Tilting Capital Corp.
NEX BOARD : TLL.H
TSX VENTURE : TLL.H

November 10, 2014 16:11 ET

Tilting Capital Corp. Announces Updates Regarding its Proposed Business Combination

CALGARY, ALBERTA--(Marketwired - Nov. 10, 2014) -

NOT FOR DISSEMINATION IN THE UNITED STATES OR THROUGH U.S. NEWSWIRES

Tilting Capital Corp. (the "Corporation" or "Tilting") (NEX:TLL.H) is pleased to announce that, further to the letter of intent entered into between Tilting and MMJ Bioscience Inc. ("MMJ") announced on April 23, 2014, Tilting has entered into a definitive arm's length business combination agreement dated October 14, 2014 (the "Business Combination Agreement") with MMJ and 1009121 B.C. Ltd. ("SubCo"), a recently incorporated wholly-owned subsidiary of Tilting. Pursuant to the Business Combination Agreement, Tilting, MMJ and SubCo have agreed to complete a business combination by way of a three-cornered amalgamation (the "Transaction") such that MMJ will amalgamate with SubCo and thereby become a wholly-owned subsidiary of Tilting and the resulting issuer will carry on MMJ's business. Pursuant to the policies of the TSX Venture Exchange (the "TSXV"), the Transaction is a reverse takeover of Tilting by MMJ. For the purposes of this press release, the term "Resulting Issuer" means the Corporation upon completion of the Transaction.

The obligations of Tilting and MMJ to complete the Transaction are subject to the satisfaction of customary conditions precedent including, but not limited to: (i) the receipt of all third party consents and necessary regulatory and TSXV approval; (ii) the receipt of all necessary shareholder and board of director approvals; (iii) the completion of a financing by MMJ of up to a maximum of $3,500,000; (iv) satisfaction of all of the conditions and requirements of sponsorship to the sole satisfaction of the sponsor, (v) each party being satisfied with its due diligence review of the other; (vi) the absence of any material breach of the representations, warranties and covenants made by each party to the other; and (vii) other conditions which are customary for a transaction such as the Transaction. The Business Combination Agreement sets out the definitive terms of the Transaction and the amalgamation of MMJ and SubCo and will be filed by Tilting on SEDAR.

The board of directors of Tilting have unanimously approved the proposed Transaction and has concluded that the Transaction is in the best interests of Tilting and the Tilting shareholders and will recommend that its shareholders vote in favour of the Transaction. Tilting and MMJ each intend to call special meetings of their respective shareholders.

About MMJ

MMJ is a privately held company, incorporated under the Business Corporations Act (British Columbia) ("BCBCA"). It was formed in 2013 in order to apply for and obtain a license to produce marijuana for medical purposes. MMJ intends to cultivate, cure, test, sell and distribute medical marijuana pursuant to federal regulations and controls under the Controlled Drugs and Substances Act, The Food and Drug Act and the Marihuana for Medical Purposes Regulations ("MMPR").

MMJ has made application to Health Canada to become a licensed producer under the MMPR. A letter dated January 21, 2014, from Health Canada stated, "We have reviewed your application and note from the information and documentation that you have provided to us your proposal meets the requirements of the quality assurance pre-licensing report and record keeping requirements of the MMPR." Subsequently on June 6, 2014, MMJ received correspondence from Health Canada stating "We have received the results of your security checks this week and we will be able to move forward with the final review." The issuance of the license is subject to verification by Health Canada of compliance and security clearance of key personnel. MMJ anticipates the grant of the licence prior to completion of the Transaction; however, there is no assurance that the licence will be granted.

MMJ leases a custom designed marijuana growing facility of approximately 16,000 square feet in Duncan, British Columbia and owns a future growing facility of approximately 62,000 square feet in Lucky Lake, Saskatchewan.

Transaction Terms

Pursuant the Transaction, (i) MMJ and SubCo will amalgamate under the provisions of the BCBCA and continue as "MMJ Bioscience Inc." ("Amalco") or such other name as may be available and acceptable to the parties; and (ii) each holder of outstanding common shares of MMJ ("MMJ Shares") and outstanding preferred shares of MMJ ("MMJ Preferred Shares") will receive such number of pre-consolidation common shares of Tilting ("Tilting Shares") determined by dividing the number of MMJ Shares or MMJ Preferred Shares by two. All of the property and assets of each of MMJ and SubCo will become the property and assets of Amalco and Amalco will be a wholly-owned subsidiary of Tilting.

