Bluerock Ventures Corp. Announces Acquisition of Colombian Cannabis Assets as Qualifying Transaction
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NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR
DISSEMINATION IN THE UNITED STATES
BLUEROCK VENTURES CORP. ANNOUNCES ACQUISITION OF COLOMBIAN CANNABIS ASSETS AS
QUALIFYING TRANSACTION
April 17, 2019 – Vancouver, British Columbia : Bluerock Ventures Corp . (NEX: BCR .H - the “ Company ”
or “ Bluerock ”), a capital pool company (a “ CPC ”), is pleased to announce it has entered into a letter
of intent dated April 5, 2019 (the “ LOI ”) to enter into an arm’s length business combinati on
transaction (the “ Proposed Transaction ”) with Verabys Inc. (“ Verabys ”). Verabys is a private
company incorporated under the laws of Alberta that has entered into a letter of intent (the “ Letter
Agreement ”) with Plantas Medicinales de Colombia (“ PlantMedco ”) dated December 24, 2018,
pursuant to which Verabys will acquire all of the i ssued and outstanding shares of Plantmedco, in
exchange for shares of Verabys (the “ Plantmedco Acquisition ”).
The purpose of the Proposed Transaction is the crea tion of a public, TSX Venture Exchange-listed,
Colombian-focused, cannabis cultivation and extract ion company. The working capital of the
combined entity (the " Resulting Issuer "), upon successful closing of the Proposed Transac tion and
the Concurrent Financing (as defined herein) is expected to be approximately CDN$2.8, sufficient to
support the Resulting Issuer’s current 12-month bus iness strategy, and the ongoing evaluation of
new opportunities.
Bluerock intends that the Proposed Transaction will constitute its Qualifying Transaction, as such
term is defined in the policies of the TSX Venture Exchange (the “ Exchange ”). Upon completion of
the Proposed Transaction, the Company expects that the Resulting Issuer will be named
“Plantmedco Inc.” and will be listed as a Tier 2 Life Sciences or Industrial Issuer on the Exchange.
Summary of the Qualifying Transaction
The LOI contemplates Bluerock and Verabys undertaki ng an arm's length business combination
transaction, currently proposed to be completed by way of a three-cornered amalgamation
pursuant to the provisions of the Business Corporations Act (Alberta). Immediately prior to the
completion of the Proposed Transaction, Verabys would complete the Plantmedco Acquisition.
Each common share in the capital of Verabys (the “ Verabys Shares ”) that is outstanding
immediately prior to the completion of the Proposed Transaction (other than Verabys Shares held
by shareholders of Verabys (“ Verabys Shareholders ”) who exercise their dissent rights) is expected
to be converted into one (1) issued, fully paid and non-assessable common share in the share capital
of the Resulting Issuer (“ Resulting Issuer Shares ”). Upon completion of the Plantmedco Acquisition
and the Proposed Transaction, and assuming completi on of the minimum Concurrent Financing (as
defined below), former holders of Bluerock Shares a re anticipated to hold, in the aggregate,
5,085,000 Resulting Issuer Shares representing approximately 9% of the outstanding Resulting Issuer
Shares, former holders of Verabys Shares are expect ed to hold, in the aggregate, 15,350,000
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Resulting Issuer Shares, representing approximately 28% of the outstanding Resulting Issuer Shares,
investors under the Concurrent Financing will hold, in the aggregate, 12,980,769 Resulting Issuer
Shares, representing approximately 24% of the outst anding Resulting Issuer Shares and former
holders of Plantmedco common shares are expected to hold, in the aggregate, 20,666,667 Resulting
Issuer Shares, representing approximately 38% of the outstanding Resulting Issuer Shares.
In addition, each share purchase warrant and option of Verabys outstanding immediately prior to
the completion of the Proposed Transaction is expec ted to be converted into securities of the
Resulting Issuer at the same ratio as the Verabys Shares.
