Cluny Capital Announces Signing of Definitive Amalgamation Agreement With Xebra Brands Ltd. for Proposed Qualifying Transaction
NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES AND DOES NOT CONSTITUTE AN OFFER OF THE SECURITIES DESCRIBED HEREIN.TORONTO, Feb. 18, 2020 (GLOBE NEWSWIRE) — Cluny Capital Corp. (the “Company”) (TSXV:CLN.H), a capital pool company pursuant to Policy 2.4 of the TSX Venture Exchange (the “TSXV”), is pleased to announce that, further to its news release dated September 4, 2019, it has entered into a definitive amalgamation agreement with Xebra Brands Ltd. (“Xebra”) dated February 14, 2020 (the “Definitive Agreement”), which outlines the terms and conditions pursuant to which the Company and Xebra will complete a transaction that will result in a reverse-takeover of the Company by the shareholders of Xebra (the “Proposed Transaction”). Xebra is a privately held arm’s length company incorporated under the Business Corporations Act (British Columbia) (the “BCBCA”) on February 21, 2019, which is focused on securing licences and authorizations to cultivate cannabis in low cost Latin American countries, for the development of cannabis-based consumer brands for the global market, with a major emphasis on cannabis infused beverages. Subject to certain conditions set out in the Definitive Agreement, Xebra will amalgamate with a wholly-owned subsidiary of the Company in order to facilitate the completion of the Proposed Transaction. Upon completion of the Proposed Transaction, it is the intention of the parties that the Company (the Company after the Proposed Transaction being referred to herein as the “Resulting Issuer”) will continue to carry on the business of Xebra and will be listed as a Tier 2 life sciences issuer on the TSXV.Further Details Regarding the Proposed TransactionOn or immediately prior to the completion of the Proposed Transaction, it is anticipated that the Company will effect: (i) the continuation of the Company under the BCBCA (the “Continuation”); (ii) the consolidation of all issued and outstanding common shares of the Company (the “Company Shares”) on a 1 for 2 basis (the “Consolidation”) resulting in an aggregate of 4,616,850 Company Shares outstanding post-Consolidation; and (iii) a name change of the Company to “Xebra Brands Ltd.” or such other name as determined by Xebra (the “Name Change”).Pursuant to the terms of the Proposed Transaction, the holders of Class A common shares of Xebra (the “Xebra Shares”) (including those held by investors in the Concurrent Financing (as defined below) subsequent to the completion thereof) will receive one (1) post-Consolidation common share of the Resulting Issuer (each a “Resulting Issuer Share”) in exchange for each outstanding Xebra Share. As of the date of this news release, the Company has 9,233,700 Company Shares issued and outstanding and 773,370 stock options outstanding, each exercisable to acquire one Company Share at an exercise price of $0.06 per Company Share (on a pre-Consolidation basis). The Company also has $56,500 of convertible debentures outstanding, which principal shall automatically convert into 470,833 Company Shares (on a post-Consolidation basis) on completion of the Proposed Transaction. As of the date hereof, Xebra has 99,982,878 Xebra Shares issued and outstanding, 1 Class B common share issued and outstanding and no convertible securities outstanding. The outstanding Class B common share will be redeemed and cancelled by Xebra prior to completion of the Proposed Transaction. Based on the issued and outstanding Xebra Shares as of the date hereof, an aggregate of 99,982,878 Resulting Issuer Shares would be issued to the Xebra shareholders in connection with the Proposed Transaction.The Proposed Transaction is subject to a number of conditions precedent, including, without limitation: (i) receipt of all applicable regulatory, shareholder and third party approvals, including approval of the TSXV for the Proposed Transaction and the Ontario Securities Commission (the “OSC”) for the Prospectus (as defined below); (ii) completion of the Continuation, Consolidation and Name Change; and (iii) the listing of the Resulting Issuer Shares on the TSXV.It is also a condition of closing of the Proposed Transaction that Xebra complete an equity private placement in such amount as is required by the TSXV and the OSC (the “Concurrent Financing”). The terms of the Concurrent Financing will be announced once applicable details are available.Proposed Management and Board of Directors of the Resulting IssuerUpon completion of the Proposed Transaction, it is anticipated that the persons identified below will serve as directors and officers of the Resulting Issuer, subject to acceptance by the TSXV. It is anticipated that at least two more independent directors will be added prior to completion of the Proposed Transaction.Robert Giustra, Chairman – Mr. Giustra has been actively engaged in venture capital markets for 25 years. He is a former investment banker with a national investment dealer (now Canaccord Genuity) where he co-founded the institutional equity sales department, and he has held senior executive positions and board seats with a number of publicly traded companies. Mr. Giustra