SecureCom Mobile Inc. (CSE: SCE) and DFMMJ Investments Ltd. have agreed for a business combination. Upon closing of the combination, SecureCom will change its name to “Liberty Health Sciences Inc.” doing business as “Aphria USA”.
In connection with the combination, Aphria Inc. (TSX: APH) has agreed to subscribe for 120,192,308 common shares of DFMMJ for aggregate gross proceeds of $25 million.
SecureCom and DFMMJ have also engaged Clarus Securities Inc. for a private placement financing of up to 168,269,231 subscription receipts of DFMMJ at a price of $0.208 per Subscription Receipt for gross proceeds of $35 million. The private placement will include a strategic lead investment from Serruya Private Equity.
The proceeds from Aphria investment and private placement will be used to fund, in part, the acquisition by DFMMJ Investments, LLC, a company founded and controlled by the Delavaco Group, of all or substantially all of the assets of Chestnut Hill Tree Farm LLC, a limited liability company existing under the laws of the State of Florida. It has operated for more than 30 years as a chestnut tree nursery. In addition, Chestnut is a licensed holder in the State of Florida as an authorized dispensing organization of low-THC medical cannabis to patients in need.
Aphria has agreed to licence its Aphria medical brand to Liberty, in exchange for a perpetual 3% royalty on all sales of marijuana and related products. Further, Aphria has agreed to licence its greenhouse growing intellectual property system to Liberty in exchange for additional common shares in Liberty.
Once the transaction is completed, Aphria will own approximately 37.6% of the issued and outstanding common shares of Liberty. Aphria will be entitled to appoint two nominees as board members to Liberty’s proposed five-person board. Vic Neufeld and John Cervini, Aphria nominees, will be joined by Aaron Serruya of Serruya Private Equity, effective upon the completion of the business combination.
Delavaco Group is also participating as a significant shareholder in Liberty.
photo credit: Chestnut Hill Tree Farm