3 Sixty Secure Corp. and Total Cannabis Security Solutions Inc. Agree to Reverse Takeover Transaction with Petro Vista Energy Corp.

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VANCOUVER, Sept. 20, 2018 /CNW/ - Petro Vista Energy Corp. (NEX: PTV.H) ("Petro Vista") announces that it has entered into a letter of intent (the "Letter Agreement") with 3 Sixty Secure Corp., a privately held corporation existing under the provisions of the Canada Business Corporations Act ("3Sixty") and Total Cannabis Security Solutions Inc. ("TCSS"), a privately held corporation existing under the provisions of the Business Corporations Act (Ontario) (the "OBCA"), which outlines the general terms and conditions pursuant to which Petro Vista, 3Sixty and TCSS have agreed to complete a transaction (the "RTO Transaction") that will result in a reverse take-over of Petro Vista by an amalgamated corporation ("Amalco") resulting from the prior amalgamation of 3Sixty and TCSS. The Letter Agreement was negotiated at arm's length and is effective as of September 20, 2018. In connection with, and immediately prior to, the completion of the Transaction, 3Sixty will continue under the OBCA and will amalgamate with TCSS (the "PrivateCo Amalgamation") under the OBCA in accordance with the terms of a transaction agreement between 3Sixty and TCSS dated as of the date hereof (the "Transaction Agreement"). In connection with the RTO Transaction, 3Sixty has engaged Hillcrest Merchant Partners and Liberty North Capital as its financial advisors and TCSS has engaged Canaccord Genuity Corp. ("Canaccord") as its exclusive financial advisor.

Description of 3Sixty

3Sixty is one of Canada's leading security service providers to the cannabis sector. 3Sixty provides guard and transport security services to approximately 40 licensed cannabis producers, including some of the world's largest, such as licensed producers owned by Canopy Growth Corporation. 3Sixty also has a commercial agreement with the Ontario Cannabis Store to provide secure transport services in respect of their cannabis-related requirements. 3Sixty has a staff of over 180 employees, including over 160 full-time guards, and employs a fleet of approximately 42 vehicles, which management believes provides a combined security footprint to approximately 30 million square feet of patrolled area.

Description of TCSS

TCSS is one of Canada's leading strategic services consulting businesses to the cannabis sector. TCSS owns 100% of David Hyde and Associates, a security consulting firm to the cannabis sector, which management believes has provided security consulting services to over 50% of all existing licensed producers currently operating, as well as to numerous prospective producers currently applying for a license to operate in the Canadian cannabis industry. Since 2013, David Hyde and Associates has provided security advisory services to over 400 customers in the cannabis sector.

Description of Amalco

Amalco will be led by Thomas Gerstenecker, as Chief Executive Officer, and David Hyde, as President. Thomas Gerstenecker is the founder of 3Sixty and previously spent a number of years with the Canadian Special Forces Group, Joint Task Force Two, and approximately 15 years with the United Nations in various senior security positions including Chief, Global Security. David Hyde is the founder of David Hyde and Associates and is one of the most highly regarded professionals in the field of cannabis security. They will be joined by a group of seasoned executives, including Carlo Rigillo (Chief Financial Officer), Craig Bromell (Chief of Security and Intelligence) and Neil Weaver (Chief Commercial Officer). The strategic rationale for the PrivateCo Amalgamation includes:

• Creation of a Leading, Full-Service, Seed-to-Sale Cannabis Security Provider to Service Growing Regulated Markets in Canada and the US: Amalco will employ over 200 employees, a fleet of over 42 vehicles and will service over 430 customers, including some of Canada's leading licensed producers of cannabis. This will allow Amalco to maintain its market leading position in Canada and provide a basis for a targeted expansion into the United States and other foreign markets.
  
  
• Generation of Significant Revenue Synergies: Management of 3Sixty and TCSS believe that the over 400 customers within TCSS will provide a significant origination channel for other services outside of strategic consulting services. Management believe that 3Sixty generates significantly more revenue than TCSS on a per customer basis, given the anticipated larger spend on transportation and on-premises guarding services.
  
