Bevo (BVO) Resumes Trading on the TSX Venture Exchange

Originally halted after announcement of a reverse takeover by licensed producer Sun Pharm Investments Ltd., Bevo Agro resumes trading under exchange symbol BVO.

VANCOUVER, Oct. 25, 2018 /CNW/ - Bevo Agro Inc. (TSXV: BVO) ("Bevo") is pleased to announce that it will resume trading on the TSX Venture Exchange effective today, October 25, 2018.

As previously announced on October 4, 2018, Bevo and Sun Pharm have entered into an arrangement agreement with respect to a reverse take-over of Bevo (the "Transaction"), and announced that the resulting issuer will change its name to Zenabis Global Inc. ("Zenabis"). Through Sun Pharm's subsidiary licensed producer Zenabis Ltd. ("Zenabis"), Zenabis Global Inc. will have nearly 3.5 million square feet of available production space.¹ At the closing of the Transaction, Bevo's shareholders will hold shares of one of the world's largest cannabis companies.

The Transaction involves three main elements:

• the amalgamation of Sun Pharm with a wholly-owned subsidiary of Bevo (the "Reverse Take-Over"), with Sun Pharm shareholders receiving Bevo shares representing 86% of the outstanding Bevo shares (the expected exchange ratio being one Bevo share for each Sun Pharm share) and the existing Bevo shareholders continuing to hold Bevo shares representing a 14% interest in Bevo.
  
• a plan of arrangement under which Bevo will distribute its interest in CubicFarm Systems Corp. ("Cubic") to the shareholders of Bevo (the "Spin-Out"), with Bevo shareholders expected to receive one common share of Cubic for every Bevo share held. A brief summary of Cubic's cubic farming business is set out below.
  
• Bevo changing its name to Zenabis Global Inc. ("Zenabis," being one of Sun Pharm's established brands in the cannabis industry).

Bevo shareholders will not be granted dissent rights under the plan of arrangement.  Instead, Bevo shareholders that do not wish to participate in Zenabis will have the right to exchange their Bevo shares for non-voting preferred shares of Zenabis which mature on the first anniversary of issuance, and are redeemable at any time at Zenabis' option, in each case at a price of $2.70 per share. The preferred shares are convertible back into Zenabis common shares on the basis of 0.81 of a Zenabis Common Share (representing a price of approximately $3.33 per Zenabis common share) for each preferred share. 

The Transaction was unanimously approved by the board of directors of Bevo. Shareholders holding approximately 58% of Bevo's common shares have entered into voting agreements committing to vote their Bevo common shares in favour of the Transaction.

Zenabis Key Milestones

• On October 4, 2018 Bevo and Sun Pharm announced the RTO and the intent of Bevo to change its name to Zenabis Global Inc. upon completion of the amalgamation
• On October 5, 2018, Zenabis released a presentation introducing the combined business
• As of October 25, 2018, Zenabis has secured purchase orders from government and third party retailers/distributors in New Brunswick, Nova Scotia, British Columbia, and the Yukon Territory

Completion of the Bevo-Sun Pharm Transaction remains subject to review and approval by the TSX Venture Exchange ("TSXV"), shareholder approval and approval of the BC Supreme Court.

Committed Financings
In connection with the Transaction, Sun Pharm secured committed or funded financing of ~$57 million, in addition to $72 million secured since the company's founding at the point of announcement of the RTO October 4, 2018. The $57 million financing consisted of three components:

• $27.5 million of subordinated financing by way of convertible notes. This financing may be converted into shares of Zenabis at a price equal to the lower of $2.62 and a 20% discount to a financing expected to be completed concurrent with completion of the Transactions (the "Concurrent Financing").  The exchange ratio used for the Reverse Take-Over is being calculated on the basis that these convertible notes are converted and form part of 86% of Zenabis that is allocated to the shareholders of Sun Pharm;
• $25 million of convertible senior debt financing that can be drawn on an as-needed basis by Zenabis. This financing may also be converted into shares of Zenabis at a price equal to a 20% discount to the Concurrent Financing, but this conversion is not considered in calculating the exchange ratio; and,
• $4 million of common shares in Sun Pharm issued at a price of $2.82 per share.

