Metropolitan Energy Corp. Announces Definitive Agreement with Bertram Capital Finance, Inc. and Update on Private Placement

/THIS PRESS RELEASE IS NOT FOR PUBLICATION OR DISSEMINATION IN THE UNITED STATES. FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF UNITED STATES SECURITIES LAW./

VANCOUVER, Oct. 17, 2018 /CNW/ - Metropolitan Energy Corp. (TSXV: MOE.H) ("Metropolitan" or the "Company"), is pleased to announce that, further to its announcement on July 5, 2015, it has entered into a definitive business combination agreement (the "Definitive Agreement") dated October 17, 2018 to acquire all of issued and outstanding securities of Bertram Capital Finance, Inc. ("Cannabis One"), which operates under the business name of Cannabis One. Cannabis One is a U.S.-based, professional management corporation formed to service the fast-growing, legal cannabis industry through real estate development and lease-back equipment financing, operating lines of credit, consultation, and intellectual property and brand management within U.S. state-legal markets. Cannabis One, headquartered in Denver, Colorado, intends to redefine the traditional, vertically-integrated, seed-to-sale business model with a specific focus on aggregating cannabis retail distribution and brand manufacturing.

TERMS OF THE TRANSACTION

Under the terms of the Definitive Agreement, Metropolitan will acquire, indirectly through its wholly owned subsidiary incorporated in Colorado ("AcquireCo"), all of the issued and outstanding equity securities of Cannabis One in exchange for newly created Class A subordinated voting shares ("Subordinated Voting Shares") and Class B super voting shares ("Super Voting Shares"), as applicable, of Metropolitan pursuant to a merger of Cannabis One and AcquireCo, the result of which will constitute a reverse takeover of the Company by the shareholders of Cannabis One (the "Proposed Transaction"). Following the Proposed Transaction, Metropolitan will have cannabis operations within a number of State-legal markets throughout the U.S. and will retain manufacturing, distribution, and licensing agreements with State-licensed cannabis companies.

Pursuant to the terms of the Definitive Agreement, the Company will seek to delist from the NEX board of the TSX Venture Exchange (the "NEX") and intends to apply for listing of the Subordinated Voting Shares on the Canadian Securities Exchange (the "CSE"), with such listing to be effective concurrent with the closing of the Proposed Transaction. Having already received the necessary approvals from both the shareholders of the Company and Cannabis One, the closing of the Proposed Transaction (the "Closing") remains subject to customary conditions for a transaction of this nature, which includes approval from the TSX Venture Exchange for voluntary delisting of the Company's common shares, from the CSE for the listing of the Subordinated Voting Shares and any other regulatory approvals.

In connection with the Proposed Transaction, the Company will be required to, among other things: (i) change its name to Cannabis One Holdings Inc., or such other name as is agreed to by the board of directors of Metropolitan and acceptable to regulatory authorities; (ii) replace all directors and officers of the Company (other than Christopher Fenn) on closing of the Proposed Transaction with nominees of Cannabis One; (iii) redesignate the common shares of the Company as Subordinated Voting Shares; and (iv) create a new class of Super Voting Shares.

Further details of the Proposed Transaction are available in the information circular of the Company dated September 11, 2018 and more particularly described in the Definitive Agreement which are filed on the Company's SEDAR profile at www.sedar.com, and will be included in subsequent news releases and disclosure documents (which will include business and financial information in respect of Cannabis One) to be filed by the Company in connection with the Proposed Transaction. It is anticipated that the closing of the Proposed Transaction will take place prior to the end of 2018. It is intended that the common shares of the Company will remain halted until the Proposed Transaction closes or the Definitive Agreement is terminated.

UPDATE TO PREVIOUSLY ANNOUNCED PRIVATE PLACEMENT

In conjunction with the execution of the letter of intent on July 5, 2018 (the "LOI"), the Company and Cannabis One determined that the private placement described in the press release dated July 5, 2018 (the "Private Placement") be structured as an offering of subscription receipts in the capital of Cannabis One ("Subscription Receipts") and be upsized to up to CAD$8,000,000.  Pursuant to the terms of the Subscription Receipts, the Subscription Receipts are automatically converted into one share in the common stock of Cannabis One (a "Cannabis One Share") and one-half of one (½) Cannabis One Share purchase warrant (a "Cannabis One Warrant") upon execution of the Definitive Agreement. 

