AmWolf Capital Provides Update on Proposed Qualifying Transaction with Pontus Water Lentils

VANCOUVER, BC, Nov. 27, 2020 /CNW/ - AmWolf Capital Corp. ("AmWolf" or the "Company") (TSXV: AMW.P) provides the following update to supplement the disclosure related to the Company's previously announced Qualifying Transaction, as defined under TSX Venture Exchange (the "Exchange") Policy 2.4 – Capital Pool Companies ("Policy 2.4"), with Pontus Water Lentils Ltd. ("Pontus") and each of the respective parties' concurrent private placements.

Qualifying Transaction Update

As previously announced by news release dated August 14, 2020, the Company, 1253044 B.C. Ltd., a wholly-owned subsidiary of AmWolf ("NewCo"), and Pontus have entered into an amalgamation agreement dated July 28, 2020 (the "Amalgamation Agreement"), pursuant to which AmWolf will acquire all of the issued and outstanding common shares (each, a "Pontus Share") of Pontus (the "Transaction").  The Company, NewCo and Pontus continue to work towards the closing of the Transaction (the "Closing").  Initial submissions, including submission of a draft filing statement with respect to the Transaction (the "Filing Statement"), have been made to the Exchange and are currently under review.  The Transaction is subject to the approval of the Exchange, and is intended to constitute the Company's Qualifying Transaction (as defined in Policy 2.4).

The Surrey Facility

Pontus has entered into a lease agreement (the "Surrey Farm Lease Agreement") with 1108190 B.C. Ltd. (the "Landlord"), an arm's length party to Pontus, pursuant to which Pontus agreed to lease a 20,570 sq/ft. commercial growing, processing and research facility located in Surrey, British Columbia (the "Surrey Farm") for a term of 5 years starting on November 1, 2020 (the "Term").  Upon the entry into of the Surrey Farm Lease Agreement, Pontus prepaid 4 month's base rent of approximately $101,000.  With the securing of the Surrey Farm, Pontus will no longer be pursuing the construction of the previously announced 10,000 sq/ft. processing farm in Delta, British Columbia.

According to the terms of the Surrey Farm Lease Agreement, the base net lease payment payable to the Landlord for the Surrey Farm is $14 per sq/ft. for the first 3 years of the Term and $16 per sq/ft. for the 4th and 5th years of the Term.  The Surrey Farm Lease Agreement provides for one further consecutive renewal term for an addition 5 years (the "Renewal Term"), which renewal option must be exercised by Pontus no later than 6 months prior to the expiration of the Term.  The terms and conditions of the Renewal Term are to be on same terms and conditions as the Term, except that the base rent shall be set at the most probable fair market rent obtainable by a landlord from an unrelated party, provided such base rent is not less than the base rent of the final year of the term prior to the Renewal Term.

As an incentive to enter into the Surrey Farm Lease Agreement, the Landlord agreed to waive the first month's lease payment in order for Pontus to complete essential tenant improvements to accommodate the installation of the CEVAS™ system.  Pontus intends to produce, package and distribute its products, including its Pontus Protein Power+ protein powder, from the Surrey Farm across North America as well as internationally upon receipt of the requisite Canadian Food Inspection Agency ("CFIA") approvals.  Pontus began tenant improvements to the Surrey Farm facility in late October, 2020.

Concurrent Financing

In multiple closings, with the final closing on September 30, 2020, Pontus issued an aggregate of 3,828,421 units (each, a "Pontus Unit") at a price of $0.15 per Pontus Unit for gross aggregate proceeds of $574,263.15 (the "Pre-Transaction Placements").  Each Pontus Unit consists of one Pontus Share and one Pontus Share purchase warrant (each, a "Pontus Warrant").  Each Pontus Warrant entitles the holder thereof to purchase one additional Pontus Share (each, a "Pontus Warrant Share") at an exercise price of $0.30 per Pontus Warrant Share for a period of 2 years from the date of closing, subject to an acceleration provision, whereby the expiry of the Pontus Warrants issued in connection with the Pre-Transaction Placements may be accelerated in the event the daily trading price of the common shares of AmWolf (each, an "AmWolf Share") or the common shares (each, a "Resulting Issuer Share") of the Resulting Issuer (as defined below), as applicable, equals or exceeds $0.50 on the Exchange (or such other exchange on which the AmWolf Shares or Resulting Issuer Shares, as applicable, may be traded) for 20 consecutive trading days after the date that is four months and one day from the date of issuance, whereby AmWolf or the Resulting Issuer, as applicable, may accelerate the expiry date of the warrants by giving notice via news release to the holders thereof and, in such case, the warrants will expire on the 30th day after the date on which the news release is disseminated by AmWolf or the Resulting Issuer, as applicable.

In connection with the June 10, 2020 and September 30, 2020 closings of the Pre-Transaction Placements, Pontus paid aggregate finder's fees of $22,313.14 and issued an aggregate of 138,489 agent's warrants (each, an "Agent's Warrant").  Each Agent's Warrant entitles the holder to purchase one Pontus Share at a price of $0.15 per Pontus Share for a period of 5 years following the date of issuance.  The proceeds from the Pre-Transaction Placements are, subject to the approval of the Exchange, to be attributed to the non-brokered private placement of Pontus Units by Pontus for gross proceeds of at least $500,000 and up to $1,000,000 (the "Pontus Private Placement").

