o:p></span></u></b></p><p class=MsoNormal><b><u><span style='font-size:11.0pt;font-family:"Cali
--->bri","sans-serif"'>DRAGONFLY CAPITAL CORP. ENTERS INTO A NEW LETTER OF INTENT TO ACQUIRE OLEAVICIN, LLC<o:p></o:p></sp
--->an></u></b></p><p class=MsoNormal align=center style='text-align:center'><b><span style='font-size:4.0pt;font-family:"
--->Calibri","sans-serif"'><o:p> </o:p></span></b></p><p class=MsoNormal align=center style='text-align:center'><b><s
--->pan style='font-size:4.0pt;font-family:"Calibri","sans-serif"'><o:p> </o:p></span></b></p><p class=MsoBodyText st
--->yle='margin-bottom:12.0pt'><span style='font-family:"Calibri","sans-serif"'>Dragonfly Capital Corp. (the "<b>Company</
--->b>" or "<b>Dragonfly</b>") (listed on the NEX Board of the TSX Venture Exchange ("<b>NEX</b>")) announces that on Marc
--->h 22, 2017, it has entered into a new Letter of Intent (the "<b>New LOI</b>") to acquire all of the membership interes
--->ts in Oleavicin, LLC ("<b>Oleavicin</b>"), a privately-held California-based manufacturer and distributor of 100% all
--->natural treatments for skin ailments, including cold sores, canker sores, fever blisters, psoriasis, shingles and dry
--->itchy skin (the "<b>Transaction</b>"). The New LOI supersedes and replaces the letter of intent entered into in
--->respect of the Transaction on July 1, 2015 (the "<b>Initial LOI</b>").<o:p></o:p></span></p><p class=MsoNormal style='
--->margin-bottom:12.0pt;text-align:justify'><span style='font-size:11.0pt;font-family:"Calibri","sans-serif"'>Dragonfly's
---> proposed acquisition of Oleavicin is intended to serve as the basis for Dragonfly's "Qualifying Transaction" under th
--->e policies of the TSX Venture Exchange (the "<b>TSXV</b>" or the "<b>Exchange</b>") and is subject to TSXV acceptance.
---> The resulting issuer will be classified as a Tier 2 Issuer in accordance with TSXV policies, in the biotech/pharmaceu
--->tical sector.<o:p></o:p></span></p><p class=MsoNormal style='margin-bottom:12.0pt;text-align:justify'><span style='fon
--->t-size:11.0pt;font-family:"Calibri","sans-serif"'>There are currently 970,000 membership units issued in Oleavicin, of
---> which Craig and Cindy Makela (the founders of Oleavicin), through The Makela Living Trust, a US resident trust, contr
--->ol 460,530 membership units, representing 47.48% of the issued membership units in Oleavicin. Since the date of
--->the Initial LOI, Harry Chew, the President, CEO, CFO and a director of Dragonfly, has acquired 307,020 membership unit
--->s through private agreements, representing 31.65% of the issued membership units in Oleavicin. All other holders
---> of Oleavicin membership units are residents of the United States. Given Mr. Chew's holdings of membership units
--->, the Transaction is now a Non-Arm's Length Qualifying Transaction and will require majority of the minority sharehold
--->er approval in accordance with the policies of the TSXV.<o:p></o:p></span></p><p class=MsoNormal style='margin-bottom:
--->12.0pt;text-align:justify'><b><span style='font-size:11.0pt;font-family:"Calibri","sans-serif"'>About Oleavicin<o:p></
--->o:p></span></b></p><p class=MsoNormal style='margin-bottom:12.0pt;text-align:justify'><span style='font-size:11.0pt;fo
--->nt-family:"Calibri","sans-serif"'>Oleavicin's business was founded in 2012 by Craig and Cindy Makela and is headquarte
--->red in Goleta, California. Oleavicin is the first brand to deliver a 100 percent all-natural olive leaf botanical gel
--->in a patented proprietary formula to instantly treat cold sores, canker sores, fever blisters and a variety of other p
--->ainful and unsightly skin conditions. Since the date of the Initial LOI, Oleavicin has added a medicinal lip bal
--->m and plans on extending its product line to include caplets, shingles kit, eczema cream, shampoos and conditioner and
