Zenabis Provides Update on Plan of Arrangement, Engages Investment Marketing Firm
Vancouver, British Columbia – February 06, 2019 – Zenabis Global Inc. (“Zenabis”) (TSXV: ZENA) today provided an update on the expected tax impact of the Plan of Arrangement completed on January 8, 2019, and announced that it has engaged an investment marketing firm to help increase Zenabis’ profile with the investment community.
Plan of Arrangement
Zenabis advises that in connection with the exchange of Bevo Shares for Zenabis Shares and CubicFarm Shares as part of the Plan of Arrangement completed on January 8, 2019, Zenabis has determined that the fair market value of each CubicFarm share distributed on the exchange was equal to $0.15. This determination, however, is not binding on the Canada Revenue Agency. Further, Zenabis has determined that the paid-up capital of each Bevo Share immediately before the exchange was greater than this determined fair market value of each Bevo Share. As a result, Bevo Shareholders should not have realized a deemed dividend on this exchange.
Bevo Shareholders are encouraged to review the tax discussion outlined in Bevo’s Management Information Circular dated November 23, 2018 as to the general tax consequences in respect of the Plan of Arrangement and the statements above are subject to the qualifications therein. This summary is not intended to be, nor should it be construed to be, legal or tax advice to any particular Bevo Shareholder. As noted in the Management Information Circular, Bevo Shareholders should consult their own tax advisors for advice with respect to their particular circumstances including, where relevant, the application and effect of the income and other taxes of any country, province, territory, state or local tax authority. All capitalized terms used above have the meanings given to them in the Management Information Circular.
Investment Marketing Services
Zenabis also announced that it has entered into an agreement (the “Agreement”) with Hybrid Financial Ltd. (“Hybrid Financial”) pursuant to which Hybrid Financial will provide investment marketing services to Zenabis.
Founded in 2011, Hybrid Financial is a high impact sales & distribution company working on behalf of clients in the financial services industry. Its unique approach helps it effectively and efficiently build brands and launch products on behalf of its small, medium and large clients. With offices in both Toronto and Montreal, Hybrid offers comprehensive coverage of both the Canadian and U.S. markets. Other than pursuant to the Agreement, Zenabis has no relationship with Hybrid Financial.
Hybrid Financial has been engaged for an initial term of six months commencing February 5, 2019 (the “Initial Period”). On expiry of the Initial Period, the Agreement shall be automatically renewed on a monthly basis. As consideration for providing the services, Zenabis is required to pay Hybrid Financial a monthly fee of C$20,000 plus applicable taxes. In addition, Zenabis is granting Hybrid Financial 150,000 options under Zenabis’ stock option plan, having a three-year term at an exercise price equal to the $4.45 (the closing market price per Zenabis share on February 4, 2019). In accordance with applicable TSXV rules, such options shall vest quarterly over the first year of the term of the Agreement. If the Agreement is terminated for any reason, all unvested options shall immediately expire.
Zenabis is making the required filings with the TSXV to implement the Agreement.
Zenabis is a significant licensed cannabis cultivator 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 facility space that can, upon full conversion, be dedicated to cannabis production.
If all facility space is fully built out and dedicated to production, 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, if fully converted for cannabis production, would 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 market, while Namaste is used to service the recreational market.
The management team at Zenabis has significant experience in finance, 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
Forward Looking Information
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. 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. 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.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
For more information, visit: https://www.zenabis.com.
Zenabis Global Inc.