TORONTO, ONTARIO--(Marketwired - Nov. 7, 2016) - Canada House Wellness Group Inc. (formerly Abba Medix Group Inc.) ("Canada House") or the ("Company") (CSE:ABA)(CSE:ABA.CN)(CNSX:ABA) is pleased to announce that it has closed its previously announced acquisition (the "Acquisition") of 672800 NB Inc. doing business as Marijuana for Trauma ("MFT") and The Longevity Project Corp. ("TLP"). In connection with the closing of the Acquisition, the net proceeds of the Company's previously announced private placement in support of the Acquisition (the "Offering") have been released to the Company from escrow, and the Company has completed a consolidation (the "Consolidation") of its common shares on the basis of one and one half (1.5) pre-Consolidation common shares to one (1) post-Consolidation common shares, and changed its name from Abba Medix Group Inc. to Canada House Wellness Group Inc. (the "Name Change").
The Acquisition
On June 15, 2016, the Company entered into a share exchange agreement to acquire all of the issued and outstanding shares of MFT and TLP. In consideration, the Company paid $250,000, issued common shares to the shareholders of MFT and TLP, in the aggregate, representing approximately 66% of the Company's issued and outstanding common shares from treasury on a post-Consolidation basis (the "Consideration Shares") prior to giving effect to the Offering, and will pay an additional $4,000,000 in cash earn-out payments. The release of the Consideration Shares to the vendors is subject to a contractual escrow dependent on the achievement of certain EBITDA targets.
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, chronic pain and/or other medical conditions. MFT does not currently grow or distribute cannabis. MFT provides services to assist their clients in accessing a Licensed Producer (as such term is defined in the Access to Cannabis for Medical Purposes Regulations ("ACMPR")), identifying appropriate strains, and consulting and supporting clients regarding the use of medical cannabis. Since its inception, MFT has directly supported thousands 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 its client services platforms, including its "Plants Not Pills" program, has provided resources to Canadians considering medical marijuana as an alternative to traditional pharmaceuticals. They have assembled a team of knowledgeable wellness consultants who guide and support clients in understanding safe and effective treatments for their conditions.
Together, MFT and TLP operate 12 wellness centers and have registered a total of approximately 9,500 clients to-date across all client platforms.
Anticipated as part of the Acquisition is the rollout of 'total' wellness centers across Canada. Adhering to best clinical practices, patients of these centers are properly medically managed and supported with services and products ancillary and adjuvant to cannabinoid therapy through integrated clinical offerings.
The Company will also continue to pursue licensing under the ACMPR through its wholly owned subsidiary Abba Medix Corp.
The Acquisition constitutes a "fundamental change" within the meaning of the Canadian Securities Exchange ("CSE") policies. In connection with the Acquisition, the Company is required to file a CSE Form 2A Listing Statement (the "Listing Statement"). More information about the Acquisition, as well as additional disclosure about MFT and TLP, can be obtained from the Company's Listing Statement to be filed on SEDAR at www.sedar.com.
The Financing
On September 6, 2016 the Company announced the closing of the Offering for gross proceeds of $6,025,000 in support of the Acquisition. The Offering consisted of 19,001,000 equity units (the "Equity Units") and 1,275 debenture units (the "Debenture Units").
Each Equity Unit is comprised of: (i) one common share of the Company; and (ii) one common share purchase warrant of the Company (a "Warrant"). Each Warrant shall be exercisable into one common share of the Company at an exercise price of $0.40 for a period of twenty-four (24) months from the issuance of the Warrant.
Each Debenture Unit is comprised of: (i) $1,000 principal amount of 8.5% secured convertible debentures ("Convertible Debentures") in the capital of the Company with a maturity date ("Maturity Date") of 48 months from the date of issuance; and (ii) 1,000 detachable common share purchase warrants of the Company (each, a "CD Warrant"). Each Convertible Debenture shall be convertible at the holder's option into fully-paid common shares of the Company (each, a "CD Share") at any time prior to the Maturity Date at a conversion price of $0.40 per CD Share, being a ratio of 2,500 CD Shares per $1,000 principal amount of Convertible Debentures. Each CD Warrant shall be exercisable into one common share of the Company (each, a "CD Warrant Share") at a price of: (a) $0.40 per CD Warrant Share between the date the escrow release conditions are met (the "Escrow Release Date") and the date that is 24 months from the Escrow Release Date; (b) $0.75 per CD Warrant Share between the date that is 24 months from the Escrow Release Date and the date that is 36 months from the Escrow Release Date; and (c) $1.00 per CD Warrant Share between the date that is 36 months from the Escrow Release Date and the Maturity Date.