Significant Conditions to Closing
The Amalgamation must be approved by not less than 66 2/3 % of the votes cast at the meeting (the
“Verabys Meeting ”) of Verabys Shareholders being held to consider, among other things, the
Amalgamation. It is expected that the Verabys Meet ing will be held in the second quarter of 2019
and a management information circular (the “ Circular ”) will be provided to Verabys Shareholders in
due course.
The completion of the Proposed Transaction is subject to the satisfaction of various conditions that
are standard for a transaction of this nature, including but not limited to (i) execution of a definitive
agreement (the “ Definitive Agreement ”) on or prior to April 30, 2019; (ii) the completi on of the
Concurrent Financing; (iii) the approval by the sha reholders of each of Bluerock and Verabys to
complete the Proposed Transaction (if required), (i v) receipt of all requisite regulatory, stock
exchange, court or governmental authorizations and consents, including the Exchange; (v) the
completion of satisfactory due diligence by each of the parties; and (vi) the completion of the
Plantmedco Acquisition. There can be no assurance t hat the Proposed Transaction will be
completed on the terms proposed above or at all.
Each of Bluerock and Verabys will bear their own costs in respect of the Proposed Transaction.
Proposed Concurrent Financing
Prior to or concurrent with completion of the Propo sed Transaction, Verabys will complete a
financing for gross proceeds of no less than USD $5 ,000,000 (the " Concurrent Financing'' ). The
proceeds raised will be used to fund the costs associated with completing the Proposed Transaction,
build-out of the Plantmedco facilities and for gene ral working capital. All securities issued pursuant
to the Concurrent Financing will be subject to a ho ld period of four months and one day.
Commissions may be paid on proceeds raised commensurate with industry norms. Richardson GMP
Ltd. is expected to be engaged to assist with fund raising activities.
Sponsorship of the Qualifying Transaction
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Sponsorship of a "Qualifying Transaction" of a CPC is required by the Exchange unless exempt
therefrom in accordance with the Exchange's policie s . Given the size and nature of the Proposed
Transaction, including the amount of the Concurrent Financing, Bluerock intends to apply for an
exemption from the sponsorship requirements pursuan t to the policies of the Exchange. If the
exemption is not granted by the Exchange, then Bluerock would be required to engage a sponsor.
Trading Halt
At the Company's request, trading in the Bluerock's Shares has been halted. Trading is expected to
remain halted until, at the earliest, the completion of the Proposed Transaction.
The Resulting Issuer’s Management
Upon completion of the Proposed Transaction, it is anticipated that all of the existing directors and
officers of Bluerock, will resign and the management of the Resulting Issuer will include the persons
identified below:
Luis Ortiz, BSc. Eng., MBA – President, Chief Operating Officer and Director
Mr. Ortiz has over 20 years of experience in intern ational sales and channel sales distribution and
project development experience in the oil & gas, in frastructure and technology industries. He has
successfully lead business expansions throughout La tin America, Europe and Africa for several
publicly traded companies (including, SMART Technol ogies, Wi-LAN Inc., and International Road
Dynamics Inc.). Since 2014 Mr. Ortiz has been President and CEO of CATENA Energy. Prior to that,
he served as Chief Operating Officer of Grand Vision Energy, a private Canadian integrated oil & Gas
company with operations in Colombia. Mr. Ortiz hol ds a Bachelor of Science Degree in Mechanical
Engineering and a MBA from Thunderbird School of Global Management in Glendale, Arizona.
Doug Porter, CA, CBV - Chief Financial Officer
Since 1997 Mr. Porter has been Managing Director of Porter Valuations & Financial Consulting Inc., a
specialty business valuation firm providing valuati on and financial consulting services to a broad
spectrum of private and public companies throughout Western Canada. From 1990 to 1997 he
practiced in the business valuation group of an int ernational accounting firm. Mr. Porter has a
Bachelor of Commerce degree from the University of Calgary (1990). He is a Chartered Professional
Accountant (1994) and a Chartered Business Valuator (1999). Mr. Porter has been a director and
officer of several TSXV listed companies in the resource, fin-tech and cannabis industries.
