Canadian Cannabis Corp.
OTCQB : CCAN

Canadian Cannabis Corp.

January 07, 2015 08:30 ET

Canadian Cannabis Corp. to Acquire Controlling Interest in Novo Healthnet

TORONTO, ONTARIO--(Marketwired - Jan. 7, 2015) - Canadian Cannabis Corp. ("CCAN" or "The Company") (OTCQB:CCAN), is pleased to announce that it has entered into a Letter of Intent ("LOI") dated January 6, 2015 to acquire sixty-one percent (61%) of Novo HealthNet ("Novo") in exchange for two million (2,000,000) common shares of The Company. The purchase shall be entirely paid through the issuance of CCAN common shares. The transaction represents an approximate 1.0 x revenue payment of 2,000,000 shares x $4.80 USD per share for a total of $9,600,000 United States Dollars (USD), approximately, $11,228,160 Canadian Dollars (CAD). The Company has engaged the audit firm BDO Canada to complete a review of the financials of Novo and has completed all other initial due diligence. The transaction is expected to close on February 12, 2015.

Novo has been successfully providing treatment solutions for patients as well as assessment and diagnostic services across Canada since 1996. Novo is the consolidation of Physiomed Peak, Peak Health, Back on Track and HealthNet Assessments Inc. Wholly-owned subsidiaries of Novo hold the following operating divisions:

  • Novo owns 14 multidisciplinary clinics and a network of 28 affiliate clinics and 3 partner clinics in the provinces of Ontario, Nova Scotia and Newfoundland;
  • Novo Peak Health Inc. operates Ontario Health Insurance Plan (OHIP), funds physiotherapy clinics, and serves the retirement and long term care homes of Physiomed Peak and Peak Health; and
  • Novo Assessments Inc. provides Independent medical evaluations for insurers, lawyers and employers.

Novo is a preferred provider within several insurance company networks. In 2013, Novo achieved its three-year re-accreditation for all its clinics through the North American standards of the Commission on Accreditation for Rehabilitation Facilities (CARF). Accreditation is a seal that ensures quality, safety and the best outcomes for its programs, services, and patients. Novo clinics are affiliated with the department of Physical Therapy at The University of Toronto and McMaster University for their residency programs.

The following table sets out a selection of relevant unaudited financial results for Novo and do not include any revenue from affiliate or partner clinics:

Year Ended August 30, 2014:

Revenue: $10,151,000.00 Canadian Dollars (CAD) approximately $8,737,305 United States Dollars (USD)

Year Ended August 30, 2013:

Revenue: $7,956,000 Canadian Dollars (CAD), approximately $6,847,995 United States Dollars (USD)

"The acquisition of a controlling interest in Novo Healthnet and its 45 clinics across the country provides shareholders of Canadian Cannabis Corp. with an established business and a stake in the third largest preferred provider network of multidisciplinary rehabilitation clinics in Canada," said Canadian Cannabis Corp. CEO Benjamin Ward. "With an experienced management team, solid track record of value creation for its owner operators, and potential future downstream distribution capability for therapeutic Medicinal Marijuana, we are excited for the opportunity to move forward and integrate Novo, their CEO Kim Wei, and his team with our company."

Canadian Cannabis Corp. has applied to Health Canada to become a producer of Medical Marijuana under the MMPR Legislation.

Cautionary Note Regarding Forward-Looking Statements

Safe Harbor:

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (The "Act"). In particular, when used in the preceding discussion, the words "pleased," "plan," "confident that," "believe," "expect," or "intend to," and similar conditional expressions are intended to identify forward-looking statements within the meaning of the Act and are subject to the safe harbor created by the Act. Such statements are subject to certain risks and uncertainties and actual results could differ materially from those expressed in any of the forward-looking statements. Such risks and uncertainties include, but are not limited to, market conditions, competitive factors, the ability to successfully complete additional financings and other risks described in the Company's SEC reports and filings.

About Canadian Cannabis Corporation:

Using an education and research focused platform targeted at healthcare providers and patients, Canadian Cannabis Corporation (CCC) will provide the highest quality medical marijuana to help manage a range of specific medical conditions and helps patients obtain their monthly prescription in a simple, seamless and transparent way. Where other Canadian marijuana growers are struggling with quality control and repeated recalls, CCC has the team and systems in place ensure the highest quality for its future patients. CCC is an innovator in the sector with globally recognized experts forming a core of its team including the first federally licensed grower in the United States.

http://canadiancannabiscorp.com/

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