Vancouver, British Columbia–(Newsfile Corp. – June 8, 2021) – 1287396 B.C. Ltd. (“396“) and Filament Ventures Corp. (“Filament“) are pleased to announce that further to the press release of Filament dated May 17, 2021, 396 and Filament have entered into an amalgamation agreement dated June 7, 2021 (the “Amalgamation Agreement“) and have received conditional acceptance from the NEO Exchange Inc. (“NEO“) for the closing of the proposed amalgamation of Filament and 396 (the “Amalgamation“).

The Amalgamation Agreement provides for the Amalgamation, pursuant to which, among other things: (a) 396 and Filament shall be amalgamated and continue as one corporation, Filament Health Corp. (the “Resulting Issuer“) in accordance with the provisions of the Business Corporations Act (British Columbia); (b) all of the outstanding common shares of Filament (each, a “Filament Common Share“) will be cancelled and, in consideration therefor, the holders thereof will receive one fully paid and non-assessable common share (each, a “Resulting Issuer Share“) in the capital of the Resulting Issuer for each one Filament Common Share held immediately prior to the Amalgamation (the “Effective Time“); and (c) all of the outstanding common shares of 396 (each, a “396 Common Share“) will be cancelled and in consideration therefor, the holders thereof will receive one fully paid and non-assessable Resulting Issuer Share for each one 396 Common Share held immediately prior to the Effective Time.

Completion of the proposed Amalgamation is subject to, among other things, receipt of all necessary regulatory and shareholder approvals.

The Amalgamation Agreement

The Amalgamation Agreement contemplates that the following conditions precedent be met prior to the closing of the Amalgamation, including, but not limited to, (a) acceptance by the NEO and receipt of other applicable regulatory approvals; (b) completion of the Private Placement (as defined below); (c) completion of the 396 Placement (as defined below); (d) receipt of the requisite shareholder approvals from Filament and 396; and (e) no adverse material change in the business, affairs, financial condition or operations of Filament or 396 shall have occurred between the date of entering into the Amalgamation Agreement and the closing of the Amalgamation. If all conditions to the implementation of the Amalgamation have been satisfied or waived, Filament and 396 will carry out the Amalgamation. There can be no assurance that Amalgamation will be completed as proposed or at all.

Pursuant to the terms of the Amalgamation Agreement, it is expected that the following security conversions, exercise and issuances will occur among 396, Filament and the securityholders of Filament immediately prior to completion of the Amalgamation:

(a) each 396 Common Share (other than those held by dissenting 396 shareholders) outstanding immediately prior to the Effective Time shall be cancelled and, in consideration therefor, the holder of such 396 Common Share shall receive such number of fully paid and non-assessable Resulting Issuer Shares;

(b) each Filament Common Share (other than those held by dissenting Filament shareholders) outstanding immediately prior the Effective Time shall be cancelled and, in consideration therefor, the holder of such Filament Common Share shall receive such number of fully paid and non-assessable Resulting Issuer Shares;

(c) each common share purchase warrant of Filament (a “Filament Warrant“) outstanding immediately prior to the Effective Time shall be cancelled and, in consideration therefor, the holder of such Filament Warrant shall receive such number of fully paid and non-assessable Resulting Issuer warrants;

(d) each stock option of Filament (a “Filament Option“) outstanding immediately prior to the Effective Time shall be cancelled and, in consideration therefor, the holder of such Filament Option shall receive such number of fully paid and non-assessable Resulting Issuer options;

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(e) each non-transferable broker warrants of Filament to be issued in connection with the Private Placement (as defined below) (a “Filament Broker Warrant“) outstanding immediately prior to the Effective Time shall be cancelled and in consideration therefor, the holder of such Filament Broker Warrant shall receive such number of fully paid and non-assessable Resulting Issuer warrants; and

(f) each non-transferable finder warrants of Filament (“Filament Finder Warrant“) outstanding immediately prior to the Effective Time shall be cancelled and in consideration therefor, the holder of such Filament Finder Warrant shall receive such number of fully paid and non-assessable Resulting Issuer warrants.

Following completion of the Amalgamation and assuming: (i) the Private Placement (as defined below) is fully subscribed; and (ii) the minimum offering pursuant to the 396 Placement is met and not exceeded, it is anticipated that the Resulting Issuer will have 177,189,369 Resulting Issuer Shares outstanding and of which 3,800,000 Resulting Issuer Shares, representing approximately 2.1% of the then outstanding Resulting Issuer Shares, will be held by former 396 Shareholders, 148,389,369 Resulting Issuer Shares, representing approximately 83.7% of the then outstanding Resulting Issuer Shares, will be held by the current Filament common shareholders, not including investors in the Private Placement (as defined below), and 25,000,000 Resulting Issuer Shares will be held by investors in the Private Placement (as defined below), representing approximately 14.1% of the then outstanding Resulting Issuer Shares.