  
• Execution on Existing Growth Opportunities in the Canadian Market in Anticipation of the Cannabis Act: 3Sixty has entered into commercial relationships with over 15 cannabis companies in the past three months for guard and transport security services and expects to enter into an increasing number of commercial relationships over the next three months for similar services. TCSS and 3Sixty also expect a significant increase in demand for both their services, given the recent expected implementation of the Canadian Cannabis Act. This expected increase in demand is expected to provide an opportune time to cross-sell Amalco's full-service security solutions offering.
  
  
• Expansion into the United States and other Foreign Markets: 3Sixty and TCSS both see a significant opportunity to expand into the United States and other foreign markets. Based on 3Sixty's experience providing security services to Canadian licensed producers and TCSS's past experiences providing security consulting services to U.S. clients, both 3Sixty and TCSS perceive an increasing need from U.S. operators for security solutions, including guard, transport and cash management services, particularly given the growing U.S. regulatory environment in respect of the cannabis industry. 3Sixty and TCSS also see opportunities for Amalco in other growing regulated markets, including Europe and Australia.

Description of Petro Vista

Petro Vista exists under the provisions of the Business Corporations Act (British Columbia) with its registered and head office in Vancouver, British Columbia. Petro Vista is a "reporting issuer" within the meaning of the Securities Act (British Columbia) and the Securities Act (Alberta). The common shares of Petro Vista (the "Petro Vista Shares") are currently listed on the NEX Board of the TSX Venture Exchange (the "TSXV"). In conjunction with the Transaction, Petro Vista will de-list the Petro Vista Shares from the TSXV and the Resulting Issuer (as defined below) expects to be listed on the Canadian Securities Exchange (the "CSE"). In accordance with TSXV requirements, Petro Vista will be seeking majority of the minority shareholder approval in connection with the de-listing.

Terms of the PrivateCo Amalgamation

Prior to the completion of the RTO Transaction and in accordance with the terms of the Transaction Agreement, 3Sixty will continue under the OBCA and amalgamate with TCSS under the OBCA to form Amalco and Amalco will continue the business of 3Sixty and TCSS under the name "3 Sixty Secure Corp.". As of the date hereof, (i) 3Sixty has 71.2 million common shares issued and outstanding on a basic basis and 76.3 million common shares outstanding on a fully-diluted basis, and (ii) TCSS has 86.2 million common shares issued and outstanding on a basic basis and 171.5 million common shares outstanding on a fully-diluted basis. Upon completion of the PrivateCo Amalgamation, all holders of common shares of 3Sixty ("3Sixty Shares") will receive one common share of Amalco (each, an "Amalco Share") for each 3Sixty Share held, and all holders of common shares of TCSS ("TCSS Shares") will receive 0.353 Amalco Shares for each TCSS Share held, and each of the 3Sixty Shares and the TCSS Shares will thereafter be cancelled. 3Sixty and TCSS expect that there will be 136.9 million Amalco Shares outstanding on a fully-diluted basis upon completion of the PrivateCo Amalgamation.

Any convertible securities of 3Sixty and TCSS remaining outstanding upon completion of the PrivateCo Amalgamation shall be exchanged on the basis of the above formulations for equivalent securities of the Amalco.

Private Placement of Subscription Receipts

In connection with the RTO Transaction and subsequent listing of the common shares of the Resulting Issuer (the "Resulting Issuer Shares") on the CSE, 3Sixty has entered into an engagement letter with Canaccord pursuant to which it is anticipated that, prior to the completion of the RTO Transaction, 3Sixty will complete an equity private placement (the "Private Placement") of subscription receipts ("Subscription Receipts") for aggregate gross proceeds of no less than $15.0 million and up to $20.0 million. Each Subscription Receipt issued under the Private Placement will entitle the holder to receive one 3Sixty Share (or, following the completion of the PrivateCo Amalgamation, one Amalco Share) which, upon completion of the RTO Transaction, will be exchanged, for no additional consideration, for one Resulting Issuer Share.

