- Stillcanna is a vertically integrated, European-based company with a focus on industrial-scale manufacturing of the highest quality CBD extracts
- Stillcanna looks to become one of the largest producers of THC-free CBD extracts in Europe
VANCOUVER, BC / ACCESSWIRE / February 26, 2020 /Â Mota Ventures Corp. (CSE:MOTA)(OTC:PEMTF)(FRANKFURT:1WZGR) (“Mota“) and Stillcanna Inc. (STIL)(SCNNF)(A2PEWA) (“Stillcanna“) are pleased to announce that they have entered into a letter of intent (the “Letter of Intent“), dated effective February 25, 2020, pursuant to which Mota proposes to acquire all of the outstanding share capital of Stillcanna (the “Proposed Transaction“).
Strategic Merger
Mota
is a globally-focused CBD product development and marketing company
with established online retail brands in both the U.S. and Europe.
Through its acquisition of First Class CBD, Mota has become a
significant direct-to-consumer retail brand in the United States. In
2019, First Class CBD (then, a division of Unified Funding, LLC)
realized approximately C$28.7 million in revenue with an EBITDA of
approximately 12.5%.1 Mota’s successful e-commerce platform currently
serves over 140,000 online customers and has generated over 400,000
leads in the United States. With the roll-out of First Class CBD’s
proven e-marketing strategy throughout Europe, Mota believes that a
merger with a high-quality CBD producer is of paramount importance in
order to capture the large margins in the CBD-product supply chain.
Stillcanna
is a vertically integrated, European-based company with a focus on
industrial-scale manufacturing of the highest quality CBD extracts.
Using proprietary extraction techniques and purpose-built equipment,
Stillcanna looks to become one of the largest producers of THC-free CBD
extracts in Europe. Stillcanna’s Polish extraction facility, NEXUS, features
industrial-scale centrifugal chromatography equipment that allows for
the production of bulk THC-free CBD distillate as well as custom
Cannabinoid profiles. In February 2020, Stillcanna’s Romanian extraction
facility, ORIGIN,
which operates pursuant to a joint venture between Stillcanna and
Dragonfly Biosciences Ltd., received approval from the Ministry of
Health and the Anti-Drug Agency to become the first government
recognized extraction facility in the country. To date C$23,000,000 has
been invested by Stillcanna in the cultivation and extraction
operations, with current cash on hand in Stillcanna of approximately
C$7,000,000.
Stillcanna’s
CBD extracts are key to unlocking additional value in Mota’s retail
offerings in Europe. Through Stillcanna, Mota hopes to guarantee the
supply of high-quality CBD for its expanding product line in Europe,
while the large production capacity of NEXUS and ORIGIN will allow Mota to be a key supplier of legal CBD products in Europe.
“We
are very excited to pursue a transaction with Stillcanna. The merger of
this large-scale, high-quality CBD producer will fit brilliantly with
Mota’s strategic expansion plan to vertically integrate operations in
Europe while increasing profit margins in product offerings. Product
awareness and availability are still quite limited in Europe, which
presents an opportunity for Mota to further establish its brands in a
market that is expected to experience rapid growth in the near term.
With the Stillcanna merger, we’re putting together a team that can
create, market and sell consumer CBD products to European customers,”
stated Ryan Hoggan, CEO of Mota.
“Combining
a company that has established brands and direct-to-consumer sales
channels with one that has proven CBD extraction expertise makes perfect
sense to us,” commented Jason Dussault, CEO of Stillcanna. “The
wholesale landscape for CBD has changed dramatically in the past year,
and the creation of a seed-to-consumer CBD company in the growing
European market creates a direct path to profitability. This merger
completes the circle for Stillcanna, evolving from a seed to CBD
concentrate company to a seed to retail sales company.”
Merger Details
Under
the terms of the Proposed Transaction, Mota would acquire all of the
outstanding share capital of Stillcanna by way of a statutory plan of
arrangement under the Business Corporations Act of British Columbia Canada. Shareholders of Stillcanna (the “Stillcanna Shareholders“) would receive one common share of Mota for every 1.8 common shares of Stillcanna held at the time of exchange (the “Exchange Ratio“).
Based on the current outstanding common share capital of Stillcanna, it
is anticipated that Mota would issue approximately 61,597,082 Mota
shares to complete the Proposed Transaction.
