At­las Blockchain en­ters LOI to ac­quire Is­ra­cann

Stockwatch Daily - - TECHNOLOGY & TELECOM - Mr. Char­lie Kiser re­ports

AT­LAS BLOCKCHAIN Group Inc. has en­tered into a non-bind­ing let­ter of in­tent dated Oct. 8, 2018, be­tween the com­pany and Is­ra­cann Bio­sciences Inc., a pri­vate B.C. com­pany. Op­er­a­tionally lo­cated in Is­rael, Is­ra­cann aims to em­bark on an in­dus­trial-scale cannabis farm­ing en­ter­prise tar­get­ing both do­mes­tic and in­ter­na­tional com­mer­cial op­por­tu­ni­ties. With three agree­ments in place, the ven­ture holds rights to over 580,000 square feet of prime agri­cul­tural land with pre-ex­ist­ing pro­duc­tion per­mits equiv­a­lent to Cana­dian ACMPR (Ac­cess to Cannabis for Med­i­cal Pur­poses Reg­u­la­tions) cul­ti­va­tion li­cens­ing. Is­rael has been a leader in cannabis re­search for over 50 years and fur­ther en­joys ex­tremely favourable cli­matic con­di­tions, both of which strate­gi­cally fac­tor into pre­mium prod­uct de­vel­op­ment op­por­tu­ni­ties. Be­ing prox­i­mally lo­cated to Europe’s un­der­sup­plied mar­kets ide­ally sit­u­ates Is­ra­cann with po­ten­tial ac­cess to a con­sumer base, which, based on pop­u­la­tion alone, is larger than the size of the United States and Canada com­bined.

The let­ter agree­ment con­tem­plates a pro­posed busi­ness com­bi­na­tion trans­ac­tion pur­suant to which the com­pany will ac­quire all the is­sued and out­stand­ing com­mon shares of Is­ra­cann in ex­change for com­mon shares of the com­pany. The ac­qui­si­tion is an arm’s-length trans­ac­tion and is ex­pected to con­sti­tute a fun­da­men­tal change un­der the poli­cies of the Cana­dian Se­cu­ri­ties Ex­change. De­tails of the ac­qui­si­tion Pur­suant to the terms of the let­ter agree­ment, share­hold­ers of Is­ra­cann will re­ceive one At­las share for each Is­ra­cann share held at the clos­ing of the ac­qui­si­tion. It is cur­rently an­tic­i­pated that 43.48 mil­lion At­las shares will be is­sued pro rata at a deemed price of 50 cents per At­las share to the share­hold­ers of Is­ra­cann.

In ad­di­tion, each com­mon share pur­chase war­rant is­sued and out­stand­ing, en­ti­tling hold­ers to ac­quire Is­ra­cann shares, will be ex­changed for one com­mon share pur­chase war­rant of the com­pany on fi­nan­cially iden­ti­cal terms. It is cur­rently ex­pected that an ag­gre­gate of 28 mil­lion re­place­ment war­rants will be is­sued to the hold­ers of Is­ra­cann war­rants. The let­ter agree­ment sets out cer­tain terms and con­di­tions pur­suant to which the ac­qui­si­tion will be com­pleted. The ac­qui­si­tion re­mains sub­ject to cer­tain clos­ing con­di­tions, in­clud­ing, with­out lim­i­ta­tion, the: (a) com­ple­tion of cus­tom­ary due dili­gence, (b) ne­go­ti­a­tion and ex­e­cu­tion of a de­fin­i­tive agree­ment, (c) com­ple­tion of a con­cur­rent eq­uity fi­nanc­ing to raise ag­gre­gate min­i­mum gross pro­ceeds of $5-mil­lion and up to $15-mil­lion, (d) re­ceipt of all re­quired reg­u­la­tory and third party ap­provals and, if ap­pli­ca­ble, the ap­proval of the share­hold­ers of the com­pany and Is­ra­cann, re­spec­tively. There can be no guar­an­tees that the ac­qui­si­tion will be com­pleted as con­tem­plated or at all. The com­pany an­tic­i­pates that cer­tain of the At­las shares is­sued pur­suant to the ac­qui­si­tion may be sub­ject to es­crow re­quire­ments and hold pe­ri­ods re­quired by CSE poli­cies and ap­pli­ca­ble se­cu­ri­ties laws.

