Company to Pursue CBD-Focused Business
VANCOUVER, May 13, 2019 /CNW/ - Clean Commodities
Corp. (TSX VENTURE: CLE) ("Clean
Commodities" or the "Corporation") is pleased to
announce that it has entered into a binding letter of intent dated
as May 9, 2019 to acquire Pacific
North Hemp Inc. ("Pacific North Hemp") by way of share
purchase agreement (the "Transaction"). Clean Commodities
and Pacific North Hemp intend to negotiate and execute a definitive
agreement (the "Definitive Agreement") respecting the
Transaction. The Transaction is an arm's-length transaction.
The Transaction
Under the Transaction, the Corporation intends to issue to
shareholders of Pacific North Hemp a total of 50 million common
shares of Clean Commodities which will be subject to customary
escrow and statutory hold periods (the "Share
Consideration"). Based on 102,448,746 common shares of the
Corporation currently outstanding as of the date of this
announcement, the resulting issuer (the "Resulting Issuer")
would be majority held by incumbent shareholders of the Corporation
at approximately 67.2% and approximately 32.8% as to incoming
shareholders of Pacific North Hemp. Following closing, the
outstanding warrants and options of the Corporation will represent
warrants and options of the Resulting Issuer.
In conjunction with Pacific North Hemp's 2019 crop planting
season, Pacific North Hemp recently entered into an arm's-length
secured bridge loan facility in the amount of $250,000 (the "Crop Planting Loan")
bearing an interest rate of 12%. The Corporation intends to acquire
the Crop Planting Loan prior to closing of the Transaction (the
"Crop Planting Loan Repayment"). The result of the Crop
Planting Loan Repayment would be to securitize the licenses and
crop assets of Pacific North Hemp in favour of the Corporation,
reduce pro-forma interest incurred by the Resulting Issuer and to
enable the Resulting Issuer to recognize the full crop revenue from
Pacific North Hemp's deployment of the Crop Planting Loan for its
2019 growing season.
Further to the Corporation's interim financial statements for
the period ending March 31, 2019 and
as filed on SEDAR, Clean Commodities reported a positive net
working capital position of $1,630,254, which shall be used to advance
near-term growth initiatives of the Resulting Issuer and fund the
Crop Planting Loan Repayment.
Clean Commodities does not intend to open a financing in
conjunction with closing of the Transaction.
Clean Commodities does not intend to consolidate or subdivide
its common shares in conjunction with closing of the
Transaction.
On closing of the Transaction, it is anticipated that the
Corporation will re-brand as Pacific North Hemp and will carry on
with the development of Pacific North Hemp's business, more
particularly described as set out below.
Subsequent to closing of the Transaction, the Corporation
intends to examine the potential for a sale of its current mining
assets with proceeds redeployed in its hemp/CBD business and/or the
distribution of those mining assets to shareholders by way of a
spin-co. There can be no assurance relating to the future sale
or distribution of the Corporation's mining assets .
The completion of the Transaction is subject to various
normal-course conditions precedent, including, but not limited to,
execution of the Definitive Agreement, the completion of
satisfactory due diligence, and the approval of the Transaction by
the TSX Venture Exchange (the "Exchange"). Pursuant to
section 4.1 of Exchange Policy 5.2, the Corporation is not required
to obtain and will not be obtaining shareholder approval of the
Transaction, as: (a) the Transaction is not a related party
transaction; (b) the Corporation is without active operations; (c)
the Corporation is not and will not be subject to a cease trade
order and will not otherwise be suspended from trading on
completion of the Transaction; and (d) shareholder approval of the
Transaction is not required under applicable corporate or
securities laws.
About Pacific North Hemp Inc.
Founded in June 2018, Pacific
North Hemp is a Health Canada-licensed producer of industrial hemp
with farm facilities located in Alberta and British
Columbia. Through a research farm in British Columbia, Pacific North Hemp intends
to engage in proprietary CBD cultivar development.
Conrich, Alberta - Hemp Farm
(Production)(the "Conrich Facility")
The Conrich Facility is a 200+-acre industrial farm location
held on a leased-basis, with renewal rights. Pacific North Hemp is
targeting 2019 production at the Conrich Facility of 63,750 pounds
of dried flower with a concentration of 4%+ CBD.
