Allied Corp. Announces Corporate Update
KELOWNA, British Columbia, March 12, 2020 (GLOBE NEWSWIRE) — Allied Corp. (“Allied” or the “Company”) (OTCQB: ALID), an international medical cannabis company focused on creating and providing targeted cannabinoid health solutions to address today’s medical issues, has employed a multi-vertical focus to establish a comprehensive approach for sufferers of post-traumatic stress disorder and cognitive trauma.
Allied Corp. is making important strides forward to position itself as a leader in the medical cannabis space.This update is organized into six categories: Production, Pharmaceutical, Natural Health, Allied Charitable Foundation, Financing and Strategy.ProductionAs a licensed producer (LP) of cannabis for medical and research applications, Allied is leveraging the ideal conditions in our Colombia grow operation and our future Kelowna location to support our Research and Development efforts. To date, Allied has registered a seed bank in excess of 3,000 indigenous seeds, including 22 different landrace varieties and 167 hybrids from around the world.Under the Colombian regulations, Allied has plants growing under national licensure and the plant varieties are well into their growth life cycle. Allied has developed more than 80 Good Manufacturing Practice (GMP) and Good Production Practices (GPP) cultivation, production, sanitation and extraction Standard Operating Protocols (SOPs) to produce cannabis and hemp oil for future export and development.Pharmaceutical On September 23, 2019, Allied announced the filing of its first United States Provisional Patent Application for Cannabinoid and Terpenoid Pharmaceutical Compositions and Methods for Treating Post-Traumatic Stress Disorder (PTSD).This marks the first of a series of proposed filings, along with recent trademark filings, as part of the Company’s Intellectual Property and Pharma Development (IP&PD) Strategy. This Pharma Development Strategy includes developing products that serve those suffering from mental health issues, with a specific focus on symptoms related to PTSD.Natural Health Allied recently announced the signing of a non-binding letter of intent between Hollister Biosciences Inc. (“Hollister”) and Allied Corp. affiliate Tactical Relief, LLC (“Tactical Relief”) with respect to the joint development and introduction of TACTICAL RELIEF™ branded products. Tactical Relief, LLC is an affiliate U.S. entity that licenses from Allied Corp. the Intellectual Property associated to the marketing and sale of Tactical Relief™ branded products. In addition to the licensing, Allied receives a licensing fee in exchange for the IP and funding of certain marketing activities. These products are intended to be initially distributed to the California market which is anticipated to commence April 1, 2020. All products in the line are expected to provide veterans and first responders with natural alternatives that are intended to ease symptoms related to health issues symptomatic of post-traumatic stress. An estimated 5% of net profits of all sales will be donated to charity.Tactical Relief and Hollister intend to design and produce an everyday premium TACTICAL RELIEF™ branded CBD/THC product line. The first stock keeping unit (SKU) is expected to be a 20:1 CBD/THC 30ml tincture with a total of 1,000 mg of cannabinoids. Allied has plans to increase this product offering by bringing to market additional SKU’s under TACTICAL RELIEF™.Onto Allied’s second brand: MaXXa™. The first shipment of commercial “Cannabis Sativa Leaf Extract” skincare products to CBD Group Asia Ltd. (“CDB Asia”) were shipped on January 28, 2020 across the Chinese market. The product line, called MaXXa, is an Allied brand focused on bringing high-quality skincare products that promote vitality and youthfulness to the Asian consumer. Using a special formula including infused-hemp, MaXXa™ is looking to make a large impact in the Asian market as one of the first companies to deliver a Canadian-formulated and designed skincare line. The first products initially rolled out will be a cosmetic facial cream and an “anti-aging” serum, with additional products currently in development for future release.This shipment included a total of 120 total units encompassing 20 units for every six unique product SKUs. This agreement leverages CBD Asia’s capabilities to distribute Allied’s CBD-based cosmetics and natural health products into China, Hong Kong and throughout Asia in a 50:50 joint venture.CBD Asia specializes in the importation and customization of premium Canadian consumer packaged goods (“CPGs”) for the Chinese marketplace. The company’s vast network is expected to be utilized to distribute premium Canadian CPGs into China’s largest retail chains and stores, including RT-Mart International Ltd and Carrefour SA. Noting that Carrefour SA sells into 210 hypermarkets and 24 convenience stores in 51 cities. RT-Mart operates 484 retail locations covering 233 cities and 29 provinces in China. Additionally, CBD Asia is expected to be marketing and selling Allied CBD products through e-commerce and we-chat sales channels. The joint venture with CBD Asia is subject to the parties’ entry into a definitive agreement and obtaining any required third party consents and applicable regulatory approvals. The parties are currently operating under the terms of the letter of intent.Allied Charitable FoundationThe Allied Charitable Foundation (“ACF”) is pleased to offer healing retreats for Veterans and First Responders working with Post Traumatic Stress Disorder (“PTSD”). In these retreats, Veterans and First Responders experience evidence-based healing modalities such as therapeutic drumming, iRest Meditation, Yoga and Shinrin-Yoku nature therapy. Through