TORONTO, Sept. 21, 2021 /CNW/ - Cann-Is Capital Corp.
("Cann-Is" or the "Corporation") (TSXV: NIS.P) is
pleased to provide certain updates from its press releases dated
November 11, 2020 and September 23, 2020 in regards to the
Corporation's proposed qualifying transaction (the
"Transaction") with CWE European Holdings Inc., a company
incorporated under the laws of Canada ("CWE"), pursuant to which the
Corporation will acquire all of the issued and outstanding shares
in the capital of CWE. When completed, the Transaction will
constitute the Corporation's Qualifying Transaction, as such term
is defined in the policies of the TSX Venture Exchange (the
"Exchange"). The Transaction is subject to compliance with
all necessary regulatory and other approvals and certain other
terms and conditions. The parties executed a binding engagement
agreement on September 23, 2020,
which was amended on November 4, 2020
and further amended on September 20,
2021.
SUMMARY OF THE TRANSACTION
It is currently anticipated that Cann-Is will acquire CWE by way
of a share exchange, or other similar form of transaction as agreed
by the parties to ultimately form the resulting issuer (the
"Resulting Issuer"). The final structure of the Transaction is
subject to the receipt of tax, corporate and securities law advice
for both Cann-Is and CWE. Upon completion of the Transaction, the
Resulting Issuer will carry on the business of CWE. The parties
have agreed that for the purposes of the Transaction, the valuation
of Cann-Is will be $624,266 and CWE
will be $3,000,000, not including any
financings and settlements for CWE which took place in the first
half of 2021.
The Transaction is not a Non-Arm's Length Qualifying
Transaction, as such term is defined in the polices of the Exchange
and consequently the Transaction will not be subject to approval by Cann-Is'
shareholders.
Cann-Is held a meeting of its shareholders on May 4, 2021 (the "Cann-Is Shareholders
Meeting") in order to pass resolutions approving among other
things, (i) the appointment of a new slate of directors and
(ii) approving an amendment to the articles of the Corporation to
change the name of the Corporation to "HANF Inc." or to such other
name as the board of directors of the Corporation, in its sole
discretion, deem appropriate (the "Name Change"). At the
Cann-Is Shareholders Meeting, the shareholders approved among other
things, the new slate of directors and the Name Change, such
changes to take effect upon completion of the Transaction.
CWE had 25,000,000 common shares issued and outstanding prior to
completion of its financing and debt settlements. Currently, CWE
has 48,529,367 shares outstanding, which is a result of a financing
and some debt settlements.
As part of the Transaction, CWE completed a financing of
$2,742,983.04 to meet the initial
listing requirements of the Exchange (the "Financing"). CWE
engaged Florence Wealth Management Inc. (the "Agent") to act
as agent in connection with the Financing and the Agent appointed
selling groups consisting of other co-agents or sub-agents who are
registered dealers. The Financing resulted in the issuance of
22,858,192 units in the capital of CWE (each a "Unit") at a
price of $0.12 per Unit. Each Unit
was comprised of one (1) CWE Share and one (1) CWE Share purchase
warrant (each a "Warrant"). Each Warrant entitles the holder
thereof to acquire one (1) CWE Share at a price of $0.18 per CWE Share for a period of twenty-four
(24) months following the closing of the Financing.
In connection with the Financing, the parties paid to the Agent
a cash commission equal to 10% of the aggregate gross proceeds of
the Financing (excluding gross proceeds raised from a president's
list for which the cash commission shall be 2%); and broker
warrants ("Broker Warrants") equivalent to 10% of the
underlying securities sold in the Financing excluding funds
raised from the president's list subscribers which were reduced
to a number of Broker Warrants, equal to 2% of the
number of securities sold under that portion of the Financing).
Each Broker Warrant is exercisable into one Unit at a price of
$0.12 per Unit for a period of
twenty-four (24) months following the closing of the Financing.
Pursuant to the Transaction: (i) holders of issued and
outstanding CWE Shares will receive one (1) common share in
the capital of the Corporation
("Cann-Is Shares") for each
CWE Share (the "Exchange Ratio") held by
them; and (ii) all options and warrants convertible into CWE Shares
shall be exchanged, based on the Exchange Ratio, for similar
securities to purchase Cann-Is Shares on substantially similar
terms and conditions.