In addition, as allowed under the terms of the RTO, Sun Pharm subsequently secured an additional ~$13 million financing, with this financing consisting of two components:

• ~$5 million of subordinated financing by way of convertible notes. This financing may be converted into shares of Zenabis at a price equal to the lower of $2.62 and a 20% discount to the Concurrent Financing.  The exchange ratio used for the RTO is being calculated on the basis that these convertible notes are not converted, and thus do not form part of 86% of Zenabis that is allocated to the shareholders of Sun Pharm; and,
• $8.7 million of common shares in Sun Pharm issued at price of $2.82 per share. The exchange ratio used for the RTO is being calculated on the basis that these common shares dilute both Bevo and Sun Pharm at the 86% to 14% exchange ratio.

The ~$13 million disclosed above was allowed under the terms of the RTO, and does not qualify as the contemplated Concurrent Financing.

About Bevo Agro
Bevo Agro is North America's leading supplier of propagated agricultural plants, operating approximately 53 acres of state-of-the-art greenhouse facilities on 98 acres of land in Langley, BC and 20 acres of land in Pitt Meadows, BC. The company has entered into a binding agreement to acquire 10.4 acres of greenhouse space on 50 acres of land in Aldergrove, British Columbia (the "Greenhouse Acquisition"). The Company's main products have been the propagation of vegetable plants such as tomatoes, peppers, cucumbers, and other plants such as bedding plants, flowers and grasses.  The Company markets its products to established greenhouse growers, nurseries and retail outlets throughout North America.

About Sun Pharm
Sun Pharm has significant experience in agriculture, technology, pharmaceutical sales, consumer packaged goods, international distribution and brand marketing, with cannabis and cannabis-related purchase orders from the provinces of New Brunswick, British Columbia, Nova Scotia, and Yukon Territory.  Sun Pharm is currently a privately-held cannabis company which has one of the largest, federally licensed indoor medical cultivation footprints in Canada, operating two licensed production facilities in British Columbia and New Brunswick, with a third expected to be coming online shortly in Nova Scotia. These facilities encompass 660,000 square feet of indoor pharmaceutical grade cannabis production space, strategically positioned on Canada's coasts, facilitating national distribution and access to international markets. Sun Pharm is currently working towards globally recognized EU GMP certifications.  Sun Pharm has a management team with decades of experience in the industry, with expertise in retail consumer packaged goods, global pharmaceutical sales and manufacturing, quality assurance, and commercialized cultivation. The growing team has more than two decades of experience in organic cultivation and distribution of herbs and nutraceutical products throughout the Americas, North Africa, and the Middle East.  Sun Pharm's sales team has more than two decades in product development, commercialization, and retail and pharmaceutical sales including international distribution.

NEITHER THE TSXV NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSXV) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

This news release contains statements that may constitute "forward-looking information" within the meaning of applicable Canadian securities legislation. Forward-looking information may include, among others, statements regarding the future plans, costs, objectives or performance of Bevo, or the assumptions underlying any of the foregoing. In this news release, words such as "may", "would", "could", "will", "likely", "believe", "expect", "anticipate", "intend", "plan", "estimate" and similar words and the negative form thereof are used to identify forward-looking statements. Forward-looking statements should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether, or the times at or by which, such future performance will be achieved. No assurance can be given that any events anticipated by the forward-looking information will transpire or occur, including the completion of the Transaction. Forward-looking information is based on information available at the time and/or management's good-faith belief with respect to future events and are subject to known or unknown risks, uncertainties, assumptions and other unpredictable factors, many of which are beyond Bevo's control. These risks, uncertainties and assumptions include, but are not limited to, those described Bevo's Management's Discussion & Analysis for the fiscal year ended June 30, 2018, a copy of which is available on SEDAR at www.sedar.com, and could cause actual events or results to differ materially from those projected in any forward-looking statements. Bevo does not intend, nor does Bevo undertake any obligation, to update or revise any forward-looking information contained in this news release to reflect subsequent information, events or circumstances or otherwise, except if required by applicable laws.

For more information,

Follow Zenabis on Facebook @zenabismmj or on Twitter and Instagram @Zenabis

Follow Zenabis' adult-use brand, Namaste, on Twitter, Facebook and Instagram @namastedotcom.

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1	after completion of planned expansions

SOURCE Bevo Agro Inc.

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