---> other related products incorporating its patented formula. Oleavicin has received FDA approval to sell it
--->s product in the United States and has recently received its NPN license number to sell its product in Canada. T
--->he gel and lip balm are currently available for purchase online and in approximately 1,000 grocery, natural products a
--->nd independent stores in the United States.<o:p></o:p></span></p><p class=MsoNormal style='margin-bottom:12.0pt;text-a
--->lign:justify'><span style='font-size:11.0pt;font-family:"Calibri","sans-serif"'>When the Company first entered into th
--->e Initial LOI in July, 2015, Oleavicin was in the initial marketing stage with distribution of its products in only 10
--->0 stores. Since then, Oleavicin has now increased its national distribution to over 1,000 locations with 2 produ
--->ct lines currently available. More products are currently being developed and Oleavicin expects new products to
--->be ready for distribution before the end of 2017.<o:p></o:p></span></p><p class=MsoNormal style='margin-bottom:12.0pt;
--->text-align:justify'><span style='font-size:11.0pt;font-family:"Calibri","sans-serif"'>Given these developments, the pa
--->rties are of the view that Oleavicin's enterprise value has significantly increased from the date of the Initial LOI,
--->and therefore the parties have agreed to amend the terms of the Transaction.<o:p></o:p></span></p><p class=MsoNormal s
--->tyle='margin-bottom:12.0pt;text-align:justify'><b><span style='font-size:11.0pt;font-family:"Calibri","sans-serif"'><o
--->:p> </o:p></span></b></p><p class=MsoNormal style='margin-bottom:12.0pt;text-align:justify'><b><span style='font-
--->size:11.0pt;font-family:"Calibri","sans-serif"'>Amended Terms of the Transaction<o:p></o:p></span></b></p><p class=Mso
--->Normal style='margin-bottom:6.0pt;text-align:justify'><span style='font-size:11.0pt;font-family:"Calibri","sans-serif"
--->'>The amended terms of the Transaction, as set out in the New LOI, are as follows: <o:p></o:p></span></p><p class=MsoN
--->ormal style='mso-margin-top-alt:0in;margin-right:0in;margin-bottom:6.0pt;margin-left:.5in;text-align:justify;text-inde
--->nt:-.5in;mso-list:l0 level1 lfo2'><![if !supportLists]><span style='font-size:11.0pt;font-family:"Calibri","sans-serif
--->"'><span style='mso-list:Ignore'>1.<span style='font:7.0pt "Times New Roman"'> &nbs
--->p; </span></span></span><![endif]><span style='font-
--->size:11.0pt;font-family:"Calibri","sans-serif"'>Dragonfly is to issue to Oleavicin's members an aggregate of 25,000,00
--->0 common shares (increased from 15,000,000) of Dragonfly (the "<b>Exchanged Shares</b>") in exchange for all of the me
--->mbership interests of Oleavicin;<o:p></o:p></span></p><p class=MsoNormal style='mso-margin-top-alt:0in;margin-right:0i
--->n;margin-bottom:6.0pt;margin-left:.5in;text-align:justify;text-indent:-.5in;mso-list:l0 level1 lfo2'><![if !supportLis
--->ts]><span style='font-size:11.0pt;font-family:"Calibri","sans-serif"'><span style='mso-list:Ignore'>2.<span style='fon
--->t:7.0pt "Times New Roman"'> &
--->nbsp; </span></span></span><![endif]><span style='font-size:11.0pt;font-family:"Calibri","sans-serif"'>Dra
--->gonfly is to raise additional funds by way of a private placement of a minimum of 4,000,000 units (the "<b>Units</b>")
---> of the Company, and a maximum of 7,000,000 Units, at a price of $0.15 per Unit (the "<b>Concurrent Financing</b>"), e
--->ach Unit consisting of one common share of Dragonfly and one share purchase warrant (a "<b>Warrant</b>"). Each Warrant
---> is to entitle the holder to purchase an additional common share of Dragonfly at a price of $0.20 per common share for
---> a period of two years from the date of issuance. The Concurrent Financing will close concurrently with the closing of
---> the Transaction (the "<b>Closing</b>"). On Closing, the members of Oleavicin will together hold approximately 71% of