is also the co-founder, Chairman, and former CEO of Columbus Gold Corp., a publicly listed gold company, which in 2015, 2017 and 2018 was recognized as a Top 50 best performing company on the OTCQX, and in 2015 achieved a Top 10 sector ranking out of approximately 1,200 companies listed on TSXV; and in 2016 was one of only two Metals & Mining sector companies to graduate to the Toronto Stock Exchange, during the previous one-year period. Mr. Giustra is a former member of one of the TSXV’s Local Advisory Committees.Patricio Caso, Director – Mr. Caso is a lawyer with post-graduate degrees in public administration and governance from the London School of Economics and from Harvard. He has held high level positions in the Mexican Institute of Social Security and at the COFEPRIS (the Mexican FDA equivalent). At the COFEPRIS he was responsible for all legal issues, and for coordination of the Mexican sanitary system. Mr. Caso was responsible for implementing the 2014 resolution of the Mexican Supreme Court that allowed for the personal consumption of cannabis for the first time, and which set the grounds for the 2017 legal reform. In addition, he was an integral part of the team that drafted the 2017 framework for legalization of medicinal cannabis and of CBD products, which was formally adopted by the Mexican government in 2018.Jordi Chemonte, Director – Mr. Chemonte is an entrepreneur who has co-founded several enterprises. He has held executive positions in the food & services, entertainment, real estate, construction, and engineering sectors. Most recently, he was a co-founder and the CEO of Elements Bioscience SAPI de CV, a first-mover in the Mexican cannabis industry.Todd Dalotto, President – Mr. Dalotto is a horticultural scientist, public policy consultant, and court-qualified expert witness, specializing in cannabis. He breeds and conducts horticultural research, teaches, and consults businesses on the horticultural science and public policy of cannabis. His research objectives over the past twenty years include breeding of in-bred lines, morphology, sustainable practices, semi-passive greenhouse production, and mutualisms. Todd has a horticultural research degree with emphasis on sustainable agriculture and plant breeding from Oregon State University, is former Chair of the Oregon Health Authority’s Advisory Committee on Medical Marijuana (ACMM), as well as the ACMM’s Horticulture, Research & Safety Committee. He has also served on various legislative and rules advisory committees for the State of Oregon, and helped draft the regulations for Oregon’s Medical Marijuana Dispensary Program and founded Oregon’s first cannabis medical clinic, education & support center.Andrew Yau, Chief Financial Officer – Mr. Yau, CPA, CGA, holds a Bachelor of Commerce and Business Administration degree from the University of British Columbia and has been in accounting and finance roles with publicly listed companies since 2006. Mr. Yau has an extensive accounting background, and has previously held senior financial positions with several TSX and TSXV listed companies where he was responsible for all aspects of accounting, tax compliance, treasury, financial reporting, and developing internal control frameworks.Jorge Martínez, Chief Operating Officer – Mr. Martinez is a Colombian national with 25 years of experience in venture capital, with both private and publicly traded companies. Throughout his career, he has worked in Latin America, the United States and in Canada, in the hospitality, technology and resource sectors. Mr. Martinez specializes in the areas of corporate operations and efficiency, technology, and marketing. He holds a BA from the University of Miami with a concentration in Business Administration, and has completed studies in Project Management at the University of British Columbia and in Advertising at the School of Communications of UPB University in Colombia.Daniela Freitas, Corporate Secretary – Ms. Freitas is a certified paralegal and has worked with publicly listed companies since 2011.XebraXebra’s principal focus is securing licences and authorizations to cultivate cannabis in low cost Latin American countries, for the development of cannabis-based consumer brands for the global market, with a major emphasis on cannabis infused beverages. Xebra has entered into an agreement to licence exclusive IP which makes cannabinoids water soluble for the commercial production of beverages. In addition, Xebra owns 100% of three Mexican companies (one of which is contingent on Xebra going public by May 31, 2020), including a company that intends to import vaping hardware and two CBD product companies that have late stage applications filed for government approval of a total of 13 cannabis infused CBD products, including balms, creams, oils, gummies and water. Xebra has also acquired Medicannabis SAS, a Colombian cannabis company with cannabis cultivation and processing licences. The cannabis harvested from Colombian operations is primarily intended to be processed and exported in a suitable form to ultimately be utilized in the creation of beverages.Further information concerning Xebra, including audited annual and unaudited interim financial statements, will be