PureKana, LLC completed the acquisition of AF1 Capital Corp. (TSXV:AFC.P) in a reverse merger transaction.
Upon completion, it is anticipated that, immediately thereafter, the Resulting Issuer will have approximately 7 million Resulting Issuer Shares issued and outstanding, with (a) the PureKana Founders holding an aggregate of 2.8 million Resulting Issuer Shares representing approximately 40.2% of the outstanding Resulting Issuer Shares, (b) Heavenly holding an aggregate of 0.6 approximately Resulting Issuer Shares, representing approximately 8.6% of the outstanding Resulting Issuer Shares, (c) the Heavenly shareholders and certain arm's-length third party transferees holding an aggregate of 3.4 million Resulting Issuer Shares, representing approximately 48.5% of the outstanding Resulting Issuer Shares, and (d) current AF1 shareholders holding an aggregate of 0.13 million Resulting Issuer Shares, representing approximately 1.8% of the outstanding Resulting Issuer Shares. Upon completion, it is the intention of the parties that the Resulting Issuer will be named "PureK Holdings Corp." and will continue the business of PureKana as a Tier 1 Industrial Issuer on the TSXV. If agreement is terminated by AF1, a cash payment of $0.7 million each to Heavenly and PureKana; if terminated by Heavenly, a cash payment of $0.1 million to AF1, and a cash payment of $1.3 million to PureKana; and if terminated by PureKana: a cash payment of $0.1 million to AF1, and a cash payment of $1.3 million to Heavenly.
Upon completion of the proposed transaction, it is anticipated that the board of directors of the Resulting Issuer will be comprised of four individuals. Paul Norman, Jeff Yauck, Cody Alt, and Michael Galloro are anticipated to be the directors and Kathy Casey as Chief Executive Officer and Brian Meadows as Chief Financial Officer and Corporate Secretary of the Resulting Issuer. The transaction is subject to, among other things, completion of satisfactory due diligence, the negotiation of a definitive agreement setting out binding transaction terms, receipt of all requisite security holder and regulatory approvals, including approval of the TSX Venture Exchange, and additional conditions to be set out in the definitive agreement. On November 4, 2020, the Exchange conditionally accepted the transaction subject to AF1 fulfilling all of the requirements of the Exchange. AF1 has received shareholder approval from a majority of its shareholders with respect to the share consolidation by way of written consent resolution. The AF1 Board has approved the transaction. AF1 has applied for, and the TSXV has provided AF1 with, a waiver from the sponsorship requirement in accordance with TSXV policies. The transaction is expected to close on or about December 3, 2020. TSX Trust Company acted as transfer agent and registrar to AF1. Steven Agnew of Irwin Lowy LLP acted as legal advisor for AF1. Sanjay M. Joshi of DLA Piper (Canada) LLP acted as legal advisor for PureKana. Peter Simeon of Gowling WLG (Canada) LLP acted as legal advisor for Heavenly, the parent company of PureKana.
PureKana, LLC completed the acquisition of AF1 Capital Corp. (TSXV:AFC.P) in a reverse merger transaction on December 7, 2020. The combined company has been renamed as PureK Holdings Corp. Trading in the common shares of PureK Holdings Corp. is expected to commence on the TSXV under the symbol PKAN on or about December 10, 2020.