--->the total issued and outstanding common shares of Dragonfly assuming completion of the minimum amount of the Concurren
--->t Financing. <o:p></o:p></span></p><p class=MsoNormal style='mso-margin-top-alt:0in;margin-right:0in;margin-bottom:6.0
--->pt;margin-left:.5in;text-align:justify;text-indent:-.5in;mso-list:l0 level1 lfo2'><![if !supportLists]><span style='fo
--->nt-size:11.0pt;font-family:"Calibri","sans-serif"'><span style='mso-list:Ignore'>3.<span style='font:7.0pt "Times New
--->Roman"'> <
--->/span></span></span><![endif]><span style='font-size:11.0pt;font-family:"Calibri","sans-serif"'>Upon completion of the
---> Transaction the new five person Board of Directors of Dragonfly is to be comprised of Harry Chew, Sonny Chew, Trent H
--->unter, Craig Makela and Cindy Makela. Before co-founding Oleavicin, Craig and Cindy Makela started Santa B
--->arbara Olive Company and ran the business for 28 years from a local startup to a world recognized national brand, when
---> it was eventually sold to a large international food company in 2009. Craig Makela has held a number of high pr
--->ofile leadership positions within the specialty food and natural products marketplace including founder of the Califor
--->nia Specialty Food Group, founder and board member of the South California Culinary Guild, and committee member with t
--->he American Institute of Wine and Food.<b> </b>Cindy Makela was a founder of the Bank of Santa Barbara and the C
--->alifornia Specialty Trade Association. Cindy's deep knowledge and passion for natural and gourmet products led h
--->er to the role of founder of the Santa Barbara Vintners' Association and as one of the first members of the American I
--->nstitute of Wine and Food. The parties intend that the senior officers of Dragonfly upon completion of the Trans
--->action will be Craig Makela, President and CEO; Harry Chew, CFO; Cindy Makela, Vice-President, Marketing; and Sonny Ch
--->ew, Secretary.<o:p></o:p></span></p><p class=MsoNormal style='margin-bottom:12.0pt;text-align:justify'><span style='fo
--->nt-size:11.0pt;font-family:"Calibri","sans-serif"'>Harry Chew and Pacific Paragon, a private company controlled by Mr.
---> Chew (collectively "<b>Paragon</b>") have loaned the sum of US$150,000 to Oleavicin in connection with the Transactio
--->n. Paragon intends to seek repayment of the loan from the proceeds the Concurrent Financing or through the conve
--->rsion of the outstanding loan amount into common shares of the resulting issuer.<o:p></o:p></span></p><p class=MsoNorm
--->al style='margin-bottom:12.0pt;text-align:justify'><span style='font-size:11.0pt;font-family:"Calibri","sans-serif"'>T
--->he Transaction is subject to the approval ("<b>Regulatory Approval</b>") of the TSXV. The parties are to negotiate a d
--->efinitive share exchange agreement to reflect the terms of the New LOI (the "<b>Share Exchange Agreement</b>"). <o:p><
--->/o:p></span></p><b><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";mso-fareast-language:EN-US'><br cl
--->ear=all style='page-break-before:always'></span></b><p class=MsoNormal style='margin-bottom:12.0pt;text-align:justify'
--->><b><span style='font-size:11.0pt;font-family:"Calibri","sans-serif"'>Conditions for Closing <o:p></o:p></span></b></p
--->><p class=MsoNormal style='margin-bottom:6.0pt;text-align:justify'><span style='font-size:11.0pt;font-family:"Calibri"
--->,"sans-serif"'>The closing of the Transaction with Oleavicin will be subject to a number of conditions, including but
--->not limited to the following: <o:p></o:p></span></p><p class=MsoNormal style='mso-margin-top-alt:0in;margin-right:0in;
--->margin-bottom:6.0pt;margin-left:.5in;text-align:justify;text-indent:-.5in;mso-list:l1 level1 lfo4'><![if !supportLists
--->]><span style='font-size:11.0pt;font-family:"Calibri","sans-serif"'><span style='mso-list:Ignore'>(a)<span style='font
--->:7.0pt "Times New Roman"'> <