In connection with the Transaction, CWE has entered into a
finder's fee agreement (the "Finder's Fee Agreement") with
an arm's length party (the "Finder") for the Finder's
introduction of CWE to the Corporation. Pursuant to the terms of
the Finder's Fee Agreement, the parties have agreed, subject to the
approval by the Exchange, to pay the Finder a fee of 1,937,600
Resulting Issuer Shares or such greater number of Resulting Issuer
Shares that is permissible under the polices of the Exchange,
subject to a maximum of 2,000,000 Resulting Issuer Shares, to be
issued upon closing of the Transaction.
Upon completion of the Transaction and on an undiluted basis, it
is expected that (i) the former shareholders of CWE will hold
approximately 46.52% of the common shares in the Resulting Issuer
(each a "Resulting Issuer Share") (on a non-diluted
basis), (ii) the former shareholders of Cann-Is will hold
approximately 9.68% of the Resulting Issuer Shares, (iii) the
investors in the Financing will hold, assuming completion of the
minimum Financing, 39.3% of the Resulting Issuer Shares, and (iv)
the Finder and others will hold 5.1% of the Resulting Issuer
Shares.
Closing of the Transaction will be subject to a number of
conditions precedent, including, without limitation:
a)
|
completion of mutual
satisfactory due diligence investigations of CWE
and Cann-Is;
|
b)
|
approval of the
Transaction by the boards of directors of CWE
and Cann-Is;
|
c)
|
execution of a
definitive agreement effecting the Transaction;
|
d)
|
completion of the
Financing;
|
e)
|
receipt of all
regulatory approvals with respect to the Transaction and the
listing of the Resulting Issuer Shares on
the Exchange;
|
f)
|
approval of the
Transaction by CWE shareholders,
|
g)
|
approval of the Name
Change, and the approval of new directors by the Cann-Is
shareholders; and
|
h)
|
confirmation of no
material adverse change by CWE and Cann-Is.
|
It is anticipated that the Resulting Issuer will qualify as a
Tier 2 Issuer pursuant to the requirements of the Exchange.
SPONSORSHIP
Sponsorship of a Transaction of a capital pool company is required by the Exchange unless
exempt in accordance with Exchange policies. The Corporation
intends to apply for a waiver from the sponsorship requirement in
accordance with Exchange Policy 2.2.
HISTORY OF CWE
CWE was incorporated under the Business Corporations Act
(Alberta) on May 6, 2019 as a private corporation with
wholly-owned subsidiaries that operate a seed to sale Hemp business
in Germany in compliance with applicable laws. CWE is selling
an organic, health conscious lifestyle based on Hemp products, some
containing CBD.
CWE is seeking to become the largest Hemp offline and online
retailer in Germany building a
controlled access to customers by opening retail locations in
Germany. Currently CWE owns and
operates ten (10) stores in the State of Bavaria in Germany through five (5) German subsidiaries.
CWE has developed a private label Hemp derived CBD brand which
makes up 50% of offline retail sales. The stores are operated under
the brand name "HANF" in Germany.
The Corporation's subsidiaries include:
- DCI Cannabis Institute GmbH ("DCI"), incorporated in
Germany on December 1, 2016. CWE acquired 89.6% of the share
capital of DCI on July 4, 2019
pursuant to an agreement with four (4) shareholders of DCI. The
balance of the share capital, 10.4%, is owned by an arm's length
German company. DCI owns and operates six (6) shops in Germany.
- CWE Trading GmbH ("CWE-UG") incorporated in Germany on April 16,
2020 as wholly owned subsidiary. CWE-UG owns and operates
two (2) shops.
- CWE Trading EINS GmbH ("CWE-E-UG") incorporated in
Germany on August 16, 2020 as wholly owned subsidiary.
CWE-E-UG owns and operates one (2) shops.
