BevCanna Completes Next Step in Transformative Acquisition of Naturo Group - Seite 2

BevCanna will realize a number of key benefits from the acquisition, including:

• Creation of a “development to distribution” beverage manufacturing vertical for both traditional and cannabis-infused beverages and natural products.
• Direct ownership of a proprietary on-site natural alkaline spring water aquifer, valued at C$18M. As water resources become increasingly scarce, the proprietary resource will contribute to a strengthened balance sheet and to BevCanna’s unique positioning within the exploding plant-based and cannabis sectors.
• An established and growing mass market distribution network of over 3,000 retail points, via Naturo’s market-leading TRACE plant-based mineral beverages and supplements. TRACE is sold across the country through Canadian retailers, with select international agreements and partnerships under review. Along with their nationally distributed alkaline and sparkling waters, and plant-based mineral beverages and supplements, TRACE is expanding its product selection and is incorporating additional nutraceuticals, including cannabinoids, adaptogens, and nootropics, into its products to be sold in domestic and international markets.
• TRACE’S proprietary Health Canada-approved plant-based fulvic and humic formulations – a category which is expanding exponentially across North America and globally.
• Naturo’s 315-acres of outdoor cultivatable land and 40,000 sq. ft. high-capacity beverage facility valued at C$10.4M, optimized for both traditional and cannabis-infused beverage manufacture, and beverage manufacturing equipment valued at C$3.4M (as of year-end).
• As per Naturo’s latest independent estimate pricing report as of January 2021, Naturo’s enterprise value is between C$37M-C$38M.

The Transaction constitutes a “related party transaction” within the meaning of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions ("MI 61-101") as Messrs. Marcello Leone and Martino Ciambrelli are shareholders of Naturo and also directors and the Chief Executive Officer and President, respectively, of the Company. The Transaction is exempt from the formal valuation and minority shareholder approval requirements under MI 61-101 pursuant to sections 5.5(a) and 5.7(1)(a) as the fair market value of the Transaction, insofar as it involves interested parties, does not exceed 25% of the Company’s market capitalization at the time the Transaction was agreed to. As the news release and material change report disclosing the Transaction are being filed less than 21 days before the expected closing date of the Transaction, there is a requirement under MI 61‐101 to explain why the shorter period is reasonable or necessary in the circumstances. In order to fully realize on the significant market opportunity presented by the combination of the two complementary companies, the Company intends to complete the Transaction in the next 10 days.