BB1 Acquisition Corp. Enters Into Definitive Agreement with PlantEXT Ltd. to Complete Business Combination
BB1 Acquisition Corp. Enters Into Definitive Agreement
with PlantEXT Ltd. to Complete Business Combination
Toronto, Ontario--(Newsfile Corp. - August 19, 2019) - PlantEXT Ltd. ("
PlantEXT
") and BB1 Acquisition Corp.
(TSXV: BBA.P)
("
BB1
" or the "
Company
"), a capital pool company as defined under Policy 2.4 - Capital Pool Companies (the "
Policy
") of the
TSX Venture Exchange (the "
Exchange
"), are pleased to announce that they have entered into a definitive share exchange
agreement (the "
Definitive
Agreement
") pursuant to which PlantEXT and BB1 will effect a transaction that will result in a
reverse takeover of BB1 by the shareholders of PlantEXT (the "
PlantEXT Shareholders
") (the "
Transaction
"). It is the
intention of the parties that the corporation resulting from the Transaction (the "
Resulting Issuer
") will continue the business of
PlantEXT, and that the common shares of the Resulting Issuer will be listed and posted for trading on the Exchange. BB1 intends
that the Transaction will constitute its Qualifying Transaction, as such term is defined in Policy 2.4 of the Exchange.
PlantEXT is an Israeli company that was founded in 2015 as an early mover in the development of medical cannabis intellectual
property and innovative products backed by clinical research. PlantEXT has assembled a world class team of pharmaceutical
research and development ("
R&D
") and product commercialization experts that have the experience to deliver on PlantEXT's
product pipeline. Doug Sommerville, a pharmaceutical industry veteran and former Head of Teva Canada, has assumed the role
of Chief Executive Officer. The Honorable Joe Oliver, Canada's former Minister of Finance, is the Chairman of PlantEXT's
Board of Directors. PlantEXT's General Manager is Dr. Tahel Altman, a physician with expertise in biotech development. Dr.
Marioara Mendelovici-Mares, a former Teva senior chemist, is operating PlantEXT's independent R&D facilities near Tel Aviv.
PlantEXT also collaborates with several senior former Teva formulation, chemical and delivery systems experts. Professor
Raphael Mechoulam is the Chair of PlantEXT's Scientific Advisory Board, which includes Dr. Zamir Halperin, one of Israel's
leading GI specialists.
PlantEXT has established its own dedicated R&D facility in a prominent, industry leading laboratory complex near Tel Aviv.
PlantEXT's strategic alliance with its laboratory partner has allowed PlantEXT to kick start its independent product development
program by providing laboratory infrastructure, access to technical professionals, and advanced analytical equipment.
PlantEXT's independent research is focused on the development of proprietary products based on unique combinations of
compounds that create synergistic anti-inflammatory activity, supported by clinical studies conducted with leading medical
centres.
Doug Sommerville, CEO of PlantEXT commented, "We are pleased to have completed this important step in our continuing
progress toward listing PlantEXT for trading on the TSX Venture Exchange in order to provide investor liquidity and allow us to
better serve patient needs through access to public capital markets."
Summary of the Qualifying Transaction
The Definitive Agreement provides that BB1 will acquire all of the issued and outstanding ordinary shares of PlantEXT
("
PlantEXT Shares
") from PlantEXT Shareholders in exchange for BB1 Shares at a rate of exchange equal to one BB1 Share
(on a post-consolidation basis) for each PlantEXT Share issued and outstanding (the "
Share Exchange Ratio
"). Following the
completion of the Transaction, the PlantEXT Shareholders will own a large majority of the issued and outstanding common
shares of the Resulting Issuer (the "
Resulting Issuer Shares
"), resulting in the reverse takeover of BB1 by the PlantEXT
Shareholders.
On or immediately prior to the completion of the Transaction, BB1 will effect a consolidation of all of the issued and outstanding
common shares of BB1 (the "
BB1 Shares
") currently issued and outstanding on a 7.15 to 1 basis (the "
Consolidation
")
resulting in an aggregate of approximately 2,097,902 BB1 Shares outstanding.