included in the Prospectus (as defined herein) being prepared by the Company in connection with the Proposed Transaction, which will also be accessible under the Company’s profile on SEDAR.Shareholder ApprovalSince the Proposed Transaction is not a Non-Arm’s Length Qualifying Transaction (as such term is defined by the TSXV), the Company will not be required to obtain shareholder approval of the Proposed Transaction. In addition, the Proposed Transaction is not a “related party transaction” as such term is defined by Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions and is not subject to Policy 5.9 of the TSXV. As a result, no meeting of the shareholders of the Company is required pursuant to Policy 2.4 of the TSXV or securities laws; however one is expected to be required pursuant to corporate law as the shareholders of the Company are expected to have to approve certain ancillary matters, including, the Consolidation, Continuation and the Name Change.Notwithstanding the foregoing, Michael Frank, an officer and director of the Company, owns 1,400,000 Xebra Shares, and James Greig, a director of the Company, owns 500,000 Xebra Shares.Sponsorship for Qualifying TransactionSponsorship of a qualifying transaction of a capital pool company is required by the TSXV unless exempt in accordance with the policies of the TSXV. Subject to applying and receiving a waiver, the Company will engage a sponsor to satisfy the sponsorship requirements pursuant to the policies of the TSXV.ProspectusIn connection with the Proposed Transaction and pursuant to the requirements of the TSXV, the Company anticipates filing a prospectus on its issuer profile on SEDAR (www.sedar.com) (the “Prospectus”), which will contain details regarding the Proposed Transaction, the Company, Xebra and the Resulting Issuer.For further information:Xebra Brands Ltd.
Jorge Martinez, Chief Operating Officer
firstname.lastname@example.orgCluny Capital Corp.
Michael Frank, Chief Executive Officer
email@example.comThe information provided in this news release regarding Xebra and the Resulting Issuer has been provided by Xebra and has not been independently verified by the Company.Completion of the transaction is subject to a number of conditions, including but not limited to, TSXV acceptance and if applicable pursuant to TSXV 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 prospectus 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 news release.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.This news release does not constitute an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction.Cautionary Statement Regarding Forward-Looking InformationThis news release contains “forward-looking information” within the meaning of Canadian securities legislation. Forward-looking information generally refers to information about an issuer’s business, capital, or operations that is prospective in nature, and includes future-oriented financial information about the issuer’s prospective financial performance or financial position.The forward-looking information in this news release includes disclosure about the terms of the Proposed Transaction, the Concurrent Financing and Xebra’s business operations, prospects and expansion plans.The Company and Xebra made certain material assumptions, including but not limited to: prevailing market conditions; general business, economic, competitive, political and social uncertainties; delay or failure to receive board, shareholder or regulatory approvals; and the ability of the Resulting Issuer to execute and achieve its business objectives, to develop the forward-looking information in this news release. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Actual results may vary from the forward-looking information in this news release due to certain material risk factors. These risk factors include, but are not limited to: adverse market conditions; the inability of the Company or Xebra to complete the Proposed Transaction on the terms disclosed in this news release, or at all; refusal of the proposed directors or officers to act for any reason, including conflicts of interest; reliance on key and qualified personnel; regulatory and other risks associated with the cannabis industry in general, as well as those risk factors discussed or referred to in disclosure documents filed by the Company with the securities regulatory authorities in certain provinces of Canada and available at www.sedar.com. The foregoing list of material risk factors and assumptions is not exhaustive. Should any factor affect the Company in an unexpected manner, or should assumptions underlying the forward looking information prove incorrect, the actual results or events may differ materially from the results or events predicted. Any such forward-looking information is expressly qualified in its entirety by this cautionary statement. Moreover, the Company does not assume responsibility for the accuracy or completeness of such forward-looking information. The forward-looking information included in this news release is made as of the date of this news release and the Company undertakes no obligation to publicly update or revise any forward-looking information, other than as required by applicable law.