BOCA RATON, Fla., July 09, 2019 (GLOBE NEWSWIRE) -- Stem Holdings, Inc.? ?(OTCQB: STMH, CSE:STEM), is pleased to announce that it has entered into a non-binding letter of intent dated July 8, 2019 with Seven Leaf Ventures Corp?.?, a private Alberta corporation and the securityholders of 7LV. Pursuant to the LOI, Stem will acquire all of the issued and outstanding shares and other securities of 7LV. It is expected that the LOI will serve as the basis for a final and binding ?agreement for the Transaction.
7LV operates retail dispensary assets in California (the “Assets”). These Assets generated US$5.6 million in revenue, US$1.8 million in gross margin in 2018, and is expected to generate US$8.0 million in revenue, US$2.2 million in gross margin, in 2019. In addition, 7LV is expected to have approximately C$2.0 million in cash from the exercise of certain warrants prior to closing.
It is contemplated that the Transaction will be structured as a share purchase agreement ?among Stem, 7LV and all of the securityholders of 7LV. It is intended that the purchase price payable by Stem for all of the issued and ?outstanding common shares of 7LV, on a fully-diluted basis, to be no more than 10,000,000 common shares in the capital of Stem.
Pursuant to the terms of the LOI, each of 7LV and ?the securityholders of 7LV have agreed not to solicit, negotiate, accept or discuss with any other entity, any transaction that would be in opposition to or in competition with 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) the negotiation of the Definitive Agreement; and (ii) completion by Stem, 7LV and their respective advisors of due diligence satisfactory to the parties. There can be no assurance that the Transaction will be completed on the terms proposed above or at all.
Upon the completion of the Transaction, it is anticipated that Arthur H. Kwan, current CEO of 7LV, will join the Board of Directors of Stem.
About Stem Holdings, Inc.?
As a vertically integrated cannabis company, Stem has positioned itself as a pioneer in the industry with its state-of-the-art cultivation, processing, extraction, retail, and distribution processes. Stem has an interest in, or is in the process of acquiring an interest in, cannabis facilities in Nevada, Oklahoma, Oregon and California, and also participates in a research project in collaboration with Cornell University. Utilizing proprietary, sustainable cultivation techniques, Stem, or its affiliates, develop exceptional products that are safe and consist of lab-tested cannabis and CBD. Stem's partner consumer brands are award-winning and nationally known, and include: cultivators, TJ's Gardens and Yerba Buena; retail brands, Stem and TJ's; infused product manufacturers, Cannavore and Supernatural Honey; and a CBD company, Dose-ology. Stem's mission in supporting the health and happiness of people and the safety of the planet is evident through the Company's continued recognition for its community involvement, employee diversification and a top place to work in cannabis, dedication to environmental causes and outstanding leadership in the cannabis industry. Stem Holdings Inc.’s Corporate Offices are located at ?7777 Glades Road Suite 203 Boca Raton,? FL 33434 United States, https://www.stemholdings.com.
