VANCOUVER, BC, Nov. 27, 2020 /CNW/ - AmWolf Capital Corp.
("AmWolf" or the "Company") (TSXV: AMW.P)
provides the following update to supplement the disclosure related
to the Company's previously announced Qualifying Transaction, as
defined under TSX Venture Exchange (the "Exchange") Policy
2.4 – Capital Pool Companies ("Policy 2.4"), with
Pontus Water Lentils Ltd. ("Pontus") and each of the
respective parties' concurrent private placements.
Qualifying Transaction Update
As previously announced by news release dated August 14, 2020, the Company, 1253044 B.C. Ltd., a wholly-owned subsidiary of
AmWolf ("NewCo"), and Pontus have entered into an
amalgamation agreement dated July 28,
2020 (the "Amalgamation Agreement"), pursuant to
which AmWolf will acquire all of the issued and outstanding common
shares (each, a "Pontus
Share") of Pontus (the "Transaction").
The Company, NewCo and Pontus continue to work towards the
closing of the Transaction (the "Closing"). Initial
submissions, including submission of a draft filing statement with
respect to the Transaction (the "Filing Statement"),
have been made to the Exchange and are currently under review.
The Transaction is subject to the approval of the Exchange,
and is intended to constitute the Company's Qualifying Transaction
(as defined in Policy 2.4).
The Surrey Facility
Pontus has entered into a lease agreement (the "Surrey Farm
Lease Agreement") with 1108190
B.C. Ltd. (the "Landlord"), an arm's length party to
Pontus, pursuant to which Pontus agreed to lease a 20,570 sq/ft.
commercial growing, processing and research facility located in
Surrey, British Columbia (the
"Surrey Farm") for a term of 5 years starting on
November 1, 2020 (the "Term").
Upon the entry into of the Surrey Farm Lease Agreement,
Pontus prepaid 4 month's base rent of approximately $101,000. With the securing of the Surrey
Farm, Pontus will no longer be pursuing the construction of the
previously announced 10,000 sq/ft. processing farm in Delta, British Columbia.
According to the terms of the Surrey Farm Lease Agreement, the
base net lease payment payable to the Landlord for the Surrey Farm
is $14 per sq/ft. for the first 3
years of the Term and $16 per sq/ft.
for the 4th and 5th years of the Term. The Surrey Farm Lease
Agreement provides for one further consecutive renewal term for an
addition 5 years (the "Renewal Term"), which renewal option
must be exercised by Pontus no later than 6 months prior to the
expiration of the Term. The terms and conditions of the
Renewal Term are to be on same terms and conditions as the Term,
except that the base rent shall be set at the most probable fair
market rent obtainable by a landlord from an unrelated party,
provided such base rent is not less than the base rent of the final
year of the term prior to the Renewal Term.
As an incentive to enter into the Surrey Farm Lease Agreement,
the Landlord agreed to waive the first month's lease payment in
order for Pontus to complete essential tenant improvements to
accommodate the installation of the CEVAS™ system. Pontus
intends to produce, package and distribute its products, including
its Pontus Protein Power+ protein powder, from the Surrey Farm
across North America as well as
internationally upon receipt of the requisite Canadian Food
Inspection Agency ("CFIA") approvals. Pontus began
tenant improvements to the Surrey Farm facility in late October,
2020.
Concurrent Financing
In multiple closings, with the final closing on September 30, 2020, Pontus issued an aggregate of
3,828,421 units (each, a "Pontus Unit") at a price of
$0.15 per Pontus Unit for gross
aggregate proceeds of $574,263.15
(the "Pre-Transaction Placements"). Each Pontus Unit
consists of one Pontus Share and one
Pontus Share purchase warrant (each,
a "Pontus Warrant"). Each Pontus Warrant entitles the
holder thereof to purchase one additional Pontus Share (each, a "Pontus Warrant
Share") at an exercise price of $0.30 per Pontus Warrant Share for a period of 2
years from the date of closing, subject to an acceleration
provision, whereby the expiry of the Pontus Warrants issued in
connection with the Pre-Transaction Placements may be accelerated
in the event the daily trading price of the common shares of AmWolf
(each, an "AmWolf Share") or the common shares (each, a
"Resulting Issuer Share") of the Resulting Issuer (as
defined below), as applicable, equals or exceeds $0.50 on the Exchange (or such other exchange on
which the AmWolf Shares or Resulting Issuer Shares, as applicable,
may be traded) for 20 consecutive trading days after the date that
is four months and one day from the date of issuance, whereby
AmWolf or the Resulting Issuer, as applicable, may accelerate the
expiry date of the warrants by giving notice via news release to
the holders thereof and, in such case, the warrants will expire on
the 30th day after the date on which the news release is
disseminated by AmWolf or the Resulting Issuer, as applicable.
In connection with the June 10,
2020 and September 30, 2020
closings of the Pre-Transaction Placements, Pontus paid aggregate
finder's fees of $22,313.14 and
issued an aggregate of 138,489 agent's warrants (each, an
"Agent's Warrant"). Each Agent's Warrant entitles the
holder to purchase one Pontus Share
at a price of $0.15 per Pontus Share for a period of 5 years following
the date of issuance. The proceeds from the Pre-Transaction
Placements are, subject to the approval of the Exchange, to be
attributed to the non-brokered private placement of Pontus Units by
Pontus for gross proceeds of at least $500,000 and up to $1,000,000 (the "Pontus Private
Placement").
