ALBUQUERQUE, N.M. – CRAFT 1861 Global Holdings Inc. (Cboe Canada/NEO: HUMN, HUMN.WT.A) (the “Company” or “Craft Global”) and Nano Cures International, Inc. (“Nano”), are pleased to announce that they have entered into a definitive arrangement agreement (the “Arrangement Agreement”) which sets out the definitive terms upon which Craft Global and Nano will combine (the “Transaction”). The Transaction will constitute a reverse take-over transaction under the policies of the Neo Exchange Inc., operating as Cboe Canada (the “Exchange”). As disclosed in Craft Global’s news release dated July 20, 2023 (a copy of which is available under Craft Global’s SEDAR+ profile at www.sedarplus.ca), Craft Global and Nano are arm’s length parties.
All currency references used in this news release are in U.S. currency unless otherwise indicated.
Transaction Highlights
Nano will acquire all of the issued and outstanding shares of Craft Global in exchange for aggregate cash and equity securities of the combined entity (“New Nano”) equaling a total of $1,849,040,480 consisting of: (i) aggregate cash consideration of $474,040,780 and (ii) equity securities representing 25% of issued and outstanding shares of New Nano, with an aggregate deemed value of approximately $1,375,000,000.
Upon closing of the Transaction, the total enterprise value of New Nano is required, as a closing condition, to not be less than $5,500,000,000.
Completion of the Transaction is currently expected to occur in December 2023.
The board of directors of both Craft Global and Nano have unanimously approved the transaction and the Craft Global board of directors unanimously recommend that Craft Global shareholders vote in favor of the Transaction.
Summary of the Transaction
Pursuant to the Arrangement Agreement, among other things, Nano will acquire all of the issued and outstanding shares of Craft Global for (i) aggregate cash consideration of $474,040,780; and (ii) equity securities representing 25% of issued and outstanding shares of New Nano, with a total deemed value of approximately $1,375,000,000. The issued and outstanding warrants to purchase subordinate voting shares of Craft Global will be exchanged on a one-for-one basis for warrants to acquire shares of New Nano.
Following closing of the Transaction, New Nano will continue to operate the business of Craft Global and intends to retain the name “Nano Cures International, Inc.” It is anticipated that following completion of the Transaction, New Nano will be a reporting issuer under Canadian securities laws and will have its shares and warrants listed for trading on the Exchange under the current symbols “HUMN” and “HUMN.WT”, respectively. Completion of the Transaction is currently expected to occur in December 2023.
The Transaction remains subject to the satisfaction or waiver of certain customary conditions, including, among other things, the approval of the Supreme Court of British Columbia (the “Court”), receipt of all required third party consents, shareholder approvals, regulatory approvals (including that of the Exchange). The Exchange has not yet approved the Transaction, and there can be no assurance that it will. The Company’s securities are expected to remain halted on the Exchange until the Transaction is completed.
The Arrangement Agreement contemplates that the Transaction will be carried out by way of plan of arrangement under the Business Corporations Act (British Columbia) (the “Plan of Arrangement”). The Arrangement will require the approval of the securityholders of the Company by not less than two-thirds of the votes cast at a meeting of such securityholders. All of the directors and executive officers of Craft Global (the “Supporting Shareholders”) have entered into voting and support agreements in which such Supporting Shareholders agree to vote all of securities held by them in favor of the Transaction and related matters. Craft Global will call a special meeting (the “Meeting”) of shareholders in compliance with an interim order of the Court, which Craft Global will seek in accordance with the terms of the Arrangement Agreement. Prior to the Meeting, it is anticipated that Craft Global will cause all issued and outstanding proportionate voting shares of Craft Global to be converted to subordinate voting shares on the basis of one proportionate voting share for one hundred subordinate voting shares. In connection with the Meeting, Craft Global will mail an information circular to its shareholders describing the Transaction, Nano, New Nano and all related matters and other information prescribed under applicable securities laws and Exchange policies.
Board Recommendation
The board of directors of both Craft Global and Nano, have unanimously approved the transaction and the Craft Global board of directors unanimously recommend that Craft Global shareholders vote in favor of the Transaction. Prior to applying to the Court for an interim court order for the Plan of Arrangement, Craft Global’s board of directors expects to receive an opinion from its financial advisor stating, and subject to the assumptions, limitations, and qualifications set forth therein, that the consideration offered pursuant to the Arrangement Agreement is fair, from a financial point of view to the holders of Craft Global’s shareholders.
About Nano Cures International, Inc.
Nano Cures International, Inc. is a US-based company focused on transforming the development and delivery of cures to major health conditions and diseases. The company is developing an accelerated Cures platform including components focused on Insulin Signaling and Resistance, in conjunction with pharma and biotech partners, that targets insulin resistance. Insulin resistance is the root cause of diabetes Type 2, obesity and many other related diseases. Another platform component aims to disrupt and enable cure development by providing resources, data and tools for partnering institutions and individual drug and cure developers to lower the barriers to entry and spur new cure innovation. Nano’s vision is to change the game of curing by targeting the root cause of disease – instead of just treating sickness when it happens, to reduce the cost and time required to introduce new cures, and to align the nations of the world behind its mission to reverse the increasing burden of healthcare that afflicts our societies today. Additional information about Nano can be found at its website: www.nanocuresintl.com.