Terms of the RTO Transaction

The RTO Transaction is expected to proceed by way of a three-cornered amalgamation between Petro Vista and Amalco, following which Petro Vista (then, the "Resulting Issuer") will continue the business of Amalco and will change its name to "3 Sixty Secure Corp." (the "Name Change").

As of the date hereof, Petro Vista has 4,072,602 Petro Vista Shares issued and outstanding, 1,130,000 common share purchase warrants to acquire Petro Vista Shares (the "Petro Vista Warrants") outstanding and nil options to acquire Petro Vista Shares outstanding. Prior to the completion of the RTO Transaction, each Petro Vista Warrant shall be exercised and the Petro Vista Shares will be consolidated on the basis of two (2) old Petro Vista Shares for one (1) new Petro Vista Share (the "Consolidation") resulting in approximately 2,601,301 Petro Vista Shares outstanding on a post-Consolidation basis. Upon the completion of the RTO Transaction and following the Consolidation, holders of Amalco Shares (including Amalco Shares received upon the automatic exchange of the Subscription Receipts) will receive one Resulting Issuer Share per Amalco Share and the Amalco Shares will be cancelled.

All convertible securities of Amalco shall be exchanged on a one-for-one basis for equivalent securities of the Resulting Issuer. Immediately prior to the completion of the RTO Transaction and pursuant to the exercise of the Petro Vista Warrants as described above, there shall be no holders of convertible securities of Petro Vista.

Subject to the receipt of applicable regulatory approvals, Amalco will pay a finder's fee to a third party in connection with the RTO Transaction in the amount of $300,000, to be paid in the form of Resulting Issuer Shares.

It is anticipated that all Resulting Issuer Shares to be received by current holders of 3Sixty Shares and TCSS Shares (including any Resulting Issuer Shares to be issued upon the exercise of any common share purchase warrants of 3Sixty or TCSS that remain outstanding  upon completion of the RTO Transaction) shall be subject to lock-up arrangements, pursuant to which 25% of such holder's Resulting Issuer Shares shall become freely tradeable at each of three months, six months, nine months and twelve months from the date of the completion of the RTO Transaction. As an incentive for the early exercise of the outstanding warrants of TCSS (the "TCSS Warrants"), to the extent holders of TCSS Warrants exercise their warrants in exchange for TCSS Shares prior to the completion of the PrivateCo Amalgamation and RTO Transaction, such warrantholders will be subject to an abbreviated lock-up period in respect of the shares received by the warrantholder upon exercise of their TCSS Warrants.   

Management and Directors of the Resulting Issuer

If the RTO Transaction is completed, it is anticipated that the board of directors of the Resulting Issuer shall be reconstituted to consist of such directors as 3Sixty and TCSS shall determine, and each of the officers of Petro Vista shall resign and be replaced with officers appointed by the new board of directors.

Petro Vista Shareholder Meeting

Prior to the completion of the RTO Transaction, Petro Vista will call a meeting of its shareholders for the purpose of approving, among other matters:

• the Name Change, as directed by 3Sixty and acceptable to the applicable regulatory authorities, to be effective upon Closing;
   
  
• the reconstitution of Petro Vista's board of directors conditional on the completion of the RTO Transaction; and
  
  
• the de-listing of the Petro Vista Shares from the TSXV.

Conditions to the RTO Transaction

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

• 3Sixty and TCSS completing the PrivateCo Amalgamation;
   
  
• each of Petro Vista, 3Sixty and TCSS calling and holding meetings of their respective directors and shareholders to gain approval for
   
• in the case of 3Sixty, the Continuance, PrivateCo Amalgamation and RTO Transaction;
   
  
• TCSS, the PrivateCo Amalgamation and RTO Transaction;
   
  
• in the case of Petro Vista, majority of the minority shareholder approval for the delisting of the Petro Vista Shares from the TSXV;
   
  
• such other approvals as may be required from the directors and shareholders of Petro Vista, 3Sixty and TCSS.
  