--->/span></span></span><![endif]><span style='font-size:11.0pt;font-family:"Calibri","sans-serif"'>completion by Dragonfl
--->y of its due diligence reviews of Oleavicin prior to April 30, 2017; <o:p></o:p></span></p><p class=MsoNormal style='m
--->so-margin-top-alt:0in;margin-right:0in;margin-bottom:6.0pt;margin-left:.5in;text-align:justify;text-indent:-.5in;mso-l
--->ist:l1 level1 lfo4'><![if !supportLists]><span style='font-size:11.0pt;font-family:"Calibri","sans-serif"'><span style
--->='mso-list:Ignore'>(b)<span style='font:7.0pt "Times New Roman"'>  
--->; </span></span></span><![endif]><span style='font-size:11.0pt;font-family:"Calibri","sa
--->ns-serif"'>receipt of historical audited financial statements of Oleavicin and such other valuations or assessments re
--->asonably required to establish the value of the Oleavicin interests, and the number of Exchanged Shares to be issued i
--->n exchange therefore, all in a form satisfactory to Dragonfly;<o:p></o:p></span></p><p class=MsoNormal style='mso-marg
--->in-top-alt:0in;margin-right:0in;margin-bottom:6.0pt;margin-left:.5in;text-align:justify;text-indent:-.5in;mso-list:l1
--->level1 lfo4'><![if !supportLists]><span style='font-size:11.0pt;font-family:"Calibri","sans-serif"'><span style='mso-l
--->ist:Ignore'>(c)<span style='font:7.0pt "Times New Roman"'>
---> </span></span></span><![endif]><span style='font-size:11.0pt;font-family:"Calibri","san
--->s-serif"'>execution of the Share Exchange Agreement; <o:p></o:p></span></p><p class=MsoNormal style='mso-margin-top-al
--->t:0in;margin-right:0in;margin-bottom:6.0pt;margin-left:.5in;text-align:justify;text-indent:-.5in;mso-list:l1 level1 lf
--->o4'><![if !supportLists]><span style='font-size:11.0pt;font-family:"Calibri","sans-serif"'><span style='mso-list:Ignor
--->e'>(d)<span style='font:7.0pt "Times New Roman"'> &nb
--->sp; </span></span></span><![endif]><span style='font-size:11.0pt;font-family:"Calibri","sans-serif"'>recei
--->pt of Regulatory Approval, including acceptance of the Share Exchange Agreement by the NEX and TSXV and Dragonfly esta
--->blishing to the TSXV that it will meet all required minimum listing requirements of the TSXV as a Tier 2 issuer, post-
--->Closing; <o:p></o:p></span></p><p class=MsoNormal style='mso-margin-top-alt:0in;margin-right:0in;margin-bottom:6.0pt;m
--->argin-left:.5in;text-align:justify;text-indent:-.5in;mso-list:l1 level1 lfo4'><![if !supportLists]><span style='font-s
--->ize:11.0pt;font-family:"Calibri","sans-serif"'><span style='mso-list:Ignore'>(e)<span style='font:7.0pt "Times New Rom
--->an"'> </span></span></span><![endi
--->f]><span style='font-size:11.0pt;font-family:"Calibri","sans-serif"'>shareholder approval of Dragonfly, if required by
---> the TSXV; <o:p></o:p></span></p><p class=MsoNormal style='mso-margin-top-alt:0in;margin-right:0in;margin-bottom:6.0pt
--->;margin-left:.5in;text-align:justify;text-indent:-.5in;mso-list:l1 level1 lfo4'><![if !supportLists]><span style='font
--->-size:11.0pt;font-family:"Calibri","sans-serif"'><span style='mso-list:Ignore'>(f)<span style='font:7.0pt "Times New R
--->oman"'> </span></span>
---></span><![endif]><span style='font-size:11.0pt;font-family:"Calibri","sans-serif"'>closing of the Concurrent Financing
---> of a minimum of $600,000; and<o:p></o:p></span></p><p class=MsoNormal style='margin-left:.5in;text-align:justify;text
--->-indent:-.5in;mso-list:l1 level1 lfo4'><![if !supportLists]><span style='font-size:11.0pt;font-family:"Calibri","sans-
--->serif"'><span style='mso-list:Ignore'>(g)<span style='font:7.0pt "Times New Roman"'> &nbs
--->p; </span></span></span><![endif]><span style='font-size:11.0pt;
--->font-family:"Calibri","sans-serif"'>the entering into employment and management agreements, including non-competition
--->terms, with Craig Makela, Cindy Makela and Harry Chew.<o:p></o:p></span></p><p class=MsoNormal style='margin-bottom:6.
