Midasco Announces Proposed Reverse Takeover by OutCo Labs Inc.
NEWS RELEASE April 25th, 2019
Midasco Announces Proposed Reverse Takeover by OutCo Labs Inc.
Vancouver, British Columbia – Midasco Capital Corp. (the “Company” or “Midasco”) (Midasco Capital Corp. – TSX-NEX Symbol MGC.H) wishes to announce that it has entered into a binding letter of intent (the “LOI”) with an established California-based cannabis company, OutCo Labs Inc. (“OutCo”). The LOI outlines the proposed terms and conditions, pursuant to which, subject to regulatory approval, the Company and OutCo will affect a business combination that will result in a reverse takeover of the Company by the securityholders of OutCo (the “Proposed Transaction”). The LOI was negotiated at arm’s length.
OutCo is a revenue producing licensed grower and distributor of cannabis products throughout southern California. They own and operate two dispensaries in the San Diego area and supply a full suite of consistently dosed high end products to several dispensaries through-out southern California.
Terms of the Transaction
The Proposed Transaction will be structured as an amalgamation, arrangement, takeover bid, share purchase or other similar form of transaction or series of transactions, resulting in the Company (the “Resulting Issuer”), on closing, directly or indirectly acquiring all of the outstanding shares of OutCo in exchange for all of the issued and outstanding shares of the Resulting Issuer (the “Resulting Issuer Shares”). Further, in connection with the Proposed Transaction, the Resulting Issuer will issue economically equivalent replacement securities for OutCo’s outstanding options and warrants. The final structure for the Proposed Transaction is subject to satisfactory tax, corporate and securities law advice for both Midasco and OutCo.
Completion of the transaction is subject to a number of conditions, which include receipt of all necessary shareholder and regulatory approvals, due diligence, the execution of definitive transaction documents and definitive approval of the listing of the common shares of the resulting issuer (the “Resulting Issuer Shares”) on the Canadian Securities Exchange (“CSE”). Upon signing of the LOI, OutCo will pay to Midasco $25,000 as a nonrefundable deposit and in the event either party terminates this LOI, a break fee of $50,000 will become payable to the other party subject to the terms of the LOI.
In connection with the Proposed Transaction, the Company will be required to, among other things: (i) change its name to OutCo Labs Inc. or such other name acceptable to applicable regulatory authorities and continue its jurisdiction from BC to Canada on closing; (ii) consolidate its outstanding common shares such that the shareholders of the Company retain an aggregate of 5,000,000 common shares of the Resulting Issuer; (iii) reconstitute its existing directors and officers of the Company on closing of the Proposed Transaction with nominees of OutCo acceptable to the CSE; (iv) settle the Company’s outstanding debt of approximately $100,000 via the issuance of common shares in the Company prior to closing of the Proposed Transaction,
12216 Boundary Drive North, Surrey, B.C. V3X 1Z5 Phone: (604) 503-0986 Email:[email protected] Midasco News Release April 25th, 2019……Page 2
subject to regulatory approval. Further details of the proposed directors and officers will be disclosed as details become available.
OutCo currently has 157,580,085 common shares issued and outstanding and other convertible securities outstanding convertible into an additional 3,578,876 common shares of OutCo. Under the LOI OutCo, although not mandatory for completion of the Proposed Transaction, intends to issue up to an additional 15,809,441 shares of common stock for gross proceeds of up to $5,375,210 USD.
As consideration for the introduction of OutCo to Midasco, a Finder’s Fee in the amount of 700,000 Resulting Issuer Shares will be paid to an arm’s length third party finder in connection with the Proposed Transaction.
Further details of the Proposed Transaction and the business and operations of OutCo (including applicable financial statements) will be included in a listing statement to be prepared and filed with the CSE and in subsequent news releases and other public filings. Closing of the Proposed Transaction is expected to take place in the third quarter of 2019. The common shares of the Company will remain halted until the necessary filings have been accepted by the applicable regulatory authorities.
On behalf of the Board of Directors of Midasco Capital Corp.
William Pettigrew CEO and Director
For more information please contact:
Midasco: OutCo:
William Pettigrew Lincoln Fish CEO and Director CEO Phone: 604-313-8585 Phone: 619-448-4420 Email: [email protected] Email: [email protected]
About OutCo Labs Inc. www.outco.com
OutCo based in El Cajon, California, is a revenue producing cannabis company operating two of its own dispensaries and suppling a number of other dispensaries in southern California. OutCo through its own grow facilities, proprietary extraction process and joint venture partners provides a full suite of consistently dosed high end products, including flower, vape pens/cartridges, topical creams and multiple forms of extracts under the brand name OutCo. With access to new capital markets OutCo’s professional and technical team is well positioned to accelerate its footprint in California and abroad.
All information contained in this news release with respect to OutCo was supplied by OutCo for inclusion herein and the Company has relied on the accuracy of such information without independent verification.
As noted above, the completion of the Proposed Transaction is subject to a number of conditions or possible changes, including the listing of the Resulting Issuer Shares on the Canadian Securities Exchange. The Proposed Midasco News Release April 25th, 2019……Page 3
Transaction cannot close until required approvals are obtained. There can be no assurance that the Proposed Transaction will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the management information circular or listing statement of the Company to be prepared in connection with the Proposed Transaction, any information released or received with respect to the Proposed Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of Midasco should be considered highly speculative.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term defined in the policies of the TSX Venture Exchange) has in any way passed upon the merits of the Proposed Transaction nor accepts responsibility for the adequacy or accuracy of this news release.
This news release does not constitute an offer to sell, or a solicitation of an offer to buy, any securities under the OutCo financing in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “US Securities Act”) or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.
Forward-Looking Information and Statements
Statements included in this announcement, including statements concerning our plans, intentions and expectations, which are not historical in nature are intended to be, and are hereby identified as “forward-looking statements”. Forward looking statements may be identified by words including “anticipates”, “believes”, “intends”, “estimates”, “expects” and similar expressions. The Company cautions readers that forward-looking statements, including without limitation those relating to the Company’s future operations and business prospects, are subject to certain risks and uncertainties that could cause actual results to differ materially from those indicated in the forward-looking statements. Readers are advised to rely on their own evaluation of such risks and uncertainties and should not place undue reliance on forward-looking statements. Any forward-looking statements are made as of the date of this news release, and the Company assumes no obligation to update the forward-looking statements, except in accordance with the applicable laws.
We seek Safe Harbor.
Contact: William Pettigrew, CEO Phone: (604) 503-0986