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Canadian Imperial Venture Corp (3)
Symbol CQV
Shares Issued 14,800,334
Close 2019-04-02 C$ 0.275
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Canadian Imperial Venture to acquire Cannus through RTO

2019-04-03 13:49 ET - News Release

Ms. Jacqueline Tucker reports

CANADIAN IMPERIAL ANNOUNCES PROPOSED BUSINESS COMBINATION TRANSACTION WITH CANNUS PARTNERS INC., DOING BUSINESS AS IKANIC FARMS

Canadian Imperial Venture Corp. has entered into a business combination agreement dated effective April 2, 2019, with Cannus Partners Inc. and a wholly owned subsidiary of the company, 11326937 Canada Inc., formed for the purpose of completing the amalgamation. Cannus is an arm's-length company incorporated under the Canada Business Corporations Act and is a vertically integrated cannabis cultivator, producer, distributor and dispensary operator that is building out its seed-to-sale business.

The transaction

Pursuant to the agreement, the company has agreed to acquire all of the issued and outstanding securities of Cannus and the business of Cannus by way of a three-cornered amalgamation between the company, Cannus and Newco pursuant to the provisions of the Canada Business Corporations Act. The transaction will result in a reverse takeover of the company by the security holders of Cannus.

Prior to the completion of the transaction, the company will designate its common shares as subordinate voting shares and create a new class of Series A compressed multiple voting shares. Each resulting Series A share will have the economic and voting rights of 100 resulting issuer SV shares, and shall be convertible into resulting issuer SV shares on the terms and conditions to be determined by Cannus. The company will consolidate its existing shares on a ratio to be mutually agreed upon by the company and Cannus such that immediately prior to the closing of the transaction, there will be an aggregate of 9.5 million common shares of the company issued and outstanding on a postconsolidation basis, which will be redesignated into resulting issuer SV shares such that shareholders of the company will own 9.5 million resulting issuer SV shares.

Pursuant to the terms of the agreement, it is anticipated that Newco and Cannus will amalgamate to form a single subsidiary of the company and that in consideration for the cancellation of all outstanding securities of Cannus, the security holders of Cannus will receive:

  • One resulting issuer SV share for each common share of Cannus;
  • One resulting Series A share for each Series A compressed share of Cannus;
  • One option to purchase resulting issuer SV shares for each option to purchase Cannus common shares on the same terms and conditions as each Cannus common option;
  • One option to purchase resulting Series A shares for each option to purchase Cannus Series A shares on the same terms and conditions as each Cannus Series A option;
  • One purchase warrant for resulting issuer SV shares for each purchase warrant for Cannus common shares on the same terms and conditions as each Cannus common warrant;
  • One purchase warrant for resulting Series A shares for each purchase warrant for Cannus Series A shares on the same terms and conditions as each Cannus Series A warrant;
  • One purchase warrant for resulting issuer SV shares for each broker right to purchase Cannus common shares on the same terms and conditions as each Cannus broker right.

In connection with the completion of the transaction, the company intends to change its name to Ikanic Farms or such other name as may be agreed by the parties.

Completion of the transaction is subject to a number of conditions, including Cannus having completed a financing for aggregate gross proceeds of no less than $10-million (U.S.), or such aggregate number as determined by Cannus, receipt of all necessary shareholder and regulatory approvals, the execution of related transaction documents, approval of the TSX Venture Exchange for the delisting of the common shares of the company from the TSX-V, and conditional approval of the Canadian Securities Exchange for the listing of the resulting issuer SV shares following completion of the transaction. Certain securities issued in connection with the transaction may be subject to the escrow requirements of the CSE, mutually agreed upon escrow conditions and hold periods as required by the CSE and applicable securities laws.

About Cannus Partners Inc.

Cannus Partners, doing business as Ikanic Farms, is a cannabis cultivator, processor, distributor and dispensary operator that is building out its seed-to-sale business across California and Massachusetts.

As a vertically integrated company, Cannus owns, operates and holds licences in California for a cultivation business and for Blunt Brothers Inc., an established distribution brand in Southern California, which has a contract with Harvest Coastal LLC, subsidiary of Halo Labs, to sell biomass and acquire distillate, and will also be selling a well-rounded assortment of branded cannabis products including flower, concentrates, edibles and topicals to retail cannabis dispensaries later this spring.

Cannus also holds leases and licence applications to open and operate a chain of retail cannabis dispensaries known as Ikanik Farms.

Directors and officers

Upon completion of the transaction, it is expected that the current directors and officers of the company will resign. In their place, there will be appointed or elected nominees to be determined by Cannus as directors, and such persons to be determined by Cannus as officers.

Trading in the company's shares

In connection with the transaction, the company will be seeking shareholder approval to delist from the TSX-V. Trading in the common shares of the company has been halted in compliance with the policies of the TSX-V, will remain halted until all necessary filings have been accepted by applicable regulatory authorities, and delisting from the TSX-V and listing of the resulting issuer SV shares on the CSE has been completed.

General

Further details of the transaction will be included in subsequent news releases and disclosure documents (which will include business and financial information in respect of Cannus) to be filed by the company in connection with the transaction. There is no assurance the transaction will be completed as planned or at all.

All of the information included in this news release with respect to Cannus has been provided by management of Cannus and has not been independently verified by the company at this time.

We seek Safe Harbor.

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