Cann-Is Capital Corp. Provides Update on Qualifying Transaction with CWE European Holdings Inc.

TORONTO, Nov. 11, 2020 (GLOBE NEWSWIRE) — Cann-Is Capital Corp. (“Cann-Is” or the “Corporation”) (TSX-V: NIS.P) is pleased to provide certain updates from its press release dated September 23, 2020 in regards to the Corporation’s proposed qualifying transaction (the “Transaction”) with CWE European Holdings Inc., a company incorporated under the laws of the Province of Alberta (“CWE”), pursuant to which the Corporation will acquire all of the issued and outstanding shares in the capital of CWE. When completed, the Transaction will constitute the Corporation’s Qualifying Transaction, as such term is defined in the policies of the TSX Venture Exchange (the “Exchange”). The Transaction is subject to compliance with all necessary regulatory and other approvals and certain other terms and conditions. The parties executed a binding engagement agreement on September 23, 2020, which was amended on November 4, 2020.
SUMMARY OF THE TRANSACTIONIt is currently anticipated that Cann-Is will acquire CWE by way of a three-corner amalgamation, share exchange, plan of arrangement or other similar form of transaction as agreed by the parties to ultimately form the resulting issuer (the “Resulting Issuer”). The final structure of the Transaction is subject to the receipt of tax, corporate and securities law advice for both Cann-Is and CWE. Upon completion of the Transaction, the Resulting Issuer will carry on the business of CWE. The parties have agreed that for the purposes of the Transaction, the valuation of Cann-Is will be $624,266 and CWE will be $3,000,000.The Transaction is not a Non-Arm’s Length Qualifying Transaction, as such term is defined in the polices of the Exchange and consequently the Transaction will not be subject to approval by Cann-Is’ shareholders.Cann-Is held a meeting of its shareholders on November 10, 2020 (the “Cann-Is Shareholders Meeting”) in order to pass resolutions approving among other things, (i) the appointment of a new slate of directors and (ii) approving an amendment to the articles of the Corporation to change the name of the Corporation to “HANF Inc.” or to such other name as the board of directors of the Corporation, in its sole discretion, deem appropriate (the “Name Change”). At the Cann-Is Shareholders Meeting, the shareholders approved among other things, the new slate of directors and the Name Change, such changes to take effect upon completion of the Transaction.Prior to completion of the Transaction and the Financing (as hereinafter defined), the parties have agreed that CWE will complete a 25:1 stock-split (the “Stock Split”). Currently, CWE has 1,000,000 common shares issued and outstanding and no convertible securities issued and outstanding and after effecting the Stock Split, CWE will have 25,000,000 common shares issued and outstanding (the “Post-Split CWE Shares”).As part of the Transaction, CWE will complete a concurrent financing of a minimum of $1,000,000 to meet the initial listing requirements of the Exchange (the “Financing”). CWE has engaged Florence Wealth Management Inc. (the “Agent”) to act as agent in connection with the Financing and the Agent may appoint a selling group consisting of other co-agents or sub-agents who are registered dealers. The Financing will be comprised of a minimum of 8,333,333 units in the capital of CWE (each a “Unit”) at a price of $0.12 per Unit. Each Unit will be comprised of one (1) Post-Split CWE Share and one (1) Post-Split CWE Share purchase warrant (each a “Warrant”). Each Warrant entitles the holder thereof to acquire one (1) Post-Split CWE Share at a price of $0.25 per Post-Split CWE Share for a period of twenty-four (24) months following the closing of the Financing.In connection with the Financing, the parties will pay to the Agent a cash commission equal to 10% of the aggregate gross proceeds of the Financing (excluding gross proceeds raised from a president’s list for which the cash commission shall be 2%); and broker warrants (“Broker Warrants”) equivalent to 10% of the underlying securities sold in the Financing (provided that funds raised from the president’s list subscribers will give rise to a reduced number of Broker Warrants, equal to 2% of the number of securities sold under that portion of the Financing). Each Broker Warrant will be exercisable into one Unit at a price of $0.12 per Unit for a period of twenty-four (24) months following the closing of the Financing.Pursuant to the Transaction: (i) holders of issued and outstanding Post-Split CWE Shares will receive one (1) common shares in the capital of the Corporation (“Cann-Is Shares”) for each Post-Split CWE Share (the “Exchange Ratio”) held by them; and (ii) all options and warrants convertible into CWE Shares shall be exchanged, based on the Exchange Ratio, for similar securities to purchase Cann-Is Shares on substantially similar terms and conditions.In connection with the Transaction, CWE has entered into a finder’s fee agreement (the “Finder’s Fee Agreement”) with an arm’s length party (the “Finder”) for the Finder’s introduction of CWE to the Corporation. Pursuant to the terms of the Finder’s Fee Agreement, the parties have agreed, subject to the approval by the Exchange, to pay the Finder a fee of 1,937,600 Resulting Issuer Shares or such greater number of Resulting Issuer Shares that is permissible under the polices of the Exchange, subject to a maximum of 2,000,000 Resulting Issuer Shares, to be issued upon closing of the Transaction.Upon completion of the Transaction and on an undiluted basis, it is expected that (i) the former shareholders of CWE will hold approximately 61.8% of the common shares in the Resulting Issuer (each a “Resulting Issuer Share”) (on a non-diluted basis), (ii) the former shareholders of Cann-Is will hold approximately 12.9% of the Resulting Issuer Shares, (iii) the investors in the Financing will hold, assuming completion of the minimum Financing, 20.6% of the Resulting Issuer Shares, and (iv) the Finder will hold 4.8% of the Resulting Issuer Shares.Closing of the Transaction will be subject to a number of conditions precedent, including, without limitation:a)  completion of mutual satisfactory due diligence investigations of CWE and Cann-Is;
b)  approval of the Transaction by the boards of directors of CWE and Cann-Is;
c)  execution of a definitive agreement effecting the Transaction;
d)  completion of the Financing;
e)  receipt of all regulatory approvals with respect to the Transaction and the listing of the Resulting Issuer Shares on the Exchange;
f)  approval of the Transaction by CWE shareholders,
g)  approval of the Name Change, and the approval of new directors by the Cann-Is shareholders; and
h)  confirmation of no material adverse change by CWE and Cann-Is.
It is anticipated that the Resulting Issuer will qualify as a Tier 2 Issuer pursuant to the requirements of the Exchange.SPONSORSHIPSponsorship of a Transaction of a capital pool company is required by the Exchange unless exempt in accordance with Exchange policies. The Corporation intends to apply for a waiver from the sponsorship requirement in accordance with Exchange Policy 2.2.HISTORY OF CWECWE was incorporated under the Business Corporations Act (Alberta) on May 6, 2019 as a private corporation with wholly-owned subsidiaries that operate a seed to sale Hemp business in Germany in compliance with applicable laws. CWE is selling an organic, health conscious lifestyle based on Hemp products, some containing CBD.CWE is seeking to become the largest Hemp offline and online retailer in Germany building a controlled access to customers by opening retail locations in Germany. Currently CWE owns and operates ten (10) stores in the State of Bavaria in Germany through three (3) German subsidiaries. CWE has developed a private label Hemp derived CBD brand which makes up 50% of offline retail sales. The stores are operated under the brand name “HANF” in Germany.The Corporation’s three (3) subsidiaries are as follows:DCI Cannabis Institute GmbH (“DCI”), incorporated in Germany on December 1, 2016. CWE acquired 89.4% of the share capital of DCI on July 4, 2019 pursuant to an agreement with four (4) shareholders of DCI. The balance of the share capital, 10.6%, is owned by an arm’s length German company. DCI owns and operates six (6) shops in Germany.CWE Trading UG (“CWE-UG”) incorporated in Germany on April 16, 2020 as wholly owned subsidiary. CWE-UG owns and operates two (2) shops.CWE Trading EINS UG (“CWE-E-UG”) incorporated in Germany on August 16, 2020 as wholly owned subsidiary. CWE-E-UG owns and operates one (2) shops.
SELECTED FINANCIAL INFORMATION OF CWEThe following table sets out historical financial information of CWE, in each case, for the periods ended and as of the dates indicated. The selected financial information of CWE has been derived from the unaudited consolidated financial statements of CWE for the years-ended December 31, 2019 and 2018 and the unaudited consolidated interim financial statements of CWE for the eight-month period ended August 31, 2020:
MANAGEMENT, BOARD OF DIRECTORS AND INSIDERS OF THE RESULTING ISSUERUpon closing of the Transaction, the board of directors of Cann-Is shall be reconstituted, to be comprised of the nominees of CWE, subject to the minimum residency requirements under the Business Corporations Act (Ontario), to consist of at least three (3) members. Upon closing of the Transaction, the management, board of directors and insiders of the Resulting Issuer will be as set forth below. CWE intends to select a Chief Financial Officer in due course.Jörn J. Follmer – Chief Executive Officer and DirectorJörn Follmer is a serial entrepreneur that has sold his company to a NASDAQ firm in 1999, built up another company to take it public at the EU-regulated market General Standard segment of Deutsche Börse in 2005. As co-founder of DCI, Jörn has consulted with Wenzel Cerveny since they met in 2016 on the campaign trail. In 2008, Jörn became an investment banker, who has since taken public more than 40 companies as official listing partner of various exchanges. Similar to his position in CWE, Jörn takes financial positions in emerging market companies. Having served on the board of directors of listed companies in Europe, he has relevant experience in going public transactions and continuous disclosure obligations. Mr. Follmer received an M.B.A. degree in 1991 from Texas Christian University.Daryl S. Fridhandler, Q.C., LLM (NYU), ICD.d, Q.Arb, Q.Med – DirectorDaryl Fridhandler is a partner with the law firm of Burnet, Duckworth & Palmer LLP and practices as a member of the firm’s corporate, securities, mergers and acquisitions and commercial transactions groups. Mr. Fridhandler has assisted on organization, reorganization and governance advisory matters for many corporations. He has been active as a founder, director, officer or legal counsel of numerous for profit (public and private) and not for profit organizations, including government related entities. Mr. Fridhandler’s board experience includes serving on and chairing numerous audit committees.Mr. Fridhandler received a BA from McGill University (1980), a law degree from Dalhousie University (1983), an LLM from New York University (2016) and is a graduate of the Institute of Corporate Directors program (2006) with their ICD.d designation. In 2016, he received his Q. Med and Q. Arb designations from the ADR Institute of Canada. In 2004, he was appointed Queen’s Counsel and in 2005, he received the Alberta Centennial Medal for community service.James Lanthier – Director Mr. Lanthier is the Chief Executive Officer of Mindset Pharma Inc., a drug discovery and development business focused on developing novel drugs for neuropsychiatric conditions. Mr. Lanthier has held executive positions at a number of technology enabled companies; prior to Mindset, Mr. Lanthier helped found Future Fertility, a provider of artificial intelligence tools to infertility physicians. Mr. Lanthier was a member of the founding management team of Mood Media (“Mood”), the world’s largest in-store media business. Mr. Lanthier was the Chief Operating Officer of Mood from 2008 to 2013 and a non-executive Director of Mood from 2013 – 2016. Prior to Mood, Mr. Lanthier co-founded FUN Technologies, a casual games business that he helped lead as Chief Financial Officer through its initial public offering on the Toronto and London Stock Exchanges through its eventual sale to Liberty Media. Mr. Lanthier has held board positions at a number of public companies. Mr. Lanthier serves as a member of the board and audit committee of Water Ways Technologies Inc. and a member of the board of Cann-Is. Mr. Lanthier holds an MBA from the Rotman School of Management at the University of Toronto and a BA (Honors) from Queens University.Ronnie Jaegermann – DirectorMr. Jaegermann has been a Venture Partner at Beyond-Ventures, an Israeli Venture Capital and Investment Advisory Firm since September 2019. Prior to that Mr. Jaegermann was the Chief Executive Officer and Head of Investment Banking Advisory at Aloni Haft, a Tel Aviv-based boutique investment bank focused on fundraisings for Israeli companies in international capital markets since 2014. He has led multiple businesses in growing them from start-up to profitable companies that became take-out targets and was involved in fundraisings and public offerings for Israeli technology companies both in Europe and the USA. Mr. Jaegermann has owned a few retail and online ventures including a retail chain of 26 Lingerie shops in Israel. Mr. Jaegermann holds a BA in Economic and Political Science from Tel Aviv University. Mr. Jaegermann serves as Chief Financial Officer of Cann-Is, an independent member of the board of directors of Adcore Inc. and a member of the board and audit committee of Water Ways Technologies Inc.  