--->0pt;text-align:justify'><b><span style='font-size:11.0pt;font-family:"Calibri","sans-serif"'><o:p> </o:p></span><
--->/b></p><p class=MsoNormal style='margin-bottom:12.0pt;text-align:justify'><b><span style='font-size:11.0pt;font-family
--->:"Calibri","sans-serif"'><o:p> </o:p></span></b></p><p class=MsoNormal style='margin-bottom:12.0pt;text-align:jus
--->tify'><b><span style='font-size:11.0pt;font-family:"Calibri","sans-serif"'>Sponsorship <o:p></o:p></span></b></p><p cl
--->ass=MsoNormal style='margin-bottom:12.0pt;text-align:justify'><span style='font-size:11.0pt;font-family:"Calibri","san
--->s-serif"'>Sponsorship of a Qualifying Transaction of a Capital Pool Company is required by the TSXV unless an exemptio
--->n from the sponsorship requirement is available. Dragonfly intends to either engage a member firm to act as the sponso
--->r for this Qualifying Transaction or rely upon an exemption from the sponsorship requirement, if available.<o:p></o:p>
---></span></p><p class=MsoNormal style='margin-bottom:12.0pt;text-align:justify;page-break-after:avoid'><b><span style='f
--->ont-size:11.0pt;font-family:"Calibri","sans-serif"'>Trading Halt</span></b><span style='font-size:11.0pt;font-family:"
--->Calibri","sans-serif"'> <o:p></o:p></span></p><p class=MsoNormal style='margin-bottom:12.0pt;text-align:justify'><span
---> style='font-size:11.0pt;font-family:"Calibri","sans-serif"'>As required by the policies of the TSXV and NEX, trading
--->of Dragonfly's common shares has been halted in connection with the announcement of the Qualifying Transaction. Tradin
--->g will remain halted pending the satisfaction of the TSXV's initial filing requirements in respect of the Qualifying T
--->ransaction and the TSXV's initial assessment of the Transaction and related matters. Shareholders are advised that tra
--->ding may remain halted until the TSXV provides its final acceptance to the Qualifying Transaction. <o:p></o:p></span><
--->/p><p class=MsoNormal style='margin-bottom:12.0pt;text-align:justify'><i><span style='font-size:11.0pt;font-family:"Ca
--->libri","sans-serif"'>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 approva
--->l. 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.<o:p></o:p></span></i></p><p class=MsoNormal s
--->tyle='margin-bottom:12.0pt;text-align:justify'><i><span style='font-size:11.0pt;font-family:"Calibri","sans-serif"'>In
--->vestors are cautioned that, except as disclosed in the management information circular or filing statement to be prepa
--->red in connection with the transaction, any information released or received with respect to the transaction may not b
--->e accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be co
--->nsidered highly speculative.<o:p></o:p></span></i></p><p class=MsoNormal style='margin-bottom:12.0pt;text-align:justif
--->y'><i><span style='font-size:11.0pt;font-family:"Calibri","sans-serif"'>The TSX Venture Exchange Inc. has in no way pa
--->ssed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press r
--->elease.<o:p></o:p></span></i></p><p class=MsoNormal style='margin-bottom:12.0pt'><span style='font-size:11.0pt;font-fa
--->mily:"Calibri","sans-serif"'>For further information, please contact:<o:p></o:p></span></p><p class=MsoNormal style='m
--->so-margin-top-alt:0in;margin-right:0in;margin-bottom:12.0pt;margin-left:.5in'><span style='font-size:11.0pt;font-famil
--->y:"Calibri","sans-serif"'>Harry Chew, President, CEO and CFO<br>Phone: (604) 689-2646<o:p></o:p></span></p><p class=Ms
--->oNormal style='margin-bottom:12.0pt;line-height:12.0pt;page-break-after:avoid'><span style='font-size:11.0pt;font-fami
