Vancouver, British Columbia – (Accesswire) – Tuesday April 21, 2020 – Stillcanna Inc. (OTC:SCNNF) (CSE:STIL) (FRANKFURT:A2PEWA) ("STIL" or the "Company"), is pleased to announce that on Friday April 17, 2020 it signed a comprehensive Letter of Intent (the “LOI”) to acquire Sativa Group PLC, one of the United Kingdom’s (UK) first medical Cannabis Companies (the “Proposed Transaction”). The Proposed Transaction, which is arm’s-length, will constitute a "Fundamental Change" of Stillcanna under the policies of the Canadian Securities Exchange (the "CSE").
GoodBody Botanicals (GBB) “CBD you can Trust” offers a wide range of CBD products including gels, balms, capsules, tinctures and more for the wellness market. The Goodbody Botanicals brand is distributed throughout UK, this includes major high street retailers and both national and local pharmacies. This channel is supported by the UK’s top distribution partners and is also available online. GBB not only manufactures for themselves utilizing their own production and packaging facility, but also provides white label services to other brands.
GoodBody Wellness is focused on the health & beauty markets, the brand is sold to high-end retail health and beauty stores. The brand is also available through Company owned GBB retail outlets, which provide a premium consumer experience, backed via online sales.
PhytoVista Laboratories (PVL) is Sativa Group’s independent analytical hemp and CBD testing facility. PVL provides support to retailers, distributors and manufacturers by expertly testing the cannabinoid levels of the hemp and CBD products. PVL is one of the UK’s most trusted laboratories operating to GLP (Good Laboratory Practice) and ISO 17025 standards, with the aim of being ISO accredited by early 2020.
Sativa Cultivation and Extraction Ltd. that holds a Controlled Drug License for the cultivation, production and possession of high THC content cannabis in the UK with an emphasis on medical research. The Company has a partnership agreement with King’s College London to research the impact of cannabinoids on inflammation and respiratory conditions.
Tessellate Collective Ltd. is Sativa’s direct sales channel, model popularized globally in the cosmetics and wellness sectors. Tessellate has over 500 well established direct sellers acting as advocates for the brand and who have access to an easy-to-use and financially rewarding commission plan.
A video overview of Sativa is available at https://youtu.be/8s0w9FUL8rs
The combined assets and licenses of Stillcanna and Sativa create a Company whose overall cannabis opportunities in Europe should be unrivalled. Stillcanna’s commitment to Novel Food licensing, and GMP licensing will assure the entities products will be available in markets beyond the February 2021 Novel Food deadline. With extraction and cultivation of all cannabinoids, from wellness to medical research combined with established brands, existing wholesale and retail sales channels, backed by a state-of-the-art laboratory, the new corporate entity will blanket opportunities within the new wellness space.
“We have vetted multiple opportunities in searching for a brand that could complete the seed to consumer model for Stillcanna,” stated Jason Dussault CEO of Stillcanna. “We believe that only companies that can control their supply chain, while complying with the upcoming legal framework outlined by the European Union, will succeed in the future Cannabis marketplace. Through this acquisition both Sativa and Stillcanna will benefit through a wider set of market opportunities and compliance. Our extraction capabilities to supply CBD as an active ingredient for Sativa’s medical and wellness products, creates a vertically integrated Company unlike any other in Europe. We look forward to monetizing and capitalizing on the resulting market opportunities that this acquisition avails.”
“Rarely do you find two companies whose industry strengths compliment each other resulting in such a synergistic entity,” stated Henry Lee-Buckley CEO of Sativa Group. “The combination of our core competencies will result in a diverse Company that addresses the majority of sectors within the Cannabis space. I feel this transaction secures both Companies involvement and success in the Cannabis space.”
Stillcanna is pleased that its subsidiary, Borganic Consulting Inc, has secured all licenses and permits required for its ORIGIN extraction facility in Romania to commence the manufacturing of CBD. The facility was constructed through a joint venture partnership with Dragonfly Biosciences Limited of the UK. Even though Borganic Consulting remains dedicated to the ORIGIN extraction facility it has become concerned with the behaviour of its partner Dragonfly Biosciences. In order to secure the future of the ORIGIN extraction facility and its investment to date, Borganic Consulting has initiated legal action in the UK against Dragonfly Biosciences for contractual breaches under the partnership agreement and Stillcanna is confident that Borganic Consulting will be able to resolve these issues in a timely manner. Regardless of this action, Stillcanna and Borganic Consulting will continue towards the commencement of manufacturing CBD at the ORIGIN facility as soon as possible.
