Danbel Ventures Inc. and Maricann Inc. Announce Definitive Agreement Relating to Reverse Takeover Transaction

TORONTO, ONTARIO--(Marketwired - March 6, 2017) - Danbel Ventures Inc. ("Danbel" or the "Company") is pleased to announce that it has entered into a binding definitive agreement dated March 3, 2017 (the "Definitive Agreement") with Maricann Inc. ("Maricann"), to acquire a 100% interest in Maricann, which will constitute a reverse takeover of Danbel by the shareholders of Maricann (the "Transaction"). As presently contemplated, it is expected that the Transaction will be completed by way of a three-cornered amalgamation under the Business Corporations Act (Ontario). The parties intend to apply for listing of the resulting issuer's (the "Resulting Issuer") common shares on the Canadian Securities Exchange ("CSE"), with such listing to be effective concurrently with the completion of the Transaction. Certain terms of the Transaction are set forth in the Company's press release dated December 15, 2016 and filed on SEDAR.

In connection with the Transaction, Danbel intends to hold a special meeting of shareholders on or about April 13, 2017 to among other things, approve a share consolidation on the basis of one (1) new common share of Danbel for every 9.22 existing common shares and approve a name change of the Company to "Maricann Inc." or such other name as may be approved by the directors. On closing of the Transaction, Danbel will have 1,250,000 post consolidation common shares at a deemed price of $1.00 per share outstanding, will have no debt and no convertible securities outstanding. Maricann also intends to hold a special meeting of shareholders on or about April 10, 2017 to approve, among other things, the Transaction.

Pursuant to the Transaction, the issued and outstanding common shares of Maricann will be exchanged for common shares of Danbel on a one (1) share for one (1) share basis and all outstanding convertible securities of Maricann will be exchanged for convertible securities of the Resulting Issuer, or entitle the holders thereof upon exercise to acquire common shares of the Resulting Issuer on equivalent terms after giving effect to the Transaction.

About Maricann

Maricann is a vertically integrated producer and distributor of marijuana for medical purposes. As one of approximately 39 companies with a federal licence to cultivate cannabis and one of approximately 29 independent licensed producers with a federal licence to process and distribute cannabis, Maricann services a patient base with more than 3,000 active patients. Maricann is currently undertaking an expansion of the cultivation and support facilities to support existing and future patient growth.

History of Business

Maricann was founded in 2013 and is based in Langton, Ontario where it operates a cultivation, marijuana extraction and distribution business under federal licence from the Government of Canada. Attracted by its fertile soil and centuries of local agricultural traditions, Maricann selected this site in Langton in September, 2013 and initially acquired and established an 8,000 square foot growing operation. Maricann expanded that facility in size, output and onsite security to its current 42,000 sq. ft. footprint. Maricann received its cultivation license on March 27, 2013 and its full Health Canada sales license to produce and distribute medical marijuana on December 12, 2014. The Company is managed by a team of experienced industry experts who have more than 150 years of combined experience. Maricann's management team is committed to aggressive, cost-effective growth, and intends to facilitate growth through cash flow from operations and strategic acquisitions in the future. Maricann has developed a near term 203,500 sq. ft. expansion plan to support existing and future patient growth.

Proposed Directors and Officers of the Resulting Issuer

Following completion of the Transaction, it is anticipated that 4 of the anticipated 5 directors of the Resulting Issuer will be:

 (i)Neil Tabatznik (Chairman);

 (ii)Raymond Stone;

 (iii)Ben Ward; and

 (iv)Eric Silver;

it is anticipated that the officers of the Resulting Issuer will be:

 (i)Ben Ward, Chief Executive Officer and President;

 (ii)Jeremy Blumer, Chief Financial Officer

 (iii)Terry Fretz, Chief Operating Officer; and

 (iv)Raymond Stone, Corporate Secretary.

The following biographies provide certain selected information in respect of the above noted persons who will be serving as directors, officers and/or management of the Resulting Issuer:

Ben Ward

Mr. Ward leads all facets of Maricann's operations, including its strategic direction and execution, finance and industry relations. He brings extensive domestic and global experience in business development, infrastructure development and capital markets to his leadership of Maricann. Mr. Ward was President and CEO of Joshua Gold Resources Inc. from January, 2011 to June, 2013 and President and CEO of Canadian Cannabis Corp. from July, 2013 to August, 2016. Mr. Ward holds a BA (Honors) and an MBA from Bradford University School of Management (England), the latter with a dual concentration in Operations and Finance.

Julian Neil Tabatznik

Mr. Tabatznik is the Chairman of Maricann. He has been with Maricann since its incorporation in 2013. Mr. Tabatznik was Chairman of Genpharm Pharmaceuticals Inc. between 1993 and 1999, and then was Director of the Arrow Group of Companies, consisting of Oryx Pharmaceuticals Inc. and Cobalt Pharmaceuticals Inc. Mr. Tabatznik is Chairman of Blue Ice Capital and Blue Ice Pictures, founder of the Blue Ice Hot Docs Documentary Film Fund, and owner of The Bloor-Hot Docs Theatre.

Raymond Stone

Mr. Stone founded Futuremed Healthcare Products, a healthcare distribution company, in 1985. Futuremed was listed on the Toronto Stock Exchange in 2006 and Mr. Stone served as CEO until its sale in 2012 to Cardinal Health, a global healthcare corporation based in the United States. Mr. Stone currently consults to the healthcare industry and sits on various boards.

Dr. Eric Silver

With extensive experience using medical cannabis to treat chronic pain, Dr. Silver co-founded L.E. Medical in 2002, a nutraceutical and natural health supplement company. Dr. Silver is an Assistant Professor and Clinical Teacher in the Department of Family and Community Medicine at the University of Toronto. He is a member of the College of Family Physicians of Canada, with a focused practice in interventional pain management.

