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POCML 2 Inc. Enters Into Binding Letter of Intent With Bedrocan Canada Inc. to Complete Qualifying Transaction

TORONTO, ONTARIO -- (Marketwired) -- 04/14/14 -- POCML 2 Inc. ("POCML 2") (TSX VENTURE:PCC.P) announced today that it has entered into a binding letter of intent with Bedrocan Canada Inc. ("Bedrocan") which outlines the general terms and conditions of a proposed transaction pursuant to which POCML 2 will acquire all of the issued and outstanding securities of Bedrocan in exchange for securities of POCML 2 (the "Transaction"). The LOI was negotiated at arm's length and is effective as of April 13, 2014.

POCML 2 is a capital pool company listed on the TSX Venture Exchange (the "TSXV"). POCML 2 has not commenced commercial operations and has no assets other than cash. The Transaction, if completed, will constitute POCML 2's "Qualifying Transaction", as defined in TSXV policies.

Bedrocan, based in Toronto, Ontario and governed by the laws of the Province of Ontario, is in the business of importing and supplying medical marijuana pursuant to the Marihuana for Medical Purposes Regulations. Bedrocan holds a license to sell medical marijuana from Health Canada.

The transaction terms outlined in the LOI are binding on the parties and the LOI is expected to be superseded by a definitive agreement (the "Definitive Agreement") to be signed between the parties. The Transaction is subject to regulatory approval, including the approval of the TSXV, and standard closing conditions, including the approval of the Transaction by the directors of each of POCML 2 and Bedrocan and completion of due diligence investigations to the satisfaction of each of POCML 2 and Bedrocan, as well as the conditions described below. The legal structure for the Transaction will be determined after the parties have considered all applicable tax, corporate and securities law, and accounting efficiencies.

Trading in the common shares of POCML 2 (the "POCML 2 Shares") will be halted as a result of this announcement and will remain halted until the resumption of trading is approved by the TSXV.

The Proposed Transaction

As of the date hereof, (i) POCML 2 has 6,000,000 POCML 2 Shares outstanding and has issued options to acquire an aggregate of 760,000 POCML 2 Shares at an exercise price of C$0.15 per share; and (ii) Bedrocan has 51,000,000 common shares (the "Bedrocan Shares") and 11,000,000 common share purchase warrants (the "Bedrocan Warrants") outstanding. In addition, Bedrocan intends to issue up to an aggregate of 2,000,000 options (the "Bedrocan Options") and/or restricted share units (the "Bedrocan RSUs") prior to the completion of the Transaction.

Pursuant to the Transaction, the holders of the issued and outstanding Bedrocan Shares will receive one POCML 2 Post-Consolidation Share (as defined below) for each Bedrocan Share (the "Exchange Ratio") held immediately prior to the Transaction. The deemed exchange price for the POCML 2 Post-Consolidation Shares to be issued in exchange for the Bedrocan Shares shall be C$0.40 per POCML 2 Post-Consolidation Share, or such other price (not less than C$0.40 per POCML 2 Post-Consolidation Share) as permitted by applicable regulatory authorities, including the TSXV.

In addition, POCML 2 will issue up to 2,000,000 options (the "POCML 2 Replacement Options") and/or restricted share units (the "POCML 2 Replacement RSUs") and 11,000,000 common share purchase warrants (the "POCML 2 Replacement Warrants") to acquire up to an aggregate of 13,000,000 POCML 2 Post-Consolidation Shares in consideration of the cancellation of the Bedrocan Options, Bedrocan RSUs and Bedrocan Warrants, respectively. The POCML 2 Replacement Options, POCML 2 Replacement RSUs and POCML 2 Replacement Warrants shall be exercisable to acquire POCML 2 Post-Consolidation Shares in lieu of Bedrocan Shares based on the Exchange Ratio and will otherwise bear the same terms and conditions as the Bedrocan Options, Bedrocan RSUs and Bedrocan Warrants so cancelled.

It is expected that following completion of the Transaction but prior to giving effect to the Private Placement (as defined below), the current holders of POCML 2 Shares will hold approximately 5.6% of the outstanding POCML 2 Post-Consolidation Shares and the current holders of Bedrocan Shares will hold approximately 94.4% of the POCML 2 Post-Consolidation Shares.