This news release does not constitute an offer, invitation or recommendation to subscribe for or purchase any securities and this news release does not form the basis of any contract or commitment. In particular, this news release does not constitute an offer to sell, or a solicitation of an offer to buy, securities in the United States or in any other jurisdiction in which such an offer or solicitation would be unlawful.
The securities referred to herein have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), or any state securities laws, and may not be offered or sold in the United States absent registration or an exemption from registration. The securities to be issued in connection with the Transaction are anticipated to be issued in reliance upon section 3(a)(10) of the U.S. Securities Act and available exemptions from applicable state registration requirements.
Non-IFRS Measures
This news release contains a reference to “total enterprise value” which does not have a standardized meaning prescribed by International Financial Reporting Standards (“IFRS”) and accordingly are unlikely to be comparable to similar measures presented by other IFRS issuers. Total enterprise value is a non-IFRS measure which is calculated by aggregating the market value of all of the New Nano’s shares at closing, adding total debt and subtracting cash and cash equivalents. Management believe that total enterprise value provides useful information to investors to assess the overall market value of New Nano and as an input to calculate financial ratios.
Legal Advisors
McMillan LLP is acting as legal counsel to Craft Global and Herrick, Feinstein LLP is acting as legal counsel to Nano.
Forward Looking Statements
This news release may contain forward–looking information within the meaning of applicable securities legislation, which reflects the Company’s current expectations regarding future events. The words “expect”, “aim”, “believe”, and similar expressions or words suggesting future outcomes are often intended to identify forward-looking information, although not all forward-looking information contains these identifying words. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances contain forward-looking statements. Forward-looking statements are not historical facts, nor guarantees or assurances of future performance but instead represent management’s current beliefs, expectations, estimates and projections regarding future events and operating performance. Specific forward-looking information contained in this news release includes, but is not limited to statements concerning the Transaction, the fairness opinion, the terms, conditions and completion of the Transaction, satisfaction or waiver of conditions precedent to the Transaction, including the obtaining of all regulatory and other approvals, listing of New Nano shares on the Exchange and the Meeting.
Forward-looking statements reflect management’s current beliefs, expectations and assumptions and are based on information currently available to management, management’s historical experience, perception of trends and current business conditions, expected future developments and other factors which management considers appropriate. With respect to the forward-looking statements included in this news release, the Company has made certain assumptions with respect to, among other things; that Craft Global / New Nano will meet its future objectives and priorities; Craft Global / New Nano will have access to adequate capital to fund its future projects and plans; that Craft Global / New Nano future projects and plans will proceed as anticipated; as well as assumptions concerning legislative frameworks, general economic and industry growth rates, prices, currency exchange and interest rates, competitive intensity, future pandemics or other material outbreaks of disease, safety issues, recalls, and no unplanned material changes in Craft Global / New Nano facilities, equipment or customer and employee relations. Forward–looking information is based on a number of assumptions, opinions, and estimates and is subject to a number of risks and uncertainties, many of which are beyond the Company’s control, that could cause actual results and events to differ materially from those that are disclosed in or implied by such forward-looking information. Such risks and uncertainties include, but are not limited to: limited long-term data with respect to the efficacy, side effects and safety of category products; uncertainties regarding U.S. hemp regulation; product recalls; failure or deterioration of quality control systems; limited shelf life of products; limited operating history; Craft Global / New Nano ability to successfully manage its growth; Craft Global / New Nano ability to achieve or maintain profitability; the popularity of Craft Global / New Nano brand portfolio; future outbreaks of infectious diseases; potential future sales of shares; execution of Craft Global / New Nano business strategies; reliance on management and conflicts of interest; competition; risks relating to new, well-capitalized entrants developing large-scale operations; reliance on key inputs; dependence on suppliers and skilled labor; Craft Global / New Nano ability to obtain high quality product for its growth needs; climate change; litigation; reliance on third-party distributors; intellectual property risks; protection of trade secrets; fraudulent or illegal activity by employees, contractors and consultants; information technology systems and cyber-attacks; security breaches; high bonding and insurance costs; costs and requirements of being a public company and risks associated with failure to comply with such requirements; no planned dividends; future acquisitions or dispositions; U.S. federal income tax; net operating loss limitations; withholding tax on dividends; risk of U.S. tax classification as a U.S. real property holding company; market price volatility; sales of a substantial number of Subordinate Voting Shares; future equity financings; the increased regulatory burden and costs associated with loss by Craft Global of foreign private issuer status under U.S. federal securities laws; limitations on certain remedies; global financial conditions; impairment of goodwill and intangible assets; the ability of Craft Global / New Nano to comply with regulatory requirements; regulatory restrictions on international sales of Craft Global / New Nano products; lack of clarity regarding the future of hemp regulation; designation of cannabinoids as an impermissible adulterant; Federal Trade Commission enforcement actions; difficulty accessing capital and banking services; differing regulatory requirements across jurisdictions; heightened scrutiny by regulators; risks relating to expansion into other markets; restrictions on deductions of certain expenses; enforceability of contracts; contractual right of action; and retention of key personnel, as well as the factors discussed under “Risk Factors” in the Company’s annual information form.
If any of these risks or uncertainties materialize, or if the opinions, estimates or assumptions underlying the forward-looking information prove incorrect, actual results or future events might vary materially from those anticipated in the forward-looking information. Accordingly, undue reliance should not be placed on forward-looking information, which speaks only as of the date made. The forward-looking information contained in this news release represents the Company’s expectations as of the date of this news release and are subject to change after such date. The Company does not undertake any obligation to update such forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable law.
