AIII.P Apolo III Acquisition Corp

Apolo III Acquisition Corp. (“Apolo” or the “Corporation”) (TSXV: AIII.P) is pleased to announce that it has entered into a binding letter of intent dated May 16, 2019 (the “Letter of Intent”) with Latitude Global Cannabis Inc. (“Latitude”) pursuant to which Apolo will acquire all of the issued and outstanding common shares in the capital of Latitude (the “Latitude Common Shares”) upon the terms and conditions to be set out in a definitive agreement (the “Proposed Transaction”).

Apolo is a Capital Pool Company (“CPC”) and intends the Proposed Transaction to constitute its Qualifying Transaction (the “Qualifying Transaction”) under the policies of the TSX Venture Exchange (the “Exchange”).

INFORMATION ON LATITUDE

Latitude was incorporated pursuant to the provisions of the Business Corporations Act (British Columbia) (the “BCBCA”) on August 3, 2018 with a head office at 700, 595 Burrard Street, Vancouver, British Columbia, V7X 1S8. Latitude is a Canadian company focused on the development and acquisition of international cannabis businesses.

In December 2018, Latitude made its first acquisition by acquiring a 90% interest in a licensed cultivator in Lesotho. Latitude recently completed its second acquisition for 100% ownership of an applicant for cannabis licenses in Colombia, and has also entered into a binding agreement to acquire 100% ownership of a company based in Slovenia that distributes CBD products in Europe. Latitude plans to build out significant cultivation and extraction operations in both Colombia and Lesotho, together with end product manufacturing in Slovenia.

BACKGROUND

The Letter of Intent provides that Apolo and Latitude will negotiate and enter into a definitive agreement in respect of the Proposed Transaction (the “Definitive Agreement”).  Once entered into, the Definitive Agreement shall supersede the Letter of Intent. Pursuant to the Letter of Intent, Apolo will acquire all of the issued and outstanding Latitude Common Shares by way of a “three-cornered amalgamation” pursuant to the provisions of the BCBCA. 

The Proposed Transaction will constitute a reverse take-over of Apolo by Latitude where the existing shareholders of Latitude will own a majority of the outstanding Apolo Common Shares. The final structure of the Proposed Transaction is subject to receipt of tax, corporate and securities law advice for both Apolo and Latitude. 

THE QUALIFYING TRANSACTION

The holders of the issued and outstanding Latitude Common Shares shall receive one post-Consolidation (as defined below) common share in the capital of Apolo (each, an “Apolo Common Share”) for each Latitude Common Share held (the “Exchange Ratio”).

Immediately prior to the completion of the Proposed Transaction, it is anticipated that: (i) Apolo will effect a name change to such name as may be determined by Apolo and Latitude (the “Resulting Issuer”); and (ii) Apolo will consolidate its common shares on the basis of one “new” share for every two “old” shares issued and outstanding (the “Consolidation”); and (iii) continue its existence under the laws of Ontario to under the laws of British Columbia (the “Continuation”). 

Completion of the Proposed Transaction will be subject to a number of conditions, including but not limited to, completion of the Consolidation, completion of the Continuation, shareholder approval, if required, completion or waiver of sponsorship, receipt of all required regulatory approvals, including the approval of the Exchange, completion of satisfactory due diligence reviews, satisfaction of all initial listing requirements of the Exchange and all requirements under the policies of the Exchange relating to the completion of the Proposed Transaction, and execution of the Definitive Agreement. There can be no assurance that the Proposed Transaction will be completed as proposed or at all.

Sponsorship of a Qualifying Transaction of a CPC is required by the Exchange unless exempt in accordance with Exchange policies or waived by the Exchange. The Proposed Transaction may require sponsorship and Apolo plans to provide a news release update should a sponsor be retained. Apolo’s shares will be halted from trading as a result of the announcement of the Proposed Transaction. Apolo expects that trading in its Apolo Common Shares will remain halted pending closing of the Qualifying Transaction. The Apolo Common Shares may trade sooner, only upon Exchange approval and the filing of required materials with the Exchange as contemplated by Exchange policy.

Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the Proposed Transaction, 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 a capital pool company should be considered highly speculative. The 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. 

LATITUDE FINANCING & STRUCTURE

As of the date of this Agreement, the capital of Apolo consists of an unlimited number of Apolo Common Shares of which 8,600,000 Apolo Common Shares are issued and outstanding and an unlimited number of preferred shares, issuable in series, of which no preferred shares have been issued. There are 860,000 options and 500,000 broker warrants outstanding, each exercisable to acquire one Apolo Common Share at an exercise price of $0.10. There are no other issued and outstanding securities convertible into Apolo Common Shares.

As of the date of this Agreement, the capital of Latitude consists of an unlimited number of Latitude Common Shares of which 45,000,000 Latitude Common Shares are issued and outstanding. Latitude has issued 4,000,000 common share purchase warrants exercisable at a price of $0.005 per share upon the occurrence of certain performance milestones pursuant to its agreement with Grogenex Consulting Inc. Latitude has also issued 2,000,000 common share purchase warrants exercisable at a price of $0.005 per share to certain advisors of Latitude.