Prior to the completion of the Transaction, POCML 2 shall call a meeting of its shareholders for the purpose of approving, among other matters, (i) a consolidation of the issued and outstanding POCML 2 Shares on the basis of one "new" POCML 2 Share (a "POCML 2 Post-Consolidation Share") for every two "old" POCML 2 Shares issued and outstanding; (ii) a change of name of POCML 2 to complement the business of the resulting issuer; (iii) election of individuals to the board of directors of POCML 2; and (iv) if required by the TSXV, the approval of the Transaction. Upon closing of the Transaction, the board of POCML 2 shall be reconstituted in a manner that complies with the requirements of the TSXV and applicable securities laws. POCML 2 shall be entitled to one nominee on the reconstituted board with the balance of the directors to be nominees of Bedrocan, subject to the receipt of applicable regulatory approvals.

Other Conditions to Transaction

Completion of the Transaction is subject to a number of conditions, including, but not limited to, TSXV acceptance and, if applicable pursuant to TSXV 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.

Other conditions to completion of the Transaction include, but are not limited to:

--  Negotiation and execution of a Definitive Agreement in respect of the
    Transaction. 
--  Preparation and filing of a disclosure document outlining the definitive
    terms of the Transaction in accordance with the rules of the TSXV. 
--  Receipt of all requisite approvals from shareholders, regulatory
    authorities (including the TSXV) and third parties (including lenders or
    financial institutions, licensors and strategic partners involved in the
    manufacturing, distribution and sale of Bedrocan's products) relating to
    the Transaction. 
--  No material adverse change prior to completion of the Transaction. 
--  The representations and warranties being true and correct in all
    material respects as of the closing of the Transaction. 
--  Receipt of legal opinions in relation to the Transaction. 
--  There being no debts or amounts owing to by certain insiders and other
    non-arm's length persons, other than for expenses incurred in the
    ordinary course. 
--  No legal proceeding, regulatory action, inquiry or investigation as at
    the closing of the Transaction which may have a material adverse effect.
--  No prohibition at law against the Transaction. 
--  Compliance with the terms of the binding letter of intent. 
--  No material breach of the covenants contained in the Transaction
    documents. 

Concurrent Financing

It is expected that prior to the completion of the Transaction, Bedrocan will complete a private placement (the "Private Placement") of securities (the "Offered Securities") on terms acceptable to POCML 2, acting reasonably. Immediately prior to the completion of the Transaction, the Offered Securities, if convertible, will be automatically converted, for no additional consideration, into Bedrocan Shares or units of Bedrocan consisting of Bedrocan Shares and warrants, as the case may be (or such other securities of Bedrocan as may be agreed among Bedrocan, POCML 2 and the agent, if any). Upon closing of the Transaction, all securities of Bedrocan issued in connection with the Private Placement will automatically be exchanged for post-Consolidation securities of POCML 2 in accordance with the Exchange Ratio.

Further Information

Further details about the proposed Transaction and the resulting issuer will be provided in a comprehensive press release when the parties enter into a Definitive Agreement and in the disclosure document to be prepared and filed in respect of the Transaction.

Investors are cautioned that, except as disclosed in the disclosure document 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.

Forward-Looking Information

This press release contains forward-looking information based on current expectations. Statements about the closing of the Transaction, expected terms of the Transaction, the number of securities of POCML 2 that may be issued in connection with the Transaction, the ownership ratio of POCML 2 post-closing, the concurrent financing, shareholder approval and the parties' ability to satisfy closing conditions and receive necessary approvals are all forward-looking information. These statements should not be read as guarantees of future performance or results. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from those implied by such statements. Although such statements are based on management's reasonable assumptions, there can be no assurance that the Transaction will occur or that, if the Transaction does occur, it will be completed on the terms described above. POCML 2 assumes no responsibility to update or revise forward-looking information to reflect new events or circumstances unless required by law.

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 release.

Contacts:
POCML 2 Inc.
David D'Onofrio, Chief Executive Officer,
Chief Financial Officer, Secretary and Director
(416) 643-3880

Bedrocan Canada Inc.
Marc Wayne
President and Director
(416) 943-5800

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