Mer­cal Cap­i­tal amends LOI with Vi­tal­ity CBD

Stockwatch Daily - - SHELLS - Mr. Tim McCunn re­ports

MER­CAL CAP­I­TAL Corp. has amended its let­ter of in­tent with Vi­tal­ity CBD Nat­u­ral Health Prod­ucts Inc. (for­merly known as Seren­ity CBD Canada Inc.), a cor­po­ra­tion in­cor­po­rated un­der the Canada Busi­ness Cor­po­ra­tions Act.

On Feb. 26, 2018, Mer­cal an­nounced that it had en­tered into a let­ter of in­tent dated Feb. 22, 2018, with Vi­tal­ity by which Mer­cal would pur­chase from Vi­tal­ity share­hold­ers all of the is­sued and out­stand­ing shares in the cap­i­tal of Vi­tal­ity in con­sid­er­a­tion for the is­suance to Vi­tal­ity share­hold­ers of a cer­tain num­ber of com­mon shares in the cap­i­tal of Mer­cal. The par­ties had in­tended that the pro­posed trans­ac­tion would con­sti­tute Mer­cal’s qual­i­fy­ing trans­ac­tion as de­fined in Pol­icy 2.4 of the poli­cies of the TSX Ven­ture Ex­change. In­stead of pro­ceed­ing with the qual­i­fy­ing trans­ac­tion, the let­ter of in­tent has been amended such that Mer­cal shall delist from the NEX board of the TSX-V and Vi­tal­ity will merge with Mer­cal in con­sid­er­a­tion of the is­suance to Mer­cal share­hold­ers of a cer­tain num­ber of com­mon shares in the cap­i­tal of Vi­tal­ity in the same pro­por­tion (sub­ject to the di­lu­tive ef­fect of fi­nanc­ings, stock op­tion is­suances and other trans­ac­tions com­pleted by Vi­tal­ity which have di­luted all the share­hold­ers of Vi­tal­ity equally on a pro rata ba­sis.) as ex­pressed in the ini­tial let­ter of in­tent. The sole rea­son to delist from the NEX is Mer­cal’s man­age­ment’s de­sire to com­plete the trans­ac­tion con­tem­plated by the amended let­ter of in­tent for the clear ben­e­fit it pro­vides to Mer­cal share­hold­ers.

Un­der the pro­posed terms of the trans­ac­tion con­tem­plated by the amended let­ter of in­tent:

• Ap­prox­i­mately 3,992,390 shares are to be is­sued to Mer­cal share­hold­ers, which shall equal 2.92 per cent of the is­sued and out­stand­ing shares of Vi­tal­ity on a fully di­luted ba­sis (which per­cent­age was orig­i­nally ex­pressed to be 5.0 per cent in the let­ter of in­tent dated Feb. 22, 2018, but has been di­luted by a se­ries of fi­nanc­ings, stock op­tion is­suances and other trans­ac­tions which have been com­pleted by Vi­tal­ity since that time which have di­luted all the share­hold­ers of Vi­tal­ity equally on a pro rata ba­sis) or 0.6796 com­mon share of Vi­tal­ity for each one com­mon share of Mer­cal;

• All fully vested stock op­tions of Mer­cal shall be con­verted into stock op­tions of Vi­tal­ity. Upon the closing of the trans­ac­tions con­tem­plated by the amended let­ter of in­tent, the ex­pected process of dis­tri­bu­tion to the Mer­cal share­hold­ers of their com­mon shares of Vi­tal­ity is by let­ter of trans­mit­tal. Com­ple­tion of the trans­ac­tions con­tem­plated by the amended let­ter of in­tent is to oc­cur prior to and as a con­di­tion prece­dent of the trans­ac­tion be­tween Vi­tal­ity and LiveWell Canada Inc. as de­scribed in a press re­lease is­sued by LiveWell and filed on SEDAR on Dec. 3, 2018, such that fol­low­ing the com­ple­tion of trans­ac­tion be­tween Vi­tal­ity and LiveWell, the cur­rent share­hold­ers of Mer­cal will own shares of LiveWell.

Mike Caswell con­densed this news re­lease ([email protected]­watch.com).

Brian Martin Baker, Antonio F Cruz, Fran­cis Michael Hunter Gleeson, Ti­mothy Joseph McCunn, Michael Peter Mueller, Calvin Ralph Stiller

(MUL) Shares: 6,975,000

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