Jeremy Blumer

Mr. Blumer is the former Head of Accounting of BlackBerry Ltd. where he led all global reporting and compliance for operations in over 50 countries worldwide. He also oversaw all quarterly and yearly reporting to the United States Securities and Exchange Commission. Mr. Blumer brings over 20 years of finance experience in complex accounting and reporting, operational finance, planning and analysis. Mr. Blumer did his articling with Ernst & Young LLP and holds a CPA, CA designation, as well as a BComm from Queen's University.

Terry Fretz

Mr. Fretz is a long-time pharmaceutical executive. Mr. Fretz was integral in establishing and running two privately held generic pharmaceutical companies. Under his leadership, both organizations were recognized as the fastest growing pharma companies in Canada. Both companies were subsequently acquired by publicly traded multinationals. Mr. Fretz served as President and General Manager of Watson Pharmaceuticals - Canada before assuming his responsibilities as COO at Maricann.

Principal Shareholders of the Resulting Issuer

To the knowledge of the directors and officers of Danbel and Maricann, as of the Closing of the Transaction, no shareholder will beneficially own or exercise control or direction over Common Shares of the Resulting Issuer carrying more than 10% of the votes attached to such Common Shares.

Maricann Financings

On December 15, 2016 Maricann completed a $22,500,000 financing (the "December 2016 Financing") with Dundee Securities Ltd. as agent (the "Agent"). Pursuant to the terms of the December 2016 Financing, Maricann issued 22,500 units (the "Units"), with each Unit comprised of one senior unsecured convertible debenture with a principal amount of $1,000 (a "Debenture") and 500 common share purchase warrants (the "Warrants"). Immediately prior to completion of the Transaction, the principal amount of the Debentures will be converted into common shares of Maricann at a conversion price of $1.00 per share and subsequently be exchanged for common shares of the Resulting Issuer pursuant to the Transaction. The Warrants will similarly be exchanged pursuant to the Transaction or will otherwise be exercisable into common shares of the Resulting Issuer at an exercise price of $1.25 per share for a period of two years from the Listing Date, subject to an accelerated expiry in the event that the volume weighted average price of the Resulting Issuer common shares for any 20 consecutive trading days equals or exceed $1.90.

As partial consideration for their services, the Agent was issued 900,000 compensation options (the "Compensation Options"). Each Compensation Option will be exchanged pursuant to the Transaction or will otherwise be exercisable to purchase one unit of the Resulting Issuer at an exercise price of $1.00 for a period of two years from the Listing Date. Each unit will be comprised of one common share and one common share purchase warrant of the Resulting Issuer, with each warrant entitling the holder to acquire one common share of the Resulting Issuer at an exercise price of $1.25 for a period of two years from the Listing Date.

Maricann anticipates completing an additional financing of common shares at a price of $2.85 per common share for gross proceeds of approximately $10,000,000 on March 7, 2017 (the "March 2017 Financing") with Eight Capital, as agent (an entity created through an employee buy-out of the assets of Dundee Capital Markets from Dundee Corporation). In connection with the March 2017 Financing, Eight Capital will also receive approximately 140,423 compensation options exercisable for common shares of Maricann.

Excluding the March 2017 Financing and any securities issuable thereunder, it is anticipated that at the closing of the Transaction, the Resulting Issuer will have approximately 66,945,703 Resulting Issuer common shares issued and outstanding, which includes the conversion of the Debentures issued under the December 2016 Financing. It is also anticipated that there will be 20,748,009 convertible securities warrants and stock options of the Resulting Issuer outstanding (including warrants, stock options and the Compensation Options), exercisable into 20,748,009 Resulting Issuer common shares.

The Transaction is subject to customary conditions for a transaction of this nature, which include the receipt of shareholder approval of both Danbel and Maricann's shareholders and CSE or other regulatory approvals. The proposed Transaction is an arm's length transaction.

Eight Capital, subject to the completion of satisfactory due diligence, has agreed, if required, to act as sponsor of Maricann in connection with the Transaction. An agreement to sponsor should not be construed as any assurance with respect to the merits of the transaction or the likelihood of completion. Eight Capital will receive a sponsorship fee and will be reimbursed for their legal and other expenses.

The Transaction is expected to close in April, 2017. Additional details of the Transaction will be available in the related meeting materials to be mailed to shareholders in connection with the various meetings required to approve the Transaction and a listing statement disclosure document completed in accordance with CSE policies. The meeting materials and listing statement will also be available on SEDAR upon mailing.

Forward-Looking Information

This news release contains certain forward-looking statements that reflect the current views and/or expectations of management with respect to performance, business and future events, including but not limited to express or implied statements and assumptions regarding the Company's intention to complete the Transaction. Forward-looking statements are based on the then-current expectations, beliefs, assumptions, estimates and forecasts about the business and the industry and markets in which the Company operates. Forward-looking statements are not guarantees of future performance and involve risks, uncertainties and assumptions which are difficult to predict. In particular, there is no guarantee that the parties will successfully complete the Transaction contemplated herein, or that the Company will obtain all required shareholder and regulatory approvals, including approval of the CSE. Accordingly, readers should not place undue reliance on forward-looking statements and information, which are qualified in their entirety by this cautionary statement. The Company does not undertake any obligations to release publicly any revisions for updating any voluntary forward-looking statements, except as required by applicable securities law.

All information contained in this press release with respect to Maricann, its business and proposed corporate reorganization and financing was supplied by Maricann for inclusion herein and Danbel does not assume any responsibility for the accuracy or completeness of such information.

 

Graham Sorkin