Kiaro Holdings Corp. (Formerly DC Acquisition Corp.) Announces Completion of Qualifying Transaction

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VANCOUVER, BC, Oct. 13, 2020 /CNW/ - Kiaro Holdings Corp. (TSXV: KO) (the "Company") is pleased to announce the closing of its previously announced qualifying transaction resulting in the reverse takeover of DC Acquisition Corp. ("DCA") by Kiaro Brands Inc. (the "Qualifying Transaction").

The Transaction

Effective October 13, 2020, as a condition to the completion of the Qualifying Transaction, DCA changed its name to "Kiaro Holdings Corp." and consolidated its share capital (the "Consolidation") on the basis of 1.7142857143 (old) common shares for 1 (new) common share. Immediately following the Consolidation, DCA had an aggregate of 20,416,663 common shares outstanding.

Pursuant to the terms of the Qualifying Transaction, Kiaro Brands Inc. ("Kiaro"), a private British Columbia company, amalgamated with 1251542 B.C. Ltd. ("DCA Subco"), a wholly owned subsidiary of DCA, by way of a three cornered amalgamation pursuant to a merger agreement dated June 9, 2020, a copy of which is available under the Company's profile on SEDAR at www.sedar.com, and all outstanding securities of Kiaro were exchanged (the "Securities Exchange") for post-Consolidation securities of DCA on a 1:1 basis, resulting in approximately 107,993,707 post-Consolidation DCA common shares being issued to former shareholders of Kiaro. An additional 45,155,309 post-Consolidation DCA common shares were issued to holders of certain convertible securities of Kiaro who exercised their conversion rights immediately prior to the completion of the Qualifying Transaction. Further details regarding the Qualifying Transaction can be found in the filing statement of DCA and Kiaro dated September 29, 2020 (the "Filing Statement"), a copy of which is available under the Company's profile on SEDAR at www.sedar.com.

The parties to the Qualifying Transaction have made their final submission to the TSX Venture Exchange (the "Exchange") in connection with the Exchange's issuance of its listing bulletin.

It is anticipated that the common shares of the Company will commence trading on the Exchange under the trading symbol "KO" on or about October 19, 2020.

Escrowed Shares

On completion of the Qualifying Transaction, certain Principals (as defined policies of the Exchange) of the resulting issuer holding an aggregate of  48,826,752 common shares of the Company are subject to escrow in accordance with section 6.2 of  Policy 5.4 – Escrow, Vendor Consideration and Resale Restrictions of the Exchange ("Policy 5.4"). Pursuant Policy 5.4, 10% of the escrowed shares will be released at the time of the Final Exchange Bulletin, with an additional 15% released on each 6 month anniversary thereafter.

In addition, certain current and/or former shareholders of DCA have entered into a CPC Escrow Agreement (the "CPC Escrow Agreement") with the Exchange and TSX Trust Company, as escrow agent, in respect of 6,547,913 post-Consolidation DCA common shares. Under the terms of the CPC Escrow Agreement, 10% of the escrowed shares will be released at the time of the Final Exchange Bulletin, with an additional 15% released on each 6 month anniversary thereafter. Concurrent with closing, Odyssey Trust Company replaced TSX Trust Company as escrow agent in respect of the CPC Escrow Agreement.

In addition, on completion of the Qualifying Transaction, certain former shareholders of Kiaro holding an aggregate of 5,174,510 common shares of the Company are subject to seed share resale restrictions ("SSRR") pursuant to section 10 of Policy 5.4. Under the policies of the Exchange, 10% of all shares subject to SSRR are released at the time of the Final Exchange Bulletin, with 15% released on each 6 month anniversary thereafter.

In addition, on completion of the Qualifying Transaction, certain former shareholders of Kiaro holding an aggregate of 44,488,925 common shares of the Company are subject to certain contractual pooling restrictions (the "Pooling Restrictions"). Pursuant to the Pooling Restrictions, 20% of the pooled shares will be released on the listing date of the Company's common shares, with an additional 20% released on each 6 month anniversary thereafter.

Board of Directors and Executive Management

Following the completion of the Qualifying Transaction, the following individuals will comprise the directors and officers of the Company:

Daniel Petrov        -               Director and Chief Executive Officer

Janet Hoffar         -               Director, Chief Financial Officer and Corporate Secretary

Herrick Lau          -               Director

Shawn Graham    -               Director

Zachary Stadnyk -               Director

Eleanor Lynch     -               President of Operations

Auditors

Concurrent with the closing of the Qualifying Transaction, MNP LLP has been appointed auditors of the Company.