BB1 will be required to hold a special meeting of shareholders in connection with the Transaction, where, among other things,
the shareholders of BB1 will be asked to approve: (i) the Consolidation; (ii) the change of name of BB1 to "PlantEXT Ltd." or
such other name as may be proposed by PlantEXT and accepted by the Exchange; and (iii) the appointment of a new slate of
directors, conditional upon completion of the Transaction.
The completion of the Transaction is subject to the satisfaction of various conditions as are standard for a transaction of this
nature, including but not limited to
(i) receipt of all requisite regulatory, stock exchange, or other third party consents approvals
and authorizations; (ii) the conditional approval of the Exchange for the listing of the Resulting Issuer Shares; (iii) in accordance
with the Policy, BB1 shall have received a final receipt for a prospectus from the Ontario Securities Commission ("
OSC
") (and
other applicable securities commissions under the passport system) unless an exemption from such a requirement is obtained
from the Exchange and the OSC; (iv) the absence of any material change affecting BB1 or PlantEXT; (v) completion of the
Concurrent Financing (as defined below); and (vi) PlantEXT shall have received the approval of at least such minimum number
of PlantEXT Shareholders as is sufficient to enable BB1 to acquire all of the PlantEXT Shares.
Concurrent Financing
Prior to or concurrently with closing of the Transaction, PlantEXT expects to complete an equity financing by way of a private
placement (the "
Concurrent Financing
"). The terms and conditions of the proposed Concurrent Financing have not been
finalized as of the date hereof and the parties have not yet engaged a lead agent to assist with the completion of the Concurrent
Financing. Additional information regarding the Concurrent Financing will be announced at a later date once determined.
Details of the Proposed Transaction
In addition to the BB1 Shares, options and warrants currently outstanding, the Transaction is expected to involve the issuance of
approximately 24,018,116 Resulting Issuer Shares at a deemed issue price of US$1.25 per Resulting Issuer Share (on a post-
Consolidation basis). In addition, each of the issued and outstanding convertible securities of PlantEXT will be adjusted in
accordance with their terms such that upon exercise or conversion thereof, the holder will receive Resulting Issuer Shares on an
economically equivalent basis and at a rate of exchange equal to the Share Exchange Ratio.
It is expected that following completion of the Transaction, the current holders of PlantEXT Shares will hold approximately 91.9%
of the outstanding Resulting Issuer Shares and the current holders of BB1 Shares will collectively hold approximately 8.1% of the
outstanding Resulting Issuer Shares, all as calculated on a non-diluted basis immediately following the closing of the Transaction
and before giving effect to the completion of the Concurrent Financing and the issuance of any additional PlantEXT Shares prior
to the completion of the Transaction.
The Resulting Issuer
Immediately prior to the completion of the Transaction, the Resulting Issuer is expected to change its name to PlantEXT Ltd.
Concurrent with the completion of the Transaction, all directors and officers of BB1 will resign and be replaced by nominees put
forth by PlantEXT. The following individuals are expected to be appointed as new directors and/or officers of the Resulting Issuer
pursuant to the Transaction:
Hon. Joe Oliver, PC
Chairman of the Board
Mr. Oliver is Chairman of the Board at PlantEXT as well as Echelon Wealth Partners, a Toronto-based wealth management and
investment firm. Mr. Oliver brings extensive management and governance experience from his service as the Government of
Canada's Minister of Finance and Minister of Natural Resources. Mr Oliver is a past president and CEO of the Investment
Dealers Association, and a former executive director of the Ontario Securities Commission. He has also held senior positions at
Merrill Lynch Royal Securities Ltd., Nesbitt Thomson Inc., BMO Nesbitt Burns and First Marathon Securities Ltd. Mr. Oliver is a
respected and outspoken advocate supporting the development of medical cannabis treatments backed by clinical research, as
demonstrated in his published articles.
