TRU.H Trius Investments Inc

Trius Investments Inc. (“Trius”) (TSXV:TRU.H) is pleased to announce that it has entered into a definitive agreement dated July 8, 2019 (the “Definitive Agreement”) relating to the business combination (the “Proposed Transaction”) with Starling Brands Inc. (“Starling”).

About Starling

Starling is a Toronto-based producer of high quality medical and recreational cannabis products. Founded in 2017, Starling leverages its industry leading expertise and relationships to deliver high-quality, consistent cannabis-derived products for itself and its wholesale and white label customers. Starling is incorporated under the federal laws of Canada.

Starling operates through Kase Manufacturing, Inc. (“Kase Manufacturing”), its wholly-owned subsidiary. Kase Manufacturing operates a state-of-the-art, 22,000 square foot cannabis manufacturing and distribution facility located in Ceres, California, and is one of the first cannabis volatile extraction and manufacturing labs approved for annual licensing in California. Kase Manufacturing is recognized for producing best in class cannabis products, including tinctures, vape pens, shatter, diamonds, or wholesale distillate and crude. For more information regarding Kase Manufacturing, please visit www.kasemfg.com.

Starling also holds exclusive rights to Jayden’s Juice, its flagship brand. Jayden’s Juice consists of a line of products derived from a CBD-rich cannabis strain and has received international recognition as a CBD medicinal brand. Jayden’s Juice was established in 2011, and has received numerous international media mentions, while being considered a pioneer in using cannabis for medicinal purposes. Starling is also developing new in house brands including vape pens and topicals to be introduced in 2019. For more information regarding Jayden’s Juice, please visit www.thejaydensjuice.com.

Definitive Agreement and Proposed Transaction

The Proposed Transaction is to be completed pursuant to a three-cornered amalgamation among Trius, Trius’ wholly-owned subsidiary, 11436465 Canada Inc. (“Subco”), and Starling, whereby Subco and Starling will amalgamate and continue as one corporation (the “Amalgamation”), and the shareholders of Starling will receive shares of Trius (referred to on a post-closing basis as the “Resulting Issuer”).

Pursuant to the Definitive Agreement, and upon the satisfaction or waiver of the conditions set out therein, in connection with the closing of the Proposed Transaction, among other things:

• Trius will: (i) continue from the Province of Alberta into the Province of British Columbia (the “Continuance”); (ii) change its name to “Starling Brands Ltd.” or such other name requested by Starling and acceptable to Trius and the applicable regulatory authorities (the “Name Change”); (iii) consolidate its existing common shares (the “Trius Shares”) such that Class A subordinate voting shares of Starling (“Starling Shares”) are ultimately exchanged on a 1:1 basis for Resulting Issuer Subordinate Voting Shares (as defined below) pursuant to the Proposed Transaction (the “Consolidation”); and (iv) adopt Articles under the Business Corporations Act (British Columbia) which will effect the amendment of Trius’ existing articles to (a) amend the rights and restrictions of the post-Consolidation Trius Shares and re-designate them as “Subordinate Voting Shares” (the “Resulting Issuer Subordinate Voting Shares”); (b) create a new class of shares consisting of an unlimited number of “Multiple Voting Shares” having economic and voting rights equivalent to one hundred (100) times the Resulting Issuer Subordinate Voting Shares and that shall be convertible into or exchangeable for Resulting Issuer Subordinate Voting Shares (the “Resulting Issuer Multiple Voting Shares”), and (c) delete Trius’ preferred shares in their entirety (collectively, the “Trius Share Amendments”);
• outstanding convertible debentures of Starling will be converted into Starling Shares and warrants;
• following completion of the foregoing, the Amalgamation will be completed, and the Starling shareholders will exchange their Starling Shares for Resulting Issuer Subordinate Voting Shares, except for certain shareholders of Starling that elect to receive Resulting Issuer Multiple Voting Shares on a 100:1 basis;
• all of the outstanding stock options and warrants of Starling on the effective date of the Amalgamation will be exchanged for stock options and warrants of the Resulting Issuer on an equivalent basis; and
• the board of directors and management of the Resulting Issuer will be replaced with nominees of Starling.

The Resulting Issuer will hold on a consolidated basis all of the assets and will be subject to all of the liabilities of Trius and Starling, and will continue the business of Starling.

