- Entered into a definitive amalgamation agreement with CannCentral Inc.
- IntellaEquity and CannCentral will complete a transaction that will result in a reverse take-over of the Corporation by the shareholders of CannCentral
- The Corporation is required to obtain shareholder approval for the Transaction, which it will seek at a special shareholders’ meeting on August 27, 2019
- IntellaEquity will seek shareholder approval for: The election of new directors of the Corporation, the continuation of the Corporation from the State of Delaware to the Province of Ontario, changing the name of the Corporation from IntellaEquity Inc. to CannCentral Inc., and a sale of certain assets of the Corporation
Toronto, Ontario–(Newsfile Corp. – July 29, 2019) – IntellaEquity Inc. (CSE: IEQ) (the “Corporation” or “IntellaEquity“) is pleased to announce that, further to its news release dated May 27, 2019, the Corporation has entered into a definitive amalgamation agreement (the “Amalgamation Agreement“) with CannCentral Inc. (“CannCentral“), a corporation existing under the laws of the Province of Ontario, which outlines the general terms and conditions pursuant to which IntellaEquity and CannCentral would be willing to complete a transaction that will result in a reverse take-over of the Corporation by the shareholders of CannCentral (the “Transaction“). Pursuant to the terms of the Amalgamation Agreement, IntellaEquity, CannCentral and Paragon Blockchain Inc. (“SubCo“), a wholly owned subsidiary of the Corporation will complete a business combination by way of a three-cornered amalgamation under the Business Corporations Act (Ontario). Under the terms of the Amalgamation Agreement CannCentral will amalgamate with SubCo and will carry on the existing business of CannCentral as a wholly owned operating subsidiary of IntellaEquity. The Amalgamation Agreement was negotiated at arm’s length and is effective as of July 26, 2019.
The Transaction is subject to requisite regulatory approval, including the approval of the Canadian Stock Exchange (the “CSE“)
and standard closing conditions, including the completion of due
diligence investigations to the satisfaction of each of IntellaEquity
and CannCentral, as well as the conditions described below.
Since the Transaction will constitute a reverse take-over of
IntellaEquity and a change of business from a “investment issuer” to an
“industrial issuer”, the Corporation is required to obtain shareholder
approval for the Transaction, which it will seek at a special
shareholders’ meeting on August 27, 2019 (the “Meeting”). At the
Meeting, IntellaEquity will also seek shareholder approval for, among
other things, the election of new directors of the Corporation, the
continuation of the Corporation from the State of Delaware to the
Province of Ontario, changing the name of the Corporation from
IntellaEquity Inc. to CannCentral Inc., and a sale of certain assets of
the Corporation.
Trading in the common shares of the Corporation is presently halted.
It is unlikely that the common shares of IntellaEquity will resume
trading until the Transaction is completed and approved by the CSE.
Conditions to Transaction
Prior to completion of the Transaction (and as conditions of closing):
- IntellaEquity and CannCentral will obtain the requisite shareholder
approvals for the Transaction and any ancillary matters contemplated in
the Amalgamation Agreement.
- All requisite regulatory approvals relating to the Transaction,
including, without limitation, CSE approval, will have been obtained.
- IntellaEquity shall have obtained the consents and waivers contemplated in the Amalgamation Agreement.
- There shall not be in force any order or decree restraining or
enjoining the consummation of the transactions contemplated by the
Amalgamation Agreement.
- None of the consents, orders, regulations or approvals contemplated
in the Amalgamation Agreement shall contain terms or conditions or
require undertakings or security deemed unsatisfactory or unacceptable
by the parties to the Amalgamation Agreement.
The Proposed Transaction
Pre-Closing Capitalization of IntellaEquity
As of the date hereof, IntellaEquity has 25,629,564 common shares (the “IntellaEquity Shares“)
issued and outstanding and securities exercisable or exchangeable for,
or convertible into, or other rights to acquire, an aggregate of
2,250,000 IntellaEquity Shares at exercise prices ranging from $0.05 per
IntellaEquity Share to $1.00 per IntellaEquity Share.
Pre-Closing Capitalization of CannCentral
As of the date hereof, CannCentral has 342,500,000 common shares (the “CannCentral Shares”
issued and outstanding and securities exercisable or exchangeable for,
or convertible into, or other rights to acquire, an aggregate of
117,500,000 CannCentral Shares at an exercise price of $0.10 per
CannCentral Share (the “CannCentral Warrants“).