About 396

396 was incorporated under the Business Corporations Act (British Columbia) as a wholly-owned subsidiary of 1289625 BC Ltd. Pursuant to a plan of arrangement under the provisions of the Business Corporations Act (British Columbia), 1289625 BC Ltd. reorganized its capital such that each holder of common shares disposed of their holdings to 1289625 BC Ltd. and, in consideration therefor, received, among other things, certain 396 Common Shares and which resulted in 396 ceasing to be a subsidiary of 1289625 BC Ltd.

396 has no material assets and does not conduct any operations or active business, other than the identification and evaluation of acquisition opportunities to permit 396 to acquire a business or assets in order to conduct commercial operations.

396 is a reporting issuer under the securities laws of the jurisdictions of Alberta and British Columbia.

About Filament

Filament is a privately-held corporation incorporated under the Business Corporations Act (British Columbia) on June 8, 2020 and changed its name to “Filament Ventures Corp.” on July 6, 2020.

Filament is an exclusively-natural psychedelic drug discovery and extraction company. Its mission is to see safe, approved, natural psychedelics in the hands of everyone who needs them as soon as possible. Filament believes measurable and efficacious medicines will be a catalyst to addressing many of the world’s mental health problems and that natural psychedelics provide an optimal option for widespread adoption of these substances. Filament engages in natural extraction technology and commercialization, utilizing its intellectual property portfolio, in-house good manufacturing practices and a Health Canada psilocybin Dealer’s License. Filament is headquartered in Vancouver, British Columbia.

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As of the date hereof, there are 148,389,369 Filament Common Shares outstanding. The following persons own, control or direct 10% or more of the outstanding Filament Common Shares:

Proposed Directors and Senior Management Team

Upon the closing of the Amalgamation, it is anticipated that Greg Mills (Chair), Ben Lightburn, Chris Wagner, Maureen O’Connell and Jon Conlin will constitute the Board of Directors of the Resulting Issuer. It is also anticipated that the new senior management team of the Resulting Issuer will be comprised of Ben Lightburn (Chief Executive Officer), Tom Kineshanko (President), Warren Duncan (Chief Financial Officer), Lisa Ranken (Chief Operating Officer), Ryan Moss (Director of Research) and Jon Conlin (Corporate Secretary).

The following are brief resumes of the currently proposed directors and senior officers of the Resulting Issuer following the Amalgamation:

Gregory Mills – Age 59 – Chair of the Board of Directors

Mills has nearly 35 years of experience in capital markets, including 20 years with RBC Capital Markets LLC. During his time at RBC Capital Markets, Mr. Mills served as Managing Director of RBC Capital Markets Global Equities, Director of RBC USA Holdco Corporation, member of the RBC Capital Markets Operating Comm, and RBC Capital Markets’ Capital Commitment and Global Risk committees. Mr. Mills is currently the Chairman of the board of directors of Sundial Growers Inc., Director of the Aequitas Innovations Inc., Director of Frontier Lithium Inc. and a capital markets advisor to Portag3 Ventures L.P.

Mr. Mills received a Bachelor of Science in Geology from the University of Windsor.

Mr. Mills will devote the time necessary to perform the work required in connection with serving as chair of board of the directors of the Resulting Issuer.

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Ben Lightburn – Age 35 – Chief Executive Officer, Director & Co-Founder

Mr. Lightburn has 15 years of experience in the natural health and technology sectors. Mr. Lightburn was previously the Chief Executive Officer of Mazza Innovation Ltd. (“Mazza“), which was focused on the commercialization of a phytochemical extraction technology called the PhytoClean Method™. Mr. Lightburn raised over $10 million in angel and venture capital and over $2 million in non-dilutive financing from local and international investors, recorded three successive years of triple-digit revenue growth (with two years of over $1 million growth), grew the team from 8 to 28 employees, developed partnerships with leading multinationals such as BASF and Givaudan, and added several patents to the portfolio relating to existing and new technologies. In 2018 Mazza was sold to Sensient Technologies Corp. (NYSE: SXT) for $26 million.

