Bevo and Sun Pharm Shareholders Enter into Voluntary Pooling Agreement with Respect to Zenabis Global

 

Shareholders of licensed producer Zenabis Ltd. – which is merging with Bevo Agro to become Zenabis Global – together with Bevo shareholders have entered into a voluntary pooling agreement.

VANCOUVERDec. 21, 2018 /CNW/ – As previously announced on October 4, 2018, Bevo Agro Inc. (TSXV: BVO) (“Bevo” or “the issuer”) and Sun Pharm Investments Ltd. (“Sun Pharm”) have entered into an arrangement agreement with respect to a reverse take-over of Bevo (the RTO Transaction”), with the resulting combined issuer being Zenabis Global Inc. (“Zenabis”).

Certain shareholders (the “Applicable Shareholders”) of Bevo and Sun Pharm have entered in to a voluntary pooling agreement (the “Pooling Agreement”) under which 111,558,446 shares of Bevo or Sun Pharm, which will represent approximately 60% of the outstanding shares of Zenabis on completion of the RTO Transaction will be subject to voluntary restrictions on disposition.1

The Applicable Shareholders depositing the Pooled Securities include all of the founders of both Bevo and Sun Pharm who will be continuing on with the business, with the following deposits of Pooled Securities being made under the Pooling Agreement:

Securityholder

Name

Title

Blue Samurai Medical Partnership

Mark Catroppa

Founder and Director – Sun Pharm

Bluecore Medical Partnership

Monty Sikka

Founder, Director and Chair – Sun Pharm

Brar Bioceutical Corp.

Rick Brar

Founder and CEO – Sun Pharm

Nuovo Enterprises Ltd.

Kevin Coft

Chief Facilities Officer – Sun Pharm

C.G.M. Ventures Inc.

Leo Benne, Jack Benne, John Hoekstra

Directors – Bevo

Leo Benne

Leo Benne

Manager, Secretary and

Director – Bevo

John Hoekstra

John Hoekstra

Chief Financial Officer – Bevo

_______________________

1 

Zenabis will have 186,742,840 shares outstanding after giving effect to the reverse takeover (assuming full exercise of Sun Pharm Warrants prior to completion of the RTO)

The Pooling Agreement represents the combined commitment of the Applicable Shareholders to the generation of long-term value for Zenabis following completion of the RTO Transaction.

On completion of the RTO Transaction, certificates (the “Certificates”) representing the Pooled Securities shall be delivered to the Pooling Agent. The Pooled Securities will be held by the Pooling Agent and released, on a pro rate basis to each Depositing Party, in accordance with the dates below (together, the “Release Dates”).

 

Release Dates

Percentage of Total
Pooled Securities to be
Released

(a)

On the date that is 1 month after the Closing Date

1.0%

(b)

On the date that is 2 months after the Closing Date

1.0%

(c)

On the date that is 3 months after the Closing Date

1.0%

(d)

On the date that is 4 months after the Closing Date

7.5%

(e)

On the date that is 5 months after the Closing Date

7.5%

(f)

On the date that is 6 months after the Closing Date

7.5%

(g)

On the date that is 7 months after the Closing Date

7.5%

(h)

On the date that is 8 months after the Closing Date

7.5%

(i)

On the date that is 9 months after the Closing Date

7.5%

(j)

On the date that is 10 months after the Closing Date

8.7%

(k)

On the date that is 11 months after the Closing Date

8.7%

(l)

On the date that is 12 months after the Closing Date

8.7%

(m)

On the date that is 13 months after the Closing Date

8.7%

(n)

On the date that is 14 months after the Closing Date

8.7%

(o)

On the date that is 15 months after the Closing Date

8.5%

TOTAL

100.00%

Pooled Securities may only be transferred given board approval, transferee acceptance to be bound by the pooling agreement, and no violation of the terms of any TSXV escrow and Seed Share Resale Restrictions imposed by the TSXV. The Depositing Parties acknowledge that the Pooled Securities may also be subject to escrow or Seed Share Resale Restrictions imposed by the TSXV and may result in a restriction of sale of Pooled Securities. The Pooling Agreement does not restrict Applicable Shareholders from each exercising the voting rights attached to their Pooled Securities.