Immediately following the amalgamation, Tilting will consolidate the Tilting Shares (including the Tilting Shares issued in connection with the amalgamation) on the basis of one post-consolidation Tilting Share for every 1.25 pre-consolidation Tilting Shares and it will change its name to "MMJ Bioscience Inc." or such other name as may be accepted by the relevant regulatory authorities and approved by the board of directors of the Resulting Issuer.

The common shares of the Resulting Issuer to be issued to certain holders of MMJ Shares will be subject to voluntary escrow and performance vesting terms and may be subject to such other trading restrictions as may be imposed by the TSXV or under applicable securities laws.

All outstanding MMJ debentures and warrants will become debentures and warrants convertible or exercisable, as applicable, to the corresponding number of common shares of the Resulting Issuer or common share purchase warrants of the Resulting Issuer, as applicable, based on the above exchange ratio.

For more information regarding the Transaction, shareholders of Tilting are encouraged to review the Business Combination Agreement, which will be filed by Tilting on SEDAR.

The Corporation plans to issue a further press release to provide, among other things, further terms of the Transaction, selected financial information respecting MMJ, controlling shareholders of MMJ, the terms of the MMJ financing, the use of proceeds and further information regarding the Resulting Issuer, including the number of outstanding Resulting Issuer securities.

Sponsorship

Canaccord Genuity Corp. ("Canaccord") is acting as exclusive financial advisor with respect to the Transaction and has agreed to act as sponsor pursuant to the sponsorship policies of the TSXV. Canaccord's agreement to act as TSXV sponsor is subject to completing due diligence.

Resumption of Trading

Trading in Tilting Shares on the TSXV is halted and will remain so until the documentation required by the TSXV has been reviewed and accepted by the TSXV.

Reader Advisory

Certain information set forth in this news release contains forward-looking statements or information ("forward-looking statements"), including details about the Transaction. By their nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond the Corporation's control, including the impact of general economic conditions, industry conditions, volatility of commodity prices, currency fluctuations, environmental risks, operational risks in exploration and development, competition from other industry participants, stock market volatility, the risks that the parties will not proceed with the Transaction, that the ultimate terms of the Transaction will differ from those that currently are contemplated, and the ability to access sufficient capital from internal and external sources. Although the Corporation believes that the expectations in its forward-looking statements are reasonable, its forward-looking statements have been based on factors and assumptions concerning future events which may prove to be inaccurate. Those factors and assumptions are based upon currently available information. Such statements are subject to known and unknown risks, uncertainties and other factors that could influence actual results or events and cause actual results or events to differ materially from those stated, anticipated or implied in the forward-looking statements. As such, readers are cautioned not to place undue reliance on the forward-looking statements, as no assurance can be provided as to future results, levels of activity or achievements. The risks, uncertainties, material assumptions and other factors that could affect actual results are discussed in our public disclosure documents available at www.sedar.com. Furthermore, the forward-looking statements contained in this document are made as of the date of this document and, except as required by applicable law, the Corporation does not undertake any obligation to publicly update or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this document are expressly qualified by this cautionary statement.

Completion of the Transaction is subject to a number of conditions, including but not limited to, TSXV acceptance and shareholder approval. 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.

Canaccord Genuity Corp., subject to completion of satisfactory due diligence, has agreed to act as sponsor to the Corporation in connection with the Transaction. An agreement to sponsor should not be construed as any assurance with respect to the merits of the Transaction or the likelihood of completion.

Investors are cautioned that, except as disclosed in the management information circular 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 on. Trading in the securities of Tilting Capital Corp. should be considered highly speculative.

Neither the NEX Board nor the TSX Venture Exchange Inc. has in any way passed upon the merits of the proposed transaction and has neither approved or disapproved the contents of this press release.

All information contained in this press release with respect to the Corporation and MMJ was supplied by the Corporation and MMJ, respectively, for inclusion herein.

This news release is not an offer of securities for sale in the United States. Securities may not be offered or sold in the United States or to or for the account or benefit of U.S. persons (as such terms are defined in Regulation S under the United States Securities Act of 1933, as amended (the "U.S. Securities Act")), absent registration or an exemption from registration. The securities offered have not been and will not be registered under the U.S. Securities Act or any state securities laws and, therefore, may not be offered for sale in the United States, except in transactions exempt from registration under the U.S. Securities Act and applicable state securities laws.

Neither the NEX Board, 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 press release.

Contact Information

  • Tilting Capital Corp.
    Scott P. Hayduk
    (403) 444-7845