Year End

Following completion of the Qualifying Transaction, the fiscal year end of the Company shall be January 31. In accordance with applicable laws, the Company will publish unaudited interim financial statements of Kiaro Brands Inc. for the six (6) months ended July 31, 2020 within 10 days of the completion of the Qualifying Transaction.

Additional Information for Shareholders

The Company's transfer agent, Odyssey, will be mailing Direct Registration System statements  to  all  former Kiaro shareholders (other than for those  that  are  required to be in certificated  form)  setting out each holder's shareholdings. The CUSIP number for Kiaro common shares is 49374K100.

Former holders of pre-Consolidation common shares of DCA will be receiving by mail, from Odyssey, a letter of transmittal with instructions on how to remit your former DCA common shares for post-Consolidation common shares of the Company.

For  further  information,  please  refer  to  the  Filing  Statement  posted  to  the Company's  issuer  profile  on  SEDAR  at  www.sedar.com, as well as the press releases dated May 12, 2020, July 14, 2020, and October 2, 2020.

Information About the Company

The Company is a holding company which holds 100% of the issued and outstanding securities of Kiaro.

Information About Kiaro

Kiaro Brands Inc. is the resulting company of an amalgamation under the Business Corporations Act (British Columbia) of Aura Cannabis Inc. and Elora Capital Ltd. on September 9, 2019. 

Based in Vancouver, British Columbia, Kiaro Holdings Corp., "Kiaro", is an independent, omni-channel cannabis retailer and distributor. Through existing storefronts across British Columbia and Saskatchewan, a wholesale distribution division servicing Saskatchewan, and plans for national expansion, Kiaro is driven to introduce new and experienced consumers to a lifelong exploration of cannabis. With more than 40 years of collective retail-focused experience, Kiaro's leadership team has a proven track record of growing retail brands across North America and plans to open multiple retail locations nationwide over the coming years.For more information, visit kiaro.com.

Disclaimer

Investors  are  cautioned  that,  except  as  disclosed  in  the Filing  Statement  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. Trading  in  the  securities  of  the Company  should  be  considered  highly  speculative.

The TSXV has in no way passed upon the merits of the Transaction or the Offering and has neither approved nor disapproved the contents of this news release.

Neither the TSX Venture Exchange Inc. nor its Regulation Service Provider (as that term is defined in the policies of the TSX Venture Exchange Inc.) accepts responsibility for the adequacy or accuracy of this press release.

This news release shall not constitute an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction. Any securities referred to herein have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States or to a U.S. Person absent registration or an applicable exemption from the registration requirements of the United States Securities Act of 1933, as amended, and applicable state securities laws.

Forward-Looking Statements

This   press   release   may   contain   certain   forward-looking   information   and   statements   ("forward-looking information") within the meaning of applicable Canadian securities legislation, that are not based on historical fact, including without limitation statements containing the words "believes", "anticipates", "plans", "intends", "will",  "should",  "expects",  "continue",  "estimate",  "forecasts"  and  other  similar  expressions.  Readers  are  cautioned  to  not  place  undue  reliance  on  forward-looking  information.  Actual  results  and  developments  may  differ materially from those contemplated by these statements. The Company undertakes no obligation to comment analyses, expectations or statements made by third-parties in respect of the Company, its securities, or financial or operating results (as applicable). Although the Company believes that the expectations reflected in forward-looking information  in  this  press  release  are  reasonable,  such  forward-looking  information  has  been  based  on  expectations,  factors  and  assumptions  concerning  future  events  which  may  prove  to  be  inaccurate  and  are  subject to numerous risks and uncertainties, certain of which are beyond the Company's control, including the risk factors discussed in the Filing Statement which are incorporated herein by reference and are available through SEDAR  at  www.sedar.com.  The  forward-looking  information  contained  in  this  press  release  are  expressly  qualified by this cautionary statement and are made as of the date hereof. The Company disclaims any intention and has  no  obligation  or  responsibility,  except  as  required  by  law,  to  update  or  revise  any  forward-looking information, whether as a result of new information, future events or otherwise.

Share numbers noted in this press release may not match the numbers disclosed in the Filing Statement due to rounding pursuant to the process of completing the Consolidation and the exchange of Kiaro securities for post-Consolidation common shares.

SOURCE Kiaro Brands Inc.

Kiaro Holdings Corp., Daniel Petrov, Chief Executive Officer, E-mail: [email protected], Phone #: [phone]

Related Links

www.kiaro.com