For more details on the Pontus Private Placement as well as the Company's previously announced non-brokered private placement for gross proceeds of at least $1,500,000 to $4,000,000 concurrent to the Transaction (together, the "Concurrent Financings"), see the Company's news release dated August 14, 2020.

Proceeds from the Concurrent Financings will be used (i) to advance the Resulting Issuer's Surrey Farm, (ii) to make payments related to the completion of the Transaction, (iii) for general and administrative expenses, and (iv) to contribute to working capital.  Conversely, the proceeds from the Pre-Transaction Placements have been used by Pontus in order to advance the Pontus' business objectives, including securing the 20,570 sq/ft. Surrey Farm, equipment for the CEVAS™ system at the Surrey Farm, and for general working capital purposes.

Convertible Promissory Notes

On August 13, 2020, August 28, 2020, September 10, 2020 and September 13, 2020, Pontus issued non-interest bearing convertible promissory notes in the aggregate principal amount of $105,000 (collectively, the "Pontus Promissory Notes").  Pursuant to the terms of the Pontus Promissory Notes, the holders may elect to convert the principal amount into Pontus Shares at a price of $0.15 per Pontus Share at any time.  The Pontus Promissory Notes are interest free, unsecured, and payable on demand.  The Pontus Promissory Notes also have no term, but, in connection with the Transaction, remain subject to the approval by the TSXV.

The proceeds from the Pontus Promissory Notes have been used by Pontus to help secure the Surrey Farm lease, procure equipment for the CEVAS™ system at the Surrey Farm and for general working capital purposes.

The securities described herein have not been, and will not be, registered under the United States Securities Act of 1933, as amended, or any state securities laws, and accordingly, may not be offered or sold within the United States absent an exemption from registration.

Closing of the Transaction

The Closing remains subject to the satisfaction of various conditions standard for a transaction of this nature, including but not limited to: (i) the Company having had the reasonable opportunity to perform searches and other due diligence, and being satisfied with the results of such due diligence; (ii) receipt of all necessary regulatory, shareholder and third party consents, waivers and approvals, including the Exchange; (iii) the absence of any material adverse change in the business, affairs or operations of AmWolf or Pontus, as applicable; and (iv) completion of the Concurrent Financings.

The combined company that will result from the completion of the Transaction (the "Resulting Issuer") will be renamed "Pontus Water Lentils Ltd." or such other name as agreed to by AmWolf and Pontus.  Subject to Exchange approval, the common shares of the Resulting Issuer will trade on the Exchange, under the symbol "HULK", and the business of the Resulting Issuer will be the business of Pontus.  It is expected that the Resulting Issuer will be listed on the Exchange as a Tier 2 Industrial issuer.

About AmWolf Capital Corp.

AmWolf Capital Corp. is a CPC as defined by the policies of the Exchange.  The Company's principal business activity is to identify and evaluate opportunities for acquisition of assets or business.  The Company is headquartered in Vancouver, British Columbia.

About Pontus Water Lentils Ltd.

Pontus Water Lentils Ltd. was founded in 2018, and is a British Columbia-based agri-tech company.  Pontus specializes in aquaponic farming through Closed Environment Vertical Aquaponics System™ or CEVAS™ system to create a sustainable, non-GMO plant-based protein product: "Pontus Protein Power+".  For more information, visit www.pontuswaterlentils.com.

Additional Information

All information contained in this news release with respect to AmWolf and Pontus (each, a "Party" and together, the "Parties") was supplied, for inclusion herein, by each respective 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 Transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and if applicable pursuant to Exchange Requirements, majority of the minority 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 a CPC should be considered highly speculative.

The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed Transaction and has neither approved nor disapproved the contents of this press release.

Disclaimer for Forward-Looking Information

Certain statements in this news release are forward-looking statements, which reflect the expectations of management regarding the Company's completion of the Transaction and related transactions.  Forward-looking statements consist of statements that are not purely historical, including any statements regarding beliefs, plans, expectations or intentions regarding the future, including but not limited to, the Company completing the Transaction on the terms and conditions of the Amalgamation Agreement, or at all, the completion of the Concurrent Financings, the completion of the Surrey Farm construction and outfitting and CFIA approval thereof, and the conditions to be satisfied for completion of the Transaction. Such statements are subject to risks and uncertainties that may cause actual results, performance or developments to differ materially from those contained in the statements, including risks related to factors beyond the control of the Company.  The risks include the following: the requisite corporate approvals of the directors and shareholders of the Parties may not be obtained; the Exchange may not approve the Transaction; the CFIA may not approve the Surrey Farm improvements; sufficient funds may not be raised pursuant to the Concurrent Financings; and other risks that are customary to transactions of this nature.  No assurance can be given that any of the events anticipated by the forward-looking statements will occur or, if they do occur, what benefits the Company will obtain from them.

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

SOURCE AmWolf Capital Corp.

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