Russ Jackson - Special Advisor
Mr. Jackson is a Canadian businessman with more tha n 15 years of direct Latin American business
experience. Mr. Jackson is currently CEO and Direc tor of Sun God Resources, a Mexico-focused oil
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and gas producer. Previously, he was the principal founder of C & C Energy, a successful Colombian
energy exploration company. He served as Presiden t of C & C Energy (Barbados Ltd.) from 2005-
2007, and served as a director of the parent compan y until the successful completion of the IPO in
2010. Mr. Jackson was also a co-founder of Prosper o Hydrocarbons Inc., a private Colombian oil
company (sold to Alange Energy Corp. in 2009).
Ivan Arias – Executive Chairman and Director
Mr Arias is the founder and Chairman of Plantmedco. He has been an entrepreneur and venture
capital investor for the past 20 years in the digit al media, infrastructure and now the Cannabis
industries. He is currently Managing Director of SHINSEN TELECOM. Previously he served as Director
for Colombia of KBR Finance and as Director for Lat in America and the Caribbean of KCB Capital
Dubai, UAE. Mr. Arias was also a director for Jump TV (at the time the world largest broadcaster of
sport content over the internet) until it went public in the TSX and London Stock Exchange. Mr. Arias
holds a Bachelor of Agronomics Engineering Degree. He also graduated in Administration Science
and Global Economics from Fairleight Dickinson University in New Jersey, USA and Wroxton College
in England.
Alberto Montoya, - Country Managing Director
Mr. Montoya has held senior management positions in the agro-industry for more than 35 years,
working in the formulation and execution of various large scale processing and distribution projects.
Most recently Mr. Montoya was the Director in the A gro-industrial Division of Meals of Colombia, a
subsidiary of Grupo Nutresa. Mr. Montoya also has vast experience on boards of directors including
the Superior Council of the University of Quindio, the Departmental Committee of Coffee Growers
of Quindio and the National Congress of Coffee Growers of Colombia
Juan Pablo Lopez – Colombian Chief Operating Officer
Mr. Lopez is an entrepreneur with more than 25 year s of experience in start-up companies,
operations, and management. Mr. Lopez has served as the Director of Frutropic, USA, starting the
first US branch of the Frozen Fruit Plant where hedeveloped and managed the marketing goals with
proven ability to implement strategic planning and organizational initiatives to increase profitability
and reduce operational cost. He has also served as a Director of The Coffee Growers Federation of
Colombia. He is also a partner and part of Directo r of Shinsen Telecom. He has a Bachelor’s degree
in Agronomic Engineering from Universidad Nacional de Colombia. Mr. Lopez also graduated from
AIU with a Master’s in International Business. Mr. Lopez studied Strategic Marketing in Universidad
Javeriana.
Gustavo Catano - Head of Agronomy
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Mr. Catano is a senior Agronomist holding a Masters of Science degree. He was a founding partner
of several successful and innovative companies in t he produce cultivation and processing industry.
These include Defrescura and Organic Green, which both focused on the production of organic fruits
and vegetables and their derivatives for the domest ic and international markets. Mr. Catano has
also served on the boards of directors of several c ompanies in the agroindustry. In addition, for
eight years he was a guest lecturer in the Market a nd Management in the Food Industry program at
Cornell University.
About Bluerock Capital Corp.
Bluerock is a CPC that completed its initial public offering and obtained a listing on the Exchange in
May 2011 (trading symbol: "BCR.H"). It does not ow n any assets, other than cash or cash
equivalents and its rights under the LOI. The principal business of Bluerock is to identify and evaluate
opportunities for the acquisition of an interest in assets or businesses and, once identified and
evaluated, to negotiate an acquisition or participa tion subject to acceptance by the TSXV so as to
complete a qualifying transaction in accordance wit h the policies of the TSXV. As this transaction is
arm’s length in nature there is no requirement to get shareholder approval.
