Licensed producer Zenabis Ltd. has merged with
Bevo Agro to become Zenabis Global -
will trade as Zenabis under exchange symbol "ZENA" January 10, 2019.
VANCOUVER, Jan. 8, 2019 /CNW/ - Today, Zenabis Global
Inc. ("Zenabis") is pleased to announce the completion of the
reverse takeover of Bevo Agro Inc. ("Bevo") (TSXV: BVO) by Sun
Pharm Investments Ltd. ("Sun Pharm") to create a company that has
the potential to become one of the largest licensed marijuana
companies in the world.
As previously announced on October 4,
2018, Bevo and Sun Pharm entered into an arrangement
agreement with respect to the spin-out (the "Spin-Out") of Bevo's
interest in CubicFarm Systems Corp. ("CubicFarm") and subsequent a
reverse take-over of Bevo by Sun
Pharm (the "RTO"), with the resulting combined issuer being
Zenabis.
While the Spin-Out and RTO were effective at 12:01 a.m. and 12:05
a.m., respectively, on January 8,
2019, Zenabis' understanding is that key timing for
investors purchasing Bevo shares on the TSX-V over the coming days
is as follows:
January 8, 2018
trading day
|
January 9, 2018
trading day
|
January 10, 2018
trading day
|
The Bevo shares will
continue to trade on the TSX-V under the Bevo name and symbol:
investors purchasing on the TSX-V will acquire Bevo shares with an
entitlement to participate in the Spin-Out and receive their pro
rata percentage of CubicFarm Shares
|
The Bevo shares will
continue to trade on the TSX-V under the Bevo name but investors
purchasing on the TSX-V on this trading day will no longer
have an entitlement to participate in the Spin-Out and receive
their pro rata percentage of CubicFarm Shares
|
Bevo shares will no
longer trade; Zenabis Shares will trade on the TSX-V under the
Zenabis name and "ZENA" trading symbol
|
As these trading and settlement mechanics are not within
Zenabis' control, investors trading or intending to trade in shares
of Bevo or Zenabis prior to January 14,
2019 are strongly encouraged to contact their investment
advisors with any questions in this regard.
As an update to the information regarding the RTO set out in
Bevo's information circular dated November
23, 2018, in connection with the RTO Transaction, several
existing Sun Pharm securityholders
exercised rights or agreed to amendments of their existing
securities:
- All of the Subordinated Secured Noteholders agreed to exercise,
or exercised, their warrants, which will result in Zenabis receipt
of $6,212,500 through the issuance of
2,346,406 Zenabis shares. This exercise price was determined as
part of the October 4, 2018 financing
round;
- Subordinated Secured Noteholders agreed to the optional
conversion of $2,000,000 of their
notes in exchange for 755,382 Zenabis shares. This conversion price
was determined as part of the October 4,
2018 financing round;
- Certain Unsecured Noteholders agreed to optional conversion of
$4,378,360 of their notes in exchange
for 1,653,667 Zenabis shares. This conversion price was determined
as part of the October 4, 2018
financing round;
- The remaining Unsecured Noteholders agreed to the extension of
the maturity of their notes by one year without payment of any
consideration on the part of Zenabis, resulting in $11,755,000 principal amount of unsecured notes
being extended; and
- Holders of only 17,860 Bevo shares elected to receive Zenabis
Preferred shares under the Plan of Arrangement. Zenabis intends to
issue a redemption notice to these preferred shareholders to effect
redemption at $2.70 per share.
"The commencement of trading on the TSXV marks the achievement
of yet another goal in a long line of important milestones for our
company," said Monty Sikka, Chair of
the Board of Directors for Zenabis. "We see our entry into the
public marketplace as an incredible opportunity, and look forward
to significantly growing shareholder value as we continue to
execute on our expansion strategy. Our goal is not only to maintain
our commitments to domestic sales partners, but for Zenabis to
become the supplier of choice across a range of international
markets. As countries around the world follow Canada's lead, allowing greater access to
cannabis and related products, we intend to become a global leader
in cannabis production and products."
The resulting entity, Zenabis, has the potential to become one
of the largest cannabis producers based on available production
space.1 Zenabis intends to become a market leader
through the following competitive advantages:
High Production Capacity | With the addition of
approximately 426,000 kilograms of capacity from Zenabis Langley,
Zenabis' facilities have been designed for a maximum of
approximately 479,000 kilograms of production capacity if the
facilities are optimized and expanded as planned.
Leading Products and Brands | Zenabis intends to offer a
full suite of products which have been developed in-house or
licenced from established third-party brands. Zenabis
currently markets dry flower products for medicinal and
recreational use and has several new dry flower and oil products in
late stage development. Additional value-added products are being
developed in anticipation of expanded legalization of recreational
cannabis products in Canada.
Management, Propagation, and Growing Expertise | Bevo is
one of the largest propagation businesses in North America, with over 30 years of
experience in propagation in a state-of-the-art greenhouse serving
clients throughout North America.