SELECTED FINANCIAL INFORMATION OF CWE
The following table sets out historical financial information of
CWE, in each case, for the periods ended and as of the dates
indicated. The selected financial information of CWE has been
derived from the unaudited consolidated interim financial
statements of CWE for the six-month period ended June 30, 2020 and the unaudited consolidated
interim financial statements of CWE for the six-month period ended
June 30, 2021:
Balance Sheet
Account
|
As at June 30,
2020 (C$)
|
As at June 30,
2021 (C$)
|
Current
Assets
|
1,119,076
|
3,390,213
|
Total Assets
|
1,520,357
|
4,221,186
|
Total
Liabilities
|
1,502,725
|
1,930,884
|
Total Shareholder's
Equity
|
17,632
|
2,290,303
|
Income
Statement
|
Six months
ended, June 30,
2020 (C$)
|
Six
months ended, June
30, 2021 (C$)
|
Revenue
|
1,045,682
|
1,550,293
|
Total
Expenses
|
1,134,884
|
2,190,407
|
Net Income
(Loss)
|
(89,202)
|
(640,784)
|
EBITDA
|
(161,595)
|
(619,550)
|
MANAGEMENT, BOARD OF DIRECTORS AND INSIDERS OF THE RESULTING
ISSUER
Upon closing of the Transaction, the board of directors of
Cann-Is shall be reconstituted, to be comprised of the nominees of
CWE to consist of at least three (3) members. Upon closing of the
Transaction, the management, board of directors and insiders of the
Resulting Issuer will be as set forth below. CWE has appointed
Aaron Meckler as the Chief Financial
Officer, Director, and Corporate Secretary.
Jörn J. Follmer – Chief Executive Officer and
Director
Jörn Follmer is a serial entrepreneur that has sold his
company to a NASDAQ firm in 1999, built up another company to take
it public at the EU-regulated market General Standard segment of
Deutsche Börse in 2005. As co-founder of DCI, Jörn has consulted
with Wenzel Cerveny since they met in 2016 on the campaign
trail. In 2008, Jörn became an investment banker, who has since
taken public more than 40 companies as official listing partner of
various exchanges. Similar to his position in CWE, Jörn takes
financial positions in emerging market companies. Having served on
the board of directors of listed companies in Europe, he has relevant experience in going
public transactions and continuous disclosure obligations. Mr.
Follmer received an M.B.A. degree in 1991 from Texas Christian University.
James Lanthier
– Director
Mr. Lanthier is the Chief Executive Officer of Mindset Pharma
Inc., a drug discovery and development business focused on
developing novel drugs for neuropsychiatric conditions. Mr.
Lanthier has held executive positions at a number of technology
enabled companies; prior to Mindset, Mr. Lanthier helped found
Future Fertility, a provider of artificial intelligence tools to
infertility physicians. Mr. Lanthier was a member of the founding
management team of Mood Media ("Mood"), the world's largest
in-store media business. Mr. Lanthier was the Chief Operating
Officer of Mood from 2008 to 2013 and a non-executive Director of
Mood from 2013 - 2016. Prior to Mood, Mr. Lanthier co-founded
FUN Technologies, a casual games business that he helped lead as
Chief Financial Officer through its initial public offering on the
Toronto and London Stock Exchanges
through its eventual sale to Liberty Media. Mr. Lanthier has held
board positions at a number of public companies. Mr. Lanthier
serves as a member of the board and audit committee of Water Ways
Technologies Inc. and a member of the board of Cann-Is. Mr.
Lanthier holds an MBA from the Rotman School of Management at the
University of Toronto and a BA (Honors)
from Queens University.
Aaron Meckler
– Chief Financial Officer and Director
Aaron Meckler is an investment
banker and seasoned corporate finance professional with experience
in both public and private capital markets across a wide range of
sectors, including real estate, technology, esports and cannabis.
He has been involved in multiple public listings, and has advised
companies across both the buy and sell side M&A
transactions. Mr. Meckler is presently the Co-Founder CFO and
Director of Amuka Capital, a boutique investment and merchant
banking firm in Toronto, Ontario.
He is also currently the CFO and board member to multiple reporting
issuers and public companies in Canada. Mr. Meckler holds a
B.Com from York University, the
Chartered Investment Manager (CIM) designation and the Fellow of
CSI (FCSI) designation.
