Hollyweed North Cannabis and Navion Capital Provide Update and Announce Private Placement Financings
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HOLLYWEED NORTH CANNABIS AND NAVION CAPITAL PROVIDE UPDATE AND
ANNOUNCE PRIVATE PLACEMENT FINANCINGS
CALGARY, ALBERTA—(Accesswire - July 5, 2019) -
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 LAW.
This News Release shall not constitute an offer to sell or the solicitation of an offer to buy any
securities nor shall there be any sale of securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful. The securities issued pursuant to the plan of arrangement
and financing described herein have not been and will not be registered under the United States
Securities Act of 1933 and may not be offere d or sold in the United States except in transactions
exempt from such registration.
Corporate Update
On August 22, 2018, Navion Capital Inc. (" Navion") (TSX -V:NAVN.P) and Hollyweed North
Cannabis Inc., (“Hollyweed” or the “Company”) announced business combination of Navion and
Hollyweed (the “ Business Combination ”). The company resulting from the Business
Combination is herein referred to as the “ Resulting Issuer”. In connection with the Business
Combination, as reported in its previous press release, Navion proposes to consolidate its issued
and outstand ing shares on a 2 for 1 basis (the “ Consolidation”). Concurrently with the
Consolidation, t he transaction is expected to result in the security holders of Hollyweed North
exchanging all securities, con sisting of 82,257,397 common shares ( not including any securities
issuable pursuant to the Offering or the Non -Brokered Financing , as defined below) and
4,257,190 stock options for 82,257,397 shares and 4,257,190 stock options of the Corporation,
on the sa me terms. The transaction will be structured by way of a plan of arrangement,
amalgamation, merger, takeover bid, reorganization or other similar form of transaction, as
determined following a review of all relevant le gal, regulatory and tax matters . Following the
Consolidation and the issuance of securities to Hollyweed shareholders (not including any
securities issuable pursuant to the Offering or the Non -Brokered Financing, as defined below ),
shareholders of Navion will hold 2,000,000 common shares of t he Resulting Issuer, representing
approximately 2.4% of the issued and outstanding shares of the Resulting Issuer, on a non -
diluted basis. The Business Combination is expected to close in November 2019 (the “ Listing
Date”).
On March 20, 2019 Canopy Growth Corporation (TSX:WEED, NYSE:CGC) (“ Canopy Growth”)
and Hollyweed Manufacturing & Extracts Inc., a wholly owned subsidiary of Hollyweed , entered
into a multi -year processing and extraction agreement. Holly weed and Canopy Growth expect
the first shipment of product for extraction will occur in fall 2019.
Non-Brokered Private Placement
Hollyweed is pleased to announce that it is offering, on a non -brokered basis, up to 10,000,000
Hollyweed common shares at a price of $0.50 per share for gross proceeds of up to $5 million
(the “Non-Brokered Placement”). Hollyweed anticipates closing the Non -Brokered Placement
on or before September 15, 2019. Finders’ fees of up to 8 % cash may be payable to qualified
parties in respect of some subscriptions.
Proposed Brokered Private Placement
In addition, Hollyweed has entered into an agreement with Haywood Securities Inc. (“Haywood”)
whereby, subject to the Non-Brokered Placement being completed with minimum gross proceeds
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of $4 million, Haywood will act as lead agent in respect of an offering of approximately $4 million
of subscription receipts (" Subscription Receipts ") of Hollyweed on a reasonable commercial
best efforts private placement basis pursuant to applicable private placement exemptions under
applicable securities laws (the "Brokered Offering").
The Subscription Receipts will be offered at a price per Subscription Receipt to be determined by
Haywood and Hollyweed in the context of the market prior to closing. Each Subscription Receipt
will entitle the holder thereof, without payment of any additional consideration and without further
action on the part of the holder, to receive one security of the Company (a " Security"), upon
meeting certain terms and conditions described below. The type of Security offered will be
subject to agreement between Haywood and Hollyweed prior to closing, acting reasonably.
Hollyweed will pay to Haywood a cash commission of 8.0% of the gross proceeds of the Brokered
Offering and issue compensation options to Haywood equal to 8% of the Securities sold under
the Brokered Offering. Each compensation option will be exercisable into one Security at the
offering price and will be exercisable for 24 months following the Listing Date. The Company will
also pay to Haywood a corporate finance fee of $125,000.
Closings
The closing of the Non -Brokered Placement is anticipated to be on or before September 15,
2019. Closing of the Brokered Offering is expected to occur in November 2019 or such other
date as Haywood and the Company may agree (the “Closing Date”). On the Listing Date, the
Common Shares of Hollyweed, including those issued pursuant to the Non -Brokered Placement
and the Brokered Offering will become freely tradable.