Terms of the Transaction
IntellaEquity proposes to acquire all of the CannCentral Shares
pursuant to the terms of the Amalgamation Agreement. It is expected that
each shareholder of CannCentral (the “CannCentral Shareholder“) will receive one (1) IntellaEquity Share for each CannCentral Share held (the “Exchange Ratio“) resulting in the IntellaEquity Shareholders holding approximately 7% of the common shares of the combined entity (the “Resulting Issuer“)
and the former CannCentral Shareholders holding approximately 93% of
the common shares of the Resulting Issuer upon completion of the
Transaction (immediately prior to giving effect to the Offering, as such
term is defined below). In addition, IntellaEquity will also acquire
all of the CannCentral Warrants on the same Exchange Ratio in exchange
for the issuance of common share purchase warrants of the Corporation on
the same terms and conditions as the CannCentral Warrants.
About CannCentral
CannCentral is an Ontario company. CannCentral seeks to become a
leading information platform for the cannabis industry. Using in part
its proprietary technology, CannCentral will look to provide cannabis
consumers with the information necessary to make informed purchasing and
lifestyle decisions with respect to cannabis products. CannCentral
seeks to accomplish this through: (1) information of the variety of
different cannabis strains and cannabis derivative products; (2)
community-driven reviews of the variety of different cannabis strains
and cannabis derivative products; (3) information on geographically
segmented dispensaries and available product offerings; (4) daily
updates to industry information and relevant news. The platform also
provides user feedback and reviews on products, and aggregates user data
to inform businesses on trends and purchasing decisions. Utilizing
consumer traffic and data analytics, CannCentral seeks to generate
revenue through a variety of different channels.
Financial Information Concerning CannCentral
For the year ended May 31, 2019, CannCentral had total assets of
$2,240,077 and total liabilities of $41,727. As of May 31, 2019,
CannCentral had working capital of $2,198,350.
CannCentral Private Placement
Prior to the closing of the Transaction, CannCentral intends to raise
capital through a private placement of up to 50 million units (the “CannCentral Units“) at an price of $0.05 per CannCentral Unit aggregate proceeds of $2,500,000 (the “CannCentral Private Placement“). Each CannCentral Unit shall be comprised of one (1) CannCentral Share and one (1) common share purchase warrant (a “CannCentral Warrant“).
Each CannCentral Warrant shall entitle the holder thereof to purchase
one additional CannCentral Share at an exercise price of $0.30 at any
time up to 36 months from date of issuance. The securities issuable
pursuant to the CannCentral Private Placement will be exchanged into
IntellaEquity Shares and common share purchase warrants on the same
Exchange Ratio.
The net proceeds of the CannCentral Private Placement will be used for general operating purposes.
Insiders, Officers and Board of Directors of the Resulting Issuer
Upon completion of the Transaction, it is anticipated that the board
of directors of the Resulting Issuer shall be comprised of: Brian
Kalish, Larry Latowsky, Gil Steinfield and Dr. Scott Wilson. It is
anticipated that additional directors will be added to the board of
directors of the Resulting Issuer. In addition, it is expected that the
officers of the Resulting Issuer shall be Brian Kalish (Chief Executive
Officer), Stephen Gledhill (Chief Financial Officer), IgorKostioutchenko
(Controller), Anton Tikhonirov (Senior Vice President, Technology and
Architecture) and Jessica Martin (Vice President, Investor Relations and
Communications).
The following sets outs the names and backgrounds of all persons who
are expected to be considered insiders of the Resulting Issuer.
Brian Kalish, Chief Executive Officer and Director
In 1999, Mr. Kalish founded the first interactive point of purchase
retail media. He later went on to co-direct the acquisition and
re-development of the Toronto Argonauts Football Club of the Canadian
Football League in 2003. Mr. Kalish was a Director and the CEO of
Gemoscan Canada, Inc. a vertically integrated healthcare company which
he reorganized and led through a series of capitalizations and public
listings. Gemoscan was the first company to have commercialized a
naturopathic service at retail pharmacy in North America. Earlier, Mr.
Kalish was a member of the turn-around team at KIK Corporation (now KIK
Custom Products) a leading private label CPG producer. Most recently, he
was a founder, Director and President of specialty finance companies
focusing on Factoring and Asset Based Lending.
Larry Latowsky, Director
Mr. Latowsky brings decades of experience in the worlds of retail,
technology and media to CannCentral. He is currently the Chairman and
CEO of Top Drug Corp and Epic Sales Limited. Prior to this Mr. Latowsky
was the Interim CEO and Chairman of the Board of Well.ca before its sale
to McKesson Corporation. Well.ca focuses on delivering over
40,000-curated health and beauty care products, thousands of peer
reviews, and Canada’s largest assortment of green and natural brands to
consumers. Before directing Well.ca, Mr. Latowsky was the CEO of Katz
Group Canada/Rexall Pharmaplus from 2010-2014 and Drug Trading Company
from 2004-2014, which provides independent or franchise pharmacy banner
programs for IDA, Guardian, and Medicine Shoppe drug stores. Drug
Trading Company also incorporated the businesses of ProPharm Technology
and DC Labs. Mr. LatowskyLatowsky received his Bachelor of Arts from
York University and is a graduate of the University of Toronto’s Rotman
School of Business and Institute of Corporate Directors. He previously
served on the board of the Retail Council of Canada, Electronic Commerce
Council of Canada, and the Canadian Association of Chain Drug Stores.