Prior to clos­ing, the com­pany will con­sol­i­date its is­sued and out­stand­ing share cap­i­tal on a one-new-At­las-share-for-three-old-At­las-share ba­sis. The At­las shares to be is­sued in con­nec­tion with the ac­qui­si­tion, the con­cur­rent of­fer­ing and oth­er­wise de­tailed in this press re­lease will be is­sued on a post­con­sol­i­dated ba­sis. Con­cur­rent fi­nanc­ing Prior to the clos­ing, At­las and/or Is­ra­cann will com­plete a bro­kered and/or non-bro­kered of­fer­ing of se­cu­ri­ties for gross pro­ceeds of up to $15-mil­lion. Terms, in­clud­ing pric­ing, will be de­ter­mined in the con­text of the mar­ket and will be an­nounced by sep­a­rate press re­lease in due course. Clos­ing of the con­cur­rent of­fer­ing is sub­ject to a num­ber of con­di­tions, in­clud­ing re­ceipt of all nec­es­sary cor­po­rate and reg­u­la­tory ap­provals, in­clud­ing the ap­proval of the CSE.

All se­cu­ri­ties is­sued in con­nec­tion with the con­cur­rent of­fer­ing will be sub­ject to a statu­tory hold pe­riod of four months plus a day from the date of is­suance in ac­cor­dance with ap­pli­ca­ble se­cu­ri­ties laws. A fin­der’s fee may be paid in con­nec­tion with the con­cur­rent of­fer­ing to el­i­gi­ble arm’s-length fin­ders in ac­cor­dance with CSE poli­cies. The ag­gre­gate net pro­ceeds from the con­cur­rent of­fer­ing will be used to com­plete the ac­qui­si­tion and to pro­vide gen­eral work­ing cap­i­tal.

Bridge loan

In con­nec­tion with the ac­qui­si­tion, At­las will ad­vance $3-mil­lion to Is­ra­cann to fi­nance Is­ra­cann’s work­ing cap­i­tal re­quire­ments for com­ple­tion of the ac­qui­si­tion. The bridge loan will carry in­ter­est at a rate of 10 per cent per an­num, payable an­nu­ally in ar­rears, and will be se­cured by a gen­eral se­cu­rity agree­ment over all of the as­sets of Is­ra­cann. As­sum­ing com­ple­tion of the ac­qui­si­tion, the bridge loan will be for­given on clos­ing. Com­ple­tion of the ac­qui­si­tion of Is­ra­cann Bio­sciences is sub­ject to a num­ber of con­di­tions, in­clud­ing, but not limited to, share­holder con­sent and ap­proval of the Cana­dian Se­cu­ri­ties Ex­change as re­quired.

About Is­ra­cann Bio­sciences Inc.

Is­ra­cann is an Is­raeli-based cannabis com­pany, fo­cused on be­com­ing a premier cannabis pro­ducer of­fer­ing low-cost pro­duc­tion tar­get­ing un­der­sup­plied, ma­jor Euro­pean mar­ket­places. Based in Is­rael’s agri­cul­tural sec­tor, Is­ra­cann will lever­age its de­vel­op­ment within the most ex­pe­ri­enced coun­try in the

world with re­spect to cannabis re­search. The com­pany has se­cured agree­ments with three li­censed Is­raeli pro­duc­ers for medic­i­nal mar­i­juana cul­ti­va­tion. Dis­clo­sure and cau­tion Fur­ther de­tails about the pro­posed ac­qui­si­tion and the con­cur­rent of­fer­ing will be pro­vided in a com­pre­hen­sive press re­lease is­sued upon the en­ter­ing into of the de­fin­i­tive agree­ment and in the dis­clo­sure doc­u­ment to be pre­pared and filed in re­spect of the ac­qui­si­tion. In­vestors are cau­tioned that, ex­cept as dis­closed in the dis­clo­sure doc­u­ment, any in­for­ma­tion re­leased or re­ceived with re­spect to the ac­qui­si­tion may not be ac­cu­rate or com­plete and should not be re­lied upon.

We seek Safe Har­bor. Sean Brom­ley, Yana Popova, Fred­er­ick Wil­liam Stear­man, John Ed­ward Veltheer

(AKE) Shares: 114,944,923

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