Through Sun Pharm’s subsidiary licensed producer Zenabis Ltd., Zenabis Global Inc. has lands and premises available that would support conversion of, or construction of, nearly 3.5 million square feet of cannabis production space.2Completion of the Bevo-Sun Pharm Transaction remains subject to receipt of shareholder and all required regulatory approvals.

_______________________

2 

If all available space is constructed and converted for cannabis production.

Zenabis Key Milestones

  • On October 4, 2018 Bevo and Sun Pharm announced the Bevo-Sun Pharm Transaction and the intent of Bevo to change its name to Zenabis Global Inc. upon completion
  • On October 5, 2018, Zenabis released a presentation introducing the combined business
  • As of December 21, 2018, Zenabis has secured purchase orders from government and third party retailers/distributors in New BrunswickNova ScotiaBritish Columbia, and the Yukon Territory

About Bevo Agro
Bevo Agro is North America’s leading supplier of propagated agricultural plants, operating approximately 53 acres of state-of-the-art greenhouse facilities on 98 acres of land in Langley, BC and 20 acres of land in Pitt Meadows, BC. The company has entered into a binding agreement to acquire 10.4 acres of greenhouse space on 50 acres of land in Aldergrove, British Columbia (the “Greenhouse Acquisition”). The Company’s main products have been the propagation of vegetable plants such as tomatoes, peppers, cucumbers, and other plants such as bedding plants, flowers and grasses. The Company markets its products to established greenhouse growers, nurseries and retail outlets throughout North America. Zenabis intends to convert the Bevo Langley greenhouse (2.1 million square feet) by March 2020. Zenabis will build and/or acquire additional propagation greenhouse space over the coming year in order to maintain all of Bevo’s current food/floral propagation capacity while the current Langley facility is being converted.

About Sun Pharm
Sun Pharm has significant experience in agriculture, technology, pharmaceutical sales, consumer packaged goods, international distribution and brand marketing, with cannabis and cannabis-related purchase orders from the provinces of New BrunswickBritish ColumbiaNova Scotia, and Yukon Territory.  Sun Pharm is currently a privately-held cannabis company which has one of the largest, federally licensed indoor medical cultivation footprints in Canada, operating two licensed production facilities in British Columbia and New Brunswick, with a third expected to be coming online shortly in Nova Scotia. These facilities encompass 660,000 square feet of indoor pharmaceutical grade cannabis production space, strategically positioned on Canada’s coasts, facilitating national distribution and access to international markets. Sun Pharm is currently working towards globally recognized EU GMP certifications.  Sun Pharm has a management team with decades of experience in the industry, with expertise in retail consumer packaged goods, global pharmaceutical sales and manufacturing, quality assurance, and commercialized cultivation. The growing team has more than two decades of experience in organic cultivation and distribution of herbs and nutraceutical products throughout the Americas, North Africa, and the Middle East.  Sun Pharm’s sales team has more than two decades in product development, commercialization, and retail and pharmaceutical sales including international distribution.

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 Bevo, Sun Pharm or 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, including the completion of the Transaction. 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 Bevo and Sun Pharm’s control. These risks, uncertainties and assumptions include, but are not limited to, those described Bevo’s Management’s Discussion & Analysis for the fiscal year ended June 30, 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. Furthermore, any forward-looking information with respect to available space for cannabis production is subject to the qualification that management of Zenabis may decide not to use all available space for cannabis production, and the assumptions that any construction or conversion would not be cost prohibitive, required permits will be obtained and the labour, materials and equipment necessary to complete such construction or conversion will be available. Bevo and Sun Pharm do not intend, nor do either Bevo or Sun Pharmundertake 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.