/THIS PRESS RELEASE IS NOT FOR PUBLICATION OR
DISSEMINATION IN THE UNITED
STATES. FAILURE TO COMPLY WITH THIS RESTRICTION MAY
CONSTITUTE A VIOLATION OF UNITED
STATES SECURITIES LAW./
VANCOUVER, Oct. 17, 2018 /CNW/ - Metropolitan Energy Corp.
(TSXV: MOE.H) ("Metropolitan" or the
"Company"), is pleased to announce that, further to its
announcement on July 5, 2015, it has
entered into a definitive business combination agreement (the
"Definitive Agreement") dated October
17, 2018 to acquire all of issued and outstanding securities
of Bertram Capital Finance, Inc. ("Cannabis One"), which
operates under the business name of Cannabis One. Cannabis One is a
U.S.-based, professional management corporation formed to service
the fast-growing, legal cannabis industry through real estate
development and lease-back equipment financing, operating lines of
credit, consultation, and intellectual property and brand
management within U.S. state-legal markets. Cannabis One,
headquartered in Denver, Colorado,
intends to redefine the traditional, vertically-integrated,
seed-to-sale business model with a specific focus on aggregating
cannabis retail distribution and brand manufacturing.
TERMS OF THE TRANSACTION
Under the terms of the Definitive Agreement, Metropolitan will
acquire, indirectly through its wholly owned subsidiary
incorporated in Colorado
("AcquireCo"), all of the issued and outstanding equity
securities of Cannabis One in exchange for newly created Class A
subordinated voting shares ("Subordinated Voting Shares")
and Class B super voting shares ("Super Voting Shares"), as
applicable, of Metropolitan pursuant to a merger of Cannabis One
and AcquireCo, the result of which will constitute a reverse
takeover of the Company by the shareholders of Cannabis One (the
"Proposed Transaction"). Following the Proposed Transaction,
Metropolitan will have cannabis operations within a number of
State-legal markets throughout the U.S. and will retain
manufacturing, distribution, and licensing agreements with
State-licensed cannabis companies.
Pursuant to the terms of the Definitive Agreement, the Company
will seek to delist from the NEX board of the TSX Venture Exchange
(the "NEX") and intends to apply for listing of the
Subordinated Voting Shares on the Canadian Securities Exchange (the
"CSE"), with such listing to be effective concurrent with
the closing of the Proposed Transaction. Having already received
the necessary approvals from both the shareholders of the Company
and Cannabis One, the closing of the Proposed Transaction (the
"Closing") remains subject to customary conditions for a
transaction of this nature, which includes approval from the TSX
Venture Exchange for voluntary delisting of the Company's common
shares, from the CSE for the listing of the Subordinated Voting
Shares and any other regulatory approvals.
In connection with the Proposed Transaction, the Company will be
required to, among other things: (i) change its name to Cannabis
One Holdings Inc., or such other name as is agreed to by the board
of directors of Metropolitan and acceptable to regulatory
authorities; (ii) replace all directors and officers of the Company
(other than Christopher Fenn) on
closing of the Proposed Transaction with nominees of Cannabis One;
(iii) redesignate the common shares of the Company as Subordinated
Voting Shares; and (iv) create a new class of Super Voting
Shares.
Further details of the Proposed Transaction are available in the
information circular of the Company dated September 11, 2018 and more particularly
described in the Definitive Agreement which are filed on the
Company's SEDAR profile at www.sedar.com, and will be included in
subsequent news releases and disclosure documents (which will
include business and financial information in respect of Cannabis
One) to be filed by the Company in connection with the Proposed
Transaction. It is anticipated that the closing of the Proposed
Transaction will take place prior to the end of 2018. It is
intended that the common shares of the Company will remain halted
until the Proposed Transaction closes or the Definitive Agreement
is terminated.
UPDATE TO PREVIOUSLY ANNOUNCED PRIVATE PLACEMENT
In conjunction with the execution of the letter of intent on
July 5, 2018 (the "LOI"), the
Company and Cannabis One determined that the private placement
described in the press release dated July 5,
2018 (the "Private Placement") be structured as an
offering of subscription receipts in the capital of Cannabis One
("Subscription Receipts") and be upsized to up to
CAD$8,000,000. Pursuant to the
terms of the Subscription Receipts, the Subscription Receipts are
automatically converted into one share in the common stock of
Cannabis One (a "Cannabis One
Share") and one-half of one (½) Cannabis One Share
purchase warrant (a "Cannabis One Warrant") upon execution
of the Definitive Agreement.