financial support from corporate sponsor Allied Corp., these retreats are offered free of charge to Veterans and First Responders. ACF is partnering with veteran-led organizations to offer healing programming between retreats to increase community outreach and cohesion following retreats. ACF is also teaming up with Dr. Anna Baranowsky from the Traumatology Institute in Toronto, Ontario, to offer follow-up support through our online community and whatisptsd.com’s seven-week online, self-guided trauma recovery program. We look forward to a spring of new and deepened connections with the Veteran and First Responder communities across Canada as we extend our partnerships beyond healing retreats. FinancingThe Company is pleased to announce that it has closed a non-brokered private placement of two convertible secured notes for aggregate proceeds of US$600,000. The Company intends to use the net proceeds of the offering to further advance its interest in Colombia and at its future Kelowna production facility in British Columbia. A portion of the funds will also be for general working capital purposes. This offering allows the Company to advance its interest in production facilities while maintaining and protecting shareholder value.Terms of the convertible notes include the following:Gross proceeds of $US600,000.Sold at an origination discount of 2% to face value.Maturity date of 179 days from the date of issuance (the “Maturity Date”) and bear interest at 10% per annum, with a minimum of six months interest.At the option of the holder, the notes are convertible into shares of common stock of Allied at any time prior to the close of business on the last business day immediately preceding the maturity date at a conversion price of $1.25 per common share.The purchasers of the convertible notes also received one share purchase warrant for each $2.50 principal amount of convertible notes purchased to purchase one share of common stock for $1.25 per share for a period of one year from the date of issuance. A total of up to 240,000 share purchase warrants may be issued in connection with the exercise of the conversion rights under the notes.The Company may pre-pay the principal amount and any unpaid interest or any portion thereof at any time and from time to time without notice, further interest, bonus or penalty provided, however, that a minimum of six months interest is payable from the date of closing regardless of such repayment date.At the option of the noteholder, upon closing of any equity based financing for the Company, the note holder may require the Company to redeem the convertible note (to the extent available as net proceeds from any such financing) through repayment of any and all principal amount remaining due together with any accrued but unpaid interest, without further interest, bonus or penalty provided, however, that a minimum of six months interest is payable from the date hereof through such redemption date.The Company granted to the noteholders a security interest in all of the Company’s assets pursuant to the terms of general security agreement entered into in connection with the issuance of the convertible notes. The shares of common stock issuable on conversion of the Notes or exercise of the Warrants will be subject to a statutory hold period of six months under U.S. law including the Securities Act of 1933.Strategic Plan“Allied Corp. is focused on building out our multi-vertical concentration in key areas of production, pharmaceutical, natural health and within the charitable foundation. We have made major strides in the natural health vertical within this last quarter, and have begun getting some traction for our Tactical Relief™ proprietary blend in the US and our MaXXa© brand in Asia,” said Allied CEO Calum Hughes. “Scaling the sales of the Allied brands, developing our production resources and following our pharmaceutical development strategies and continuing to help through our healing retreats are our top priorities. As the Allied team continues to achieve our milestones, we are poised for rapid growth. Near term goals include further enhancing our product offerings, completion of production harvests in Colombia whilst adding depth to the core management team. The Allied team also looks forward to working closely with our partners and associates to execute on our long-term strategy,” Hughes continued.HighlightsThe Company has a vertically-integrated production supply chain from seed to sale;
Management is focused on making Colombia a low-cost producer in the creation of a high-quality product for export;
Management believes that the pharmaceutical focus of the Company offers a potential blue-sky opportunity. The pharmaceutical product development process has begun. The Company’s purposeful business model is to bring a PTSD pharma product through to Phase I clinical trials and then license to big pharma as a revenue opportunity;
Allied maintains a diverse natural health product line up with an international brand focused approach;
Management believes that the Company has now started to get brand appeal and international traction in two significant markets;
The Allied Charitable Foundation is making a difference in the lives of veterans and first responders;
Management believes that Allied is well-capitalized and fully funded.This news release does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), or any state securities laws and may not be offered or sold within the United States or to, or for the account or benefit of, “U.S. persons,” as such term is defined in Regulation S under the U.S. Securities Act, unless an exemption from such registration is available.For more information on Allied Corp., visit www.allied.health About Allied Corp.
