Plantext Ltd. and BB1 Acquisition Corp. Announce Letter of Intent for a Proposed Qualifying Transaction

Toronto, Ontario--(Newsfile Corp. - January 24, 2019) - Plantext Ltd. ("Plantext") and BB1 Acquisition Corp. (TSXV: BBA.P) ("BB1" or the "Company") are pleased to announce the entering into of a binding Letter of Intent (the "LOI"), which sets forth the general terms and conditions pursuant to which Plantext and BB1 have agreed to complete a transaction (the "Transaction") that will result in a reverse take-over of BB1 by the shareholders of Plantext. It is intended that the Transaction will constitute the "Qualifying Transaction" of BB1 as such term is defined in Policy 2.4 of the Corporate Finance Manual (the "Policy") of the TSX Venture Exchange (the "TSXV").

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. Leonid Metsger, 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.

According to Doug Sommerville, Plantext's CEO, "The LOI announced today puts Plantext on a pathway to becoming a public company in order to enhance our ability to expand and serve more patients globally, while allowing our investors to participate in our growth. Plantext is executing on its aggressive product development pipeline of proprietary products for the treatment of inflammatory diseases. We are on track to launch our first product by the end of this quarter - a treatment developed in collaboration with the State of Israel's Agricultural Research Organization ("ARO") for patients suffering with inflammatory bowel disease."

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.

Plantext has entered into a license agreement with ARO and has acquired the exclusive rights to fund development of medical cannabis intellectual property ("IP") and products at ARO for the treatment of inflammatory bowel disease ("IBD") and the exclusive rights to commercialize ARO's IBD IP and products globally.

Under the terms of the LOI, it is intended that Plantext and BB1 will enter into a business combination agreement (the "Definitive Agreement"), pursuant to which the Transaction will be completed by way of a share exchange, merger, amalgamation, arrangement or other similar form of transaction, the final structure of which will be subject to receipt by the parties of relevant tax, corporate and securities law advice.

Conditions of the Transaction

Completion of the proposed transaction is subject to a number of conditions including, but not limited to: (i) completion of mutually satisfactory due diligence reviews; (ii) execution of the Definitive Agreement; (iii) completion of the Concurrent Financing (as defined below); (iv) requisite board and shareholder approvals; (v) receipt of all requisite regulatory approvals relating to the Transaction, including, without limitation, the TSXV; (vi) receipt of a ruling from the Israeli tax authorities providing for a deferral for Israeli PlantExt shareholders of any tax otherwise owing on the Transaction; and (vii) BB1 shall have no less than $800,000 in cash remaining on the closing date, less all costs and expenses of BB1 relating to the Transaction.

The Proposed Transaction

Pre-Closing Capitalization of BB1

As of the date hereof, BB1 has 15,000,000 issued and outstanding common shares (each a "BB1 Share") and securities exercisable or exchangeable for, or convertible into, or other rights to acquire, an aggregate of 1,100,000 BB1 Shares at an exercise price of $0.10 per BB1 Share (collectively with the BB1 Shares, the "BB1 Securities").

The BB1 Shares are currently listed on the TSXV under the symbol "BBA.P". The BB1 Shares are currently halted from trading and are expected to remain halted pending the completion of the Transaction.

Pre-Closing Capitalization of Plantext

Plantext is incorporated under Israeli corporate law and, as of the date hereof, has (a) 23,052,116 common shares issued and outstanding (the "Plantext Shares"), (b) 2,473,000 stock options exercisable to acquire 2,473,000 Plantext Shares (the "Plantext Options") and (c) 600,000 restricted stock units ("Plantext RSUs") (collectively, the "Plantext Securities"). The holders of Plantext Options and Plantext RSUs will receive options and restricted stock units of BB1 on the same economic terms as the Plantext Options and Plantext RSUs which they replace.

Terms of the Transaction

Prior to the completion of the Transaction, the BB1 Shares shall be consolidated at a ratio of approximately 7.15 pre-consolidation BB1 Shares for every 1 post-consolidation BB1 Share (each a "Post-Consolidation BB1 Share"). Upon completion of the Transaction there will be 2,250,000 BB1 Securities outstanding which will be held by current securityholders of BB1.

Prior to or concurrently with closing of the Transaction, Plantext expects to complete a concurrent financing with arm's length subscribers (the "Concurrent Financing").

It is anticipated that the Plantext Shares will be attributed an aggregate value of approximately US$23,000,000 (pre-money and non-diluted). The Plantext Shares will be acquired by BB1 in exchange for the issuance of 23,052,116 Post-Consolidation BB1 Shares. Prior to the completion of the Transaction, the total number of shares issuable by BB1 and the aggregate value of the Plantext Shares shall be adjusted to take into account the Concurrent Financing and any issuances of Plantext Options and Plantext RSUs that occur prior to the Transaction. BB1 shareholders will hold 2,250,000 Post-Consolidation BB1 Securities in total on closing of the Transaction.

Management and Insiders of the Resulting Issuer

The proposed board of directors of the corporation resulting from the Transaction (the "Resulting Issuer") will be Joe Oliver, Oded Sagee, Ittamar Herman, Al Shefsky, Kevin McGovern, Stan Bharti and Doug Sommerville. The proposed officers of the Resulting Issuer will be Doug Sommerville, Chief Executive Officer, Al Shefsky, President (Canada), Oded Sagee, President (Israel) and Paul Andersen, Chief Financial Officer. The relevant professional experience of the proposed directors and officers is set out below:

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 sales-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 $1.4 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 amassed 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 bright start-ups throughout North America, South America, Africa and Australia. He continues to expand his global reach.

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 18th 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 31 Plantext shareholders holding 6,089,103 Plantext Shares, representing approximately 26% 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 43% 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 18% of the total issued and outstanding shares of Plantext as of the date hereof. Cannadigm is controlled by Alan 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 12% of the total issued and outstanding shares of Plantext as of the date hereof. Cannadigm is controlled by Fred Leigh, a resident of the province of Ontario.

About Plantext

Plantext is focused on developing and commercializing the world's most effective medical cannabis formulations for the treatment of inflammation related medical conditions. Plantext has entered into a strategic partnership with the State of Israel's ARO to develop and commercialize a treatment for IBD.

Plantext conducts pre-clinical and clinical studies in collaboration with ARO and leading medical centres in Israel and internationally. Plantext is preparing to begin commercial marketing of its first IBD product in Israel during Q1 2019 and is advancing the development of a pipeline of anti-inflammatory products.

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.

Forward Looking Information, Disclaimer and Reader Advisory

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. These 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 ability of the Company to complete the Transaction. 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. 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. 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 release.

NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES AND DOES NOT CONSTITUTE AN OFFER OF THE SECURITIES DESCRIBED HEREIN.

For more information please contact BB1's Chief Executive Officer, Stephen Shefsky at (416)-366-4200 or Plantext's Chief Executive Officer, Douglas Sommerville at (416)-640-5353.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/42443

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