TORONTO--(BUSINESS WIRE)--SOL Global Investments Corp. (“SOL Global”) (CSE: SOL) (OTCPK: SOLCF) (Frankfurt: 9SB) and Goldstream Minerals Inc. (“Goldstream”) (NEX: GSX.H) are pleased to announce that Goldstream and CannCure Investments Inc. (“CannCure”), a portfolio company of SOL Global, have entered into a definitive business combination agreement (the “Combination Agreement”) which, subject to certain conditions and applicable shareholder and regulatory approvals, including, without limitation, approval from the Florida Department of Health, Office of Medical Marijuana Use, will result in a reverse takeover of Goldstream by CannCure (the “Proposed Transaction”). The resulting issuer from the Proposed Transaction (the “Resulting Issuer”) will carry on the business of CannCure as a U.S. multi-state cannabis company (the “MSO”). The Resulting Issuer will initially operate in the State of Florida via One Plant Florida (formerly 3 Boys Farm LLC) and in the event that its proposed acquisition of ECD Holdings Inc. (d/b/a as “Northern Emeralds”) is completed, will begin operations in the State of California. As was previously announced, Brady Cobb will step down as CEO and a director of SOL Global to lead the new MSO effective upon the closing of the Proposed Transaction. Closing of the Proposed Transaction is expected to occur in late April, 2020 or such other date as may be mutually agreed to by the parties.
The Combination Agreement
Under the terms of the Combination Agreement, the Proposed Transaction will be completed by way of a three-cornered amalgamation involving a wholly-owned subsidiary of Goldstream amalgamating with CannCure to form a single, wholly-owned subsidiary of the Resulting Issuer. In connection with the Proposed Transaction, Goldstream will reconstitute its board of directors and management team and change its name to “Bluma Wellness Inc.” or such other similar name as may be accepted by the relevant regulatory authorities (the “Name Change”) and the Resulting Issuer will conduct its business under the new name.
As a condition to the Proposed Transaction, Goldstream will de-list from the NEX board of the TSX Venture Exchange (“TSXV”) and the Resulting Issuer will apply to list its common shares on the Canadian Securities Exchange (the “CSE”). The Proposed Transaction cannot be completed while Goldstream is listed on the NEX board of the TSXV. Accordingly, an application will be made to voluntarily delist its common shares from the NEX board of the TSXV and to list the common shares of the Resulting Issuer on the CSE. The delisting of Goldstream’s common shares from the NEX board of the TSXV and the listing of the Resulting Issuer shares on the CSE will be subject to all applicable shareholder and regulatory approvals. The parties anticipate that upon the satisfaction of the CSE’s initial listing requirements and approval by the CSE, the common shares of the Resulting Issuer will begin trading on the CSE following the closing of the Proposed Transaction. There is no guarantee that the Resulting Issuer will meet the listing requirements or that the CSE will approve the Resulting Issuer for listing.
The Combination Agreement includes a number of other conditions, including but not limited to:
- the consolidation of Goldstream’s common shares on a 23.3053:1 basis (the “Consolidation”), the issuance of post-Consolidation Goldstream common shares to holders of CannCure common shares (the “CannCure Shares”) on a 1:1 basis;
- the continuance of Goldstream into the province of British Columbia;
- the entering into of lock-up agreements by certain CannCure shareholders, officers and directors;
- CannCure obtaining a US$15,000,000 construction loan from an arm’s length third party lender or completing an alternative financing to ensure sufficient funding for the MSO operations following closing;
- the approvals of all regulatory bodies having jurisdiction in connection with the Proposed Transaction, including, without limitation, approval from the Florida Department of Health, Office of Medical Marijuana Use; and
- other closing conditions customary to transactions of the nature of the Proposed Transaction.
An annual general and special meeting of shareholders of Goldstream will be held on April 9, 2020 to consider and approve, among other things, the de-listing of Goldstream from the NEX, the reconstitution of Goldstream’s board of directors, the Name Change and the Consolidation.
Pursuant to the terms of the Combination Agreement, and in connection with the Proposed Transaction:
- holders of CannCure Shares will receive one (1) fully paid and non-assessable post-Consolidation Resulting Issuer share for each CannCure Share held; and
- all outstanding warrants, convertible debentures and other securities to purchase CannCure Shares will be exchanged on an equivalent basis for warrants, convertible debentures and other such securities to purchase common shares of the Resulting Issuer.
Upon the completion of the Proposed Transaction, it is expected that holders of CannCure Shares, including those parties expected to receive CannCure Shares as partial consideration for the sale of Northern Emeralds to CannCure and the former CannCure shareholders who have received CannCure Shares in connection with the satisfaction of the Earn-Out (as described below), will hold approximately 99% of the issued and outstanding Resulting Issuer shares on a non-diluted basis. Sol Global Investments will be one of the largest shareholders of the Resulting Issuer.