Upon
completion of the Proposed Transaction: (i) all outstanding incentive
stock options of Stillcanna will be exchanged for options to purchase
Mota shares on the basis of the Exchange Ratio and will thereafter be
subject to the incentive stock option plan of Mota; and (ii) all
unexercised share purchase warrants of Stillcanna will be exchanged for
warrants to purchase Mota shares on the basis of the Exchange Ratio and
will expire in accordance with their current expiry dates.
Mota
and Stillcanna are at arms-length. The Proposed Transaction does not
constitute a reverse-takeover of Mota, nor is it expected to result in a
change of control of Mota within the meaning of applicable securities
laws and the policies of the Canadian Securities Exchange. Upon
completion of the Proposed Transaction, there will be no changes to the
management or the board of directors of Mota and it is expected that
members of management and the board of Stillcanna will continue to
assist in relation to the management of Stillcanna’s business.
Completion
of the Proposed Transaction remains subject to a number of conditions,
including, but not limited to: (i) satisfactory completion of due
diligence; (ii) negotiation of definitive, legally-binding
documentation; (iii) receipt of any required regulatory approvals,
including the court; (iv) the approval of the Stillcanna Shareholders;
(v) receipt of a satisfactory fairness opinion in respect of the
Proposed Transaction; (vi) Stillcanna having arranged to amend the terms
of certain existing employment and consulting engagements; (vii)
shareholders of Stillcanna holding at least 40,000,000 of the
outstanding share capital of Stillcanna having agreed to the terms of a
pooling arrangement restricting their ability to trade one-half of the
Mota shares they receive for a period of six months following completion
of the Proposed Transaction; (viii) Stillcanna having positive working
capital of not less than C$6,000,000, after taking into account all
expenses associated with the Proposed Transaction; and (ix) Mota
completing a private placement of units to raise gross proceeds of not
less than C$5,000,000 (the “Mota Financing“).
The Proposed Transaction cannot be completed until these conditions are
satisfied. There can be no assurance that the Proposed Transaction will
be completed as proposed or at all.
The
proposed Mota Financing will consist of units at a price of C$0.45 per
unit, with each unit comprised of one Mota common share and one share
purchase warrant of Mota. Each such warrant will be exercisable to
purchase one common share of Mota at a price of C$0.60 for a period of
two years. All securities to be issued in connection with the Mota
Financing will be subject to a four-month-and-one-day statutory hold
period in accordance with applicable securities laws. Mota anticipates
paying finders fees to certain eligible parties who have introduced
subscribers to the Mota Financing.
The
board of directors of each of Mota, and Stillcanna, have unanimously
approved the Letter of Intent. Further information about the Proposed
Transaction will be included in subsequent press releases when
available.
About Mota Ventures Corp.
Mota
is seeking to become a vertically integrated global CBD brand. Its plan
is to cultivate and extract CBD into high-quality value-added products
from its Latin American operations and distribute it both domestically
and internationally. Its existing operations in Colombia consist of a
2.5-hectare site that has optimal year-round growing conditions and
access to all necessary infrastructure. Mota is looking to establish
sales channels and a distribution network internationally through the
acquisition of the Sativida and First Class CBD brands. Low cost
production, coupled with international, direct to customer sales
channels will provide the foundation for the success of Mota.
About Stillcanna Inc.
Stillcanna
is a Canadian early-stage life sciences company focused on the
large-scale manufacturing of CBD in Europe using its proprietary
intellectual property. Stillcanna has signed an initial extraction
contract in Europe to be the exclusive extractor for Dragonfly
Biosciences LLC, a United Kingdom-based supplier of CBD. Stillcanna also
recently completed the acquisition of Olimax NT SP.Z.O.O., a
multi-generational hemp agricultural firm that is expected to increase
market share in the European CBD industry.
On behalf of Mota Ventures Corp.
Ryan Hoggan
Chief Executive Officer
On behalf of Stillcanna Inc.
Jason Dussault
Chief Executive Officer
For more information visit
www.motaventuresco.com or contact:
Investor Relations
[email protected]
+1.604.423.4733
For more information visit www.stillcanna.com or contact:
Mauricio Inzunza
[email protected]
