Trichome Financial Corp. and 22 Capital Corp. Receive TSXV Conditional Approval for Proposed Qualifying Transaction and Joint Information Circular

TORONTO, May 28, 2019 /CNW/ - 22 Capital Corp. (TSXV: LFC.P) ("22 Capital") and Trichome Financial Corp. ("Trichome") are pleased to announce that 22 Capital and Trichome have received conditional approval from the TSX Venture Exchange (the "Exchange") for their announced amalgamation under the provisions of the Business Corporations Act (Ontario) that will result in a reverse take-over of 22 Capital by the shareholders of Trichome (the "Transaction"). The Transaction, if completed, will constitute 22 Capital's "Qualifying Transaction" as such term is defined in Policy 2.4 of the Exchange. Currently a subsidiary of CannaRoyalty Corp. d/b/a Origin House (CSE: OH) (OTCQX: ORHOF) ("Origin House"), Trichome is a private corporation. Each of Trichome and Origin House exists under the laws of the Province of Ontario.

The Transaction is being undertaken pursuant to the terms and conditions of the amalgamation agreement between 22 Capital and Trichome dated November 13, 2018, as amended January 30, 2019, April 5, 2019 and May 27, 2019 (the "Amalgamation Agreement"). The recent amendment clarified the terms of the consolidation of the 22 Capital common shares contemplated by the Amalgamation Agreement due to an exercise of broker warrants in 22 Capital.

Shareholder Meetings and Approvals

22 Capital and Trichome will seek approval of various matters in connection with the Transaction at meetings of the common shareholders of 22 Capital (the "22 Capital Shareholders") and the common and preferred shareholders of Trichome (the "Trichome Shareholders" and, together with the 22 Capital Shareholders, the "Shareholders"), each as more particularly described in the joint management information circular of 22 Capital and Trichome to be mailed to the Shareholders. The meetings of Shareholders are expected to occur on July 4, 2019 or such other date as 22 Capital and Trichome may agree and in accordance with applicable laws.

At the 22 Capital Shareholder meeting, 22 Capital will be seeking the approval of, among other things, (i) a resolution electing directors of 22 Capital for the ensuing year (who will resign upon completion of the Transaction); (ii) a resolution appointing the auditors of 22 Capital for the ensuing year (subject to change upon completion of the Transaction); (iii) an ordinary resolution confirming the existing stock option plan of 22 Capital; (iv) a special resolution authorizing and approving a consolidation (the "Consolidation") of 22 Capital's issued and outstanding common shares (the "22 Capital Common Shares") on the basis of one post-Consolidation 22 Capital Share for every 14.24347 pre-Consolidation 22 Capital Common Shares (the "Consolidation Resolution"); (v) a special resolution approving the Transaction; (vi) a resolution of disinterested 22 Capital Shareholders authorizing the transfer of the listing of 22 Capital to the NEX Board of the Exchange in the event that 22 Capital does not complete a "Qualifying Transaction" by August 15, 2019; (vii) a resolution of disinterested 22 Capital Shareholders authorizing the cancellation of certain seed shares of 22 Capital; and (viii) an ordinary resolution approving the proposed incentive plans of the amalgamated entity. The record date for the 22 Capital Shareholder meeting is May 28, 2019.

At the Trichome Shareholder meetings, Trichome will be seeking approval of, among other things, (i) a special resolution approving the Transaction; (ii) a special resolution approving an immediate share split of every issued and outstanding common shares of Trichome (the "Trichome Common Shares") into three Trichome Common Shares; (iii) a special resolution approving a share split of every Class A Preference, Series 1 Share of Trichome (the "Trichome Preferred Shares") into three Trichome Preferred Shares; and (iv) an ordinary resolution approving the new incentive plans of the amalgamated entity.

Closing & Trading

The closing of the Transaction is expected to take place on or around July 5, 2019 or such other date as 22 Capital and Trichome may agree, subject to a number of conditions, including satisfaction of the escrow release conditions of the private placement of subscription receipts completed by Trichome as well as other customary closing conditions for a transaction of a similar nature, including, but not limited to: (i) receipt of all necessary shareholder approvals, (ii) all necessary regulatory, corporate and third party approvals, (ii) confirmation of the representations and warranties of each party to the Amalgamation Agreement, and (iii) delivery of customary closing documentation.

The trading of 22 Capital's common shares will remain halted until 22 Capital receives the Exchange's final acceptance of the Transaction.  Following closing of the Transaction, and upon receipt of the Exchange's final acceptance, the common shares of the resulting issuer are expected to be listed on Tier 1 of the Exchange under the symbol "TFC".

About 22 Capital

22 Capital is a Capital Pool Company listed on the Exchange. 22 Capital currently has no commercial operations and has no significant assets other than cash. The principal purpose of 22 Capital, as a Capital Pool Company, is the identification, evaluation and acquisition of assets, properties or business with a view to complete a Qualifying Transaction.

About Trichome Financial Corp.

Trichome was incorporated on September 18, 2017 and is a specialty finance company focused on providing flexible and creative capital solutions to the global legal cannabis market. It was created to address the lack of credit availability in the large, growing and increasingly complex cannabis market. Founded by industry leaders Origin House, Stoic Advisory, and Sprott Inc. (TSX: SII), Trichome's experienced management team has a unique edge to capitalize on proprietary deal flow and insight while developing a first mover advantage as a global cannabis focused specialty finance company. Trichome provides customized financing solutions across the industry value chain to support growth, capital expenditures, M&A, working capital and other needs.  Transactions are typically structured to earn attractive rates of contractual cash flows, retain optionality on value creation and ensure return of capital. Leveraging the combined resources and knowledge of its founders and management, it is able to offer significant value-added financial, product, market and operational support to its partner companies. Trichome's current assets are all based in Canada and it has no operations or assets in the United States.

About Origin House

Origin House is a North American cannabis consumer product company currently focused on building a leading distribution business in California, the world's largest regulated cannabis market. By building a world-class logistics platform and supporting contract manufacturing assets, Origin House intends to support the growth of new and established cannabis brands. Origin House believes California, home to some of the world's most discerning consumers and a nexus of information and trends, will be the point of inception for the global cannabis brands of the future. Origin House has developed a diversified portfolio of assets within the cannabis sector, including research, infrastructure and intellectual property to support our existing brands, partner products and distribution networks. The company's leadership and staff combines passion and a hands-on understanding of the cannabis industry, with proven financial and legal expertise. Origin House's shares trade on the Canadian Stock Exchange ("CSE") under the symbol OH and in the US on the OTCQX under the symbol CNNRF. On April 1, 2019, Origin House announced an agreement pursuant to which, subject to the approval of the shareholders of Origin House and other conditions to closing, it will be acquired by Cresco Labs Inc. (CSE: CL).  

Further Information

All information contained in this news release with respect to 22 Capital and Trichome 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 the Transaction is subject to a number of conditions, including but not limited to, shareholder approvals and final TSXV acceptance. There can be no assurance that the Transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the management information circular to be 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 a capital pool company should be considered highly speculative.

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.

NEITHER THE TSXV NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSXV) 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 Transaction and the receipt of applicable approvals in respect of the proposed Transaction and related matters. 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. Except as required by law, 22 Capital and Trichome assume no obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change.

SOURCE Origin House

For further information regarding the Transaction, please contact: Steve Mintz, President and Chief Executive Officer, 22 Capital Corp., Telephone: [phone], Email: [email protected]; Michael Ruscetta, Chief Executive officer, Trichome Financial Corp., Telephone: [phone], Email: [email protected]