For more details on the Pontus Private Placement as well as the
Company's previously announced non-brokered private placement for
gross proceeds of at least $1,500,000
to $4,000,000 concurrent to the
Transaction (together, the "Concurrent Financings"),
see the Company's news release dated August
14, 2020.
Proceeds from the Concurrent Financings will be used (i) to
advance the Resulting Issuer's Surrey Farm, (ii) to make
payments related to the completion of the Transaction, (iii) for
general and administrative expenses, and (iv) to contribute to
working capital. Conversely, the proceeds from the
Pre-Transaction Placements have been used by Pontus in order to
advance the Pontus' business objectives, including securing the
20,570 sq/ft. Surrey Farm, equipment for the CEVAS™ system at the
Surrey Farm, and for general working capital purposes.
Convertible Promissory Notes
On August 13, 2020, August 28, 2020, September
10, 2020 and September 13,
2020, Pontus issued non-interest bearing convertible
promissory notes in the aggregate principal amount of $105,000 (collectively, the "Pontus Promissory
Notes"). Pursuant to the terms of the Pontus Promissory
Notes, the holders may elect to convert the principal amount into
Pontus Shares at a price of $0.15 per
Pontus Share at any time. The
Pontus Promissory Notes are interest free, unsecured, and payable
on demand. The Pontus Promissory Notes also have no term,
but, in connection with the Transaction, remain subject to the
approval by the TSXV.
The proceeds from the Pontus Promissory Notes have been used by
Pontus to help secure the Surrey Farm lease, procure equipment for
the CEVAS™ system at the Surrey Farm and for general working
capital purposes.
The securities described herein have not been, and will not be,
registered under the United States
Securities Act of 1933, as amended, or any state securities
laws, and accordingly, may not be offered or sold within
the United States absent an
exemption from registration.
Closing of the Transaction
The Closing remains subject to the satisfaction of various
conditions standard for a transaction of this nature, including but
not limited to: (i) the Company having had the reasonable
opportunity to perform searches and other due diligence, and being
satisfied with the results of such due diligence; (ii) receipt of
all necessary regulatory, shareholder and third party consents,
waivers and approvals, including the Exchange; (iii) the absence of
any material adverse change in the business, affairs or operations
of AmWolf or Pontus, as applicable; and (iv) completion of the
Concurrent Financings.
The combined company that will result from the completion of the
Transaction (the "Resulting Issuer") will be renamed "Pontus
Water Lentils Ltd." or such other name as agreed to by AmWolf and
Pontus. Subject to Exchange approval, the common shares of
the Resulting Issuer will trade on the Exchange, under the symbol
"HULK", and the business of the Resulting Issuer will be the
business of Pontus. It is expected that the Resulting Issuer
will be listed on the Exchange as a Tier 2 Industrial issuer.
About AmWolf Capital Corp.
AmWolf Capital Corp. is a CPC as defined by the policies of the
Exchange. The Company's principal business activity is to
identify and evaluate opportunities for acquisition of assets or
business. The Company is headquartered in Vancouver, British Columbia.
About Pontus Water Lentils Ltd.
Pontus Water Lentils Ltd. was founded in 2018, and is a
British Columbia-based agri-tech
company. Pontus specializes in aquaponic farming through
Closed Environment Vertical Aquaponics System™ or CEVAS™ system to
create a sustainable, non-GMO plant-based protein product: "Pontus
Protein Power+". For more information, visit
www.pontuswaterlentils.com.
Additional Information
All information contained in this news release with respect to
AmWolf and Pontus (each, a "Party" and together, the
"Parties") was supplied, for inclusion herein, by each
respective Party and each Party and its directors and officers have
relied on the other Party for any information concerning the other
Party.
Completion of the Transaction is subject to a number of
conditions, including but not limited to, Exchange acceptance and
if applicable pursuant to Exchange 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 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 a CPC 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.
Disclaimer for Forward-Looking Information
Certain statements in this news release are forward-looking
statements, which reflect the expectations of management regarding
the Company's completion of the Transaction and related
transactions. Forward-looking statements consist of
statements that are not purely historical, including any statements
regarding beliefs, plans, expectations or intentions regarding the
future, including but not limited to, the Company completing the
Transaction on the terms and conditions of the Amalgamation
Agreement, or at all, the completion of the Concurrent Financings,
the completion of the Surrey Farm construction and outfitting and
CFIA approval thereof, and the conditions to be satisfied for
completion of the Transaction. Such statements are subject to risks
and uncertainties that may cause actual results, performance or
developments to differ materially from those contained in the
statements, including risks related to factors beyond the control
of the Company. The risks include the following: the
requisite corporate approvals of the directors and shareholders of
the Parties may not be obtained; the Exchange may not approve the
Transaction; the CFIA may not approve the Surrey Farm improvements;
sufficient funds may not be raised pursuant to the Concurrent
Financings; and other risks that are customary to transactions of
this nature. No assurance can be given that any of the events
anticipated by the forward-looking statements will occur or, if
they do occur, what benefits the Company will obtain from
them.
Neither the TSX Venture Exchange nor its Regulation
Services Provider (as that term is defined in policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release
SOURCE AmWolf Capital Corp.