Wenzel Cerveny Founder and Majority ShareholderWenzel Cerveny, a seasoned restaurant owner & event organizer after an apprenticeship with Hilton Hotels, spent most of his career in the hospitality industry. In 2017, the new legal act on the legalization of Medical Cannabis in Germany came in effect, with Wenzel having contributed more than decimally to this. In 2018 Wenzel became a delegate in the elections to the Bavarian Parliament for the Liberal Party, which were held in October. Wenzel’s activism gave tremendous media coverage to him and CWE, in fact making him one of the top 5 names in the German Cannabis legalization arena, however him emphasizing mainly the Medical side to Cannabis use, lesser the recreational ones. In 2017. Wenzel turned to concentrate full-time on the development of HANF retail stores.NON-OFFERING PROSPECTUSIn connection with the Transaction and pursuant to the requirements of the Exchange, Cann-Is will file on SEDAR ( a non-offering prospectus which will contain details regarding the Transaction, Cann-Is, CWE and the Resulting Issuer.ABOUT CANN-IS CAPITAL CORP.The Corporation is a Capital Pool Company (“CPC”). It has not commenced commercial operations and has no assets other than a minimum amount of cash. Except as specifically contemplated in the CPC Policy, as defined in the final prospectus, until Completion of the Transaction, the Corporation will not carry on any business other than the identification and evaluation of assets or businesses with a view to completing a proposed Transaction.ADDITIONAL INFORMATIONCompletion of the Transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and if applicable pursuant to Exchange requirements, majority of the minority shareholder approval. Where applicable, the Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Transaction will be completed as proposed or at all.Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the Transaction, any information release or received with respect to the Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.The TSX Venture Exchange Inc. has in no way passed upon the merits of the Transaction and has neither approved nor disapproved the contents of this press release.NEITHER THE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.This news release does not constitute an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction.FORWARD-LOOKING STATEMENTSThis news release contains certain forward-looking statements, including statements relating to the Transaction and certain terms and conditions thereof, the ability of the parties to complete the Transaction, the Stock Split, the Financing, the Exchange Ratio, the Name Change, the Resulting Issuer’s ability to qualify as a Tier 2 Issuer, the Corporation receiving a waiver from the Exchange for sponsorship requirements, shareholder, director and regulatory approvals, future press releases and disclosure, and other statements that are not historical facts. Wherever possible, words such as “may”, “will”, “should”, “could”, “expect”, “plan”, “intend”, “anticipate”, “believe”, “estimate”, “predict” or “potential” or the negative or other variations of these words, or similar words or phrases, have been used to identify these forward-looking statements. These statements reflect management’s current beliefs and are based on information currently available to management as at the date hereof.Forward-looking statements involve significant risk, uncertainties and assumptions. Many factors could cause actual results, performance or achievements to differ materially from the results discussed or implied in the forward-looking statements. As a result, the Corporation cannot guarantee that the Transaction will be completed on the terms described herein or at all. These factors should be considered carefully, and readers should not place undue reliance on the forward-looking statements. Although the forward-looking statements contained in this press release are based upon what management believes to be reasonable assumptions, the Corporation cannot assure readers that actual results will be consistent with these forward-looking statements. These forward-looking statements are made as of the date of this press release, and the Corporation assumes no obligation to update or revise them to reflect new events or circumstances, except as required by law.FOR ADDITIONAL INFORMATION, PLEASE CONTACT:Cann-Is Capital Corp.:Jonathan Graff, Chief Executive Officer
Telephone: (416) 862-3558
CWE European Holdings Inc.:Jörn J. Follmer, President and Co-Chief Executive Officer
Telephone: +49 (172) 390-1107

CBJ Newsmakers

Collection Sites Announces Agreement to Offer COVID-19 Testing Services and Protocols for The Elf On The Shelf’s Magical Holiday JourneyEmerita Resources Announces OTC Ticker Symbol and Clearance From FINRA