BevCanna Announces Definitive Agreement to Acquire Embark Health Inc.

Acquisition of solventless hashish extraction and enhanced supply expertise bolsters the corporate’s beverage portfolio with helpful IP, including 4 progressive manufacturers within the adult-use hashish market and $17M in property to the steadiness sheet

VANCOUVER, British Columbia, September 20, 2021–(BUSINESS WIRE)–Rising chief in progressive well being and wellness drinks and merchandise, BevCanna Enterprises Inc. (CSE:BEV, Q:BVNNF, FSE:7BC) (“BevCanna” or the “Firm”) declares at this time that it has entered right into a definitive settlement dated September 19, 2021 (the “Settlement”) to amass Embark Health Inc. (“Embark”).

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Embark has in depth manufacturing and mental property (“IP”) property associated to high-end solventless hashish extracts, reminiscent of bubble hash, conventional pressed hash, rosin, dry sift and its progressive and best-selling Hazel Hash Stick. Embark can be geared up to provide a spread of hashish concentrates, liquid and powder beverage mixes, topicals and edible merchandise. With 4 adult-use manufacturers, throughout all three hashish 2.0 product classes, within the Canadian market that characteristic the solventless and enhanced supply, Embark boasts an entire adult-use product providing that features drinks, topicals, solventless extracts and hash. Embark can be the bulk proprietor of ProteinQuest, which applies Embark’s progressive and proprietary expertise to the protein-enhanced and purposeful meals industries with preliminary business merchandise using hemp seed, positioning it for additional development within the well being and wellness business.

“The acquisition of Embark considerably accelerates BevCanna’s evolution right into a diversified well being and wellness firm,” mentioned John Campbell, CFO of BevCanna. “Our distinctive and various portfolio will now embody a good broader vary of adult-use and wellness channels and progressive product classes. The acquisition will unlock important worth for each organizations and brings collectively two exceptionally skilled groups, forming one of the various and progressive well being and wellness corporations within the business.”

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Deal Highlights:

• The acquisition is accretive for BevCanna, and the mixed entity may have over $100M in property on the steadiness sheet.

• Provides a singular vary of helpful manufacturers, throughout all three hashish 2.0 classes, that allows BevCanna to promote differentiated and complementary adult-use and wellness merchandise.

• Provides a state-of-the-art manufacturing facility in Delta, BC, with ~$17M¹ in tangible & intangible property together with direct possession of $11M¹ in gear.

• Deemed worth represents a 33% premium to the amount weighted common buying and selling worth of the BevCanna Shares on the CSE for the 5 buying and selling days previous the date of this announcement.

• Gross income totaled $790,000 and roughly 65% gross margin for the final three months of economic manufacturing.

• Bolsters beverage portfolio with the addition of proprietary nanotechnology and speedy onset supply expertise for beverage, topical and edible merchandise, permitting BevCanna to vertically combine its provide for choose in-house and white-label purchasers.

• Provides progressive solventless extraction expertise that allows BevCanna to supply hash, bubble hash, dwell rosin and different extremely sought-after adult-use hashish merchandise.

• Provides world class administration and operations workforce members who’re pioneers in hashish, extraction, and drug supply expertise, together with:

  • Bruce Dawson-Scully, Founder and Chief Government Officer of WeedMD (TSXV:ENTG)

  • Marcus “Bubbleman” Richardson, greatest identified for being the founding pioneer of bubble hash

  • Michael West, international extraction knowledgeable who has developed, designed, and constructed over a dozen world class extraction amenities for corporations reminiscent of Cresco Labs (CSE:CL)

  • Curtis Leifso, knowledgeable in enhanced bioavailability drug supply expertise

• Diversifies the enterprise between hashish and wellness with an emphasis on cutting-edge expertise and excessive development product classes.

