Vancouver, British Columbia – Four River Ventures Ltd. (TSXV: FFC.H) (“Four River” or the
“Company”), a Tier 2 issuer listed on the NEX division of the TSX Venture Exchange (the
“Exchange”), is pleased to announce that it has entered into a letter of intent dated August 8, 2016
relating to the acquisition of Canabo Medical Corporation (“Canabo” or “CMClinic”), a private
corporation existing under the laws of Canada (the “Acquisition”). This transaction will be effected
through an exchange of securities with all of the securityholders of Canabo (the “Transaction”).
Overview of Canabo
Canabo is a Canadian corporation, incorporated on March 19, 2014. Canabo operates through its whollyowned
subsidiary, 2412550 Ontario Inc., DBA The Cannabinoid Medical Clinic (“CMC”), a private
corporation existing under the laws of Ontario and incorporated on March 27, 2014.
The principal business carried on and intended to be carried on by Canabo is the operation of medical
clinics for evaluating the suitability of, prescribing, and monitoring cannibinoid treatments for patients
suffering from chronic pain and disabling illnesses. Clinics operated by Canabo are staffed by physicians
and qualified health care practitioners specifically trained to assess patient suitability for cannabinoid
treatment, recommend treatment regimes, and monitor treatment progress. Canabo sees patients only on a
physician-referral basis. The Marihuana for Medical Purposes Regulations (“MMPR”) requires that
medical marijuana must be prescribed by a health care practitioner; however, no cannabinoid products or
medical marijuana will be sold at Canabo’s cannabinoid medical clinics (each a “CMClinic”).
Canabo operates seven (7) clinics across Canada, with aggressive plans for future expansion. Canabo
plans to capitalize on the growing demand for medicinal marijuana, high-quality patient care, and its
research abilities. The main components of Canabo’s operations are:
All patients referred to Canabo are fully assessed and their medical history reviewed prior to their
visit to the CMClinic. Following consultation with a CMClinic’s internally-trained physician,
patients selected for herbal cannabis products receive an introductory cannabinoid education
session with one of CMClinic’s trained cannabinoid educators. These sessions help patients
navigate the new medical marijuana regulatory system, providing patient education with respect
to treatment with cannabinoids and medical marijuana generally, the different cannabis strains
and cannabinoid profiles, and how to access medical marijuana from a Licensed Producer.
Patients of CMClinic are re-assessed for treatment with each prescription renewal appointment.
In addition, the effect and success of the treatment on each patient are measured and tracked.
CMClinic uses a sophisticated database model to collect treatment efficacy results including inperson,
web-based and mobile platforms for patients to provide feedback on the effects of the
treatments on their condition. CMClinic tracks efficacy trends on Canabo’s total patient
population by condition, severity, treatment, and demographic profiles.
Pursuant to the terms of the Acquisition, Four River will acquire all of the issued securities and control of
Canabo, and as consideration, subject to Exchange approval, the Company will issue approximately
20,606,700 common shares (post-consolidation) to the securityholders of Canabo representing,
approximately 89% of the issued and outstanding common shares of the Company after completion of the
Acquisition (but before the completion of the Private Placement) on the basis of approximately one (1)
common share of the Company for each one (1) common share of Canabo outstanding.
The Company currently has 5,072,900 common shares issued and outstanding and 8,562,040 common
shares on a fully-diluted basis. As a condition of the proposed transaction, the Company proposes to
complete a share consolidation on the basis of two (2) old common shares of Four River for one (1) new
common share of Four River.
Concurrently with the Acquisition and subject to the approval of the Exchange, the Company intends to
complete a private placement of a minimum of 2 million common shares (post-consolidation) of the
Company at a price of $0.50 per share, to raise aggregate gross proceeds of at least $1 million (the
“Private Placement”). Finder’s fees may be payable in connection with the Private Placement as
permitted under the policies of the Exchange. The net proceeds from the Private Placement will be used
by the resulting issuer to fund its expansion plan, opening up to six (6) new clinics in the next
approximate 12 months and general working capital.
In connection with the proposed Acquisition, the Company has engaged Evans & Evans, an independent
consulting firm, to review the business of Canabo and prepare a valuation report (the “Valuation
Upon completion of the Transaction, it is expected that the resulting issuer will meet the public
distribution requirements of an Exchange Tier 2 technology or life sciences issuer. Shareholders of the
Company and the resulting issuer are expected to comply with any special escrow restrictions as are
required to satisfy the Exchange’s minimum listing requirements, as well as to comply with applicable
escrow policies of the Exchange. It is also expected that the principals of Canabo will control the
resulting issuer. No party involved in the Transaction is a related or non-arm’s length party. No deposit
or loan has been made to Canabo.