Earlier in his career, Mr. Lightburn was the Business Manager at Radient Technologies Inc. He managed technicians and chemists who produced high value plant extracts for use as active pharmaceutical ingredients.

Mr. Lightburn received a Master of Business Administration (MBA) from the Sauder School of Business at UBC and a Bachelor of Science (Honours) in Physics from Queen’s University.

Chris Wagner – Age 53 – Director

Mr Wagner has over 25 years of experience in commercialization and product development in the life sciences industry. Mr. Wagner is currently the Founder and Chief Executive Officer of ImmunoFlex Inc. and focused on immune system genomics. Mr. Wagner was recently Chief Executive Officer and a director of Emerald Health Therapeutics, where they filed 17 patents, launched an international brand, and increased the market capitalization by 400%. Prior to Emerald, Mr. Wagner held several executive positions including Founder & Chief Executive Officer of Canexia Health (currently selling its medical products globally), Chief Executive Officer of Sirius Genomics (sold to a strategic investor), Vice President of Business Development of Aspreva Pharmaceuticals (sold to a strategic investor), and Global Team Leader at Eli Lilly.

Mr. Wagner is an Accredited director and received a Bachelor of Science in Organic Chemistry from UBC.

Maureen O’Connell – Age 59 – Director

It is expected that Maureen O’Connell will become a director of Filament at the annual and special meeting of the holders of Filament Common Shares to be held on June 18, 2021. With over 35 years of experience, Ms. O’Connell has held progressively more senior roles in public companies, with the most recent position being Executive Vice President, Chief Administrative Officer and Chief Financial Officer of Scholastic Corporation. Currently, Ms. O’Connell is Chair of the Board of Acacia Research Corporation and serves on the board of ISACA. Previously, Ms. O’Connell served on the Board of Harte Hanks Inc. (Chair of the Compensation Committee and member of Audit Committee), Sucampo Pharmaceuticals Inc. and Beazer Homes USA, Inc. (Chair of Audit Committee and member of Compensation Committee).

Ms. O’Connell received a Bachelor of Science in Accounting and Economics from the Leonard N. Stern School of Business at New York University and is a certified public accountant.

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Jon Conlin – Age 36 – Director

Mr. Conlin is a Partner at Fasken Martineau DuMoulin LLP in the Securities & Technology Group. Mr. Conlin brings over 10 years of financing, M&A, and corporate governance experience, with expertise in the life sciences, mental health and cannabis sectors. In recent years, Mr. Conlin has led venture capital, private equity and other strategic transactions for high growth companies totalling over $1 billion. Mr. Conlin has served as an officer in multiple public and private companies. Mr. Conlin is currently the corporate secretary for, among other companies, Lungpacer Medical Inc. (a venture-backed medical device company headquartered in Exton, PA, USA), Starling Minds Inc. (a venture-backed digital mental health therapy technology company headquartered in Vancouver, BC) and Alavida Health Ltd. (a venture-backed addiction treatment technology company headquartered in Vancouver, BC).

Mr. Conlin received a Bachelor of Arts in Political Science and Government from Washington State University and a Juris Doctor from UBC.

Mr. Tom Kineshanko – Age 36 – President

Mr. Kineshanko brings 12 years of experience as a founder, executive, and director in regulated frontier markets to Filament. Most recently, Mr. Kineshanko co-founded Protos Asset Management where he helped the team successfully launch and raise approximately $10 million for the first fully SEC compliant tokenized hedge fund (the PRTS token).

Mr. Kineshanko has been a seed round investor in over fifty start-ups from Ethereum to Argo Blockchain (Founding Member of the Board of Advisors) that have grown to greater than $50 million in total market capitalization.

Mr. Kineshanko received a Joint Honours BBA (Finance and Geography) from Simon Fraser University.

Mr. Kineshanko will devote the time necessary to perform the work required in connection with serving as a President of the Resulting Issuer.

Warren Duncan – Age 31 – Chief Financial Officer

Warren Duncan brings a wealth of experience in capital markets, transaction advisory, and accounting. Previously, Mr. Duncan spent over four years in investment banking at Cormark Securities Inc. where he acted as an underwriter on over 75 financings raising greater than $6.5 billion in aggregate proceeds with significant go-public experience.

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Prior to Cormark Securities Inc. , Mr. Duncan spent approximately five years at Ernst & Young Global Limited between the Private Mid Market Audit Practice and the Transaction Advisory Services. Mr. Duncan serves as a Director for the Tusarnaarniq Sivumut Association Music for the Future non-profit organization which delivers youth music programs to communities in Nunavut, Canada.

