/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES
OR DISSEMINATION IN THE UNITED
STATES/
VANCOUVER, July 9, 2018
/CNW/ - Theia Resources Ltd. (THH:TSXV) (the "Company"
or "Theia") is pleased to announce that it has entered into an
Amalgamation Agreement dated June 29, 2018 (the "Amalgamation
Agreement") with CNX Holdings Inc. ("CNX") and Flower One Corp.
("Subco"), a wholly‑owned subsidiary of the Company, pursuant to
which the Company will acquire all of the outstanding shares of CNX
in exchange for common shares of the Company (the "Proposed
Transaction").
About CNX
CNX is currently a privately held, Ontario based company with strategic
investments in the cannabis sector through its wholly-owned
subsidiaries. The company's wholly-owned subsidiaries are
located in Nevada where it is
currently converting the largest commercial scale greenhouse in the
State. The 430,000 square foot facility will be used for cannabis
cultivation as well as the processing, production and high-volume
packaging of cannabis oils, concentrates and infused products.
CNX, through one of its wholly-owned subsidiaries, is currently
overseeing an intensive conversion of a greenhouse to prepare it
for large-scale hydroponic cannabis cultivation, processing and
production. The 430,000 square foot greenhouse is strategically
positioned and within close proximity to the lucrative,
tourism-driven Las Vegas adult-use
and medical cannabis market. To date, more than 4,700 hours of
construction and renovation work have been completed on the
greenhouse. Planting in the facility will begin late 2018 and will
be fully operational in early 2019. The Las Vegas Convention and
Visitors Authority cites more than 55 million tourists are
forecasted to visit the city in 2018.
Financings
Prior to or concurrently with completion of the Proposed
Transaction, CNX intends to complete one or more private placement
financings (the "CNX Private Placement") to raise gross proceeds of
up to US$50 million by the sale of
its Class A common voting shares, on terms and conditions
acceptable to each of Theia, CNX and the TSX Venture Exchange (the
"TSXV").
Prior to completion of the Proposed Transaction, CNX will
subscribe by way of a non-brokered private placement or bridge-loan
financing (the "Theia Financing"), at the sole discretion of CNX,
for gross proceeds to Theia of $250,000, subject to the acceptance of the TSXV.
The proceeds of the Theia Financing will be used to pay the
existing and proposed fees of Theia's professional advisors.
Board and Management of Theia after the Proposed
Transaction
It is anticipated that upon completion of the Proposed
Transaction, all of the directors and officers of Theia will resign
and will be replaced with nominees of CNX.
The Transaction
The principal terms of the Proposed Transaction are as
follows:
- Theia will complete a 10:1 share consolidation (the
"Consolidation"). The effect of the proposed Consolidation
will be to reduce the number of common shares issued and
outstanding from 21,547,750 pre-consolidated common shares to
2,154,775 post-consolidated common shares.
- Theia will change its name to "Flower One Holdings Inc." in
conjunction with the proposed Consolidation.
- The Proposed Transaction will be structured as a triangular
amalgamation. Under the terms of the Amalgamation Agreement,
CNX will amalgamate with Subco and as part of the amalgamation,
Theia will acquire all of the outstanding shares of CNX in exchange
for post–consolidation common shares of Theia ("Theia Shares") on a
one for one basis. It is contemplated that Theia will also
acquire all outstanding options of CNX in exchange for equivalent
Theia options, adjusted for the applicable exchange ratio.
- On or before completion of the Proposed Transaction, Theia will
seek to delist from the TSXV and will apply to relist the Theia
Shares on the Canadian Securities Exchange (the "CSE").
- Concurrently with completion of the Proposed Transaction, Theia
will be required to relinquish all claim to its mining assets, in
exchange for a release of all claims and liabilities whatsoever
related to the mining assets.
- On or prior to completion of the Proposed Transaction, Theia
intends to complete a settlement of outstanding indebtedness owed
by Theia in the amount of approximately $950,000 by way of issuing 250,000 Theia Shares,
subject to TSXV approval, to the creditors owed such debt (the
"Debt Settlement").