The Company must either (i) convene a general meeting for the purpose of obtaining shareholder approval to
the Transaction, or (ii) obtain written consents from the holders of over 50% of the total issued and
outstanding shares of the Company, approving the Transaction, in accordance with the policies of the
Exchange (the “Shareholders’ Approval”).
The completion of the Transaction will be subject to at least the following mutual conditions precedent:
- the execution of a definitive agreement (the “Definitive Agreement”);
- the approval of all matters and documentation in support of the Transaction (including and
without limitation, the Shareholders’ Approval and any required approval or consent of the
shareholders of Canabo);
- the receipt of all necessary regulatory, and third party approvals, including the acceptance of the
Exchange, and compliance with all applicable regulatory requirements and conditions in
connection with the Transaction;
- the completion of the Private Placement;
- the appointment of a qualified sponsor, if required by the Exchange;
- the confirmation of the representations and warranties of each party to the Definitive Agreement
the delivery of standard completion documentation; and other conditions precedent customary for securities exchange transactions similar to the
In addition to the above listed mutual conditions precedent, the completion of the Transaction is also
subject to the following conditions precedent in favour of Canabo:
- the completion of a satisfactory due diligence review of the Company, its financial condition,
operations, assets and liabilities, by Canabo and its professional advisors;
- the completion of a share consolidation on the basis of two (2) old common shares of the Company
for one (1) new common share of Company; and
- receipt of the approval of the board of directors of Canabo.
In addition to the above listed mutual conditions precedent, and conditions precedent in favour of Canabo,
the completion of the Transaction is also subject to the following additional conditions precedent in
favour of the Company:
- the completion of a satisfactory due diligence review of Canabo, including a review of the Valuation
Report, by the Company and its professional advisors; and
- the receipt of audited annual financial statements and reviewed interim financial statements of
Canabo by the Company.
The conditions precedent in favour of the Company may be waived in whole or in part by the Company
and the conditions precedent in favour of Canabo may be waived in whole or in part by Canabo.
The completion of the Transaction is expected to occur on the day that is the seventh business day
following the satisfaction or waiver of the conditions precedent or such other date as mutually agreed to
by the Company and Canabo, but in any event no later than December 31, 2016. Each of the Company
and Canabo will bear its own respective costs and expenses associated with the Transaction. The
Company intends to apply for a waiver or an exemption from sponsorship requirements; however, there is
no assurance that the Company will be able to obtain this exemption.
Overview of Management and the Board of Directors
It is expected that the management of the resulting issuer will consist of John Philpott as President and
Chief Executive Officer, Dr. Danial Schecter as Chief Medical Officer and Rob Randall as Chief Financial
Officer and Corporate Secretary.
Mr. Philpott, President and Chief Operating Officer of Canabo, has been active in the medical industry for
the past two decades, serving as CEO of a leading North American physician recruitment firm. His
background includes management and consulting assignments relating to clinic operational efficiencies in
wide variety of hospital, clinic and medical research operations.
Dr. Danial Schecter, a Director of Canabo, is a founder, Chief Medical Officer and a Director of CMC
and is primarily responsible for supervising the medical consulting services of the operation. After
working alongside some of Canada’s leading researchers in the field of medical marijuana, Dr. Schecter
developed a strong interest in the therapeutic use of cannabinoids. As a recognized medical expert in the
field of prescription cannabinoids and medical marijuana, Dr. Schecter has given numerous presentations
to fellow physicians and developed educational programs on this subject. Dr. Schecter is the driving force
behind physician training and operating process protocol, oversees cannabinoid educator programs and
designed the CMClinic treatment efficacy database and protocols.
Mr. Randall, Chief Financial Officer and Secretary of Canabo, has served as contract CFO for a number
of companies listed on the TSX-V over the past five years and has extensive financial experience within
the public company environment. He currently serves as CFO for Stockport Exploration Inc. and
Metallum Resources Inc. Previously, he was the Corporate Controller with Etruscan Resources Inc. and a
principal with PricewaterhouseCoopers.
Board of Directors
It is the intention of the Company and Canabo to establish and maintain a board of directors with a
combination of appropriate skill sets that is compliant with all regulatory and corporate governance
requirements, including any applicable independence requirements. The board of directors of the
Company currently consists of three members. Upon completion of the Transaction, the board of the
resulting issuer is expected to be reconstituted to comprise of five members, consisting of Alistair
MacLennan, Robert Coltura (current directors of the Company) and Dr. Danial Schecter, Dr. Neil Smith
and Ian Klassen (current directors of Canabo).
Change of Name
The Company proposes to change its name on closing to “Canabo Medical Inc.” or such other name as is
acceptable to the Registrar of Companies and the Exchange.
About Four River Ventures Ltd.