About Verabys Inc.
Verabys was incorporated on March 10, 2017 under th e Business Corporations Act (Alberta).
Verabys’s principal business is the identification, negotiation for, and investment in cannabis-related
opportunities, with a specific focus on Colombia-ba sed operators. The head office of Verabys is
located at #1100, 736 – 8th Avenue SW, Calgary, AB T2P 1H4.
Pursuant to Letter Agreement, Verabys agreed to acquire all of the issued and outstanding shares of
Plantmedco in consideration of the issuance of Verabys Shares to the shareholders of Plantmedco. It
is anticipated that Verabys and Plantmedco will ent er into a definitive agreement setting forth the
terms and conditions of the Plantmedco Acquisition on or prior to April 15, 2019.
A subsequent news release disclosing certain financial informat ion of Verabys will be disseminated
in due course.
About Plantmedco
Plantmedco was established in 2017 to take advantag e of the evolving cannabis laws and
opportunities in Colombia. Plantmedco possesses al l four Colombian cannabis licenses for the:
importation, marketing and commercialization of seeds for cannabis production; production of non-
psychoactive plants; production of psychoactive plants, and; extraction, production and export of oil
and cannabis derivatives.
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The local management team has extensive experience in agricultural food production and processing
for consumer market. Plantmedco’s existing cultiva tion land is situated in an ideal agricultural
region in west-central Colombia. The Company currently owns and operates seven hectares and has
an option for long-term lease on an additional 100 hectares. Plantmedco is beginning the tendering
process for the acquisition of cannabis oil extract ion equipment with an initial annual capacity of
approximately 6,700 liters of full spectrum CBD and THC oil. The Company is in late stage
negotiations for the acquisition of a full European -level GMP (Good Manufacturing Process) facility.
Both the company’s current cultivation site and the proposed extraction facility are within a 15-
minute drive to an international airport.
Verabys and Plantmedco continue to work jointly to establish international off-take customers for its
oil production, which is expected to be available for marketing in H2-2019.
Cautionary Note
As noted above, completion of the Proposed Transact ion is subject to a number of conditions
including, without limitation, approval of the Exchange, approval of the shareholders of Verabys and
Bluerock, completion of the Concurrent Financing an d completion of the Plantmedco Acquisition.
Where applicable, the Proposed Transaction cannot c lose until the required approvals have been
obtained. There can be no assurance that the Propo sed Transaction will be completed as proposed
or at all.
Investors are cautioned that, except as disclosed i n the continuous disclosure document containing
full, true and plain disclosure regarding the Propo sed Transaction, required to be filed with the
securities regulatory authorities having jurisdiction over the affairs of the Company, any information
released or received with respect to the Proposed Transaction may not be accurate or complete and
should not be relied upon. The trading in the secu rities of Bluerock on the Exchange, if reinstated
prior to completion of the Proposed Transaction, should be considered highly speculative.
ON BEHALF OF THE BOARD OF DIRECTORS:
Praveen Varshney,
President and Director
For further information, please contact:
Karan Thakur Tel: 778-987-3446
Disclaimer for Forward-Looking Information
This press release contains forward-looking statements and information that are based on the beliefs
of management and reflect Bluerock's current expect ations. When used in this press release, the
words "estimate", "project", "belief", "anticipate" , "intend", "expect", "plan", "predict", "may" or
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"should" and the negative of these words or such va riations thereon or comparable terminology are
intended to identify forward-looking statements and information. The forward-looking statements and
information in this press release include informati on relating to the business plans of Bluerock,
Verabys, and the Resulting Issuer, the Concurrent F inancing, the Proposed Transaction (including
Exchange approval and the closing of the Proposed T ransaction), the Plantmedco Acquisition and the
proposed board of directors and management of the R esulting Issuer upon completion of the
Proposed Transaction. Such statements and information reflect the current view of Bluerock. Risks and
uncertainties that may cause actual results to diff er materially from those contemplated in those
forward-looking statements and information.