Mr. Duncan received a Bachelor of Commerce from Queen’s University and holds the Chartered Professional Accountant designation.

Lisa Ranken – Age 38 – Chief Operating Officer

Lisa Ranken is the Chief Operating Officer of Filament. Ms. Ranken has spent her career honing operations and leading teams in rapidly growing industries. Ms. Ranken’s expertise and success in new technology start-ups show that she is a master of solving complex business challenges. Most recently, Ms. Ranken led the commercialization of a patented extraction technology through acquisition and supported the successful advancement of the first-of-its-kind low carbon biofuel technology. Ms. Ranken has operational experience in HR, process and workflow design, supply chain, compliance and R&D.

Ms. Ranken is an active member in her community, acting as the President of the Lake Country Health Planning Society and a director on a pet therapy board, Pets and Friends.

Ms. Ranken holds a Bachelor of Engineering (B. Eng) in Chemical Engineering from McGill University and a Master of Engineering (M. Eng) in Process Engineering from New South Wales University. Ms. Ranken also holds the P. Eng designation (Professional Engineers and Geoscientists of British Columbia).

Ryan Moss – Age 33 – Director of Research

Ryan Moss is the Director of Research at Filament. Mr. Moss brings ten years of R&D experience dealing with all aspects of industrial process chemistry and the scale-up of extraction, purification, and standardization of natural products. Mr. Moss has brought over 20 products from bench-scale to commercialized products in the food, cosmetic and nutraceutical industries. This includes two patents involving the commercial-scale extraction and purification processes using water and aqueous solvent chemistry.

Mr. Moss received a Bachelor of Science in Chemistry and a Master of Science in Chemistry, both from UBC.

Filament Private Placement

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Further to the news release of Filament dated May 17, 2021, concurrently with the transactions contemplated by the Amalgamation Agreement and as a condition to completion of the Amalgamation, Filament plans to complete a brokered and non-brokered private placement for aggregate gross proceeds of up to $10,000,000 through the issuance of up to 25,000,000 subscription receipts (“Subscription Receipts“) and units (each, a “Filament Unit“) at a price of $0.40 per security, or such other amount and price as may be determined by the Filament (the “Private Placement“).

In connection with the brokered Private Placement, Filament has entered into an agreement with Echelon Wealth Partners Inc. and Canaccord Genuity Corp. (collectively, the “Agents“) to act on a commercially reasonable best-efforts basis to complete the offering of Subscription Receipts upon terms and conditions to be superseded by a formal agency agreement between Filament and the Agents.

The Private Placement is expected to close in multiple tranches with the first tranche of approximately 12,500,000 Subscription Receipts and Filament Units (for aggregate proceeds of approximately $5,000,000) expected to close on June 11, 2021 or such other date as mutually determined by Filament and the Agents.

The Subscription Receipts will be created and issued pursuant to the terms of the subscription receipt agreement (the “Subscription Receipt Agreement“) between, inter alios, Computershare Trust Company of Canada, as subscription receipt agent (the “Subscription Receipt Agent“), Filament and the Agents. Each Subscription Receipt will be automatically converted, without payment of additional consideration or further action by the holder thereof, into one Unit, subject to adjustment in certain events, immediately prior to the completion of the Amalgamation upon the satisfaction or waiver of certain Escrow Release Conditions (as defined in the Subscription Receipt Agreement) at or before the Outside Date (as defined in the Subscription Receipt Agreement).

Each Filament Unit is comprised of one Filament Common Share and one-half of one Filament Warrant. Each whole Filament Warrant will entitle the holder thereof to purchase one Filament Common Share at a price equal to $0.60 at any time on or before the date which is 24 months after the Escrow Release Conditions have been satisfied.

Subject to certain assumptions discussed under the Amalgamation Agreement, the Filament Common Shares and Filament Warrants comprising the Filament Units will be exchanged for Resulting Issuer Shares and Resulting Issuer Warrants (as such term is defined in the Amalgamation Agreement) in accordance with the terms of the Amalgamation.

A portion of the gross proceeds of the brokered Private Placement, being the Escrowed Funds, will be held in escrow by the Subscription Receipt Agent, in accordance with the Subscription Receipt Agreement and will be released to Filament upon the satisfaction of the Escrow Release Conditions, provided that the Escrow Release Conditions are satisfied at or prior to the Outside Date.