• Allows cross-utilization of current licenses, together with Well being Canada issued adult-use gross sales license that offers BevCanna the flexibility to promote its merchandise on to provincial distribution boards throughout Canada. Its Well being Canada-issued medical gross sales license permits for expanded distribution of direct-to-customer. A analysis and growth sensory license additionally permits speedy product growth with its current and future white-label business companions.

• Publicity to the protein-enhanced and purposeful meals business with majority possession of ProteinQuest, which focuses on producing a variety of proprietary hemp seed derived protein powders, cooking oils, and drinks.

Embark Services:

The acquisition of Embark additionally contains two world-class manufacturing amenities that collectively deliver over $17M¹ in tangible and intangible property, together with $11M¹ in state-of-the-art gear and nanotechnology IP.

1. Embark Delta is a 40,000 sq. ft. facility, purpose-built to GMP customary. Embark Delta is federally licensed and is actively producing concentrates, beverage mixes and topicals. It produces solventless concentrates for B2B contract manufacturing provide agreements and white-label providers, in addition to Embark-branded merchandise on the market to provincial boards for adult-use leisure markets and medical markets. Embark Delta is centrally positioned in decrease mainland British Columbia and offers turn-key and scalable development capability by way of decreased outsourced hashish secured/licensed storage, transport charges, manufacturing, packaging, and labelling.

2. EmbarkNano is a 4,600 sq. ft. facility positioned in Calgary, Alberta. Devoted to the manufacturing of nano precursors, in addition to supply expertise analysis and growth on nano merchandise, EmbarkNano is concentrated on manufacturing completed merchandise from the “non-controlled” precursors produced in Calgary. EmbarkNano just isn’t licensed underneath Hashish Laws and there’s no plan right now to license this facility.

Embark Manufacturers

1. Distilled and Infused – Liquid and powder beverage mixes
   One of the crucial versatile and accessible infused beverage choices, Embark’s Distilled and Infused beverage mixes are supplied in liquid and powder codecs, with a powder line to be launched in early 2022. The underlying expertise may be utilized to varied well being and wellness merchandise.

2. The Hazel Hash Stick – Disruptive focus product
   Embark holds the unique and worldwide license to this product, which is the first-of-its-kind within the Canadian market. Initially created within the British Columbian inside by two passionate hash advocates, Embark is now increasing manufacturing capability to maintain up with surging demand.

3. The Hank Hash – Prime quality, accessible concentrates
   Crafted by Marcus Richardson, an internationally acknowledged determine within the hashish business, The Hank line of concentrates is formulated to cater to a devoted and passionate buyer base. Mr. Richardson’s substantial advertising attain has additionally generated important demand for licensing and partnership agreements by worldwide companions for the Embark line of merchandise.

4. Meridian Co. – Topicals infused with proprietary pharmaceutical supply expertise
   One other first-of-its-kind product, the Meridian topical line integrates supply expertise that permits lively components to cross by way of dermal layers and permits for a real systemic absorption of cannabinoids. The supply expertise just isn’t restricted to cannabinoids however has broad purposes for different medication and APIs throughout the well being and wellness and pharmaceutical markets.

5. ProteinQuest – Hemp seed derived protein powders, oils, and drinks by way of novel strategies
   These strategies ship a singular powdery white protein and golden oil with the important thing advantages of hemp seed however with out lots of the drawbacks.

¹ Unaudited

The Transaction

The Settlement is amongst Embark Well being Inc., an arm’s size privately held company, 1323977 B.C. Ltd. (“Subco”), a wholly-owned subsidiary of BevCanna, Bruce Dawson-Scully, in his capability as shareholder consultant and never in his private capability, and sure shareholders of Embark, pursuant to which BevCanna will purchase the entire issued and excellent securities of Embark (every an, “Embark Safety”) by the use of a three-cornered amalgamation (the “Transaction”). Upon completion of the Transaction, Embark will turn into a wholly-owned subsidiary of BevCanna.

