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Jiminex Announces Letter of Intent for Reverse Takeover Transaction with Cannabco

Newsfile Corp.

Toronto, Ontario--(Newsfile Corp. - June 27, 2018) - Jiminex Inc. (TSXV: JIM.H) ("Jiminex" or the "Company") is pleased to announce that it has entered into a letter of intent (the "LOI") dated June 26, 2018 with Cannabco Pharmaceutical Corp. ("Cannabco") whereby the parties will complete a business combination by way of a transaction that will constitute a reverse takeover of the Company by Cannabco (the "Transaction"). Pursuant to the Transaction, the Company will apply to delist from the NEX Board of the TSX Venture Exchange (the "TSXV").

It is currently anticipated that the Transaction will be effected by way of a three-cornered amalgamation involving Cannabco and a wholly-owned subsidiary of Jiminex (the "Amalgamation"). The resulting issuer that will exist upon completion of the Transaction (the "Resulting Issuer") will change its business from mining to the cannabis industry. The final structure of the Transaction will be determined by the parties following receipt of tax, corporate and securities law advice. The Transaction is an arm's length transaction. Upon the closing of the Transaction (the "Closing"), it is expected that current shareholders of the Company will hold 3.87% of the common shares of the Resulting Issuer (the "Resulting Issuer Shares") and current shareholders of Cannabco will hold 96.13% of the Resulting Issuer Shares (on a non-diluted basis).

Description of Cannabco and its Business

Cannabco was established with the intent of becoming a licensed cannabis producer under the Access to Cannabis for Medical Purposes Regulations.  Cannabco utilizes an exclusive and proprietary commercial cultivation technology to improve yields and product quality, while reducing production costs when compared to a standard indoor grow facility.  Cannabco is currently in the process of licensing its 17,500 sq/ft facility in the Greater Toronto Area and has plans for an expansion facility.  Operations have been tailored for the facilities to provide medical and recreational grade Cannabis to the Canadian market as well as the potential export of oils, extracts, and pharmaceutical grade isolates to the global marketplace.

Share Consolidation and Exchange of Securities

Pursuant to the terms of the LOI, the Company will effect a consolidation (the "Share Consolidation") of its issued and outstanding common shares (the "Jiminex Shares") prior to Closing on a 3.886:1 basis resulting in approximately 4,995,008 Jiminex Shares outstanding on a post-Share Consolidation basis.

In accordance with the terms of the Transaction, the Company shall acquire all of the issued and outstanding common shares in the capital of Cannabco ("Cannabco Shares") in exchange for Jiminex Shares on a one-for-one basis. The deemed exchange price for the Jiminex Shares will be $0.20 per Jiminex Share, or such other price as permitted by governing regulatory bodies. Subject to the receipt of applicable regulatory approvals, Cannabco will pay a finder's fee to an unrelated third party in connection with the Transaction in the amount of $20,000.

Jiminex Shareholder Meeting

Prior to the completion of the Transaction, Jiminex will call a meeting of its shareholders for the purpose of approving, among other matters:

  • a change of name of the Company, as directed by Cannabco and acceptable to the applicable regulatory authorities, to be effective upon Closing;
  • the Share Consolidation;
  • the reconstitution of the Company's board of directors; and
  • the de-listing of the Jiminex Shares to the extent required by the TSXV.

Management of the Resulting Issuer

If the Transaction is completed, it is anticipated that the board of directors of the Resulting Issuer shall be reconstituted to consist of such directors as Jiminex and Cannabco shall determine, and certain officers of Jiminex shall resign and be replaced with officers appointed by the new board of directors.

Closing Conditions

The completion of the Transaction is subject to a number of conditions, including but not limited to the following:

  • the execution of a definitive agreement;
  • completion of mutually satisfactory due diligence;
  • completion of the Share Consolidation;
  • the de-listing of the Jiminex Shares; and
  • receipt of all required regulatory, corporate and third party approvals, the approval of the shareholders of Jiminex and Cannabco, and the fulfillment of all applicable regulatory requirements and conditions necessary to complete the Transaction.

Trading Halt

Trading in the Jiminex Shares was halted on June 26, 2018 and is expected to remain halted until following Closing.

Further information

Upon entering into the definitive agreements in respect of the Transaction, Jiminex intends to issue a further news release which will disclose, among other things, details of insiders and proposed directors and officers of the Resulting Issuer, and a summary of financial information pertaining to Cannabco.

Investors are cautioned that any information released or received with respect to the Transaction in this press release may not be complete and should not be relied upon. Trading in Jiminex Shares should be considered highly speculative.

The securities to be issued in connection with the Transaction 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 (as defined in Regulation S promulgated under the U.S. Securities Act) unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

Completion of the Transaction is subject to a number of conditions, including but not limited to, TSXV acceptance and if applicable, 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 Jiminex should be considered highly speculative.

The TSXV has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this news release.

About Jiminex Resources Inc.

Jiminex Resources Inc. is a junior mineral exploration company.

Cautionary Statements Regarding Forward Looking Information

This news release contains "forward-looking information" within the meaning of applicable securities laws relating to the proposal to complete the Transaction and associated transactions. Any such forward-looking statements may be identified by words such as "expects", "anticipates", "believes", "projects", "plans" and similar expressions. Readers are cautioned not to place undue reliance on forward-looking statements. Statements about, among other things, the closing of the Transaction, expected terms of the Transaction, the number of securities of Jiminex that may be issued in connection with the Transaction, the ownership ratio of the Resulting Issuer post-closing, shareholder approval, Cannabco's strategic plans and the parties' ability to satisfy closing conditions and receive necessary approvals are all forward-looking information. These statements should not be read as guarantees of future performance or results. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from those implied by such statements. Although such statements are based on management's reasonable assumptions, there can be no assurance that the Transaction will occur or that, if the Transaction does occur, it will be completed on the terms described above. Jiminex and Cannabco assume no responsibility to update or revise forward-looking information to reflect new events or circumstances unless required by applicable law.

For more information, please contact:

Jiminex Inc.
Michael Lerner, CEO & Director
Telephone: 416-710-4906
Email: mlerner10@gmail.com

Cannabco Pharmaceutical Corp.
Mark Pellicane, CEO
Telephone: 416-616-3468
Email: info@cannabco.ca

THIS NEWS RELEASE IS INTENDED FOR DISTRIBUTION IN CANADA ONLY AND IS NOT INTENDED FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES.