Announces Proposed Qualifying Transaction
BIG DOUGIE CAPITAL CORP.
ANNOUNCES PROPOSED QUALIFYING TRANSACTION
Calgary, Alberta - May 13, 2019. Big Dougie Capital Corp. ("Big Dougie") (TSX Venture: STUV.P) is
pleased to announce details concerning its proposed arm's length qualifying transaction involving a
business combination with LaSanta Botanicals Ltd. ("LaSanta"), a private company incorporated under
the laws of Alberta on August 10, 2017.
Overview of LaSanta
LaSanta has offices in Calgary and Bogota and its primary commercial operations are based in Colombia,
where LaSanta's wholly owned subsidiary is licensed to cultivate psychoactive and non -psychoactive
cannabis, manufacture and export cannabis extracts, an d produce and sell cannabis genetics. LaSanta was
formed in 2017 to capitalize on Colombia's ideal growing climate and strong agricultural and scientific
expertise to produce low cost, premium -quality medical cannabis products for sale in Colombia
and global markets. LaSanta’s experienced team believes it has established the foundation to create long-
term value in the global cannabis industry.
LaSanta has more than 2.1 million square feet of land licensed for cannabis cultivation, including a 1.3
million square foot farm in Sutamarchan purchased in 2018, 160 kilometres north of the capital city of
Bogota, and 800,000 square feet in Cajica. The Sutamarchan farm was formerly used for organic tomato
cultivation and is situated in an ideal micro climate for ye ar-round indoor and outdoor cannabis
production, with optimal solar radiation, ample water and ideal relative humidity. LaSanta leases the
800,000 square feet in Cajica.
LaSanta has approximately 50,000 square feet of greenhouse in operation in Sutamarchan and Cajica, and
a further 190,000 square feet under construction in Sutamarchan. The initial phase of operation, with total
greenhouse space totalling 240,000 square feet, is expected to have the ability to produce approximately
36,000 kilograms of drie d cannabis flower annually when fully operational in 2020, at an estimated cost
of less than CAD$0.10 per gram. LaSanta is building a state-of-the-art extraction facility, designed for EU
GMP certification, and recently took possession of a new BPE certifi ed laboratory for producing finished
products. LaSanta has a world -class genetics bank, with over 125 strains, and harvested its first crop of
plants for seed characterization earlier this year. LaSanta has applied for characterization of 20 strains to
date and expects to harvest and sell its first commercial crop in the second half of 2019.
LaSanta’s strategy is to leverage research and distribution partnerships to establish a leading position in
the global cannabis industry. LaSanta has executed letters-of-intent with potential take-a-way partners and
is working towards definitive supply agreements with a number of buyers in Colombia, Canada, Australia
and Europe. LaSanta has also secured exclusive research and product development ag reements with
leading brands and top medical institutions in Colombia and North America, with the goal of delivering
scientifically-proven products to market.
Summary of the Proposed Transaction
Big Dougie has entered into a non -binding Letter of Intent with LaSanta dated May 6, 2019 (the " LOI")
pursuant to which Big Dougie and LaSanta intend to complete a business combination (the
"Transaction") with the ongoing public company (the " Resulting Issuer ") being called "LaSanta
Botanicals Inc." Pursuant to t he proposed Transaction, (i) the issued and outstanding common shares of
LaSanta (the "LaSanta Common Shares") will be exchanged for common shares of the Resulting Issuer
(the " Resulting Issuer Common Shares ") on a one for one basis; and (ii) the outstandi ng options to
acquire LaSanta Common Shares ( "LaSanta Options "), share purchase warrants to acquire LaSanta
Common Shares ( "LaSanta Share Purchase Warrants "), and agent's warrants to acquire LaSanta
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Common Shares ( "La Santa Agent’s Warrants ") will be excha nged for replacement options, share
purchase warrants and agent's warrants issued by the Resulting Issuer on a one for one basis. There are
currently issued and outs tanding, 38,931,704 LaSanta Common Shares, 4,075,000 LaSanta Options,
15,382,514 LaSanta Sh are Purchase Warrants and 423,642 LaSanta Agent’s Warrants. In connection
with the Transaction, it is expected that the issued and outstanding common shares of Big Dougie (the
"Big Dougie Common Shares ") will be consolidated (the "Consolidation") on a rat io equal to the
Financing Strike Price (as defined below) divided by $0.12 per Big Dougie Common Share (the " Big
Dougie Rollback Ratio") and that the outstanding stock options to purchase Big Dougie Common Shares
("Big Dougie Options ") and agents' option t o purchase Big Dougie Common Shares ( "Big Dougie
Agent’s Options ") will be adjusted on an equivalent economic basis. There are c urrently issued and
outstanding 12,000,000 Big Dougie Common Shares, 1,200,000 Big Dougie Options and 200,000 Big
Dougie Agent’s Options. The deemed value of the LaSanta Common Shares and the Big Dougie Rollback
Ratio will be disseminated in a press release when the Financing Strike Price is determined.
It is intended that the Transaction, when completed, will constitute Big Dougie's "Qualifying Transaction"
in accordance with Policy 2.4 of the TSX Venture Exchange (the " Exchange"). A more comprehensive
news release will be issued by Big Dougie disclosing details of the Transaction, including financial
information respecting LaSanta, the names and backgrounds of all persons who will constitute insiders of
the Resulting Issuer, and i nformation respecting sponsorship, once an agreement has been finalized and
certain conditions have been met, including:
i) approval of the Transaction by Big Dougie’s Board of Directors;
ii) satisfactory completion of due diligence; and
iii) execution of the definitive agreement.
Shareholder approval is not required with respect to the Transaction under the rules of the Exchange
because the Transaction does not constitute a Non -Arm's Length Qualifying Transaction . However, the
structure of th e Transaction has not yet been finalized so shareholder approval under corporate law may
be required. Trading in the common shares of Big Dougie has been halted and is not expected to resume
trading until the Transaction is completed or until the Exchange receives the requisite documentation to
resume trading.
Summary of the Proposed Private Placement
Pursuant to the LOI, the parties have agreed to use their "commercially reasonable efforts" to cause
LaSanta to complete a private placement (the "LaSanta Private Placement") of LaSanta Common
Shares or subscription receipts exercisable into LaSanta Common Shares (the "Subscription Receipts").
It is intended that the minimum gross proceeds of the LaSanta Private Placement will be for $5,000,000
up to a maximum of $10,000,000. An agent will be retained in respect of the LaSanta Private Placement
and the pricing for the LaSanta Common Shares or Subscription Receipts will be determined in
consultation with the agent (the "Financing Strike Price"). The LaSanta Private Placement may include
warrants exercisable into LaSanta Common Shares. The agent is expected to be paid a cash commission
and be granted broker warrants in connection with LaSanta Private Placement. Further particulars of the
LaSanta Private Placement will be disseminated in a press release to be issued upon finalization of terms
with an agent.
Forward Looking Information
Statements in this press release regarding Big Dougie's business, which are not historical facts, are
"forward-looking statements" that involve risks and uncertainties, such as the terms and conditions of the
proposed Transaction, the LaSanta Private Placement and the Consolidation as well as the business of
LaSanta such as annual dried cannabis flower production expe ctations, expected costs per gram,
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construction of an extraction facility, timing of sale and harvest of its first commercial crop, and
execution of supply agreements . Since forward -looking statements address future events and conditions,
by their very nature, they involve inherent risks and uncertainties. Actual results in each case could differ
materially from those currently anticipated in such statements. Factors which may cause the actual
results and future events to differ materially from those expres sed or implied by such forward -looking
statements, include but are not limited to: estimates regarding flower bench size, yield per square foot
and harvest per annum, the ability to obtain or maintain necessary licenses and permits for the extraction
facility, future legislative and regulatory developments involving cannabis; inability to access sufficient
capital from internal and external sources, and/or inability to access sufficient capital on favourable
terms; the labour market generally and the abilit y to access, hire and retain employees; general business,
economic, competitive, political and social uncertainties; and the delay or failure to receive board or
regulatory approvals, as applicable. There can be no assurance that such statements will prove to be
accurate, as actual results and future events could differ materially from those anticipated in such
statements. Accordingly, readers should not place undue reliance on the forward -looking statements and
information contained in this news release. E xcept as required by law, nei ther Big Dougie nor LaSanta
assume any obligation to update the forward -looking statements of beliefs, opinions, projections, or other
factors, should they change, except as required by law.
Completion of the Transaction, the L aSanta Private Placement and the Consolidation are subject to a
number of conditions, including but not limited to, execution of binding definitive agreements relating to
the Transaction and the LaSanta Private Placement and satisfaction of conditions precedents thereof
(including but not limited to receiving all required shareholder, regulatory and other approvals),
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 prepare d 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 in no way passed upon the merits of the proposed Transaction and
has neither approved nor disapproved the contents of this press release.
For further information, please contact:
Big Dougie Capital Corp.
Al Kroontje
Chief Executive Officer and Director
Phone: (403) 607-4009
Email: [email protected]
LaSanta Botanicals Ltd.
Peter Verburg
President
Phone: 403-870-0644
Email: [email protected]
Neither TSX Venture Exchange nor its Regulation Services Provider (as tha t term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news
release.