RMS.P RMR Science Technologies Inc

/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR RELEASE PUBLICATION, DISTRIBUTION OR DISSEMINATION DIRECTLY, OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES./

VANCOUVER, April 17, 2018 /CNW/ - RMR Science Technologies Inc. (TSX.V: RMS.P) ("RMR" or the "Corporation") announces that it has signed a letter of intent (the "LOI") with cannÖgen Biosciences Inc., a privately held corporation existing under the laws of the state of Nevada and having operations throughout North America ("cannÖgen"), which outlines the general terms and conditions with respect to a proposed business combination between RMR and cannÖgen (the "Transaction") by way of an amalgamation, arrangement, share purchase or other similar form of transaction which will result in cannÖgen becoming a wholly-owned subsidiary of RMR or otherwise combining its corporate existence with that of RMR. The final structure of the Transaction is subject to receipt of tax, corporate and securities laws advice for both RMR and cannÖgen. Upon completion of the Transaction, the combined entity (the "Resulting Issuer") will continue to carry on the business of cannÖgen. The LOI was negotiated at arm's length and is effective as of April 14, 2018.

cannÖgen possesses significant intellectual property, including patents and trade secrets, which are the basis of its Health Composition Products and Medical Foods Formulations for humans and its products designed specifically for pet health. cannÖgen also holds exclusive licenses for comprehensive patent based intellectual property from respected third-party biochemists for use in soluble biomass extraction, soluble minerals and other related processes to allow water-based compositions to be used in a number of cannŌgen products.  

RMR exists under the provisions of the Business Corporations Act (British Columbia) with its registered office in Vancouver, British Columbia. RMR is a capital pool company and it is intended that the Transaction will constitute RMR's "Qualifying Transaction", as such term is defined in the TSX Venture Exchange ("TSXV") Policy 2.4 – Capital Pool Companies. RMR is a "reporting issuer" within the meaning of the Securities Act (Ontario), Securities Act (British Columbia) and Securities Act (Alberta). 

Terms of the Transaction

The Transaction is expected to proceed by way of a business combination pursuant to which cannÖgen will become a wholly-owned subsidiary of RMR, and as consideration therefore, RMR shall issue and deliver up to 7,500,000 class "A" common shares of RMR (the "Common Shares") at a deemed price of C$0.27 per Common Share, or such other price as may be agreed to by the parties and the TSXV.

Prior to the completion of the Transaction, RMR will complete a brokered private placement of 10,000,000 subscription receipts ("Subscription Receipts") at a price of C$0.50 per Subscription Receipt for aggregate gross proceeds of C$5,000,000 (the "Offering").  Upon completion of the Qualifying Transaction, each Subscription Receipt will automatically convert without any further action on the part of the holder into one Common Share of RMR and one half of one Common Share purchase warrant of RMR. Each whole Common Share purchase warrant ("Warrant") shall entitle the holder to acquire one Common Share at an exercise price of $0.75 per Common Share for a period of 2 years from the date of issuance. The Warrants shall also contain an accelerated expiry provision wherein if the Common Shares of RMR trade over $1.00 on the TSXV, or on another recognized exchange, for a period of ten consecutive trading days, RMR may provide written notice to the holder that the Warrant shall expire 30 days from the date of that notice. Subject to the terms of an agency agreement to be entered into in connection with the Offering, the agents for the Offering are expected to receive a cash commission equal to 7% of the gross proceeds raised by such agents and such number of broker warrants ("Broker Warrants"), that is equal to 7% of the number of Subscription Receipts sold by such broker. Each Broker Warrant shall be exercisable to acquire one Common Share at a price of C$0.50 for a period of 2 years from the date of issuance.

The net proceeds from the Offering will be used to expand cannÖgen's business and for general corporate purposes.