  
• 3Sixty completing the Private Placement;
  
  
• Petro Vista and Amalco entering into a definitive agreement (the "Definitive Agreement") in respect of the RTO Transaction;
  
  
• all requisite regulatory approvals relating to the RTO Transaction, including, without limitation, CSE approval, having been obtained.

Additional Information Regarding the RTO Transaction

It is intended that the RTO Transaction will occur after the Petro Vista Shares have been delisted from the TSXV. The RTO Transaction is subject to requisite regulatory approval, including the approval of the CSE for the listing of the Resulting Issuer Shares and customary closing conditions, including the approval of the directors of each of Petro Vista and Amalco of the Definitive Agreement and the other conditions described herein. The final legal structure for the RTO Transaction will be determined after the parties have considered all applicable tax, securities law and accounting efficiencies.

Petro Vista and Amalco shall use their commercially reasonable efforts to complete the RTO Transaction by March 31, 2019, or such later date as the parties may agree to in writing. In the event that the Transaction has not been completed by March 31, 2019, each of the parties shall be entitled to terminate its obligations under the Letter Agreement.

Further Information

Upon entering into the Definitive Agreement in respect of the RTO Transaction, Petro Vista intends to issue a further news release which will disclose, among other things, details of insiders and proposed directors and officers of the Resulting Issuer, and a summary of financial information pertaining to Amalco.

Investors are cautioned that any information released or received with respect to the RTO Transaction in this press release may not be complete and should not be relied upon. Trading in Petro Vista Shares should be considered highly speculative

All information contained in this news release with respect to Petro Vista, 3Sixty and TCSS 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.

Completion of each of the PrivateCo Amalgamation and the RTO Transaction is subject to a number of conditions. In particular, completion of the RTO Transaction is subject to conditions including, but not limited to, CSE acceptance and if applicable pursuant to the requirements of TSXV and the CSE, majority of the minority shareholder approval. Where applicable, each of the PrivateCo Amalgamation and the RTO Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that each of the PrivateCo Amalgamation and the RTO Transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the management information circular or listing statement to be prepared in connection with the PrivateCo Amalgamation and RTO Transaction, as applicable, any information released or received with respect to each of the PrivateCo Amalgamation and the RTO Transaction may not be accurate or complete and should not be relied upon.

This press release does not constitute an offer to sell or a solicitation of an offer to sell any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

Neither TSXV nor the CSE has in any way passed upon the merits of the Private Placement, the proposed RTO Transaction or the listing of the Resulting Issuer Shares 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), NOR THE CSE OR ITS MARKET REGULATOR (AS THAT TERM IS DEFINED IN THE POLICIES OF THE CSE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION:

This news release contains "forward-looking information" and "forward-looking statements" (collectively, "forward-looking statements") within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as "expects", or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "budget", "scheduled", "forecasts", "estimates", "believes" or "intends" or variations of such words and phrases or stating that certain actions, events or results "may" or "could", "would", "might" or "will" be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements. In this news release, forward-looking statements relate, among other things, to: the terms and conditions of the proposed PrivateCo Amalgamation and the proposed RTO Transaction; the terms and conditions of the proposed Private Placement; and the business and operations of Petro Vista, 3Sixty, TCSS, Amalco after the proposed PrivateCo Amalgamation and the Resulting Issuer after the proposed RTO Transaction. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: general business, economic, competitive, political and social uncertainties; and the delay or failure to receive board, shareholder or regulatory approvals. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this news release. The terms and conditions of each of the PrivateCo Amalgamation and the RTO Transaction may change based on the receipt of tax, corporate and securities law advice for each of the parties. Except as required by law, Petro Vista, 3Sixty and TCSS assume no obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change, except as required by law.

SOURCE Petro Vista Energy Corp.

regarding the RTO Transaction, please contact: Darryl Cardey, Director, Petro Vista Energy Corp., Telephone: [phone], Email: [email protected]; Thomas Gerstenecker, Founder and Chief Executive Officer, 3 Sixty Secure Corp., Telephone: [phone], Email: [email protected]; Neil Weaver, Chief Executive Officer, Total Cannabis Security Solutions Inc., Telephone: [phone], Email: [email protected]