Name Change and Consolidation
In connection with the Acquisition, at a special meeting of shareholders of the Company on October 18, 2016, resolutions authorizing the Name Change and Consolidation were overwhelmingly approved by shareholders.
New Board and Management
Effective on the closing of the Acquisition, Georges Durst, Richard Vallee, and Michael Boucher resigned from the board of directors of the Company (the "Board"). The Company wishes to thank the former Board members for their service and dedication.
Mike Southwell, Edwin Corey and Nicole Ferris were named to the Board, joining current directors Gerry Goldberg, Brad Rogers, and David Shpilt.
In connection with the closing of the Acquisition, the Company entered into employment and non-competition agreements with Fabian Henry, Mike Southwell, David Shpilt and Scott Fitzgerald.
The officers of the Company consist of Gerry Goldberg (Interim Chief Executive Officer), Mike Johnston (Chief Financial Officer), David Shpilt (Vice-President of Clinical Business Development), Fabian Henry (President and Founder of MFT) and Mike Southwell (Vice-President and Founder of MFT).
Please refer to the Listing Statement for selected biographical details.
The Company has granted a total of 5.1 million options to certain of its directors, officers and employees, each entitling the holder to acquire one common share at an exercise price of $0.25 for a period of 5 years from the grant date.
CSE Listing
The Company has obtained conditional approval to list its common shares on the CSE, under the new name and ticker symbol (CHV). The common shares are expected to begin trading on the CSE at the opening of markets on Wednesday November 9, 2016.
Transmittal Letter
Shareholders will receive a letter of transmittal (the "Letter of Transmittal") which will need to be duly completed and submitted by registered shareholders wishing to receive share certificates reflecting the Name Change and the post-Consolidation common shares to which he, she or it is entitled to receive. The Letter of Transmittal can be used for the purpose of surrendering certificates representing the currently outstanding common shares to the Company's registrar and transfer agent in exchange for new share certificates reflecting the Name Change and the whole post-Consolidation common shares of the Company. Currently issued share certificates reflecting the current name of the Company and pre-Consolidation common shares of the Company will (i) not constitute good delivery for the purpose of trades following the Name Change and post-Consolidation common shares; and (ii) be deemed for all purposes to represent the number of post-Consolidation common shares to which the Shareholders are entitled as a result of the Consolidation. No delivery of a new certificate to a shareholder will be made until the shareholder has surrendered his, her or its current issued certificates.
Issued and Outstanding
Following completion of the Acquisition, Consolidation, and Offering, there are 116,384,067 issued and outstanding common shares on a non-diluted basis, and 166,954,028 common shares on a fully diluted basis.
Canada House Wellness Inc.
Canada House is the parent company of MFT, TLP, and Abba Medix Corp. The Company's goal is to become a marketplace leader through strategic partnerships, mergers, and acquisitions to create a fully integrated medical marijuana marketplace. For more information please visit www.abbamedix.com, www.mftgroup.ca and www.plantsnotpills.ca.
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 cause actual and future events to differ materially from those anticipated in such statements. Forward-looking could statements include, but are not limited to, statements with respect to the anticipated effects of the Acquisition, regulatory changes, timeliness of government approvals for the granting of permits and licenses, including the final approval to resume trading on the CSE, changes in medical marijuana prices, actual operating performance of facilities, competition and other risks affecting the Company in particular and the medical marijuana industry generally, including those set out in the Listing Statement. The Company assumes no responsibility to update or revise forward-looking information to reflect new events or circumstances unless required by law. 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.
Contact Information:
Gerry Goldberg
Interim Chief Executive Officer
1-844-696-3349