Pursuant to the Settlement, BevCanna will purchase the entire issued and excellent Embark Securities by the use of a “three-cornered” amalgamation (the “Amalgamation”) whereby Subco, a wholly-owned subsidiary of BevCanna, and Embark shall amalgamate pursuant to the provisions of the Enterprise Firms Act (British Columbia) to kind one company, which shall proceed underneath the title “Embark Well being Inc.”, as an entirely owned subsidiary of BevCanna.

Pursuant to the Amalgamation, on closing of the Transaction (“Closing”), BevCanna will, topic to customary closing changes, subject to holders (every, a “Embark Shareholder”) of frequent shares of Embark (every an “Embark Share”) an combination of 46,666,666 frequent shares of BevCanna (every a “BevCanna Share”, and such BevCanna Shares issued as consideration for the Transaction, the “Consideration Shares”) issued at a deemed worth of $0.45 per share, equal to combination consideration of $21,000,000. The deemed worth represents a 33% premium to the amount weighted common buying and selling worth of the BevCanna Shares on the CSE for the 5 buying and selling days previous the date of this announcement of roughly $0.34 per share. Along with the Consideration Shares, the Amalgamation offers for the issuance of most well-liked shares of BevCanna to every Embark Shareholder which entitle the holders to obtain earn-out funds of an combination of as much as $9,199,442, contingent upon Embark attaining as much as $92,178,280 EBITDA over the primary three accomplished monetary years following the Closing. The Consideration Shares will probably be topic to voluntary resale restrictions, with 1/12^th of the Consideration Shares being launched from the resale restriction on the final day of every month following Closing for a interval of 1 12 months. The earn-out funds will probably be made by the issuance of BevCanna Shares pursuant to conversion of the popular shares (at a fee equal to the then present 5-day VWAP), redemption of most well-liked shares for money, or a mix of each conversion and redemption, at BevCanna’s sole discretion. The Settlement additionally offers for a post-closing worth adjustment pursuant to which the online proceeds from the disposition of Embark’s facility in Woodstock Ontario will probably be distributed to Embark Shareholders if such disposition happens inside 18 months of Closing.

Completion of the Transaction stays topic to, amongst different issues: approval of the Canadian Securities Trade (the “CSE”); shareholder approval by Embark; and different circumstances that are customary for transactions of this nature.

All BevCanna Shares to be issued within the Transaction will probably be issued pursuant to an exemption from relevant securities legal guidelines. There will probably be no finder’s charges paid in reference to the Transaction.

This information launch doesn’t represent a suggestion to promote or a solicitation of a suggestion to purchase the securities described herein in the US. The securities described herein haven’t been and won’t be registered underneath the US Securities Act of 1933, as amended (the “Act”), or any state securities legal guidelines and is probably not supplied or bought in the US or to the account or good thing about a U.S. particular person absent an exemption from the registration necessities of such Act.

About Embark Well being Inc.

Embark Health Inc. is a pacesetter in solventless hashish extraction and enhanced supply expertise, with a concentrate on the formulation and manufacturing of superior 2.0 merchandise for the B2B, medical, and adult-use markets. Embark continues to be on the forefront of manufacturing of focus merchandise, together with bubble hash, conventional pressed hash, rosin, dry sift and the top-selling Hazel Hash Stick. Embark has additionally introduced best-in-class drink mixes with speedy onset and enhanced bioavailability to market, in addition to the market’s first topical product with true systemic absorption of cannabinoids. Embark merchandise are presently bought in BC, Alberta, Saskatchewan, Manitoba and Ontario.

Embark’s 40,000 sq ft Delta, BC-based facility is absolutely licensed for the manufacturing of concentrates, drinks, edibles and topicals. Embark’s medical gross sales license and analysis license bolster the progressive ecosystem attracting third-party manufacturers and white label purchasers.

About BevCanna Enterprises Inc.

BevCanna Enterprises Inc. (CSE:BEV, Q:BVNNF, FSE:7BC) is a diversified well being & wellness beverage and pure merchandise firm. BevCanna develops and manufactures a spread of alkaline, plant-based, and cannabinoid drinks and dietary supplements for each in-house manufacturers and white-label purchasers.

