Carpincho Capital Corp. announces proposed acquisition of MM Development Company, LLC and related financing transaction

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TORONTO , Feb. 14, 2018 /CNW/ – Carpincho Capital Corp. ("Carpincho") announces that it has entered into a binding letter agreement (the "Letter Agreement") with MM Development Company, LLC (doing business as Planet 13 and Medizin), a privately held limited liability company existing under the laws of the State of Nevada ("MMDC"), which outlines the general terms and conditions pursuant to which Carpincho and MMDC have agreed to complete a transaction (the "Transaction") that will result in a reverse take-over of Carpincho by the current shareholders of MMDC. The Letter Agreement was negotiated at arm’s length and is effective as of February 13, 2018 .

Founded in 2014, MMDC is a leading vertically integrated cannabis company in the State of Nevada . MMDC operates an award-winning dispensary located in Las Vegas with both a medical and recreational license, and sells its own in-house brands, Medizin (medical) and Planet 13 (recreational). MMDC also operates two cultivation licenses and two production licenses in Clark County and Nye County . Planet 13 has received recognition for its plant strain development and has earned awards and industry recognition for its current dispensary.

Terms of the Transaction and Financing Matters

In connection with the Transaction, Carpincho will acquire all of the issued and outstanding membership interests of MMDC in exchange for an aggregate of 75,000,000 post-consolidated shares of Carpincho. In the event that MMDC completes a reorganization prior to the completion of the Transaction, Carpincho will acquire the business of the successor entity to MMDC on the same terms described herein.

Prior to the completion of the Transaction, a brokered private placement of subscription receipts (the "Subscription Receipts") will be completed for aggregate gross proceeds of up to CAD$25,000,000 (the "Private Placement"). The Private Placement will be conducted by a syndicate of agents co-led by Beacon Securities Limited (as sole bookrunner) and Canaccord Genuity Corp., and including Haywood Securities Inc. (collectively, the "Agents").

A cash fee payable to the Agents in consideration of the services rendered representing 6.0% of the gross proceeds of the Private Placement (other than in respect of proceeds from sales to persons on a "president’s list" on which a 3% fee shall be payable) will be placed in escrow on the closing date of the Private Placement and will be released to the Agents, together with any interest earned thereon, upon satisfaction of the Escrow Release Conditions (defined below). As additional consideration, the Agents shall be granted compensation options ("Compensation Options") equal to 6% of the number of Subscription Receipts sold pursuant to the Private Placement (other than in respect of Subscription Receipts sold to persons on a "president’s list" pursuant to which 3% Compensation Options shall be issuable). Each Compensation Option shall entitle the holder to acquire one Resulting Issuer Share (defined below) (subject to any necessary adjustments) at the issue price of the Subscription Receipts for a period of 24 months following the satisfaction of the Escrow Release Conditions.

The gross proceeds of the Private Placement net of certain expenses will be placed into escrow (the "Escrowed Proceeds") and released upon the satisfaction of a number of conditions, including that all conditions precedent to the closing of the Transaction have been satisfied or waived (the "Escrow Release Conditions"). Immediately prior to the closing of the Transaction, the Escrowed Proceeds will be released from escrow, and the holders of Subscription Receipts will ultimately receive common shares of the Resulting Issuer (defined below) on closing of the Transaction after giving effect to a consolidation by Carpincho (the "Consolidation") of its existing common shares (the "Existing Shares") on the basis of 5.5 new common shares (the "Resulting Issuer Shares") for each six Existing Shares. It is anticipated that net proceeds of the Private Placement will be used by the Resulting Issuer to fund the construction of a new dispensary near the Las Vegas Strip, to construct a greenhouse complex for the cultivation and production of cannabis and cannabis-based products in Beatty, Nevada , and for general corporate purposes. Further details regarding the Private Placement will be included in a subsequent news release once additional details become available.

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