As of the date hereof, Cannabis One has closed on Subscription
Receipts and issued instructions for the registration of the
underlying Cannabis One Shares and Cannabis One Warrants
representing aggregate gross proceeds of approximately CAD$6,900,000. Cannabis One anticipates that an
additional tranche of Subscription Receipts shall be sold under the
Private Placement for additional gross proceeds of up to
CAD$977,693. Cannabis One
intends to use the net proceeds of the Private Placement for
general working capital.
Forward-Looking Information & Statements
Completion of the Proposed Transaction is subject to a
number of conditions, including TSXV, CSE and other regulatory
acceptance and as more particularly described in the Definitive
Agreement. There can be no assurance that the Proposed Transaction
will be completed as proposed or at all. Investors are cautioned
that, any information released or received with respect to the
Proposed 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 (the "TSXV") nor its Regulation
Services Provider (as such term is defined in policies of the TSXV)
has in no way passed upon the merits of the Proposed Transaction
and has neither approved nor disapproved the contents of this press
release.
All information contained in this news release with respect
to Cannabis One was supplied by Cannabis One for inclusion herein
and the Company has relied on the accuracy of such information
without independent verification.
Certain statements contained in this press release constitute
forward-looking information. These statements relate to future
events or future performance. The use of any of the words
"anticipate", "could", "intend", "expect", "believe", "will",
"projected", "estimated" and similar expressions and statements
relating to matters that are not historical facts are intended to
identify forward-looking information and are based on the parties'
current belief or assumptions as to the outcome and timing of such
future events. Actual future results may differ materially. In
particular, this release contains forward-looking information
relating to the information concerning the Proposed Transaction and
the Private Placement, expectations regarding whether the Proposed
Transaction will be consummated, including whether conditions to
the consummation of the Proposed Transaction will be satisfied,
expectations for the effects of the Proposed Transaction or the
ability of the combined company to successfully achieve business
objectives, expectations regarding whether an additional tranche of
the Private Placement will be consummated, and expectations for
other economic, business, and/or competitive factors. Various
assumptions or factors are typically applied in drawing conclusions
or making the forecasts or projections set out in forward-looking
information. Those assumptions and factors are based on information
currently available to the parties. The material factors and
assumptions include the parties being able to obtain the necessary
corporate, regulatory and other third parties approvals and
completion of satisfactory due diligence. Among the key factors
that could cause actual results to differ materially from those
projected in the forward-looking information and statements are the
following: the ability to consummate the Proposed Transaction and
the additional tranche of the Private Placement; the ability to
obtain requisite regulatory and securityholder approvals and the
satisfaction of other conditions to the consummation of the
Proposed Transaction on the proposed terms and schedule; the
potential impact of the announcement or consummation of the
Proposed Transaction on relationships, including with regulatory
bodies, employees, suppliers, customers and competitors; changes in
general economic, business and political conditions, including
changes in the financial markets; changes in applicable laws;
compliance with extensive government regulation; and the diversion
of management time on the Proposed Transaction and the Private
Placement. The forward-looking information contained in this
release is made as of the date hereof and the parties are not
obligated to update or revise any forward-looking information,
whether as a result of new information, future events or otherwise,
except as required by applicable securities laws. Because of the
risks, uncertainties and assumptions contained herein, investors
should not place undue reliance on forward looking information. The
foregoing statements expressly qualify any forward-looking
information contained herein.
This press release does not constitute an offer to sell or a
solicitation of an offer to buy any of the securities in
the United States. The securities
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 or an exemption from such
registration is available. Not for distribution to U.S. Newswire
Services or for dissemination in the
United States. Any failure to comply with this restriction
may constitute a violation of U.S. securities laws.
Unlike in Canada which has
Federal legislation uniformly governing the cultivation,
distribution, sale and possession of medical cannabis under the
Cannabis Act (Federal), readers are cautioned that in the U.S.,
cannabis is largely regulated at the State level. To the Company's
knowledge, there are to date a total of 29 states, plus the
District of Columbia, that have
legalized cannabis in some form. Notwithstanding the permissive
regulatory environment of medical cannabis at the State level,
cannabis continues to be categorized as a controlled substance
under the Controlled Substances Act in the U.S. and as such,
cannabis-related practices or activities, including without
limitation, the manufacture, importation, possession, use or
distribution of cannabis are illegal under U.S. Federal law. Strict
compliance with State laws with respect to cannabis will neither
absolve the Company of liability under the U.S. Federal law, nor
will it provide a defense to any Federal proceeding, which may be
brought against the Company. Any such proceedings brought against
the Company may adversely affect the Company's operations and
financial performance.
SOURCE Metropolitan Energy Corp.