Upon completion of the Proposed Transaction, Theia will have
approximately 143,183,975 Theia Shares outstanding (assuming
completion of the Consolidation, the Amalgamation and the Debt
Settlement, but prior to completion of the CNX Private
Placement).
Trading in the Theia Shares on the TSXV is halted at present.
Unless the Proposed Transaction fails to close, Theia does not
expect its shares will resume trading again until listing has been
accepted by the CSE.
The Proposed Transaction is an arms-length transaction.
Other Transaction Details
Shareholder Approval
Theia and CNX intend to seek shareholder approval for the
Proposed Transaction and related matters to the extent
required. Theia does not intend to seek shareholder approval
for the Proposed Transaction itself, unless required by applicable
regulatory authorities. Theia's annual and special meeting
(the "Theia Meeting") of its shareholders (the "Theia
Shareholders") is scheduled for August 17, 2018. CNX's
special meeting (the "CNX Meeting") of its shareholders (the "CNX
Shareholders") is scheduled for August 17,
2018.
Conditions to the Proposed
Transaction
The completion of the Proposed Transaction will be subject to
certain conditions precedent, including the following:
(a)
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Theia shall have
completed the Consolidation;
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(b)
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the approval of the
TSXV to delist the Theia Shares therefrom;
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(c)
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the approval of the
CSE, subject to the CSE's usual conditions, for the listing of
Theia Shares existing at the time of the Proposed Transaction,
issuable pursuant to the Proposed Transaction and upon exercise of
any Theia options convertible or exercisable into Theia
Shares;
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(d)
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the name of Theia
will have changed to "Flower One Holdings Inc." or such other
name requested by CNX;
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(e)
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receipt by CNX of a
written resignation effective as at the time of the Proposed
Transaction from each of the current directors and officers of
Theia; and
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(f)
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completion of the
Debt Settlement.
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Closing of the Proposed Transaction
The Proposed Transaction is expected to close on approximately
August 21, 2018. The Proposed
Transaction is an arm's length transaction.
ON BEHALF OF THE BOARD
Raj Kang
Chief Financial Officer
Completion of the Proposed Transaction is subject to a number
of conditions, including TSX Venture Exchange acceptance and
shareholder approval. 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 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 Theia should be considered highly
speculative.
The TSX Venture 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.
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.
Forward-Looking Statements
This news release may contain forward-looking statements that
are based on the Company's current expectations and estimates.
Forward-looking statements are frequently characterized by words
such as "plan", "expect", "project", "intend", "believe",
"anticipate", "estimate", "suggest", "indicate" and other similar
words or statements that certain events or conditions "may" or
"will" occur, and include, without limitation, statements regarding
the Company's current plans. Such forward-looking statements
involve known and unknown risks, uncertainties and other factors
that could cause actual events or results to differ materially from
estimated or anticipated events or results implied or expressed in
such forward-looking statements. Such forward-looking statements
are qualified in their entirety by the inherent risks and
uncertainties surrounding future expectations, including that the
Proposed Transaction contemplated herein is completed.
Forward-looking statements are based on a number of assumptions
which may prove to be incorrect, including, but not limited to: the
ability of Theia and CNX to obtain necessary shareholder approval
to complete the Proposed Transaction or to satisfy the requirements
of the TSXV with respect to the Proposed Transaction. The
cautionary statements qualify all forward-looking statements
attributable to Theia and CNX and persons acting on their behalves.
Any forward-looking statement speaks only as of the date on which
it is made and, except as may be required by applicable securities
laws, the Company disclaims any intent or obligation to update any
forward- looking statement, whether as a result of new information,
future events or results or otherwise. Forward-looking statements
are not guarantees of future performance and accordingly undue
reliance should not be put on such statements due to the inherent
uncertainty therein.
The securities referred to in this news release have not
been, and will not be, registered under the United States
Securities Act of 1933, as amended, or any state securities laws,
and may not be offered or sold in the
United States unless pursuant to an exemption therefrom.
This press release is for information purposes only and does not
constitute an offer to sell or a solicitation of an offer to buy
any securities of Theia or CNX in any jurisdiction.
SOURCE Theia Resources Ltd.