
- Entered into a binding letter of intent, effective June 23, 2019, to acquire all of the issued and outstanding securities of Nevada Botanical Science, Inc.
- Transaction valued at USD$7Â million
- Located in Reno, Nevada
- Medical and adult use licenses for cultivation extraction and distribution.
- NBS currently operates a 5,000 sq. ft. indoor cultivation facility and have been approved for expansion of up to 100,000 sq. ft.
TORONTO, June 25, 2019 — North Bud Farms Inc. (CSE: NBUD) (OTCQB: NOBDF) (“NORTHBUD” or the “Company”) is pleased to announce that it has entered into a binding letter of intent (“LOIâ€), effective June 23, 2019, to acquire all of the issued and outstanding securities of Nevada Botanical Science, Inc. (“NBSâ€) in a transaction valued at USD$7 million.    Â
Nevada Botanical Science is located in Reno, Nevada. They hold medical and adult use licenses for cultivation extraction and distribution. NBS’ operation is located on 3.2 acres of land within the Reno green zone industrial park. NBS currently operates a 5,000 sq. ft. indoor cultivation facility and have been approved for expansion of up to 100,000 sq. ft. The property also houses an extraction facility and commercial kitchen capable of manufacturing beverages and edibles. Operated by healthcare professionals, NBS has been primarily focused on the cultivation and manufacturing of medical cannabis products. NBS currently manufactures and sells award winning* (Jack Herer Cup 2018) topical pain creams, balms and lotions under the Trichomic brand.
“We are very excited to have the opportunity to enter the Nevada market,†said Ryan Brown, CEO of NORTHBUD. “The Nevada market is considered one of the best markets in America with recreational sales of USD$580 million in the first full year of legalization* (2017 Nevada Dept. of Taxation). Assuming the successful closing of the proposed transaction with NBS and our previously announced transactions with Eureka Vapor and Tanforan Ventures, we are building an excellent platform in the 3 largest markets in the United States on which to build our brand focused strategy.â€
“The NBS team is pleased to be entering into this agreement with
NORTHBUD, as we believe that NORTHBUD and its brands will be a perfect
addition to our existing medical business and allow us to capitalize on
the Nevada recreational market,†said Robert Dalrymple, MD., CEO of
Nevada Botanical Science.
Transaction Terms
The
proposed transaction (the “Transactionâ€) is currently structured as a
share purchase agreement whereby in exchange for the purchase of all of
the securities of NBS, NORTHBUD will pay USD$6M in cash and issue USD$1M
in common shares (“Common Sharesâ€) to the shareholders of Nevada
Botanical Science (the “NBS Shareholdersâ€) with the price per Common
Share to be determined based on a formula of the higher of (a) CAD$0.35
per Common Share and (b) the 30-day volume weighted average price
(“VWAPâ€) calculated on the closing date (the “Closing Dateâ€) of a
definitive agreement in respect of the Transaction (the “Definitive
Agreementâ€). In addition, NORTHBUD has agreed to loan up to USD$500,000
under a promissory note to NBS while the companies work towards a
definitive agreement. Specific terms of the promissory note are not yet
determined, however any amounts loaned to NBS under the promissory note
will be fully refundable and may be converted into equity in NBS, at the
option of NORTHBUD, in the event that the transaction is not completed.
NORTHBUD and NBS Shareholders expect to enter into the Definitive
Agreement on or before October 1, 2019.
The Transaction is a significant acquisition but will not result in a “Fundamental Change†pursuant to the policies of the Canadian Securities Exchange (“CSEâ€). Financial information on NBS will be disclosed following receipt of audited financial statements in connection with the Company’s due diligence. NORTHBUD will be preparing the necessary corporate and securities filings in order to secure the required approvals for the Transaction.
NORTHBUD has agreed to pay up USD$280,000 in broker/finder fees to arm’s length parties in connection with the closing of the Transaction.
The closing of the Transaction is conditional on the receipt by the parties of applicable corporate and regulatory approvals including that of the CSE.
While the proposed transactions involving NBS, Tanforan Ventures and Eureka Vapor are complementary, they are independent and the Company may ultimately proceed to close one, two, all or none of the proposed transactions, depending on market conditions and regulatory requirements.
About Nevada Botanical Science, Inc.
Founded by a
group of northern Nevada physicians and healthcare professionals who
believe in the promise of medical cannabis, Nevada Botanical Science has
developed a world class cannabis production, research and development
facility in Reno’s Washoe County. Its work and commitment are fully in
compliance with the Hippocratic Oath as well as Nevada statute. Nevada
Botanical Science is dedicated to ensuring the highest measure of
safety, governance and stewardship for its patients, employees and the
community it serves.
For more information visit: www.nevadabotanicalscience.com
About North Bud Farms Inc.
North Bud Farms Inc.,
through its wholly owned subsidiary GrowPros MMP Inc., is pursuing a
licence under The Cannabis Act. The Company is constructing a
state-of-the-art purpose-built cannabis production facility located on
95 acres of Agricultural Land in Low, Quebec. North Bud Farms Inc. has
entered into agreements to acquire assets in California, Colorado and
Nevada.
For more information visit: www.northbud.com
Neither the Canadian Securities Exchange (the “CSEâ€) nor its Regulation Services Provider (as that term is defined in the policies of the CSE) accepts responsibility for the adequacy or accuracy of this release.
Forward-looking statements
Certain statements
included in this press release constitute forward-looking information or
statements (collectively, “forward-looking statementsâ€), including
those identified by the expressions “anticipateâ€, “believeâ€, “planâ€,
“estimateâ€, “expectâ€, “intendâ€, “mayâ€, “should†and similar expressions
to the extent they relate to the Company or its management. The
forward-looking statements are not historical facts but reflect current
expectations regarding future results or events. This press release
contains forward- looking statements including those relating to the
entering into of the Definitive Agreement, closing of the Transaction
and associated approvals, Nevada Botanical Science’s ability to achieve
milestones under the Definitive Agreement and associated Common Share
issuances. These forward-looking statements are based on current
expectations and various estimates, factors and assumptions and involve
known and unknown risks, uncertainties and other factors. Such risks and
uncertainties include, among others, the risk factors included in North
Bud Farms Inc.’s final long form prospectus dated August 21, 2018 which
is available under the issuer’s SEDAR profile at www.sedar.com.
FOR ADDITIONAL INFORMATION, PLEASE CONTACT:
North Bud Farms Inc.
Edward Miller
VP, IR & Communications
Office: (855) 628-3420 ext. 3
[email protected]