Gil Steinfeld, Director
Mr. Steinfeld has over 20 years’ experience as a marketing executive
and online marketing consultant to the top online gaming brands. Mr.
Steinfeld oversaw top level Canadian and U.S marketing strategies for
PartyGaming Plc, and World Poker tour in the areas of online and
traditional media. He was the founding Director of Marketing at
Microgaming where he helped grow the company from 20 to over 1000
employees.
Dr. Scott Wilson, Director
Dr. Wilson is a passionate clinician, a serial healthcare
entrepreneur, and a board-certified Doctor of Chiropractic in both
Canada and the USA with over 25 years of experience treating patients.
Dr. Wilson is the Founder & Chairman of PhysiomedTM, one of Canada’s
largest franchised networks of interdisciplinary healthcare clinics,
with over 30 clinics in Ontario and British Columbia. He has also
founded or supported numerous other healthcare focused companies. Dr.
Wilson has had speaking engagements alongside Tony Robbins and is widely
acknowledged to be a subject matter expert in the North American
healthcare sector.
Stephen Gledhill, Chief Financial Officer
Mr. Gledhill is the founding member of Keshill Consulting Associates
Inc., a boutique management consulting practice specializing in
accounting, administrative and corporate secretarial services. Mr.
Gledhill is also the Managing Director and founding member of RG
Management services Inc. Mr. Gledhill has over 25 years of
financial-control experience acting as CFO and Corporate Secretary for
multiple publicly-traded companies, several of which he was instrumental
in scaling-up and taking public. He currently serves as the CFO of
Caracara Silver Inc, DelphX Capital Markets Inc and CO2 GRO Inc. Prior
to RGMS, Mr. Gledhill served as SVP and CFO of Borealis Capital
Corporation, and VP Finance of OMERS Realty Corporation. He is a
Chartered Public Accountant and a Certified Management Accountant and
holds a Bachelor of Math Degree from the University of Waterloo.
Igor Kostioutchenko, Controller
Mr. Kostioutchenko has extensive experience providing controllership
services, applying IFRS, ASPE and U.S. GAAP frameworks, advising on
restructuring, mergers, acquisitions and public market offerings, and
conducting accounting investigations. Mr. Kostioutchenko graduated with
distinction from the University of Toronto’s Rotman School of
Management. He began his public accounting career with Deloitte LLP, he
later moved to lead audit and special engagements with Collins Barrow
Toronto LLP, now RSM Canada LLP. Subsequent to his tenure at Collins
Barrow Toronto LLP, Mr. Kostioutchenko co-founded Kostioutchenko &
Patel, CPAs, Professional Corporation, an affiliate under Abacus Group,
where he now serves as Partner in the assurance and advisory practice.
Anton Tikhomirov, Senior Vice President, Technology and Architecture
Mr. Tikhomirov has over fifteen years of experience in digital
technologies, with a specialization in e-Commerce constructs. His unique
approach to systems allowed him to establish a chain of e-Commerce
platforms in 2008 which, within two years generated over 1 million
unique visitors per month. Mr. Tikhomirov’s ability to develop strategic
plans and execute against them allowed him to open a full-service
digital agency in 2016 which currently serves nearly 40 clients across
Canada and the US.
Jessica Martin, Vice President Investor Relations and Communications
Ms. Martin is a seasoned communications expert with nearly 20 years
of investor, government and media relations expertise. Most recently, as
VP of Public Relations and Regulatory Affairs for Invictus MD, she
negotiated some of the first government contracts for licensed cannabis
producers. Previously Ms. Martin was a spokesperson for Toronto Hydro,
Press Secretary and Senior Communications Advisor to the Premier of
Ontario and Ontario’s Minister of Finance. Earlier she worked as a
research analyst at Queen’s Park and as a Floor Director at CityTV in
Toronto. She is a graduate of the McMaster-Syracuse Master of
Communications Management (MCM) program.
Additional Information
All information contained in this news release with respect to
IntellaEquity and CannCentral was supplied by the parties respectively,
for inclusion herein, and each party and its directors and officers have
relied on the other party for any information concerning the other
party.
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
upon.
For further information please contact:
CannCentral Inc.:
Brian Kalish, CEO
Email: [email protected]
IntellaEquity Inc.:
Allen Lone, President and CEO
Email: [email protected]