The Company was incorporated in British Columbia on February 2, 2007 and is listed on the NEX
division of the Exchange under the symbol “FFC.H”. The Company’s current business is the exploration
for mineral resources. The Company does not currently have any ongoing operations and has no material
assets other than cash.
In accordance with Exchange policy, the Company’s shares are currently halted from trading and are
expected to remain halted until after the Exchange accepts and confirms the completion of the
Except for statements of historical fact, all statements in this press release, including, but not limited to,
statements regarding future plans, objectives and payments are forward-looking statements that involve
various risks and uncertainties.
For More Information
For more information about Four River, please contact:
President & Chief Executive Officer
Telephone: (604) 899-0106
For more information about Canabo, please contact
President & Chief Operating Officer
Telephone: (902) 442-0653
Completion of the Transaction is subject to a number of conditions, including but not limited to,
Exchange acceptance and disinterested shareholder approval. Where applicable, the Transaction cannot
close until the required shareholder approval is obtained. There can be no assurance that the
Transaction will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the management information circular or filing
statement to be prepared in connection with the Transaction, any information released or received with
respect to the Transaction may not be accurate or complete and should not be relied upon. Trading in
the securities of the Company should be considered highly speculative.
The Exchange has in no way passed on the merits of the proposed Transaction and has neither approved
or disapproved the contents of this press release.
Neither Exchange nor its Regulation Services Provider (as that term is defined in the policies of the
Exchange) accepts responsibility for the adequacy or accuracy of this release.
FORWARD LOOKING INFORMATION
This press release contains forward-looking statements and information that are based on the beliefs of management
and reflect the Company’s current expectations. When used in this press release, the words “estimate”, “project”,
“belief”, “anticipate”, “intend”, “expect”, “plan”, “predict”, “may” or “should” and the negative of these words or
such variations thereon or comparable terminology are intended to identify forward-looking statements and
information. The forward-looking statements and information in this press release includes information relating to
the Acquisition (including the structure of the Acquisition), the Transaction (including shareholder approval,
shareholder support, and other terms), the Private Placement (including its completion and the use of proceeds from
the Private Placement), the directors and management of the resulting issuer upon completion of the Transaction,
and the implementation of Canabo’s business plan. Such statements and information reflect the current view of the
Company with respect to risks and uncertainties that may cause actual results to differ materially from those
contemplated in those forward-looking statements and information.
By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors
which may cause our actual results, performance or achievements, or other future events, to be materially different
from any future results, performance or achievements expressed or implied by such forward-looking statements.
Such factors include, among others, the following risks: risks associated with the completion of the Transaction and
matters relating thereto; and risks associated with the marketing and sale of securities, the need for additional
financing, reliance on key personnel, the potential for conflicts of interest among certain officers or directors, and
the volatility of the Company’s common share price and volume. Forward-looking statements are made based on
management’s beliefs, estimates and opinions on the date that statements are made and the Company undertakes no
obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances
should change. Investors are cautioned against attributing undue certainty to forward-looking statements.
There are a number of important factors that could cause the Company’s actual results to differ materially from
those indicated or implied by forward-looking statements and information. Such factors include, among others,
risks related to Canabo’s proposed business such as failure of the business strategy and government regulation; risks
related to Canabo’s operations, such as additional financing requirements and access to capital, reliance on key and
qualified personnel, insurance, competition, intellectual property and reliable supply chains; risks related to Canabo
and its business generally such as infringement of intellectual property rights and conflicts of interest. The Company
cautions that the foregoing list of material factors is not exhaustive. When relying on the Company’s forwardlooking
statements and information to make decisions, investors and others should carefully consider the foregoing
factors and other uncertainties and potential events. The Company has assumed a certain progression, which may
not be realized. It has also assumed that the material factors referred to in the previous paragraph will not cause
such forward-looking statements and information to differ materially from actual results or events. However, the list
of these factors is not exhaustive and is subject to change and there can be no assurance that such assumptions will
reflect the actual outcome of such items or factors. While the Company may elect to, it does not undertake to update
this information at any particular time.
THE FORWARD-LOOKING INFORMATION CONTAINED IN THIS PRESS RELEASE REPRESENTS THE EXPECTATIONS OF THE COMPANY AS OF THE DATE OF THIS PRESS RELEASE AND,
ACCORDINGLY, IS SUBJECT TO CHANGE AFTER SUCH DATE. READERS SHOULD NOT PLACE UNDUE IMPORTANCE ON FORWARD-LOOKING INFORMATION AND SHOULD NOT RELY UPON THIS INFORMATION AS OF ANY OTHER DATE. WHILE THE COMPANY MAY ELECT TO, IT DOES NOT
UNDERTAKE TO UPDATE THIS INFORMATION AT ANY PARTICULAR TIME EXCEPT AS REQUIRED IN ACCORDANCE WITH APPLICABLE LAWS.