As of the date hereof, Cannabis One has closed on Subscription Receipts and issued instructions for the registration of the underlying Cannabis One Shares and Cannabis One Warrants representing aggregate gross proceeds of approximately CAD$6,900,000. Cannabis One anticipates that an additional tranche of Subscription Receipts shall be sold under the Private Placement for additional gross proceeds of up to CAD$977,693.  Cannabis One intends to use the net proceeds of the Private Placement for general working capital.

Forward-Looking Information & Statements

Completion of the Proposed Transaction is subject to a number of conditions, including TSXV, CSE and other regulatory acceptance and as more particularly described in the Definitive Agreement. There can be no assurance that the Proposed Transaction will be completed as proposed or at all. Investors are cautioned that, any information released or received with respect to the Proposed 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 TSX Venture Exchange (the "TSXV") nor its Regulation Services Provider (as such term is defined in policies of the TSXV) has in no way passed upon the merits of the Proposed Transaction and has neither approved nor disapproved the contents of this press release.

All information contained in this news release with respect to Cannabis One was supplied by Cannabis One for inclusion herein and the Company has relied on the accuracy of such information without independent verification.

Certain statements contained in this press release constitute forward-looking information. These statements relate to future events or future performance. The use of any of the words "anticipate", "could", "intend", "expect", "believe", "will", "projected", "estimated" and similar expressions and statements relating to matters that are not historical facts are intended to identify forward-looking information and are based on the parties' current belief or assumptions as to the outcome and timing of such future events. Actual future results may differ materially. In particular, this release contains forward-looking information relating to the information concerning the Proposed Transaction and the Private Placement, expectations regarding whether the Proposed Transaction will be consummated, including whether conditions to the consummation of the Proposed Transaction will be satisfied, expectations for the effects of the Proposed Transaction or the ability of the combined company to successfully achieve business objectives, expectations regarding whether an additional tranche of the Private Placement will be consummated, and expectations for other economic, business, and/or competitive factors. Various assumptions or factors are typically applied in drawing conclusions or making the forecasts or projections set out in forward-looking information. Those assumptions and factors are based on information currently available to the parties. The material factors and assumptions include the parties being able to obtain the necessary corporate, regulatory and other third parties approvals and completion of satisfactory due diligence. Among the key factors that could cause actual results to differ materially from those projected in the forward-looking information and statements are the following: the ability to consummate the Proposed Transaction and the additional tranche of the Private Placement; the ability to obtain requisite regulatory and securityholder approvals and the satisfaction of other conditions to the consummation of the Proposed Transaction on the proposed terms and schedule; the potential impact of the announcement or consummation of the Proposed Transaction on relationships, including with regulatory bodies, employees, suppliers, customers and competitors; changes in general economic, business and political conditions, including changes in the financial markets; changes in applicable laws; compliance with extensive government regulation; and the diversion of management time on the Proposed Transaction and the Private Placement. The forward-looking information contained in this release is made as of the date hereof and the parties are not obligated to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable securities laws. Because of the risks, uncertainties and assumptions contained herein, investors should not place undue reliance on forward looking information. The foregoing statements expressly qualify any forward-looking information contained herein.

This press release does not constitute an offer to sell or a solicitation of an offer to buy 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. Not for distribution to U.S. Newswire Services or for dissemination in the United States. Any failure to comply with this restriction may constitute a violation of U.S. securities laws.

Unlike in Canada which has Federal legislation uniformly governing the cultivation, distribution, sale and possession of medical cannabis under the Cannabis Act (Federal), readers are cautioned that in the U.S., cannabis is largely regulated at the State level. To the Company's knowledge, there are to date a total of 29 states, plus the District of Columbia, that have legalized cannabis in some form. Notwithstanding the permissive regulatory environment of medical cannabis at the State level, cannabis continues to be categorized as a controlled substance under the Controlled Substances Act in the U.S. and as such, cannabis-related practices or activities, including without limitation, the manufacture, importation, possession, use or distribution of cannabis are illegal under U.S. Federal law. Strict compliance with State laws with respect to cannabis will neither absolve the Company of liability under the U.S. Federal law, nor will it provide a defense to any Federal proceeding, which may be brought against the Company. Any such proceedings brought against the Company may adversely affect the Company's operations and financial performance.

SOURCE Metropolitan Energy Corp.

please contact the Company at 604.561.9696.