OTTAWA, ONTARIO–(Nov. 6, 2014) – Mazorro Resources Inc. (the “Company” or “Mazorro“) (CSE:MZO)(FRANKFURT:JAM) is pleased to announce that it has entered into a definitive amalgamation agreement (the “Amalgamation Agreement“) with GrowPros MMP Inc. (formerly 8816301 Canada Inc.) (“GrowPros“) to complete the business combination initially announced on June 16, 2014. The signing of the Amalgamation Agreement is a significant step in the Company’s implementation of its diversification strategy and the development of GrowPros.
“The management of GrowPros is very pleased to have finalized the definitive agreement, which will provide us with a vehicle to grow our company and pursue our goal of becoming a premier strategic partner to producers of medical marijuana in Canada and related segments of the ever evolving cannabis industry,” commented Mr. Ryan Brown, the President and sole director of GrowPros.
The transaction will be carried out by way of a three-cornered amalgamation (the “Amalgamation“) pursuant to which, among other things: (i) GrowPros will amalgamate with 9048073 Canada Inc., a newly-incorporated subsidiary of Mazorro, and will continue as a wholly-owned subsidiary of Mazorro; and (ii) shareholders of GrowPros will receive one common share of the Company in exchange for every Class A common share of GrowPros held at the effective time of the Amalgamation. Holders of Class A common share purchase warrants of GrowPros will receive common share purchase warrants of the Company on the same exchange ratio.
In order to become effective, the Amalgamation must be approved by a special majority (66 2/3%) of the votes cast at a meeting of shareholders of GrowPros and, pursuant to the policies of the Canadian Securities Exchange (the “CSE“), by a majority of shareholders of the Company.
The Company has requested reservation of the trading symbol “GRP” has called a special meeting of its shareholders, to be held on December 19, 2014, to seek the requisite approval for the Amalgamation and to change its name to “GrowPros Cannabis Inc.” upon completion of the Amalgamation.
In accordance with the policies of the CSE, a trading halt has been implemented pending the CSE’s review of the disclosure related to the Amalgamation. The Company understands the need for a halt at this stage of the implementation of its change of business and, in order to assist the CSE in their review, will file an updated Form 2A Listing Statement reflecting the new business.
Completion of the Amalgamation remains subject to a number of conditions, including, but not limited to, approval by special resolution of the shareholders of GrowPros, satisfaction of standard closing conditions for transactions of this nature, and the acceptance of the CSE.
Trading will resume upon satisfactory review of the Form 2A Listing Statement, which the Company expects will be completed in a timely manner.
Management Changes
The Company also wishes to announce that Mr. John McNeice has resigned as Chief Financial Officer and Corporate Secretary of the Company effective October 28, 2014. Mr. McNeice will focus on his CFO roles with other junior resource companies that he is currently involved with and other opportunities.
Mr. André Audet, Interim President and CEO of the Company, expressed, “on behalf of Mazorro’s management and board we thank John for his service to the Company over the past six years. We wish John success as he focuses on his other roles.”
Mr. Audet will act as Interim CFO in addition to his current roles as Interim President and CEO of the Company until completion of the Amalgamation, at which time it is anticipated that Mr. Ryan Brown will be appointed as President and CEO and Mr. Sabino Di Paola, the current CFO of GrowPros, will be appointed as CFO of the Company.
Upon completion of the Amalgamation, it is also anticipated that current director Mr. Léo Coté will resign and that the board of directors of the Company will consist of current directors Messrs. André Audet and Dean Hanisch and a third director to be appointed by the board, Mr. Ryan Brown.
Capitalization
The currently issued and outstanding capital of the Company consists of 32,770,387 common shares, 7,463,000 common share purchase warrants, 501,300 agent compensation options, and 1,225,000 stock options. The currently issued and outstanding capital of GrowPros consists of 25,300,100 Class A common shares and 8,000,000 common share purchase warrants.
Upon completion of the Amalgamation, the issued and outstanding capital of the Company will consist of 58,070,487 common shares, 15,463,000 common share purchase warrants, 501,300 agent compensation options, and 1,225,000 stock options. As a result, former shareholders of GrowPros will hold approximately 43.57% of the outstanding common shares of the Company on a non-diluted basis.
The Canadian Securities Exchange (CSE) has not reviewed this news release and does not accept responsibility for its adequacy or accuracy
Forward-looking statements
Some statements in this release may contain forward-looking information. All statements, other than of historical fact, that address activities, events or developments that the Company believes, expects or anticipates will or may occur in the future (including, without limitation, statements regarding potential acquisitions and financings) are forward-looking statements. Forward-looking statements are generally identifiable by use of the words “may”, “will”, “should”, “continue”, “expect”, “anticipate”, “estimate”, “believe”, “intend”, “plan” or “project” or the negative of these words or other variations on these words or comparable terminology. Forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond the Company’s ability to control or predict, that may cause the actual results of the Company to differ materially from those discussed in the forward-looking statements. Factors that could cause actual results or events to differ materially from current expectations include, among other things, without limitation, the inability of the Company to achieve its diversification strategy (including, without limitation, the proposed acquisition of GrowPros); failure to obtain sufficient financing, and other risks disclosed in the Company’s public disclosure record on file with the relevant securities regulatory authorities. 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.
Mazorro Resources Inc.
Andre Audet
Interim President & CEO
(613) 241-2332
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