Franchise Cannabis Corp. ("FCC") entered into a binding letter of intent to acquire Thoughtful Brands Inc. (CNSX : TBI) ("TBI") in a reverse merger transaction for approximately CAD 220 million on January 6, 2021. Under the terms of the Letter of Intent, TBI will consolidate its outstanding share capital on a fifty-for-one basis (the "Consolidation") and will issue 78,400,000 post-consolidation common shares to the existing shareholders of FCC, valuing FCC at approximately CAD 196,000,000. Following completion of the transaction, it is anticipated that current TBI shareholders will hold approximately 10% of the merged company, with the balance held by current shareholders FCC and subscribers in the financing conducted concurrently with the transaction. The Transaction will involve the acquisition of all of the outstanding share capital of FCC by TBI, with the resulting Canadian reporting company being listed on the Canadian Securities Exchange (the "CSE") under the name Franchise Cannabis Corp.
Completion of the Transaction remains subject to a number of conditions, including, but not limited to: negotiation of definitive documentation; receipt of any required regulatory approvals; the approval of the shareholders of TBI and FCC; completion of the Consolidation; completion of the Concurrent Offering for gross proceeds of not less than CAD 10,000,000 and resulting Canadian reporting company being listed on the Canadian Securities Exchange. The Transaction cannot be completed until these conditions are satisfied. There can be no assurance that the Transaction will be completed as proposed or at all.The Transaction is expected to be highly-accretive as both companies look to build on their complementary expertise to grow their respective businesses within the United States and Europe.
Canaccord Genuity Corp. acted as financial advisor to FCC and its board of directors. Gowling WLG (Canada) LLP and Irwin Lowy LLP acted as legal advisors to FCC. Fiore Management & Advisory Corp. acted as financial advisor to TBI and its board of directors. Cassels Brock & Blackwell LLP acted as legal advisor to TBI.
Franchise Cannabis Corp. ("FCC") cancelled the acquisition of Thoughtful Brands Inc. (CNSX : TBI) ("TBI") in a reverse merger transaction on March 8, 2021. In connection with termination of the merger transaction with FCC, Thoughtful Brands has agreed to pay FCC CAD 100,000 in cash and to issue FCC 5,000,000 common shares of Thoughtful Brands at a deemed value of $0.05 per share. The common shares will be subject to a four-month-and-one day statutory hold period in accordance with applicable securities laws. Following termination of the transaction, the Company intends to apply to the Canadian Securities Exchange for the reinstatement of trading in its common shares under the existing ticker symbol TBI