Zenabis believes the addition of Bevo's significant propagation
expertise and proven practices will allow Zenabis to achieve
industry-leading operational efficiency, production costs and plant
quality.
Low Production Cost | With the combination of the mild
external climate, greenhouse structure, and state-of-the-art
technologies, Zenabis believes that it is well positioned to
deliver low production costs and operating efficiencies. Zenabis
believes Bevo's existing relationships with greenhouse technology
providers, combined with an increased global focus on greenhouse
cannabis production, will allow it to continuously improve its
propagation and growing techniques, thereby resulting in
continuously declining production costs.
"Zenabis is the result of almost a year of hard work and
dedication from the entire management team at Bevo and Sun Pharm",
said Rick Brar, CEO of Zenabis. "We
could not be happier to move forward as one team, incorporating a
world-class propagator and agricultural expert. We are a focused,
driven set of individuals that together aim to set the standard for
cannabis production while becoming a market leader in every
vertical we pursue."
Through its subsidiary licensed producer Zenabis Ltd. and other
subsidiaries expected to be licensed, Zenabis Global Inc. will have
3.5 million square feet of constructed premises available that it
has already converted or intends to convert into cannabis
production space.2
_______________________
|
1 If
all available constructed space is converted for cannabis
production.
|
2 If
all available constructed space is converted for cannabis
production.
|
Early Warning Disclosures as a result of Completion of the
RTO
Manoj Sikka acquired
control over 32,698,732 Zenabis Shares as part of the RTO
Transaction, through the issuance of 32,548,392 Zenabis Shares to
Bluecore Medical Partnership ("Bluecore"), an entity controlled by
Mr. Sikka and 150,340 Zenabis Shares to him in his personal
capacity, all of which were issued in exchange for the common
shares each such person held in Sun
Pharm prior to completion of the RTO Transaction. Bluecore
also holds a convertible note in the principal amount of
$3,200,000 that is convertible into
1,208,611 Zenabis Shares at a price of approximately $2.65 per share On a non-diluted basis, Mr.
Sikka exercises control over 32,698,732 (17.69%) of the Zenabis
Shares. On a fully-diluted basis, Mr. Sikka exercises control over
33,907,343 (18.23%) of the issued and outstanding Zenabis
Shares.
Mark Joseph Catroppa acquired
control over 32,738,360 Zenabis Shares as part of the RTO
Transaction, through the issuance of 32,548,392 Zenabis Shares to
Blue Samurai Medical Partnership ("Blue Samurai"), an entity
controlled by Mr. Catroppa, 150,340 Zenabis Shares to him in his
personal capacity and 39,628 Zenabis Shares to 1015359 B.C. Ltd., an entity controlled by Mr.
Catroppa, all of which were issued in exchange for the common
shares each such person held in Sun
Pharm prior to completion of the RTO Transaction. Blue
Samurai also holds a convertible note in the principal amount of
$3,200,000 that is convertible into
1,208,611 Zenabis Shares at a price of approximately $2.65 per share On a non-diluted basis, Mr.
Catroppa exercises control over 32,738,360 (17.71%) of the Zenabis
Shares. On a fully-diluted basis, Mr. Catroppa exercises control
over 33,946,971 (18.25%) of the issued and outstanding Zenabis
Shares.
Brar Bioceutical Corp. ("Brar Bioceutical"), which is controlled
by Rick Brar, was issued 25,758,352
Zenabis Shares as part of the RTO Transaction in exchange for the
common shares it held in Sun Pharm
prior to completion of the RTO Transaction. Brar Bioceutical also
holds a convertible note in the principal amount of $2,600,000 that is convertible into 981,997
Zenabis Shares at a price of approximately $2.65 per share on a non-diluted basis, Brar
Bioceutical holds 25,758,352 (13.94%) of the Zenabis Shares. On a
fully-diluted basis, Brar Bioceutical holds 26,740,349 (14.39%) of
the issued and outstanding Zenabis Shares.
Each of Bluecore, Blue Samurai and Brar Bioceutical originally
acquired its common shares in Sun
Pharm as founders of Sun
Pharm, and the convertible notes in connection with the
amendment of the terms of existing indebtedness of Sun Pharm to each holder thereof in the same
principal amounts. The common shares of Sun
Pharm held by Mr. Catroppa and Mr. Sikka in their personal
capacities and those held by 1015359
B.C. Ltd. were acquired for investment purposes. The Zenabis
Shares (including those issuable upon conversion of the convertible
notes) held by each of Bluecore, Blue Samurai and Brar Bioceutical
are subject to the terms of the voluntary pooling agreement
previously announced in a news release of Bevo dated December 21, 2018, a copy of which is available
on Zenabis' SEDAR profile at www.sedar.com.
The foregoing disclosure regarding Zenabis' holdings is being
disseminated pursuant to National Instrument 62-103 The Early
Warning System and Related Take-Over Bid and Insider Reporting. A
copy of the report to be filed with Canadian securities regulators
in connection with the acquisition of these securities will be
available on Zenabis' SEDAR profile at www.sedar.com or by
contacting Shobana Thaya at
416-807-1009 or Invest@zenabis.com.