Completion of the Proposed Transaction is subject to a number of conditions including, but not limited to, Starling completing a brokered private placement of subscription receipts for minimum gross proceeds of $5,000,000 (the “Private Placement”); Trius completing the Continuance, the Name Change, the Consolidation and the Trius Share Amendments (collectively, the “Trius Meeting Matters”); TSX Venture Exchange (“TSXV”) acceptance of the delisting of the Trius Shares;  acceptance of listing of the Resulting Issuer Subordinate Voting Shares by the Canadian Securities Exchange (the “CSE”); and approvals of the shareholders of Trius and Starling. The Proposed Transaction will not be completed while Trius is listed on the TSXV.

The Definitive Agreement will be posted to Trius’ SEDAR profile at www.sedar.com and contains additional details regarding the Proposed Transaction, including as to finder’s fees and break fees. As well, further details with respect to the Proposed Transaction are summarized in Trius’ news release dated April 15, 2019.

Listing

In connection with the Proposed Transaction, applications will be made to delist the Trius Shares from the TSXV, and list the Resulting Issuer Subordinate Voting Shares on the CSE. The TSXV delisting will be subject to satisfying all of the requirements of the TSXV. The CSE listing will be subject to satisfying all of the CSE’s initial listing requirements.

Management

Following the closing of the Proposed Transaction, the Resulting Issuer will be led by John Di Girolamo, Chairman, President, and Corporate Secretary; Mike Reynolds, Chief Executive Officer; Maurizio Silvestri, Chief Financial Officer; Eric Shevin, General Counsel and Chief Compliance Officer; and Andrew Ford, Chief Science Officer. The Resulting Issuer’s board of directors is expected to consist of five directors, all of whom will be nominated by Starling.

Trius Shareholder Meeting and Anticipated Closing

It is anticipated that an annual general and special shareholder meeting of Trius to approve, among other matters, the Trius Meeting Matters and the delisting of the Trius Shares from the TSXV, will take place in September 2019.  The completion of the Proposed Transaction is expected to occur on or before September 30, 2019.

For further information please contact:

Trius Investments Inc.Joel FreudmanPresident and Chief Executive OfficerTelephone: (647) 880-6414

Starling Brands Inc.Media Relations and Investor Relations:Tara MurphyTelephone: (647) 556-0430IR@StarlingBrands.com         

In accordance with TSXV policy, the Trius Shares are currently halted from trading and are expected to remain halted until Trius is delisted from the TSXV. Completion of the Proposed Transaction is subject to a number of conditions including, but not limited to, CSE acceptance and receipt of applicable corporate approvals. 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 of Trius or the listing statement of the Resulting Issuer 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.

Neither the TSXV nor the CSE has in any way passed on the merits of the Proposed Transaction, and neither has approved nor disapproved the contents of this press release.

Neither the TSXV nor the Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.

All information contained in this press release with respect to Trius and Starling was supplied by the parties respectively for inclusion herein, and each party has relied entirely on the other party for any information concerning the other party. Trius does not assume any responsibility for the accuracy or completeness of the information provided by Starling.

This press release does not constitute an offer to sell or a solicitation of an offer to sell any of the securities described herein 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 “U.S. 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

This press release includes statements containing forward-looking information that reflect the current views and/or expectations of management of Trius and Starling, respectively, with respect to performance, business and future events, including but not limited to express or implied statements and assumptions regarding the completion of the Proposed Transaction, the Trius Meeting Matters or the Private Placement as proposed or at all. Forward-looking information is based on the current expectations, beliefs, assumptions, estimates and forecasts about the business and the industry and markets in which Trius and Starling respectively operate. Statements containing forward-looking information are not guarantees of future performance and involve risks, uncertainties and assumptions, which are difficult to predict and which are outside of Trius’ control. In particular, there is no guarantee that conditions to the completion of the Proposed Transaction will be satisfied, that the annual general and special meeting of shareholders of Trius or the closing of the Proposed Transaction will take place at the times indicated, that the Private Placement or the Proposed Transaction will be completed, that Trius and Starling will obtain any required shareholder or regulatory approvals, including delisting of the Trius Shares from the TSXV and the listing of the Resulting Issuer Subordinate Voting Shares on the CSE, or that the Resulting Issuer will be able to achieve its business objectives. Actual results may differ, and may differ materially from those projected in the forward-looking information. Accordingly, readers should not place undue reliance on forward-looking statements and information herein, which are qualified in their entirety by this cautionary statement. The forward-looking information contained in this press release is provided as of the date of this press release, and neither Trius nor Starling undertakes any obligation to release publicly any revisions for updating any forward-looking statements made herein, except as required by applicable securities laws.