Under the terms of the LOI, Stillcanna will issue 191,539,968 of its common shares, at a deemed price of CDN$0.095 per share, to the shareholders of Sativa as consideration for all of the issued and outstanding shares of Sativa (the "Consideration Shares"), representing an exchange ratio (the "Exchange Ratio") of 0.33651 Stillcanna shares for each Sativa share. It is expected that the Consideration Shares will constitute 65% of the resulting issuer on a combined and fully diluted basis. In addition, the outstanding warrants and options of Sativa will be exchanged for options and warrants in Stillcanna in accordance with the Exchange Ratio. The Consideration Shares will be subject to escrow restrictions and hold periods pursuant to applicable securities laws and the policies of the CSE. There will not be any finder’s fees payable for the Transaction. Other than in a limited number of circumstances, if Stillcanna terminates the LOI, Stillcanna will pay Sativa a material break fee of £1,000,000 or 25% of the value of an alternative transaction, in the event Stillcanna elects to pursue such a transaction during the exclusivity period. The parties have not undertaken an independent valuation of the Transaction.
As at their close of trading on Friday, April 17, 2020, the Sativa market cap was £15,700,000 (CDN$27,600,000). The Sativa financial statements for the first two quarters of 2019 (January – June) reported revenues of £588,000 (CDN$1,034,000); gross profit of £273,000 (CDN$480,000); cash on hand of £2,230,000 (CDN$3,924,000); net assets of £4,081,000 (CDN$7,181,000); and no material debt obligations (based upon an exchange rate of £1: CDN$1.75965).
The Transaction will be completed by way of a "scheme of arrangement" under Part 26 of the Companies Act 2006 of the United Kingdom. The Transaction represents a fundamental change for the Company, pursuant to Policy 8 of the Canadian Securities Exchange.
At this time, the Company and Sativa are proceeding with their respective due diligence reviews with a view towards negotiation and execution of a definitive transaction agreement, or implementation deed. Also, the Transaction remains subject to the customary closing conditions including the approval of the shareholders of Stillcanna and Sativa and the Canadian Securities Exchange. Further details will be provided upon successful completion of the due diligence period and the signing of the implementation deed. The Company expects to complete the Transaction immediately upon the receipt of all required approvals.
About Sativa Group PLC
The Sativa Group PLC joined the UK’s NEX market in March 2018 as the UK’s first medicinal cannabis investment vehicle.
The business evolved to focus on the development of an operational business capitalizing on its first-mover advantage. This change transitioned the Company from an investment Company to an operating Company at the forefront of both the CBD wellness and medicinal cannabis sectors in the UK.
About Stillcanna Inc.
Stillcanna Inc. (CSE: STIL) www.stillcanna.com is a Canadian early-stage life sciences Company focused on the large scale manufacturing of CBD in Europe. The Company believes its proprietary intellectual property allows it to extract CBD at a lower cost. The Company has signed an initial extraction contract in Europe to be the exclusive extractor for Dragonfly Biosciences LLC, a United Kingdom-based supplier of CBD. The Company also recently completed the acquisition of Olimax NT SP. Z .O.O, a multi-generational hemp agricultural firm that is expected to increase the Company’s market share in the European CBD industry.
On Behalf of the Board
Jason Dussault, CEO
Neither the Canadian Securities Exchange nor its Market Regulator (as defined in the policies of the Canadian Securities Exchange) accept responsibility for the adequacy or accuracy of this release.
This news release contains certain "forward-looking information" within the meaning of applicable Canadian securities legislation and may also contain statements that may constitute "forward-looking statements" within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Such forward-looking information and forward-looking statements are not representative of historical facts or information or current condition, but instead represent only the Company's beliefs regarding future events, plans or objectives, many of which, by their nature, are inherently uncertain and outside of Stillcanna's control. Generally, such forward-looking information or forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or may contain statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "will continue", "will occur" or "will be achieved". The forward-looking information and forward-looking statements contained herein include, but are not limited to information concerning the LOI, the Proposed Transaction, and the Definitive Agreement, including but not limited to the negotiation and execution of a Definitive Agreement, the anticipated closing date of the Proposed Transaction, the approval of the Proposed Transaction by the Canadian Securities Exchange and certain shareholder and regulatory requirements. Although Stillcanna believes that the assumptions and factors used in preparing, and the expectations contained in, the forward-looking information and statements are reasonable, undue reliance should not be placed on such information and statements, and no assurance or guarantee can be given that such forward-looking information and statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information and statements. In particular, there is no guarantee that that the parties will successfully complete the Proposed Transaction on the terms contemplated herein or at all, that either will be satisfied with the results of their proposed due diligence, or that any required shareholder or regulatory approvals will be obtained. The forward-looking information and forward-looking statements contained in this news release are made as of the date of this press release, and Stillcanna does not undertake to update any forward-looking information and/or forward-looking statements that are contained or referenced herein, except in accordance with applicable securities laws.