Ronnie Jaegermann – Director
Mr. Jaegermann has been a Venture Partner at Exiteam Capital
Partners, an Israeli Venture Capital and Investment Advisory Firm
since November 2020. Prior to that,
he was a Venture Partner at Beyond-Ventures, an Israeli Venture
Capital and Investment Advisory Firm since September 2019. Prior to that, Mr. Jaegermann was
the Chief Executive Officer and Head of Investment Banking Advisory
at Aloni Haft, a Tel Aviv-based
boutique investment bank focused on fundraisings for Israeli
companies in international capital markets since 2014. He has led
multiple businesses in growing them from start-up to profitable
companies that became take-out targets and was involved in
fundraisings and public offerings for Israeli technology companies
both in Europe and the
USA. Mr. Jaegermann has owned a
few retail and online ventures including a retail chain of 26
Lingerie shops in Israel. Mr. Jaegermann holds a BA in
Economic and Political Science from Tel Aviv
University. Mr. Jaegermann serves as Chief Financial Officer
of Cann-Is, an independent member of the board of directors of
Adcore Inc. and a member of the board and audit committee of Water
Ways Technologies Inc.
Jerry Cerveny –
Director
Jerry Cerveny is the Chief
Executive Officer of DCI GmbH, which is the operating subsidiary of
CWE since 2019. Between 2012 and 2019, Mr. Cerveny was the manager
of a technology venture in New
Zealand developing nanoparticles. Between 2003 and 2016, Mr.
Cerveny held executive positions at BP Oil NZ Ltd. Between
1999-2003 he was a Manager at Shell NZ Ltd.
DISCLOSURE DOCUMENT
In connection with the Transaction, Cann-Is expects to apply to
the Exchange for a waiver from the requirement to file a
non-offering prospectus. Instead, Cann-Is expects to file a filing
statement which will contain details regarding the Transaction,
Cann-Is, CWE and the Resulting Issuer.
ABOUT CANN-IS CAPITAL CORP.
The Corporation is a Capital Pool Company ("CPC"). It has
not commenced commercial operations and has no assets other than a
minimum amount of cash. Except as specifically contemplated in the
CPC Policy, as defined in the final prospectus, until Completion of
the Transaction, the Corporation will not carry on any business
other than the identification and evaluation of assets or
businesses with a view to completing a proposed Transaction.
ADDITIONAL INFORMATION
Completion of the Transaction is subject to a number of
conditions, including but not limited to, Exchange
acceptance and if applicable pursuant to Exchange 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.
Investors are cautioned that, except as disclosed in the
management information circular or
filing statement to be prepared in connection with the Transaction, any information release 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 Transaction and has neither approved nor disapproved
the contents of this press release.
NEITHER THE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS
THAT TERM IS DEFINED IN THE POLICIES OF THE EXCHANGE) ACCEPTS
RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS
RELEASE.
This news release does not constitute an offer to sell or the
solicitation of an offer to buy any securities in any
jurisdiction.
FORWARD-LOOKING STATEMENTS
This news release contains certain forward-looking
statements, including statements relating to the Transaction and
certain terms and conditions thereof, the ability of the parties to
complete the Transaction, the Financing, the Exchange Ratio, the
Name Change, the Resulting Issuer's ability to qualify as a Tier 2
Issuer, the Corporation receiving a waiver from the Exchange for
sponsorship requirements, shareholder, director and regulatory
approvals, future press releases and disclosure, and other
statements that are not historical facts. Wherever possible, words
such as "may", "will", "should", "could", "expect", "plan",
"intend", "anticipate", "believe", "estimate", "predict" or
"potential" or the negative or other variations of these words, or
similar words or phrases, have been used to identify these
forward-looking statements. These statements reflect management's
current beliefs and are based on information currently available to
management as at the date hereof.
Forward-looking statements involve significant risk,
uncertainties and assumptions. Many factors could cause actual
results, performance or achievements to differ materially from the
results discussed or implied in the forward-looking statements. As
a result, the Corporation cannot guarantee that the Transaction
will be completed on the terms described herein or at all. These
factors should be considered carefully, and readers should not
place undue reliance on the forward-looking statements. Although
the forward-looking statements contained in this press release are
based upon what management believes to be reasonable assumptions,
the Corporation cannot assure readers that actual results will be
consistent with these forward-looking statements. These
forward-looking statements are made as of the date of this press
release, and the Corporation assumes no obligation to update or
revise them to reflect new events or circumstances, except as
required by law.
SOURCE Cann-Is Capital Corp.