By their nature, forward-looking statements involve known and unknown risks, uncertainties and other
factors which may cause our actual results, perform ance or achievements, or other future events, to
be materially different from any future results, performance or achievements expressed or implied by
such forward-looking statements.
Such factors include, among others, the following risks:
• there is no assurance that the Concurrent Financing will be completed or as to the actual
offering price or gross proceeds to be raised in co nnection with the Concurrent Financing. In
particular, the amount raised may be significantly less than the amounts anticipated as a result
of, among other things, market conditions and investor behaviour;
• there is no assurance that Bluerock and Verabys wil l obtain all requisite approvals for the
Proposed Transaction, including the approval of Ver abys Shareholders, or the approval of the
Exchange for the Proposed Transaction (which may be conditional upon amendments to the
terms of the Proposed Transaction);
• there is no assurance that Verabys will be able to complete the Plantmedco Acquisition on the
terms currently proposed or at all;
• following completion of the Proposed Transaction, the Resulting Issuer may require additional
financing from time to time in order to continue its operations. Financing may not be available
when needed or on terms and conditions acceptable to the Resulting Issuer;
• new laws or regulations could adversely affect the Resulting Issuer's business and results of
operations; and
• the stock markets have experienced volatility that often has been unrelated to the
performance of companies. These fluctuations may ad versely affect the price of the Resulting
Issuer's securities, regardless of its operating performance.
There are a number of important factors that could cause Bluerock's actual results to differ materially
from those indicated or implied by forward-looking statements and information. Such factors include,
among others: currency fluctuations; limited busine ss history of Bluerock; disruptions or changes in
the credit or security markets; results of operation activities and development of projects; project cost
overruns or unanticipated costs and expenses, fluct uations in commodity prices, and general market
and industry conditions.
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Bluerock cautions that the foregoing list of materi al factors is not exhaustive. When relying on
Bluerock's forward-looking statements and information to make decisions, investors and others should
carefully consider the foregoing factors and other uncertainties and potential events. Bluerock has
assumed that the material factors referred to in th e previous paragraph will not cause such forward-
looking statements and information to differ materially from actual results or events. However, the list
of these factors is not exhaustive and is subject t o change and there can be no assurance that such
assumptions will reflect the actual outcome of such items or factors.
THE FORWARD-LOOKING INFORMATION CONTAINED IN THIS P RESS RELEASE REPRESENTS THE
EXPECTATIONS OF BLUEROCK AS OF THE DATE OF THIS PRE SS RELEASE AND, ACCORDINGLY, IS
SUBJECT TO CHANGE AFTER SUCH DATE. READERS SHOULD N OT PLACE UNDUE IMPORTANCE ON
FORWARD-LOOKING INFORMATION AND SHOULD NOT RELY UPO N THIS INFORMATION AS OF ANY
OTHER DATE. WHILE BLUEROCK MAY ELECT TO, IT DOES NO T UNDERTAKE TO UPDATE THIS
INFORMATION AT ANY PARTICULAR TIME EXCEPT AS REQUIR ED IN ACCORDANCE WITH APPLICABLE
LAWS.
This press release is not an offer of the securitie s for sale in the United States. The securities ha ve not
been registered under the U.S. Securities Act of 19 33, as amended, and may not be offered or sold in
the United States absent registration or an exempti on from registration. This press 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 state in which such offer, solicitation or sale would be unlawful.
Completion of the Proposed Transaction is subject t o a number of conditions, including but not limited
to, Exchange acceptance. Where applicable, the transaction cannot close until the required shareholder
approval is obtained. There can be no assurance tha t the Proposed Transaction will be completed as
proposed or at all.
Investors are cautioned that, except as disclosed i n the filing statement to be prepared in connection
with the Transaction, any information released or r eceived with respect to the Proposed Transaction
may not be accurate or complete and should not be r elied 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 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 respo nsibility for the adequacy or accuracy of this pres s
release.