Based upon the number of issued and outstanding shares in each of RMR and cannÖgen on the date hereof, upon completion of the Transaction and the Offering, it is expected that there will be approximately 25,235,775 Common Shares issued and outstanding (non-diluted), of which the shareholders of RMR will hold approximately 70% and the shareholders of cannÖgen will hold approximately 30% (assuming no exercise of any stock options of RMR prior to closing). 

Insiders, Officers and Board of Directors of the Resulting Issuer

Upon completion of the Transaction, one of the directors of RMR shall resign and two nominees of cannÖgen (the "cannÖgen Nominees") shall be appointed. The following sets out the names and backgrounds of the individuals cannÖgen has identified as the potential cannÖgen Nominees:

Don Hagans – Chief Executive Officer and Director – Don Hagans has a Juris Doctor degree from the University of Texas, and is highly experienced in international market entry, management, industry regulation and amalgamation, and business development. He was a Major in the U.S. Marine Corps, a Board Certified Civil Trial Lawyer, and the Legislative Director to a U.S. Senator. His management experience includes being Executive Chairman of Austar (Australia's major regional pay television provider) now part of Liberty Media, and chief executive Akamai A.P. (head of Asia Pacific operations for one of the world's largest internet content managers). His professional recognition includes being elected Chairman of the American Bar Association's Law Practice Management Section, Chairman of ABA Net (the A.B.A. on-line services platform), and Chairman of the Supreme Court of Texas Technology Advisory Commission.  In the international business in industry, he was Chairman of the Texas/Mexico Authority of the State of Texas, and Chairman of the Australia Subscription Television and Radio Association.

Dr. Larry McCleary – Chief Medical Officer – Dr. McCleary was a Rufus Choate scholar at Dartmouth College and completed all course work necessary for a Ph.D. in physics. He graduated first in his medical school class. Dr. McCleary completed his surgical internship at the University of Minnesota followed by a neurosurgery residency at New York University – Bellevue Medical Center. He served in a senior role in Pediatric Neurosurgery at Denver Children's Hospital and spent well over a decade in academic medicine prior to starting his mission to pursue the development of nutritional interventions for major human health issues. Dr. McCleary has given numerous invited presentations in the field of neurosurgery. Since 2000, he has focused on preventative medicine related to brain health, bone health and metabolic diseases. He has published in international peer-reviewed medical journals and authored three (3) books on brain health, metabolic bone disease and bone fracture healing as well as two (2) books on childhood cancer.

As at the date hereof, the above individuals collectively own, in the aggregate, directly or indirectly, approximately 66.67% of the common shares of cannÖgen ("cannÖgen Shares"). 

Financial Information for cannÖgen

RMR will make available to the TSXV all financial information as required by the TSXV and will provide, in a press release to be disseminated at a later date, summary financial information derived from such statements.

Upon completion of the Transaction, it is the intention of the parties that the Resulting Issuer will continue to focus on the current business and affairs of cannÖgen and will be an Industrial or Technology or Life Sciences Issuer listed on the TSXV.

Conditions to Transaction

The Transaction is subject to various conditions, including as follows:

• RMR will complete the Offering;
• RMR and cannÖgen will enter into a definitive agreement (the "Definitive Agreement") in respect to the Transaction;
• RMR shall have changed its name to "cannÖgen Biosciences Inc.";
• all outstanding options will expire 12 months after completion of the Transaction; and
• all requisite regulatory approvals relating to the Transaction, including, without limitation, TSXV approval, will have been obtained.

Pre-Closing Capitalization of RMR

As of the date hereof, RMR has 7,735,775 Common Shares issued and outstanding. Based upon the number of issued and outstanding securities of RMR and cannÖgen on the date hereof, upon completion of the Transaction and the Offering, the Resulting Issuer will have approximately 25,235,775 Common Shares issued and outstanding, together with an aggregate of 5,000,000 Warrants, 760,000 options issued to directors and officers of RMR, 364,225 options issued to the agents in connection with RMR's initial public offering and 700,000 broker warrants issued in connection with the Offering.

