Makena Resources Inc., Biocan Technologies Inc. and Epimeron Inc. Announce Completion of Private Placement, Strategic Investment From Tuatara Capital and Business Combination to Form Willow Biosciences Inc.

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Makena Resources Inc. (“Makena“) (CSE: MKNA), BioCan Technologies Inc. (“BioCan“) and Epimeron Inc. (“Epimeron“) are pleased to announce: (i) the completion of the previously announced non-brokered private placement of common shares (“Common Shares“) and units (“Units“) of Makena for aggregate gross proceeds of $29.0 million (the “Private Placement“), including an investment of $12.1 million of Units by Tuatara Capital, L.P. (“Tuatara“), a sector-focused cannabis private equity firm; (ii) the completion of the previously announced business combination by way of a statutory plan of arrangement (the “Arrangement“) involving Makena, BioCan and Epimeron under the Business Corporations Act (Alberta); (iii) the name change of Makena to “Willow Biosciences Inc.” (“Willow“); and (iv) the appointment of a new management team (the “New Management Team“) and board of directors (the “New Board“) of Willow.

The Common Shares will commence trading on the Canadian Securities Exchange (the “CSE“) under the new name “Willow Biosciences Inc.” and new trading symbol “WLLW” at the market opening on Monday, April 15, 2019.

Willow Highlights

  • With a net working capital position of approximately $27.5 million(1), Willow is well-positioned to become an industry leader in cannabinoid biosynthetic production by capturing key intellectual property around the most cost effective methods to produce cannabinoids;
  • The combination of Makena, BioCan and Epimeron will drive greater operational capacity, exposure to Canadian and U.S. markets, a larger market capitalization and natural synergies between BioCan and Epimeron to expand BioCan’s current biosynthesis platform; and
  • The Arrangement brings together world-leading discovery biologists and business experts in Canada and the United States who will guide a multidisciplinary team that possesses the capabilities needed to underpin achievement at all stages of the development cycle (from gene discovery through manufacturing and commercialization).

Note:

1)

After giving effect the Arrangement and the Private Placement, as well as certain adjustments, including transaction costs.

Trevor Peters, President and Chief Executive Officer of Willow, commented: “We are very excited to be entering our next phase of development. The capital we have raised will augment and accelerate the work we have already started in developing a biosynthesis platform for producing cannabinoids and will fund us to full scale production”.

Private Placement

Pursuant to the Private Placement, Makena issued an aggregate of 828,571,429 Common Shares and Units at a price of $0.035 per Common Share or Unit, as applicable, for aggregate gross proceeds of $29.0 million, representing an upsize of $0.5 million from the previous announcement. Units were issued to subscribers that are members of the New Management Team and New Board, together with certain additional subscribers identified by such persons, and Common Shares were issued to all other subscribers. Each Unit is comprised of one Common Share and one performance-based Common Share purchase warrant (each, a “Performance Warrant“). Subject to the certificates representing the Performance Warrants, each Performance Warrant entitles the holder to purchase one Common Share at a price of $0.035 for a period of five years. The Performance Warrants will vest and become exercisable as to: (i) one-third upon the 20-day volume weighted average trading price of the Common Shares (the “Market Price“) equaling or exceeding $0.0525; (ii) an additional one-third upon the Market Price equaling or exceeding $0.070; and (iii) a final one-third upon the Market Price equaling or exceeding $0.0875. In addition, in the event the Market Price equals or exceeds $0.140, each Performance Warrant will be exercisable for 1.5 Common Shares, provided that, at the time of exercise in respect of the additional 0.5 of a Common Share per Performance Warrant, the Common Shares are: (i) listed on the facilities of a recognized stock exchange (other than the CSE or the TSX Venture Exchange (the “TSXV“)); (ii) acquired for cash; or (iii) acquired for the securities of a company listed on a recognized stock exchange (other than the CSE or the TSXV).

Pursuant to applicable securities laws, all securities issued pursuant to the Private Placement will be subject to a hold period of four months plus one day following the date of issuance of such securities.

The New Management Team intends to use the net proceeds from the Private Placement to fund the pro forma business plan of Willow and for working capital and general corporate purposes.

As a result of the Private Placement, Tuatara became a new “control person” of Willow, as such term is defined by the policies of the CSE.

Arrangement

Pursuant to the Arrangement: (i) each outstanding common share of BioCan was exchanged for 7.301 Common Shares; and (ii) each outstanding common share of Epimeron was exchanged for 577.153 Common Shares, through the issuance of an aggregate of 857,142,858 Common Shares on the basis of a deemed value of $0.035 per Common Share for a total transaction value of $30.0 million.

In connection with the Arrangement, Makena sold all of its mining assets to an arm’s length third party.

Following completion of the transactions, Willow has a total of 1,731,328,462 Common Shares and 543,525,321 Performance Warrants issued and outstanding.

Eight Capital acted as financial advisor in respect of the Arrangement and the Private Placement, including the investment by Tuatara. AltaCorp Capital Inc. and Laurentian Bank Securities Inc. acted as strategic advisors in respect of the Private Placement.

New Management Team and Board of Directors

Willow’s New Management Team and New Board include the following individuals:

Trevor Peters

Director, President and Chief Executive Officer

Dr. Joseph Tucker

Executive Chairman

Dr. Peter Facchini

Chief Scientific Officer

Travis Doupe

Chief Financial Officer

Jerry Ericsson

Vice President, Operations

Dr. Jillian Hagel

Vice President, Applied Science

Dr. Mathias Schuetz

Vice President, Research and Development

Sanjib (Sony) Gill

Corporate Secretary

Dr. Peter Seufer-Wasserthal

Director

Sadiq H. Lalani

Director

Donald Archibald

Director

Dr. Fotis Kalantzis

Director

Al Foreman

Director

 

SOURCE Makena Resources Inc.