With many years of expertise creating, manufacturing and distributing iconic manufacturers that resonate with customers on a worldwide scale, the workforce demonstrates an experience unmatched within the nutraceutical and cannabis-infused beverage classes. Primarily based in British Columbia, Canada, BevCanna owns a pristine alkaline spring water aquifer and a world–class 40,000–sq.–foot, HACCP licensed manufacturing facility, with a bottling capability of as much as 210M bottles yearly. BevCanna’s in depth distribution community contains greater than 3,000 factors of retail distribution by way of its market-leading TRACE model, its Pure Therapy pure well being and wellness e-commerce platform, its absolutely licensed Canadian hashish manufacturing and distribution community, and a partnership with #1 U.S. hashish beverage firm Keef Brands.

Disclaimer for Ahead-Wanting Data

This information launch accommodates forward-looking statements. All statements, aside from statements of historic proven fact that handle actions, occasions or developments that the Firm believes, expects or anticipates will or could happen sooner or later are forward-looking statements. Ahead-looking statements on this information launch embody statements concerning: the potential synergies between the enterprise of BevCanna and Embark and the enterprise of the Firm following the Closing of the Transaction; the phrases of the Transaction, together with the consideration to be payable in reference to the Closing; the addition of sure Embark administration and operations workforce members to the Firm following the Closing of the Transaction; future product choices; and the Closing of the Transaction. The forward-looking statements mirror administration’s present expectations based mostly on info presently out there and are topic to various dangers and uncertainties that will trigger outcomes to vary materially from these mentioned within the forward-looking statements.

Though the Firm believes that the assumptions inherent within the forward-looking statements are cheap, forward-looking statements are usually not ensures of future efficiency and, accordingly, undue reliance shouldn’t be placed on such statements as a result of their inherent uncertainty. Elements that would trigger precise outcomes or occasions to vary materially from present expectations embody, amongst different issues: that the CSE could not approve the Transaction as proposed or in any respect; that the events could not be capable of fulfill the circumstances to Closing of the Transaction; normal market circumstances; dangers related to the COVID-19 pandemic; and different elements past the management of the events. BevCanna expressly disclaims any intention or obligation to replace or revise any forward-looking statements whether or not on account of new info, future occasions or in any other case, besides as required by relevant regulation, and the Firm doesn’t assume any legal responsibility for disclosure referring to some other firm talked about herein.

This information launch accommodates future-oriented monetary info and monetary outlook info (collectively, “FOFI”) about BevCanna’s anticipated enhance in property on a post-Closing foundation, all of that are topic to the identical assumptions, threat elements, limitations, and {qualifications} as set out within the above paragraphs. The precise monetary outcomes of BevCanna on a post-Closing foundation could range from the quantities set out herein and such variation could also be materials. BevCanna and its administration imagine that the FOFI has been ready on an affordable foundation, reflecting administration’s greatest estimates and judgments. Nonetheless, as a result of this info is subjective and topic to quite a few dangers, it shouldn’t be relied on as essentially indicative of future outcomes. Besides as required by relevant securities legal guidelines, BevCanna undertakes no obligation to replace such FOFI. FOFI contained on this information launch was made as of the date hereof and was supplied for the aim of offering additional details about BevCanna’s anticipated future enterprise operations on a post-closing foundation. Readers are cautioned that the FOFI contained on this information launch shouldn’t be used for functions aside from for which it’s disclosed herein.

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Contacts

On behalf of the Board of Administrators:
John Campbell, Chief Monetary Officer and Chief Technique Officer
Director, BevCanna Enterprises Inc.

For media enquiries or interviews, please contact:
Wynn Theriault, Thirty Sprint Communications Inc.
416-710-3370
wynn@thirtydash.ca

For investor enquiries, please contact:
Bryce Allen, BevCanna Enterprises Inc.
778-766-3744
bryce@bevcanna.com