In consideration for their services in connection with the brokered Private Placement, Filament shall pay the Agents a cash commission equal to 6.0% of the aggregate gross proceeds from the sale of the Subscription Receipts (3.0% of the aggregate gross proceeds of the issue and sale to the president’s list), 50% of which commission will be paid on the closing of the brokered Private Placement and the remaining 50% of which commission to be deposited in escrow. As additional consideration for the services of the Agents, the Agents will be granted Filament Broker Warrants equal to 6.0% of the aggregate number of Subscription Receipts issued (3.0% of the aggregate number of Subscription Receipts sold to the president’s list). Each Filament Broker Warrant is exercisable to acquire one Filament Common Share at a price of $0.40 per share for a period of 24 months from the date the Resulting Issuer Shares are listed on the NEO. The Filament Broker Warrants will be exchanged for an equivalent number of Resulting Issuer Filament Broker Warrants (as such term is defined in the Amalgamation Agreement) pursuant to, and on completion of, the Amalgamation.

The 396 Placement

Prior to the completion of the Amalgamation, 396 is expected to complete a private placement for aggregate gross proceeds of approximately $20,000 through the issuance of approximately 50,000 396 Common Shares at a price of $0.40 per 396 Common Share, or such other amount and price as may be determined by 396 and Filament (the “396 Placement“).

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Further Information

396 and Filament will provide further details in respect of the Amalgamation, Private Placement and 396 Placement in due course by way of a subsequent news release, however, 396 and Filament will make available to NEO, all information, including financial information, as may be requested or required by the NEO.

All information contained in this news release with respect to 396 and Filament was supplied by the respective party, for inclusion herein, without independent review by the other party, and each party and its directors and officers have relied on the other party for any information concerning the other party.

Completion of the Amalgamation is subject to a number of conditions, including but not limited to, NEO acceptance and if applicable pursuant to NEO requirements. The Amalgamation cannot close until the required Filament shareholder approval is obtained. There can be no assurance that the Amalgamation or the Private Placement will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the management information circular of Filament to be prepared in connection with the Amalgamation, any information released or received with respect to the Amalgamation may not be accurate or complete and should not be relied upon. Trading in the securities of the Resulting Issuer should be considered highly speculative.

The NEO has not in any way passed upon the merits of the proposed Amalgamation and has neither approved nor disapproved the contents of this news release.

This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities 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.

For further information, please contact:

James Ward
Chief Executive Officer
1287396 B.C. Ltd.

Email: [email protected]

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Ben Lightburn
Chief Executive Officer, director and Co-Founder
Filament Ventures Corp.

Email: [email protected]

Forward-Looking Information

Certain statements and information herein, including all statements that are not historical facts, contain forward-looking statements and forward-looking information within the meaning of applicable securities laws. Such forward-looking statements or information include but are not limited to statements or information with respect to: the Private Placement and 396 Placement, including amounts anticipated to be raised thereunder; the Escrow Release Conditions and the use of net proceeds therefrom; the terms and conditions of the Amalgamation, including receipt of NEO and shareholder approval; the details of any securities issuances, exchanges or cancellations; the anticipated directors, officers and insiders of the Resulting Issuer; and the closing of the Amalgamation. Often, but not always, forward-looking statements or information can be identified by the use of words such as “estimate”, “project”, “belief”, “anticipate”, “intend”, “expect”, “plan”, “predict”, “may” or “should” and the negative of these words or such variations thereon or comparable terminology are intended to identify forward-looking statements and information.

With respect to forward-looking statements and information contained herein, 396 and Filament have made numerous assumptions including among other things, assumptions about general business and economic conditions of Filament and the market in which it operates. The foregoing list of assumptions is not exhaustive.

Although management of 396 and Filament believe that the assumptions made and the expectations represented by such statements or information are reasonable, there can be no assurance that forward-looking statements or information herein will prove to be accurate. Forward-looking statements and information by their nature are based on assumptions and involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements or information. These factors include, but are not limited to: risks relating to the Private Placement and 396 Placement; risks relating to the receipt of all requisite approvals for the Amalgamation and/or other ancillary transactions, including the approval of Filament and 396 shareholders and the NEO; and other risk factors as detailed from time to time. 396 and Filament do not undertake to update any forward-looking information, except in accordance with applicable securities laws.

Readers should not place undue reliance on the forward-looking statements and information contained in this news release. 396 and Filament assume no obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change, except as required by law. The statements in this press release are made as of the date of this release.

Not for distribution to U.S. news wire services or for dissemination in the United States

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/86975