--->ly:"Calibri","sans-serif";letter-spacing:-.15pt'>ON BEHALF OF THE BOARD OF DIRECTORS<o:p></o:p></span></p><h1 align=le
--->ft style='margin-bottom:12.0pt;text-align:left;page-break-after:auto'><span style='font-size:11.0pt;font-family:"Calib
--->ri","sans-serif"'>"Harry Chew"<u><br> &nb
--->sp; &
--->nbsp;  
--->; <br></u>Harry Chew<br>President, CEO and CFO<o:p></o:p><
--->/span></h1><p class=MsoNormal align=center style='text-align:center'><span style='font-size:9.0pt;font-family:"Calibri
--->","sans-serif"'>NEITHER 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<i>.<o:p></o:p></i></
--->span></p><p class=MsoNormal style='line-height:12.0pt'><span style='font-size:11.0pt;font-family:"Calibri","sans-serif
--->";letter-spacing:-.15pt'><o:p> </o:p></span></p><p class=MsoNormal style='margin-bottom:12.0pt;text-align:justify
--->'><i><span style='font-size:11.0pt;font-family:"Calibri","sans-serif"'>Forward-looking Information<o:p></o:p></span></
--->i></p><p class=MsoNormal style='margin-bottom:12.0pt;text-align:justify'><i><span style='font-size:11.0pt;font-family:
--->"Calibri","sans-serif"'>The information in this news release includes certain information and statements about managem
--->ent's view of future events, expectations, plans and prospects that constitute forward looking information under appli
--->cable Canadian securities laws ("forward-looking statements"). These forward-looking statements are based upon assumpt
--->ions and subject to a number of conditions, including, without limitation: the completion of satisfactory due diligenc
--->e; negotiation and execution of the Share Exchange Agreement; receipt of regulatory approvals and, if required by the
--->TSXV, shareholder approvals; acceptance of the Proposed Transaction as Dragonfly's Qualifying Transaction by the TSXV;
---> receipt of approval for the listing of the common shares of the Resulting Issuer (as this term is defined under the T
--->SXV Policies); the completion of the share exchange; the closing of the Concurrent Financing; and the entering into em
--->ployment and management agreements, including non-competition terms, with proposed senior management, all of which are
---> subject to significant risks and uncertainties. Because of these risks and uncertainties and as a result of a variety
---> of factors, the actual results, expectations, achievements or performance may differ materially from those anticipate
--->d and indicated by these forward looking statements. Although Dragonfly believes that the expectations reflected in fo
--->rward-looking statements are reasonable, it can give no assurances that the expectations of any forward-looking statem
--->ents will prove to be correct or that the Proposed Transaction will be completed as proposed or at all. Except as requ
--->ired by law, Dragonfly disclaims any intention and assumes no obligation to update or revise any forward-looking state
--->ments to reflect actual results, whether as a result of new information, future events, changes in assumptions, change
--->s in factors affecting such forward-looking statements or otherwise.<o:p></o:p></span></i></p><p class=MsoNormal style
--->='line-height:12.0pt'><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";letter-spacing:-.15pt'><o:p>&nb
--->sp;</o:p></span></p><p class=MsoNormal style='text-align:justify'><span style='font-size:11.0pt;font-family:"Calibri",
--->"sans-serif"'><o:p> </o:p></span></p></div></body></html>
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