Allied Corp. is an international medical cannabis production company with a mission to address today’s medical issues by researching, creating and producing targeted cannabinoid health solutions. Allied Corp. uses an evidence-informed scientific approach to make this mission possible, through cutting-edge pharmaceutical research and development, innovative plant-based production and unique development of therapeutic products.Media Contact:
+1-778-388-5258Forward-Looking Statements:This press release contains “forward-looking information” within the meaning of applicable securities laws in Canada or “forward-looking statements” made pursuant to the “safe harbour” provisions of the United States Private Securities Litigation Reform Act of 1995 (collectively, “forward-looking information”). Forward-looking information may relate to the Company’s future outlook and anticipated events, plans or results, and may include information regarding the Company’s objectives, goals, strategies, future revenue or performance and capital expenditures, and other information that is not historical information. Forward-looking information can often be identified by the use of terminology such as “believe,” “anticipate,” “plan,” “expect,” “pending,” “in process,” “intend,” “estimate,” “project,” “may,” “will,” “should,” “would,” “could,” “can,” the negatives thereof, variations thereon and similar expressions. The forward-looking information contained in this press release is based on the Company’s opinions, estimates and assumptions in light of management’s experience and perception of historical trends, current conditions and expected future developments, as well as other factors that management currently believes are appropriate and reasonable in the circumstances. Forward looking statements in this press release include the following: that Allied is leveraging the conditions in its Colombia grow operation and future Kelowna location to support its Research and Development efforts; that Allied is making important strides forward to position itself as a leader in the medical cannabis space, that Allied intends to make a series of proposed trademark and other intellectual property protection filings, as part of the Company’s Intellectual Property and Pharma Development (IP&PD) Strategy, statements respecting the joint development, manufacturing, and introduction of TACTICAL RELIEF™ branded products, and the use of proceeds from the offering of convertible notes.There can be no assurance that the underlying opinions, estimates and assumptions will prove to be correct. Risk factors that could cause actual results to differ materially from forward-looking information in this release include: the Company’s exposure to legal and regulatory risk; the effect of the legalization of adult-use cannabis in Canada and Colombia on the medical cannabis industry is unknown and may significantly and negatively affect the Company’s medical cannabis business; that the medical benefits, viability, safety, efficacy, dosing and social acceptance of cannabis are not as currently expected; that adverse changes or developments affecting the Company’s main or planned facilities may have an adverse effect on the Company; that the medical cannabis industry and market may not continue to exist or develop as anticipated or the Company may not be able to succeed in this market; risks related to completion of the greenhouse construction in Colombia, risks related to market competition; risks related to the proposed adult-use cannabis industry and market in Canada and Colombia including the Company’s ability to enter into or compete in such markets; that the Company has a limited operating history and a history of net losses and that it may not achieve or maintain profitability in the future; risks related to the Company’s current or proposed international operations; risks related to future third party strategic alliances or the expansion of currently existing relationships with third parties; that the Company may not be able to successfully identify and execute future acquisitions or dispositions or successfully manage the impacts of such transactions on its operations; risks inherent to the operation of an agricultural business; that the Company may be unable to attract, develop and retain key personnel; risks resulting from significant interruptions to the Company’s access to certain key inputs such as raw materials, electricity, water and other utilities; that the Company may be unable to transport its cannabis products to patients in a safe and efficient manner; risks related to recalls of the Company’s cannabis products or product liability or regulatory claims or actions involving the Company’s cannabis products; risks related to the Company’s reliance on pharmaceutical distributors; that the Company, or the cannabis industry more generally, may receive unfavourable publicity or become subject to negative consumer or investor perception; that certain events or developments in the cannabis industry more generally may impact the Company’s reputation or its relationships with customers or suppliers; that the Company may not be able to obtain adequate insurance coverage in respect of the risks that it faces, that the premiums for such insurance may not continue to be commercially justifiable or that there may be coverage limitations and other exclusions which may result in such insurance not being sufficient; that the Company may become subject to liability arising from fraudulent or illegal activity by its employees, contractors, consultants and others; that the Company may experience breaches of security at its facilities or losses as a result of the theft of its products; risks related to the Company’s information technology systems; that the Company may be unable to sustain its revenue growth and development; that the Company may be unable to expand its operations quickly enough to meet demand or manage its operations beyond their current scale; that the Company may be unable to secure adequate or reliable sources of necessary funding; risks related to, or associated with, the Company’s exposure to reporting requirements; risks related to conflicts of interest; risks related to fluctuations in foreign currency exchange rates; risks related to the Company’s potential exposure to greater-than-anticipated tax liabilities; risks related to the protection and enforcement of the Company’s intellectual property rights, or the intellectual property that it licenses from others; that the Company may become subject to allegations that it or its licensors are in violation of the intellectual property rights of third parties; that the Company may not realize the full benefit of the clinical trials or studies that it participates in; that the Company may not realize the full benefit of its licenses if the licensed material has less market appeal than expected and the licenses may not be profitable; as well as any other risks that may be further described in and the risk factors discussed in the Company’s continuous disclosure including its Management’s Discussion and Analysis sections in its Quarterly Reports on Form 10-Q, Annual Reports on Form 10-K and Current Reports on Form 8-K filed under the Company’s profile at www.sec.gov.Although management has attempted to identify important risk factors that could cause actual results to differ materially from those contained in the forward-looking information in this presentation, there may be other risk factors not presently known to the Company or that the Company presently believes are not material that could also cause actual results or future events to differ materially from those expressed in such forward-looking information in this presentation. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers and viewers should not place undue reliance on forward-looking information, which speaks only as of the date made. The forward-looking information contained in this release represents the Company’s expectations as of the date of this release or the date indicated, regardless of the time of delivery of the presentation. The Company disclaims any intention, obligation or undertaking to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required under applicable securities laws.