Additional Information Regarding the Transaction

In connection with the Transaction, each shareholder of cannÖgen will receive one Common Share for each cannÖgen Share then held, resulting in the issue to such shareholders of cannÖgen of 7,500,000 Common Shares. The Transaction terms outlined in the LOI are non-binding on the parties and the LOI is expected to be superseded by a definitive agreement (the "Definitive Agreement") to be signed by the parties. The Transaction is subject to requisite regulatory approval, including the approval of the TSXV and standard closing conditions, including the approval of the directors of each of RMR and cannÖgen of the Definitive Agreement and the Transaction, completion of due diligence investigations to the satisfaction of each of RMR and cannÖgen, as well as the conditions described herein. The final legal structure for the Transaction will be determined after the parties have considered all applicable tax, securities law, and accounting efficiencies.

RMR and cannÖgen shall use their commercially reasonable efforts to complete the Transaction by July 31, 2018, or such later date as the parties may agree to in writing. In the event that the Transaction has not been completed by July 31, 2018, the current LOI will terminate.

Since the Transaction is an arm's length transaction, RMR is not required to obtain shareholder approval for the Transaction. RMR's Common Shares are currently listed for trading on the TSXV. In accordance with TSXV policy, however, the Corporation's Common Shares are currently halted from trading and will remain halted until such time as determined by the TSXV, which, depending on the policies of the TSXV, may not occur until the completion of the Qualifying Transaction.

Sponsorship

RMR proposes to make an application for exemption from the sponsorship requirements of the TSXV in connection with the Transaction, however there is no assurance that the TSXV will exempt RMR from all or part of applicable sponsorship requirements.

Further Information

The Corporation will issue a subsequent press release in accordance with the policies of the TSXV providing further details in respect of the Qualifying Transaction, including information relating to sponsorship, the Offering, the proposed management team of the Resulting Issuer and summary financial information.

All information contained in this news release with respect to RMR and cannÖgen was supplied by the parties respectively, for inclusion herein, without independent review by the other party, and each party and its directors and officers have relied on the other party for any information concerning the other party.

Cautionary Statements

This news release contains "forward-looking information" within the meaning of applicable securities laws relating to the proposal to complete the Transaction and associated transactions, including statements regarding the terms and conditions of the Transaction, the Offering, the use of proceeds of the Offering and the proposed directors and officers of the Resulting Issuer. The information about cannÖgen contained in the press release has not been independently verified by the Corporation. Although the Corporation believes in light of the experience of its officers and directors, current conditions and expected future developments and other factors that have been considered appropriate that the expectations reflected in this forward-looking information are reasonable, undue reliance should not be placed on them because the Corporation can give no assurance that they will prove to be correct. Readers are cautioned to not place undue reliance on forward-looking information. Actual results and developments may differ materially from those contemplated by these statements depending on, among other things, the risks that the parties will not proceed with the Transaction, the Offering, the appointment of the proposed directors and officers of the Resulting Issuer and associated transactions, that the ultimate terms of the Transaction, the appointment of the proposed directors and officers of the Resulting Issuer and associated transactions will differ from those that currently are contemplated, and that the Transaction, the appointment of the proposed directors and officers of the Resulting Issuer and associated transactions will not be successfully completed for any reason (including the failure to obtain the required approvals or clearances from regulatory authorities). The terms and conditions of the Transaction may change based on the Corporation's due diligence (which is going to be limited as the Corporation intends largely to rely on the due diligence of other parties of the Transaction to contain its costs, among other things) and the receipt of tax, corporate and securities law advice for both RMR and cannÖgen. The statements in this press release are made as of the date of this release. The Corporation undertakes no obligation to comment on analyses, expectations or statements made by third-parties in respect of the Corporation, cannÖgen, their securities, or their respective financial or operating results (as applicable)

Completion of the Transaction and associated transactions is subject to a number of conditions, including 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 Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Transaction or the associated transactions 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 capital pool company should be considered highly speculative.  The TSXV 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 TSXV NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSXV) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

SOURCE RMR Science Technologies Inc.