Investors are cautioned that, except as disclosed in the management information circular or listing statement to be prepared in connection with the Proposed Transaction, any information released or received with respect to the Proposed Transaction may not be accurate or complete and should not be relied upon. There can be no assurance that the Proposed Transaction will be completed as proposed or at all.
Satisfaction of Earn-Out
The entering into of the Business Combination Agreement triggered the clause under the CannCure earn-out in accordance with the terms of the amended and restated purchase agreement dated April 8, 2019 (the “Agreement”) between SOL Global and the former shareholders of CannCure. SOL Global transferred an aggregate of 35,151,483 CannCure Shares to the former shareholders of CannCure based on the calculation outlined in the Agreement, thereby fully satisfying the earn-out provision.
Management of the Resulting Issuer
Subject to applicable shareholder and CSE approval, upon completion of the Proposed Transaction, the board of directors and management of the Resulting Issuer will be comprised of the following individuals:
Brady Cobb, age 39, Chief Executive Officer and Director
Brady Cobb is the current CEO of SOL Global Investments, an investment company that specialized in making strategic investments in the budding U.S. cannabis sector as well as Esports and the CBD markets. Since April of 2019, Brady has been focused on the build-out and scale-up of the One Plant Florida (formerly 3 Boys Farm, LLC), a licensed medical marijuana treatment center, and One Plant has emerged as an up and coming operator with a focus on an authentic, premium product experience and a bottom line focused home delivery model and retail network. Brady has also emerged as an advocate for medical cannabis use and has been instrumental in the legal and regulatory development of the U.S. cannabis market, both at the state and federal level. Prior to leading SOL Global, Brady was a practicing attorney in South Florida with a focus on mergers and acquisitions, regulatory and governmental relations, and compliance/shareholder disclosure issues with the TSX, CSE and NASDAQ. He is routinely featured in national media including Bloomberg, ABC News, Fox Business, MarketWatch, Cheddar TV, Newsweek, Yahoo Finance, and Real Clear Markets. Additionally, Brady served as the Liberty Health Sciences (LHS:CSE) Chief Legal Officer from inception through July of 2018 when he accepted a position on the board of directors of SOL Global Investments.
Michael Bondurant, age 50, President and Chief Strategy Officer
Michael was Director of Florida & Chief Operating Officer for 3 Boys Farm LLC, a Florida-based Medical Marijuana Treatment Center licensee. Michael, a former Director at Sato Global Solutions, provided consultative services for supply chain, inventory management, transportation, packaging, postal, information technology, procurement and retail. Michael has nearly 20 years of experience in senior banking and finance and is also involved in real estate financing, closely-held businesses and money management in the eastern United States. Michael is a veteran of the Armed Services, having served in the United States Coast Guard from 1988 – 1993.
Michael Smuts, age 37, Chief Operating Officer
Mike managed the opening of Natural Remedies, the City of Denver’s first 20 dispensaries. He also served in numerous roles across retail, cultivation and administrative operations at Patient’s Choice/Livegreen, and The Green Solution in Denver, Colorado, The Boulder Wellness Center in Boulder, Colorado, and Harvest House in Nederland, Colorado. He was also a part of teams and processes to design, build, and run operations for Florida’s sixth and seventh Medical Marijuana Treatment Centers. He served as VP of Operations of San Felasco Nurseries/The Green Solution in Gainesville, Florida and Director of Operations for GrowHealthy/iAnthus in Lake Wales, Florida. In 2019, Mike was appointed to the Florida Department of Agriculture & Consumer Services Medical Marijuana Committee under Commissioner, Nikki Fried, and Cannabis Director, Holly Bell.
Chris Polaszek, age 49, Chief Legal Officer
Chris has 20+ years of experience in the legal industry with a strong background in Mergers & Acquisitions, Investor Relations, Capital Markets, Negotiations and Complex Commercial Litigation. Chris’ legal experience with companies in highly regulated markets led to his focus in the cannabis market. Most recently, Chris was the Chief Legal Officer and head of Mergers & Acquisitions for a multi-state cannabis company. Chris has also worked with and counseled professional and Olympic athletes for a number of years. In addition to his professional career, Chris personally dedicates a significant amount of time to charitable, civic, and community organizations in Tampa Bay, Florida and the surrounding areas.
Cody Stross, age 35, Chief Cultivation Officer and Director
Cody is the Founder and CEO of California’s finest purveyor of craft cannabis, Northern Emeralds. Northern Emeralds cannabis stands out even in a marketplace of outstanding cannabis. Northern Emerald’s proprietary strain, Titan OG, received a score of 9.6 for “nearly perfect cannabis”. Cody leads a passionate team of over 100 members, including craft cultivators, manicurists, and employees responsible for packaging, distribution, sales, customer support and administrative team members. Cody is also the Founding Chairman of the Board of Directors for the Humboldt County Growers Alliance.
