CanadaBis Capital Inc. and 1926360 Alberta Ltd. (dba Stigma Pharmaceuticals) Receive TSXV Conditional Acceptance
CanadaBis Capital Inc. (TSXV:CANB.P) (“CanadaBis” or the “Company”), an Alberta capital pool corporation listed on the TSX Venture Exchange, is pleased to announce that it has received conditional acceptance from the TSX Venture Exchange (“TSXV”) for its proposed qualifying transaction (the “Qualifying Transaction”) with 1926360 Alberta Ltd. doing business as Stigma Pharmaceuticals (“Stigma”). Stigma is a company that recently obtained its cultivation and processing licenses for cannabis and cannabis products with a facility located in Red Deer, Alberta (the “Facility”). Closing of the Qualifying Transaction is expected to occur on or about April 24, 2019. Upon closing, Stigma will amalgamate with a subsidiary of CanadaBis to become a wholly owned subsidiary of CanadaBis.
The Company filed a filing statement (the “Filing Statement”) dated April 1, 2019, regarding its Qualifying Transaction. Upon completion, the proposed transaction will constitute a “Qualifying Transaction” as defined in the policies of the TSXV and the resulting issuer will be a Tier 2 Life Sciences Issuer (the “Resulting Issuer”). Upon completion of the Qualifying Transaction, the Resulting Issuer will continue to operate under the name of “CanadaBis Capital Inc.”
The Company wishes to provide additional information regarding the Lease and Option to purchase the Facility dated April 1, 2019, as amended and restated (the “Lease”), entered into between Stigma’s operating subsidiary and a related party of Stigma. The lease has a five-year term, expiring in December 2023, with an option to renew for a further five year term. In addition, the agreement contains an option for the lessee to purchase the building for approximately $4.2 million, plus 5% interest per annum should the option be exercised after the first year of the lease. The Lease contemplates Stigma incurring all operating expenses for the Facility directly to the extent possible. The “rent” payable by Stigma under the Lease is equal to the expenses actually incurred by the Landlord as owner of the Facility and has been capped at a maximum of $10,000 per month. In addition, non-payment of rent under the Lease is only a default if not paid for 12 months following notice and a 60-day cure period.
The completion of the Qualifying Transaction is subject to a number of conditions, including but not limited to receipt of all required regulatory consents, including final TSXV acceptance.
Trading in the common shares of CanadaBis is currently halted and will resume following publication of the Final Exchange Bulletin by the TSXV in respect of the closing of the Qualifying Transaction.
Investors are cautioned that, except as disclosed in the Filing Statement, any information released or received with respect to the Qualifying 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. There can be no assurance that the Qualifying Transaction will be completed as proposed or at all.
Please see the Filing Statement, which is available on SEDAR at www.sedar.com, for more information regarding the Qualifying Transaction, Stigma and its business. The Company will issue additional news releases related to closing of the Qualifying Transaction and other material information as it becomes available.
In accordance with the policies of the Exchange, an aggregate of 90,846,000 common shares in the capital of the Company (the “Escrowed Shares”) owned or controlled by directors, management, certain shareholders and incoming Principals of CanadaBis will be held pursuant to an escrow agreement with Computershare Trust Company of Canada, acting as escrow agent. Of these Escrowed Shares, 79,686,000 will be released from escrow based on the Exchange’s Surplus Escrow schedule as follows: 5% upon issuance of the Exchange bulletin granting final approval for the Transaction (the “Final Bulletin”); 5% on the date that is six months after the date of the Final Bulletin; 10% on the date that is 12 months after the date of the Final Bulletin; 10% on the date that is 18 months after the date of the Final Bulletin; 15% on the date that is 24 months after the date of the Final Bulletin; 15% on the date that is 30 months after the date of the Final Bulletin; and 40% on the date that is 36 months after the date of the Final Bulletin. In the Filing Statement, Mr. Michaud was shown incorrectly as being subject to Value Escrow, however he will in fact be subject to Surplus Escrow and his 1,325,000 shares are included in the numbers stated above. The remaining 11,160,000 Escrowed Shares are governed by the Value Escrow schedule (including the 3,000,000 governed by the initial CPC Escrow Agreement) and will be released from escrow as follows: 10% released upon receipt of final Exchange approval and a further fifteen percent (15%) released on each of the six-month, twelve-month, eighteen-month, twenty-four month, thirty month and thirty-six month anniversaries of the date of the Final Bulletin.
Stigma has developed a commercial “craft cannabis” grow facility located on land it purchased in the County of Red Deer. Stigma currently has 42 proprietary cannabis strains with a wide range of terpene and potency profiles. It holds a lease and option to purchase a 66,000sq ft facility located on its lands. The facility has currently been built out for 22,000sq ft of cultivation to meet demands of recreational cannabis, as well as medicinal consumption needs. The facility is currently set up for multiple grow rooms, drying rooms, a packaging and processing room, a shipping area and a secure product storage area.
Stigma recently received a Cultivation License and a Processing License for cannabis from Health Canada on March 6, 2019. “Phase 1” of the facility is designed to produce 1,500 kg per annum. “Phase 2” will involve the raising of additional capital and the investment in an expansion to approximately 16,000 kgs per annum. The founders of Stigma have invested over 2 years of research and development to determine optimal cannabinoid profiles and yield. Stigma currently has the ability to sell to other licensed producers throughout Canada, however, the Company has also applied for a Sales License. After successfully completing two test crops, the Sales License will enable Stigma to sell to Alberta Liquor Gaming & Cannabis (AGLC), which is the only Provincially authorized retailer in Alberta. Stigma looks to become one of the few vertically integrated craft companies in this market space.
All information contained in this news release with respect to CanadaBis and Stigma was supplied by the parties respectively for inclusion herein.
For further information, please contact:
Tel: (587) 356-5625
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.
SOURCE: CanadaBis Capital Inc.