CubicFarm Update
CubicFarm has applied to list its common shares on the TSX
Venture Exchange. There can be no assurances as to if or when
the common shares of CubicFarm will be accepted for listing on the
TSX Venture Exchange.
Agentis Capital acted as financial advisor to Bevo regarding the
RTO. Fasken Martineau Dumoulin LLP acted as counsel to Bevo and
Stikeman Elliott LLP acted as counsel to Sun Pharm.
Zenabis Key Milestones
- On September 17, 2018, Zenabis
submitted its application package to license the Langley greenhouse, which is currently under
active review
- On October 4, 2018 Bevo and Sun
Pharm announced the Bevo-Sun Pharm Transaction and the intent of
Bevo to change its name to Zenabis Global Inc. upon completion
- In October 2018, Zenabis became a
founding partner of the Centre for Medicinal Cannabis ("CMC"), a UK
based non-profit organisation advocating, educating and lobbying
for the implementation of a fair, responsible, and evidence-based
medicinal cannabis regime within the National Health System in the
United Kingdom.
- On December 22, 2018, Zenabis
submitted its cultivation license application for its Stellarton facility, which is currently under
active review
- Since October 2018, three
additional flower rooms have been approved by Health Canada and are
in operation, with two more in active review
- As of January 8, 2019, Zenabis
has secured purchase orders from government and third-party
retailers/distributors in New
Brunswick, Nova Scotia,
British Columbia, Saskatchewan, and the Yukon Territory
About Zenabis
Zenabis is a significant Licensed Producer of medical and
recreational cannabis, and employs staff coast-to-coast, across
facilities in Atholville, New
Brunswick; Delta and
Langley, B.C.; and Stellarton, Nova Scotia. In addition to
gaining technologically advanced knowledge of plant propagation,
the recent addition of state of the art greenhouses in Langley provides Zenabis with 3.5 million
square feet of land and premises that can, upon full conversion, be
dedicated to production space.
Once all facilities have been fully built out, Zenabis will own,
and have access to, 660,000 square feet of high quality indoor
cannabis production space, as well as 2.1 million square feet of
greenhouse space at its Langley
facility (an additional 700,000 square feet of greenhouse space
will be used to continue the existing propagation business, to be
converted at such a time that is beneficial to the strategic
position of the company), strategically positioned on Canada's coasts. These facilities have the
design capacity to yield 479,700 kg of dried cannabis
annually, for both national and international market distribution.
The Zenabis brand name is used among the medical space,
while Namaste is used to service the recreational
market.
The management team at Zenabis has significant experience in
agriculture, technology, pharmaceutical sales, consumer packaged
goods, international distribution and brand marketing. Leadership
is backed by the expertise of a Chief Growing Officer, a Chief
Science Officer and Chief Medical Officer. As evidenced by letters
of intent with strategic partners, and purchase orders with
governments and a multitude of distribution partners, Zenabis has
been proven as a trusted and innovative cannabis front-runner.
This news release contains statements that may constitute
"forward-looking information" within the meaning of applicable
Canadian securities legislation. Forward-looking information may
include, among others, statements regarding the future plans,
costs, objectives or performance of Zenabis, or the assumptions
underlying any of the foregoing. In this news release, words such
as "may", "would", "could", "will", "likely", "believe", "expect",
"anticipate", "intend", "plan", "estimate" and similar words and
the negative form thereof are used to identify forward-looking
statements. In this news release, forward-looking
statements relate, among other things, to: future production
capacity of Zenabis; conversion, expansion and optimization of
existing facilities; future products of Zenabis; and future
production costs of Zenabis. Forward-looking statements should not
be read as guarantees of future performance or results, and will
not necessarily be accurate indications of whether, or the times at
or by which, such future performance will be achieved. No assurance
can be given that any events anticipated by the forward-looking
information will transpire or occur. Forward-looking information is
based on information available at the time and/or management's
good-faith belief with respect to future events and are subject to
known or unknown risks, uncertainties, assumptions and other
unpredictable factors, many of which are beyond Zenabis' control.
These risks, uncertainties and assumptions include, but are not
limited to, those described Zenabis Management Information Circular
dated November 23, 2018, a copy of
which is available on SEDAR at www.sedar.com, and could cause
actual events or results to differ materially from those projected
in any forward-looking statements. Furthermore, any forward looking
information with respect to available space for cannabis production
is subject to the qualification that management of Zenabis may
decide not to use all available space for cannabis production, and
the assumptions that any construction or conversion would not be
cost prohibitive, required permits will be obtained and the labour,
materials and equipment necessary to complete such construction or
conversion will be available. Accordingly, readers should not place
undue reliance on the forward-looking statements and information
contained in this news release. Zenabis does not intend, nor
undertake any obligation, to update or revise any forward-looking
information contained in this news release to reflect subsequent
information, events or circumstances or otherwise, except if
required by applicable laws.
SOURCE Bevo Agro Inc.