Doug Sommerville, MBA
Chief Executive Officer
Mr. Sommerville has more than a quarter-century of results-driven success in medical and pharmaceutical business
development, both in domestic and international markets. Before joining PlantEXT, Mr. Sommerville headed up Teva Canada,
where he oversaw record annual revenues of over $1.3 billion. He has also held executive positions within Baxter International,
serving in Chicago as global vice president of infusion systems and in Canada as vice president of medication delivery. His
wealth of experience includes a term as chair of the Canadian Generic Pharmaceutical Association, the leading industry group
for the thriving $6 billion-dollar generic pharmaceutical market in Canada.
Dr. Oded Sagee, PhD
Founder and President (Israel)
Dr. Sagee founded PlantEXT in 2015 as a wholly owned subsidiary of Israel Plant Sciences Limited. He is also CEO and
founder of BreedIT Corp., an agro-breeding information technology company. As PlantEXT's founder and president, he
combines decades of scientific experience in plant biology with management acumen from his time as chief scientist and
manager of business development for Gaon Agro Industries Ltd., in addition to senior positions at Phytech Ltd. and AminoLab
Ltd. Previously, Dr. Sagee held the role of department head at the Agricultural Research Organization, Volcani Center, a leading
public research institute in Israel, and authored numerous scientific papers in the fields of botany and plant sciences.
Al Shefsky, JD
President (Canada)
Mr. Shefsky has focused his career on starting up, financing and operating innovative businesses in the technology and resource
sectors. He is also president of Cannadigm Corp., a private Canadian company that invests in the medical cannabis sector, and
he co-founded Delshen Therapeutics Corp., a licensed Canadian producer and seller of medical cannabis. Prior to entering the
cannabis industry, Mr. Shefsky founded and served as president for Pele Mountain Resources Inc. for over 20 years, providing
vision and leadership in the execution of the company's project generation, financing and development strategies, including
raising tens of millions of dollars and negotiating several successful joint venture agreements with industry leading companies.
Paul Andersen, CA, CPA, GGMA
Chief Financial Officer
Mr. Andersen is the managing partner of Forbes Andersen LLP, a financial management company that works with both business
owners and public companies. He has over 25 years of experience as a senior officer and director in public and private
companies, both in Canada and internationally. Mr. Andersen has experience in the cannabis industry as a director of Abba
Medix Group (now Canada House Wellness Group Inc.) and is the CFO and a director of Cannabis Growth Opportunity
Corporation, a cannabis focused investment corporation.
Stan Bharti, PEng, CEng, MSc, DIC
Board Member
Mr. Bharti is a professional engineer, international financier, and seasoned entrepreneur. He has more than 30 years of
experience in business, finance, markets, and operations. He has been instrumental in raising over $3 billion worth of investment
capital for the companies that he has worked with. Mr. Bharti has been pivotal in the acquiring, financing, restructuring and
building dozens of established companies and start-ups throughout North America, South America, Africa and Australia.
Kevin McGovern
Board Member
Mr. McGovern is chairman and CEO of McGovern Capital LLC, a global investment, strategy and licensing provider to emerging
companies, particularly in consumer technologies and IP-based industries. Through McGovern Capital and its affiliates, he has
co-founded over twenty-five (25) companies, six of which have become world/category leaders. Mr. McGovern also founded
SoBe Beverages, at one time, the fastest-growing beverage company in the United States, before selling to Pepsi for $375
million. Mr. McGovern is also a Director of WeedMD Inc., a Canadian-licensed producer and distributor of medical-grade
cannabis.
Ittamar Herman, LLB
Board Member
Mr. Herman is an experienced senior manager who has served for over 30 years at various companies in marketing,
technologies, communications and tourism. He is currently chairman of Kfar Maccabiah, an Israeli hotel in Tel Aviv. Mr. Herman
also boasts considerable experience in public and non-profit sector management, having served as chairman of the 18
th
Maccabiah Organizing Committee and as director of Jewish National Fund, which oversees 17% of all land in Israel.
Control Persons
As of the date hereof, PlantEXT Shareholders who each hold a controlling interest in PlantEXT are Israel Plant Sciences Ltd.
