(Source: Marketwire)
TORONTO, ONTARIO--(Marketwire - Dec. 9, 2008) - 99 CAPITAL CORPORATION (TSX VENTURE:WDG.P) ("99 Capital"), a capital pool company, is pleased to announce that it has entered into an agreement with Gilla Inc. ("GILLA") dated December 5, 2008, pursuant to which it has agreed to acquire all of the issued and outstanding shares of GILLA (the "Acquisition"). The acquisition of GILLA, if completed, will be 99 Capital's Qualifying Transaction pursuant to the rules and policies of the TSX Venture Exchange (the "Exchange"). It is expected that, upon completion of the Acquisition, 99 Capital will change its name to Gilla Inc. and will result in Gilla Inc. becoming listed on the Exchange as a Tier 2 Resource Issuer.
The Qualifying Transaction
Pursuant to the Acquisition, 99 Capital has agreed to acquire all of the issued and outstanding common shares of GILLA in consideration for 99 Capital issuing a minimum of 45 million common shares from its treasury to GILLA shareholders.
Each GILLA shareholder will be entitled to receive 99 Capital Shares on a pro rata basis according to their respective shareholdings in GILLA. In addition, all of the issued and outstanding options or convertible securities of GILLA shall be converted into options or convertible securities of 99 Capital having corresponding terms. Also pursuant to the Acquisition, GILLA may undertake a private placement (the "Private Placement") to raise up to an additional $1,000,000 in working capital prior to the closing of the Acquisition. In the event the Private Placement is consummated at a price of $0.50 per GILLA common share or greater, the number of 99 Capital Shares issuable to GILLA shareholders shall be increased by 10 million common shares (in addition to the shares issuable to the Private Placement subscribers). If the Private Placement raises gross proceeds of less than $1 million, then the number of additional 99 Capital Shares shall be reduced proportionately, provided that a minimum of $500,000 is raised.
Conditions Precedent
Completion of the Acquisition is subject to a number of usual conditions, including, but not limited to, the satisfaction of the minimum listing requirements of the Exchange, Exchange approval of the Acquisition as 99 Capital's Qualifying Transaction, respective financial and legal due diligence investigations of GILLA by 99 Capital and by GILLA of 99 Capital (both to be completed by January 15, 2009), the approval of the respective board of directors of 99 Capital and GILLA (both to be completed by January 15, 2009) and 99 Capital obtaining all requisite shareholder approvals and requisite regulatory approvals. Sponsorship may be required by the Exchange in connection with the proposed Acquisition.