Kamloops, British Columbia -
Hemp Farm (Production/R&D)(the "Kamloops Facility")
The Kamloops Facility is a 20-acre farm held on a lease-basis,
with renewal rights. The location is focused on seedling
development, cultivar development and experimentation and
specialized fiber production. Pacific North Hemp is targeting 2019
production at the Kamloops Facility of 8,500 pounds of dried flower
with a concentration of 4%+ CBD.
Pacific North Hemp currently holds two Health Canada licenses
permitting the plantation, cultivation and harvesting of industrial
hemp. The licenses are in the process of being renewed, and it is a
condition of closing the Transaction that the licenses have been
renewed prior to their expiration on June
30, 2019. The company is examining options to consolidate
these licenses into a single company-wide operating license.
In addition, Pacific North Hemp holds an inventory of hemp
seeds.
Pacific North Hemp is a private company incorporated under the
laws of British Columbia, and has
a head office in Coquitlam, British
Columbia.
Proposed Directors and Officers of the Resulting
Issuer
There are no proposed changes to the Corporation's Board of
Directors in conjunction with the Transaction.
There are no proposed changes of the Chief Executive Officer or
Chief Financial Officer of the Corporation in conjunction with the
Transaction.
Upon closing of the Transaction, the Company intends to appoint
two new additional executive officers to contribute to the
management and business development of the Resulting Issuer.
Mr. Robert Maciak, M.Sc. – Chief
Operating Officer (Proposed)
Mr. Maciak is the Founder and CEO of Pacific North Hemp Inc. He
brings over a dozen years of progressive corporate and government
experience in the agricultural and natural resources sectors. Mr.
Maciak was employed at Canada's
Ministry of Agriculture for six years as Senior Research Scientist
and Policy Economist. He also held project development roles at
KGHM International, NexGen Energy Ltd. and Victoria Gold Corp. Mr.
Maciak holds a B.A. (Hydrology and Natural Resource Management) and
a Master of Science (Economics).
Dr. Ellie Rahmani, Ph.D., PharmD,
RPh – Chief Science Officer (Proposed)
Dr. Rahmani is an accomplished executive with
significant experience in the North American pharmacy sector and
currently serves as Vice President and Chief Scientific
Officer at Transderma Pharmaceuticals Inc., and as a
clinical instructor at the University of
British Columbia. Previous experience includes four
years as Director of Pharmacy Operations for Rexall, and two years
as Vice President of Pharmacy Operations for a private retail
chain. Her research and professional expertise focuses
on industrial pharmacy and topical/transdermal drug delivery
systems, including Cannabinoid delivery systems, pharmacy
compounding, and functional medicine. Dr. Rahmani holds
a Ph.D. from the University of British
Columbia and a PharmD from Tehran University. She is a registered
pharmacist in Canada in
good-standing with the Canadian Pharmacists Association.
Change of Business & Trading Halt
The Transaction is expected to constitute a Change of Business
as that term is defined under the policies of the Exchange.
Pursuant to same, the Corporation intends to seek a change to its
issuer classification from the current Exploration & Mining
classification (Tier 2) to that of a Life Sciences classification
(Tier 2). As such, the shares of the Corporation are expected to
remain halted until completion of the Transaction or until
satisfactory documentation is filed with the Exchange. Additional
information about the Transaction will be provided by way of future
news release and through company filings on SEDAR.
Completion of the transaction is subject to a number of
conditions, including but not limited to Exchange acceptance. 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 Clean Commodities Corp. 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.
About Clean Commodities Corp.
Clean Commodities Corp. (TSXV:CLE) is an exploration company
involved in a diverse portfolio of clean commodity assets including
lithium and uranium projects. For more information, please visit
www.cleancommodities.com.
Signed,
Ryan Kalt, Chief Executive
Officer
Forward-Looking Statements
This news release contains forward-looking statements.
Forward-looking statements address future events and conditions and
therefore, involve inherent risks and uncertainties. Actual results
may differ materially from those currently expected or forecast in
such statements.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
SOURCE Clean Commodities Corp.
