TORONTO, ONTARIO--(Marketwired - June 30, 2016) - Abba Medix Group Inc. ("Abba" or the "Company") (CSE:ABA) is pleased to announce that it has executed a definitive agreement to acquire Marijuana For Trauma Inc. ("MFT") and The Longevity Project ("TLP").
Both MFT and TLP are focused on the promotion of health and wellness through a multiple step approach delivered through their wellness centres and clinics across Canada.
MFT is a Veteran owned and operated company whose mission is to improve the quality of life for anyone suffering from Post-Traumatic Stress Disorder (PTSD), Chronic Pain and other medical conditions. Since its inception, MFT has directly supported hundreds of Veterans across the country with first class service and care. MFT continues to provide a community environment for those engaged in the process of healing with a focus on support during the various steps of the program.
TLP, through their client services platforms, including its Plants Not Pills program, has provided resources to Canadians considering medical marijuana as an alternative to prescription medication. They have assembled a team of knowledgeable wellness consultants who guide and support clients in understanding safe and effective treatments for their conditions.
Anticipated as part of the acquisition, is the rollout of 'total' health clinics across Canada. Adhering to best clinical practices, patients of these clinics are properly medically managed and supported with services and products ancillary and adjuvant to Cannabinoid Therapy through integrated clinical offerings.
"We are thrilled to have both MFT and TLP join the Abba team," said Gerry Goldberg, Interim CEO of Abba. "This is a large step forward for the collective companies and we are looking forward to continuing to strengthen our business in the near term."
"At MFT, we feel the partnership with Abba and TLP accelerates MFT's ability to offer assistance to Veterans across Canada" said Mike Southwell, Vice President of MFT. "Having access to the capital markets will help us further establish nationwide Wellness Centres. Such centres are safe and welcome spaces for any Veteran who wishes to access them. These centres build upon the values fostered by The Canadian Armed Forces of brotherhood/sisterhood/family and camaraderie and will provide a platform from which we are able to assist all Veterans seeking support".
David Shpilt, President of TLP said, "The founders of MFT had a vision to provide dignified access to Cannabis Therapy to their Veteran brothers and sisters. This acquisition will enable us to take the next step forward beyond just cannabinoid therapy.
With the experienced and talented leadership teams that will be joining forces,, I believe we are creating one of the strongest organizations in Canada whose goal is to help provide much needed treatments to our patient populations".
Terms of the acquisition
Through the acquisition, the vendors of MFT and TLP, collectively, will be issued shares (the "share consideration") amounting to approximately 66% of the issued and outstanding common shares of Abba Medix Group immediately post-acquisition (non-diluted and prior to giving effect to the concurrent financing). The common shares for this transaction will be issued from treasury and will be broken down as follows: MFT will be issued 51% of the corporation in common shares and TLP will be issued 15% of the issued and outstanding shares. The purchase price also includes approximately $4 million in cash consideration. The share consideration and cash consideration will be released to the vendors over a period of three years from closing, subject to acceleration upon the Clinical Wellness business achieving certain performance targets.
The acquisition is expected to close in September 2016 and is subject to a number of conditions, including (i) the completion of a minimum $5 million concurrent private placement financing (the terms of which will be disclosed in a separate news release), (ii) approval by the shareholders of Abba of the acquisition and certain related matters at a special meeting to be called for these purposes, (iii) there being no material adverse change in the business of Abba, MFT or TLP (as applicable) prior to closing, and (iv) applicable regulatory approvals including the approval of the CSE.
A copy of the definitive purchase agreement will be available under Abba's SEDAR profile at www.sedar.com, and further details of the acquisition will be included in an information circular to be distributed to shareholders in connection with the special meeting of Abba shareholders.
The acquisition constitutes a "fundamental change" within the meaning of CSE policies, and therefore, the shares of Abba have been halted from trading and are expected to remain halted until the CSE has issued its conditional approval for the acquisition and related transactions.
The acquisition of TLP may constitute a "related party transaction" within the meaning of applicable securities law on the basis that David Shpilt, a director of Abba, is also a significant shareholder of TLP. The transaction was unanimously approved by the disinterested members of the Abba board, with Mr. Shpilt having declared his interest and recused himself from voting.
Special meeting of shareholders
Abba intends to call a special meeting of its shareholders in order to vote upon the acquisition and a number of related proposals, including:
- Proposed consolidation of the outstanding common shares on the basis of one new common share for every 1.5 old common shares
- Expansion of the Company's board to seven directors, expected to consist of current Abba directors Gerry Goldberg, Brad Rogers and David Shpilt, Mike Southwell, CEO of MFT, Edwin Corey, C.A. and Strategic Advisor to MFT, and two independent directors to be named
About Abba Medix Corp.
Abba Medix Group Inc. (CSE:ABA) is the parent company of Abba Medix Corp. In compliance with Health Canada's regulations, the company's goal is to become a marketplace leader through strategic partnerships, mergers, and acquisitions to create a fully integrated medical marijuana marketplace. Abba's mission is to find, acquire or create joint venture opportunities in patient focused medical marijuana related companies, products, organizational events, sponsorships, educational training, and research and development within medical marijuana sector. For more information please visit www.abbamedix.com.
Cautionary Statements Regarding Forward-Looking Information
Certain statements within this press release relating to the Company constitute "forward-looking statements", within the meaning of applicable securities laws, including without limitation, statements regarding future estimates, business plans and / or objectives, sales programs, forecasts and projections, assumptions, expectations, and/or beliefs of future performance, are "forward-looking statements". Such "forward-looking statements" involve known and unknown risks and uncertainties that could cause actual and future events to differ materially from those anticipated in such statements. These risks and uncertainties relate to, among other things, to the Company's historical experience with medical marijuana operations, regulatory changes, timeliness of government approvals for the granting of permits and licenses, changes in medical marijuana prices, actual operating performance of facilities, risks associated with completion of the acquisition, including the availability of sufficient financing to complete the acquisition and fund the business of the combined company, other risks relating to the roll-out and intended expansion of a clinical wellness business, business integration risks, competitive risks, and other risks relevant to the medical marijuana and clinical wellness industries in general and to the Company in particular. Certain of these risks are disclosed in the Company's public filings at www.sedar.com and/or will be disclosed in the information circular to be filed in connection with the Company's anticipated special meeting of shareholders. The Company assumes no responsibility to update or revise forward-looking information to reflect new events or circumstances unless required by law. There can be no assurance that Abba Medix's medical marijuana license application will be approved by Health Canada, nor that the proposed acquisition will be successfully completed on the terms or within the timeline contemplated above or at all. Neither the CSE nor its Regulation Services Provider (as that term is defined in the policies of the CSE) accepts responsibility for the adequacy or accuracy of this release.