Early Warning Press Release Issued in Connection With The Acquisition of Shares of Santé Veritas Holdings Inc. (the “issuer”) by Michael Orr
Toronto, ON – April 25, 2018: On April 24, 2018 the Issuer (formerly Marchwell Ventures Ltd. (NEX:MVE.H) (“Marchwell”)) and Santé Veritas Therapeutics Inc. (“SVT”) completed the previously announced business combination (the “Business Combination”) among the Issuer, SVT, and 1148607 B.C. Ltd. (“Marchwell Subco”), creating a medical and adult use cannabis cultivation company.
The Business Combination was completed by way of a three cornered amalgamation (the “Amalgamation”), pursuant to which the Issuer acquired all of the issued and outstanding shares of SVT (“SVT Shares”) and issued one common share in the capital of the Issuer (a “Share”) to SVT shareholders in exchange for each SVT Share held (the “Share Exchange”).
As a result of the Share Exchange, Michael Orr (the “Acquiror”), Chairman of the Issuer, acquired beneficial ownership and control of (i) 32,110,981 Shares (the “Acquired Shares”); and (ii) 10,000,000 Share purchase warrants (the “Acquired Warrants”, and together with the Acquired Shares, the “Acquired Securities”). The Acquired Shares represent 12.62% of the Issuer’s issued and outstanding Shares after the Business Combination on an undiluted basis and 11.54% on a fully diluted basis. Prior to the Business Combination, the Acquiror did not own any Shares or Warrants.
Each Acquired Warrant entitles the Acquiror to purchase one additional Share at a price of $0.12 until October 19, 2020. If all Acquired Warrants were exercised, the Acquiror would beneficially own and control 42,110,981 Shares representing 16.56% of Issuer’s issued and outstanding Shares on an undiluted basis and 15.13% on a fully diluted basis.
The Acquired Shares are being held in escrow pursuant to an escrow agreement (the “Escrow Agreement”) in the form provided under National Policy 46-201 – Escrow for Initial Public Offerings. In accordance with the Escrow Agreement, the Acquired Shares will be released as follows: 10% on the date the Shares are listed on the Canadian Securities Exchange and six subsequent releases of 15% each every six months thereafter (as such percentage amounts refer to the original number of Acquired Shares deposited into escrow pursuant to the Escrow Agreement).