Latitude may also be required to issue additional compensation to the original vendors of Farmakem based on successful completion of milestones pursuant to the Farmakem Agreement, which includes:

(i) common shares of the Resulting Issuer totaling €5,200,000 at a share price equal to the equity raising that will occur in conjunction with the RTO at an exchange rate of €1.50 per $1CAD; and

(ii) cash payment of €500.000.

In addition, the Parties acknowledge and agree that Latitude may:  (i) complete an additional $3.5 million private placement of Latitude Common Shares (the “Latitude Financing”) at a price of $0.25 per Latitude Common Shares, resulting in the additional issuance of up to 14,00,000 Latitude Common Shares; (ii) issue 15,000,000 Latitude Common Shares to acquire Southern Europe Cannabis Corp.; and (iii) complete a concurrent equity financing at or prior to the closing of the Transaction at an equivalent price of at least $0.50 per common share of the Resulting Issuer (as such term is defined below) upon terms yet to be determined (the “QT Financing”), and it shall consult with Apolo in connection therewith as applicable. Immediately prior to completion of the RTO and QT Financing, Latitude expects to have a total of 74,000,000 Latitude Common Shares issued and outstanding prior to the Qualifying Transaction. Latitude may also issue management options in line with is proposed 10% rolling stock option plan prior to the Qualifying Transaction being completed.

The Resulting Issuer, post completion of the Qualifying Transaction, is expected to have the following share structure displayed in Table 1:

Table 1 – Pro Forma Structure of Resulting Issuer

	Shares	Price	Ownership
Apolo III Acquisition Corp.	4,300,000	$.50	4.4%
Latitude Global Cannabis Inc.	74,000,000	$.50	75.3%
QT Financing – C$10,000,000	20,000,000	$.50	20.3%
	98,300,000		100%

Latitude would use the net proceeds from the Latitude Financing and the QT Financing to fund: (i) development and growth of its operations and business in Lesotho, Colombia and Slovenia; (ii) transaction costs and expenses in respect of the Proposed Transaction; (iii) general and administrative expenses; and (iv) additional working capital. 

PROPOSED DIRECTORS OF THE RESULTING ISSUER  

Subject to applicable shareholder and Exchange approval, on completion of the Proposed Transaction, the Resulting Issuer's board of directors will be reconstituted and is expected to be composed of five (5) directors, including four nominees of Latitude and one nominee of Apolo. Also, on completion of the Proposed Transaction, all existing officers of Apolo will resign and be replaced with officers appointed by the new board of the Resulting Issuer.

Details of the constitution of the new board and management of the Resulting Issuer and any additional information required pursuant to the policies of the Exchange will be announced or disclosed in due course, in accordance with the policies of the Exchange.

ADDITIONAL TERMS

A comprehensive news release with further particulars relating to the Proposed Transaction, financial particulars, descriptions of the proposed management of the Resulting Issuer, Latitude Financing and QT Financing, as applicable, will follow in accordance with the policies of the Exchange.

All information contained in this news release with respect to Apolo and Latitude was supplied by the parties respectively, for inclusion herein, and each party and its directors and officers have relied on the other party for any information concerning the other party.

This news release does not constitute an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction.

The Apolo 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 news 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.

Completion of the Proposed Transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and if applicable, disinterested shareholder approval. Where applicable, the Proposed Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Proposed 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 Proposed Transaction, 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 Apolo 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 news release.

For further information please contact:

Apolo III Acquisition Corp. Jeff Hergott, Corporate SecretaryTelephone: 416.361.4783Email: Michael@apolocapital.ca

Neither the Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Exchange) accepts responsibility for the adequacy or accuracy of this news release.

FORWARD LOOKING STATEMENTS

This news release contains certain forward-looking statements, including, but not limited to, statements about the Corporation’s future plans and intentions, statements with respect to the completion of the Proposed Transaction, the Consolidation, Continuation, the Latitude Financing and the QT Financing, including the use of proceeds therefrom. Wherever possible, words such as “may”, “will”, “should”, “could”, “expect”, “plan”, “intend”, “anticipate”, “believe”, “estimate”, “predict” or “potential” or the negative or other variations of these words, or similar words or phrases, have been used to identify these forward-looking statements. These statements reflect management’s current beliefs and are based on information currently available to management as at the date hereof. 

Forward-looking statements involve significant risk, uncertainties and assumptions. Many factors could cause actual results, performance or achievements to differ materially from the results discussed or implied in the forward-looking statements. These factors should be considered carefully and readers should not place undue reliance on the forward-looking statements. Although the forward-looking statements contained in this news release are based upon what management believes to be reasonable assumptions, the Corporation cannot assure readers that actual results will be consistent with these forward-looking statements. These forward-looking statements are made as of the date of this news release, and the Corporation assumes no obligation to update or revise them to reflect new events or circumstances, except as required by law.