Trail Blazing Ventures Announces Proposed Qualifying Transaction with HEMPALTA

Trail Blazing Ventures Announces Proposed Qualifying Transaction with HEMPALTA

CALGARY, Alberta – (Newsfile Corp. - October 11, 2023) – Trail Blazing Ventures Ltd. (the "Corporation" or "TBV") (TSXV: BLAZ.P) is pleased to announce details concerning its proposed non-arm's length qualifying transaction (the "Transaction") involving a proposed business combination with Hempalta Inc. ("HEMPALTA"), a private company incorporated under the laws of Alberta. 

HEMPALTA™ is an Alberta based agricultural technology company focused on harnessing the immense potential of industrial hemp. HEMPALTA is pioneering the global hemp carbon credit industry and utilizing advanced agricultural technology to process industrial hemp at scale. HEMPALTA products are made from hemp grown sustainably in Southern Alberta and processed using a state-of-the-art HempTrain™ Advanced Processing Plant at the company’s production facility in Calgary. HEMPALTA is led by passionate advocates for industrial hemp who have years of operations, manufacturing, marketing, consumer packaged goods and retail sales experience. This year, HEMPALTA was recognized as one of the 50 most investable cleantech companies in Canada by Foresight Canada, an organization focused on accelerating sustainable cleantech businesses to support a global transition to a green economy.

Prior to the completion of the Transaction, HEMPALTA intends to complete a brokered private placement offering of a minimum of $1,450,000 and up to a maximum of $3,300,000 (the "Subscription Receipt Private Placement"). The Private Placement shall be in the form of subscription receipts of HEMPALTA ("Subscription Receipts ") at a price of $0.17 per Subscription Receipt. The Private Placement is expected to be completed prior to the closing of the Transaction. In connection with the completion of the Transaction, the Subscription Receipts shall automatically convert into Newco Common Shares (as defined below).

The Corporation has entered into a non-binding letter of intent with HEMPALTA dated October 11, 2023 (the "LOI") pursuant to which the Corporation and HEMPALTA intend to complete the Transaction by way of share purchase, plan of arrangement, amalgamation, three-cornered amalgamation or alternate structure to be determined, having regard to relevant tax, securities and other factors, to form the resulting issuer ("Newco") to be named such name as may be determined by HEMPALTA. Pursuant to the proposed Transaction, each issued and outstanding HEMPALTA Common Share and Subscription Receipt will be exchanged into one common share of Newco ("Newco Common Share") on a 1:1 basis so that all of the issued and outstanding HEMPALTA Common Shares and existing convertible debentures will be exchanged for approximately 53,041,210 Newco Common Shares (not including the Subscription Receipts issued pursuant to the Subscription Receipt Private Placement or other HEMPALTA Common Shares reserved for issuance), and each unexercised incentive stock option of HEMPALTA shall be exchanged for a replacement option issued by Newco with the same terms as the option exchanged therefor. Additionally, it is expected that the outstanding common shares and options of the Corporation will be consolidated on a 1.7:1 basis. 

Non-Arm's Length Qualifying Transaction 

Darren Bondar is the Chief Executive Officer and President of both HEMPALTA and TBV and holds 6,521,000common shares of TBV (16.3%), and 10,000,000 HEMPALTA Shares (21.2%). However, as no party is a control person of both TBV and HEMPALTA, the proposed Transaction does not constitute a "Non-Arm's Length Qualifying Transaction" within the meaning of Exchange Policy 2.4 and, as such, Majority of the Minority Approval (as defined in Exchange Policy 2.4) is not required to approve the proposed Transaction.

However, the proposed Transaction is expected to constitute a "related party transaction" within the meaning of Multilateral Instrument 61-101 - Protection of Minority Securityholders in Special Transactions ("MI 61-101"). As TBV"s common shares are only listed on the Exchange, the Corporation intends to rely on an exemption to the formal valuation requirement of MI 61-101. For greater certainty, it is expected that the proposed Transaction will be subject to approval of the minority shareholders of TBV (excluding Darren Bondar) and accordingly TBV is expected to call a special meeting of shareholders to seek approval of the Transaction by the TBV's minority shareholders.

It is intended that the Transaction, when completed, will constitute the Corporation's "Qualifying Transaction" in accordance with Policy 2.4 of the TSX Venture Exchange (the "Exchange") Corporate Finance Manual. A more comprehensive news release will be issued by the Corporation disclosing details of the Transaction, including financial information respecting HEMPALTA, further details regarding the Private Placement, the names and backgrounds of all persons who will constitute insiders of Newco, and information respecting sponsorship, once an agreement has been finalized and certain conditions have been met, including:

  1. i) approval of the Transaction by the boards of directors of the Corporation and HEMPALTA;
  2. ii) satisfactory completion of due diligence; and

iii)        execution of the definitive agreement.

In the event a final agreement is not reached, the Corporation will notify shareholders. Trading in the common shares of the Corporation will remain halted and is not expected to resume trading until the Transaction is completed or until the Exchange receives the requisite documentation to resume trading.

ABOUT THE CORPORATION

Trail Blazing Ventures is a capital pool company (a "CPC") that has not commenced commercial operations and has no assets other than cash.  Except as specifically contemplated in the Exchange’s CPC Policy, until the completion of its qualifying transaction, the Corporation will not carry on business, other than the identification and evaluation of businesses or assets with a view to completing a proposed qualifying transaction.

For further information, please contact:

Craig Steinberg

Director

 Trail Blazing Ventures Ltd.

Telephone: 403.262.1337

Email:Craig.steinberg@trailblazingventures.com

Darren Bondar

Chief Executive Officer

Hempalta Inc.

Telephone: 1-877-622-3354

Email: info@hempalta.com

 

Forward-Looking Information Cautionary Statement

Statements in this press release regarding the Corporation's business which are not historical facts are "forward-looking statements" that involve risks and uncertainties, such as terms and completion of the proposed Transaction, and the terms and completion of the Subscription Receipt Private Placement. Since forward-looking statements address future events and conditions, by their very nature, they involve inherent risks and uncertainties. Actual results in each case could differ materially from those currently anticipated in such statements. The forward-looking statements and circumstances discussed in this press release, including the completion of the Transaction may not occur or could differ materially as a result of known and unknown risk factors and uncertainties affecting the Corporation, including (without limitation) risks relating to HEMPALTA completing the Subscription Receipt Private Placement, risks relating to the viability of the hemp processing business model and the scalability of local production practices and risks regarding market conditions, economic factors, and the equity markets generally. No forward-looking statement can be guaranteed. Forward-looking statements speak only as of the date on which they are made and, except as required by applicable securities laws, the Corporation undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.

Completion of the Transaction is subject to a number of conditions, including but not limited to, execution of a binding definitive agreement relating to the Transaction, completion of satisfactory due diligence, Exchange acceptance, receipt of requisite regulatory approvals, and if applicable pursuant to Exchange requirements, majority of the minority shareholder approval. Where applicable, the Transaction cannot close until the required shareholder approvals, and any ancillary matters thereto, are 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 capital pool company 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.

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

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