("
IPS
"), Cannadigm Corp. ("
Cannadigm
") and Greenway International Investments Ltd. ("
Greenway
"). The current ownership of
the remaining interest in PlantEXT consists of 48 PlantEXT shareholders holding
7,055,103 PlantEXT Shares, representing
approximately 29.4% of the total issued and outstanding shares of PlantEXT as of the date hereof. IPS is a company
incorporated under the laws of Israel and currently owns 10,000,000 PlantEXT Shares, representing approximately 41.6% of the
total issued and outstanding shares of PlantEXT as of the date hereof. Two shareholders hold a controlling interest in IPS:
Starbiotech 2015 Ltd. ("
Starbiotech
") and McGovern Capital LLC ("
McGovern Capital
"). Starbiotech is a company
incorporated under the laws of Israel and is owned and controlled by Oded Sagee, a resident of Herzliya, Israel and Ittamar
Herman, a resident of Ramat HaSharon, Israel. McGovern Capital is a company incorporated under the laws of the State of
Florida and is controlled by Kevin McGovern, a resident of Boca Raton, Florida.
Cannadigm is a company incorporated under the federal laws of Canada and currently owns 4,105,870 PlantEXT Shares,
representing approximately 17.1% of the total issued and outstanding shares of PlantEXT as of the date hereof. Cannadigm is
controlled by Al Shefsky, a resident of the province of Ontario.
Greenway is a company incorporated under the laws of Barbados and currently owns 2,857,143 PlantEXT Shares, representing
approximately 11.9% of the total issued and outstanding shares of PlantEXT as of the date hereof. Greenway is controlled by
Fred Leigh, a resident of the province of Ontario.
It is anticipated that immediately following the Transaction, the only shareholders that will hold greater than 10% of the issued
and outstanding Resulting Issuer Shares will be IPS, Cannadigm and Greenway.
Sponsorship
BB1 intends to apply to the Exchange for an exemption from applicable sponsorship requirements.
About PlantEXT
PlantEXT is an Israeli company focused on developing and commercializing the world's most effective pharmaceutical cannabis
formulations for the treatment of inflammation related medical conditions. PlantEXT has entered into a strategic partnership and
exclusive agreement with the State of Israel's Agricultural Research Organization to develop and commercialize a treatment for
inflammatory bowel disease. PlantEXT also operates independent research and development facilities near Tel Aviv, where it is
developing an extensive pipeline of anti-inflammatory products supported by pre-clinical and clinical research.
About BB1
BB1 Acquisition Corp. is a capital pool company whose sole business is the identification and evaluation of assets or
businesses with a view to completing a qualifying transaction.
Contact Information
For more information about PlantEXT, please contact Doug Sommerville, PlantEXT's CEO at +1 (416) 640 5353.
For more information about BB1 please contact Stephen Shefsky, BB1's CEO at +1 (416) 366 4200.
Cautionary Note
Completion 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 released 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 not passed upon the merits of the proposed Transaction and has neither approved nor
disapproved the contents of this press release.
Forward-Looking Information
The information in this news release includes certain information and statements about management's view of future events,
expectations, plans and prospects that constitute forward looking statements. The foregoing statements are based upon
assumptions that are subject to significant risks and uncertainties. Because of these risks and uncertainties and as a result of a
variety of factors, the actual results, expectations, achievements or performance may differ materially from those anticipated and
indicated by these forward-looking statements. Forward-looking statements in this news release include, but are not limited to
the completion of the Transaction on the terms and conditions contained herein; the completion of the Concurrent Financing; the
listing of the Resulting Issuer Shares on the Exchange; and BB1 receiving a final receipt for a prospectus from the OSC. Any
number of factors could cause actual results to differ materially from these forward-looking statements as well as future results.
Although the Company believes that the expectations reflected in forward looking statements are reasonable, it can give no
assurance that the expectations of any forward-looking statements will prove to be correct, or that the Transaction or the
Concurrent Financing will be completed on the terms contained herein, or at all. Except as required by law, the Company
disclaims any intention and assumes no obligation to update or revise any forward-looking statements to reflect actual results,
whether as a result of new information, future events, changes in assumptions, changes in factors affecting such forward-looking
statements or otherwise.
This press release is not an offer of the securities for sale in the United States. The securities have not been registered under
the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an
exemption from registration. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall
there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.
NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES
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