Upon the closing of the Brokered Offering, which is subject to conditions customary for offerings
of this nature, the gross proceeds from the issu ance of Subscription Receipts (the " Escrowed
Proceeds") less 50% of Haywood’s commission will be held by a Canadian trust company or
other escrow agent acceptable to the Company and Haywood, and invested in short -term
obligations of, or guaranteed by, the Government of Canada (and other approved investments)
until the earlier of: (i) the satisfaction of the Escrow Release Conditions; and (ii) the Termination
Time. Provided the Escrow Release Conditions are satisfied on or before the Termination Time,
the Escrowed Proceeds will be released to the Company (along with any accrued interest
thereon) upon receipt of a notice by the Escrow Agent from Haywood and the Company that
certain Escrow Release Conditions have been satisfied (the " Escrow Release Notice "). The
Subscription Receipts shall be deemed to be converted at such time without further action on the
part of the holder upon closing of the Business Combination. If the Business Combination has
not been completed by 4:00 pm ( Vancouver time) on the date that is 120 days following the
closing date of the Offering (the "Listing Deadline") or the Company advises Haywood or the
public that it does not intend to proceed with the Business Combination (in each case, the earliest
of such dates being the " Termination Time"), the Escrowed Proceeds will be reimbursed on a
pro rata basis to the holders of Subscription Receipts at the original subscription price, plus such
holder's pro rata portion of any interest earned thereon.
Use of Proceeds
The net proceeds received by the Company from the Non -Brokered Placement and the Brokered
Offering will be used by Hollyweed and the Resulting Issuer for equipment purchases, facility
improvements, and corporate and general working capital purposes.
About Hollyweed North Cannabis Inc.
Hollyweed was incorporated February 2017 to enter into the Canadian federally regulated
cannabis production and manufacturing space, legislated for the adult -use recreational market
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October 2018. Initiated and led by Renee Gagnon, the founder of one of Canada’s original
licensed producers (Thunderbird Biomedical (Federal License 005) now Emerald Health
(TXV:EMH.V)), Hollyweed provides economies of scale to other l icensed participants such as
existing standard licensed producers and the new upcoming micro producer marketplace.
Hollyweed’s wholly owned subsidiary, Hollyweed Manufacturing & Extracts Inc (“HWM”) holds a
Processor License issued by Health Canada under the Cannabis Act . HWM’s license for
cultivation purposes is complete, pending inspection by Health Canada.
Hollyweed’s group of subsidiaries also include s: Terracube International Inc ., ( proprietary
environmentally controlled clean room grow technology to facilitate pharmacy -grade cannabis
products), Hollyweed Grow Inc. ( franchise turnkey grow operations), and Hollyweed Retail Inc.
(retail solutions provider and supply chain management).
About Navion Capital Inc.
Navion is a “capital pool company” incorporated to identify and evaluate assets or business es
with a view to completing a “Qualifying Transaction” under the policies of the TSX Venture
Exchange (“TSXV”).
For further information regarding the Transaction, please contact:
Hollyweed:
Cheryl Evans
Tel: (250) 507-8214
Email: [email protected]
Navion:
Livio Susin
Tel: (604) 789-2410
Email: [email protected]
Completion of the Business Combination is subject to a number of conditions, includin g but not
limited to, TSXV acceptance and, if applicable, pursuant to the requirements of the TSXV,
majority of the minority shareholder approval. Where applicable, the Business Combination
cannot close until the required shareholder and regulatory approval is obtained. There can be no
assurance that the Business Combination 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 wit h the Business Combination, any information
released or received with respect to the Business Combination may not be accurate or complete
and should not be relied upon. Trading in the securities of Navion should be considered highly
speculative.
This press release is not an offer of securities for sale in the United States. The securities described in
this press release have not been registered under the U.S. Securities Act of 1933, as amended, and
may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons (as
defined in Regulation S under the U.S. Securities Act of 1933, as amended) absent registration or an
exemption from registration. This press release shall not constitute an offer to sell or a solicitation of
an offer to buy nor shall there be any sale of the securities in any jurisdiction where such offer,
solicitation, or sale would be unlawful.
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The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed Business
Combination and has neither approved nor disapproved the contents of this press 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.
CAUTIONARY STATEMENT REGARDING FORWARD -LOOKING INFORMATION: This news
release includes certain "forward -looking statements" under applicable Canadian securities
legislation. Forward-looking statements include, but are not limited to , statements with respect
to: the terms and conditions of the proposed Business Combination; the terms and conditions
of the proposed Offering; future developments and the business and operations of the
"Resulting Issuer " after the proposed Business Combin ation. Forward -looking statements are
necessarily based upon a number of estimates and assumptions that, while considered
reasonable, are subject to known and unknown risks, uncertainties, and other factors which may
cause the actual results and future events to differ materially from those expressed or implied by
such forward-looking statements. Such factors include, but are not limited to: general business,
economic, competitive, political and social uncertainties; and delay or failure to receive board,
shareholder or regulatory approvals. There can be no assurance that the Business Combination
will proceed and that such statements will prove to be accurate, as actual results and future
events could differ materially from those anticipated in such statem ents. Accordingly, readers
should not place undue reliance on forward-looking statements. Navion and Hollyweed disclaim
any intention or obligation to update or revise any forward-looking statements, whether as a result
of new information, future events or otherwise, except as required by law.