Chad Moss, age 49, Chairman of the Board of Directors
Chad is a prominent ambassador for Moss & Associates and is known for building strong relationships throughout the United States. He is an effective and passionate advocate for building sustainability, new technology, and mentoring in the industry. Chad co-founded family-owned-and-operated Moss & Associates after he began his 20-year career in operations. Chad serves as President of the Moss Foundation, a non-profit organization established to provide a platform for the South Florida community. The Foundation supports other non-profit organizations and partners, promoting the premise that Moss is not just about building structures, we are helping to build communities.
Adam Wilks, age 34, Director
Adam has served as Chief Operating Officer to One Plant (Three Habitat Consulting) and the company’s chain of dispensaries. Adam has, in his 10 years of experience, worked with brands like Yogen Fruz, Pinkberry, Cold Stone Creamery, Buy N Bulk, and more. Adam co-founded Buy N Bulk and was actively involved in business development from 2013 – 2016. He was on the board of one of California's leading cannabis brands, Old Pal, and the board of Sacred CBD. Adam has also been involved with Serruya Private Equity for the last 2 years, focusing on cannabis-specific investments.
All information contained in this press release with respect to Goldstream and CannCure was supplied by the parties respectively, for inclusion herein, and each party and its directors and officers have relied on the other party for any information concerning the other party.
The common shares of Goldstream have not been and will not be registered under the United States Securities Act of 1933, as amended and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirement. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.
About SOL Global Investments Corp.
SOL Global is an international investment company with a focus on investing in cannabis and cannabis related companies in legal U.S. states, the hemp and CBD marketplaces and the emerging European cannabis and hemp marketplaces with an objective of providing shareholders with a long term return through capital appreciation, dividends and interest from its investments. If SOL Global believes there is a strategic reason to do so, it may also invest in companies not in the cannabis sector.
Goldstream Minerals Inc. is a mineral exploration company with no current activities or operations and is currently listed on the NEX Board of the TSX Venture Exchange.
Completion of the Proposed Transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and if applicable, disinterested shareholder approval. Where applicable, the transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Proposed Transaction will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the management information circular or listing statement to be prepared in connection with the Proposed Transaction, any information released or received with respect to the transaction may not be accurate or complete and should not be relied upon. Trading in the securities of Goldstream should be considered highly speculative.
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 news release.
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.
Neither the CSE nor its Market Regulator (as that term is defined in the policies of the CSE) accepts responsibility for the adequacy or accuracy of this release.
This press release contains “forward-looking information” within the meaning of applicable securities laws including statements regarding the terms and conditions of the Proposed Transaction, the de-listing of Goldstream from the NEX and the listing of the Resulting Issuer shares on the CSE, the meeting of Goldstream’s shareholders as well as information relating to CannCure. All statements contained herein that are not clearly historical in nature may constitute forward-looking information. In some cases, forward-looking information can be identified by words or phrases such as “may”, “will”, “expect”, “likely”, “should”, “would”, “plan”, “anticipate”, “intend”, “potential”, “proposed”, “estimate”, “believe” or the negative if these terms, or other similar words, expressions and grammatical variations thereof, or statements that certain events or conditions “may”, or “will” happen, or by discussions of strategy. Forward-looking information is based upon certain material assumptions that were applied in drawing a conclusion or making a forecast or projection, including management’s perceptions of historical trends, current conditions and expected future developments, as well as other considerations that are believed to be appropriate in the circumstances. While each of Sol Global and Goldstream consider these assumptions to be reasonable based on information currently available to management of each such company, there is no assurance that such expectations will prove to be correct. By its nature, forward-looking information is subject to inherent risks and uncertainties that may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate, that assumptions may not be correct and that objectives, strategic goals and priorities will not be achieved. A variety of factors, including known and unknown risks, many of which are beyond the respective companies’ control, could cause actual results to differ materially from the forward-looking information in this press release. Such factors include, but are not limited to: information concerning the Proposed Transaction; expectations on whether the Proposed Transaction will be consummated, including whether conditions to the consummation of the Proposed Transaction will be satisfied including obtaining receipt of all required regulatory and shareholder approvals; the timing for completing the Proposed Transaction; the business plans and strategies of Goldstream, SOL Global, CannCure and the Resulting Issuer, the ability of CannCure to comply with all applicable governmental regulations in a highly regulated business; the inherent risks in investing in target companies or projects which have limited or no operating history and are engaged in activities currently considered illegal under US federal laws; changes in laws; limited operating history; reliance on management; requirements for additional financing; competition; inconsistent public opinion and perception regarding the medical-use and adult-use marijuana industry; and regulatory or political change. Readers are cautioned to consider these and other factors, uncertainties and potential events carefully and not to put undue reliance on forward-looking information. The forward-looking information contained herein is made as of the date of this press release and neither Goldstream nor SOL Global undertakes any obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable law.