VANCOUVER, BC, CANADA (July 23, 2020) – Mota Ventures Corp. (CSE:MOTA FSE: 1WZ:GR OTC: PEMTF) (the “Company” or “Mota Ventures”) is pleased to announce that it has entered into an amended and restated binding letter of intent (the “Letter of Intent”) dated July 22, 2020 with Unified Funding LLC (“Unified”). The Letter of Intent replaces the previous letter of intent with Unified announced on June 6, 2020, where Unified would be acquired at a valuation of US$45 million, with an additional bonus payment of US$15 million. Under the new Letter of Intent, Mota Ventures will acquire Unified in an all-stock transaction at a valuation of US$10 million, with an additional bonus payment of US$5 million if Unified achieves revenue of over US$5 million during the twelve-month period post-closing.
Mota Ventures will be acquiring the same asset as previous reported, but at a significantly reduced valuation, resulting in less dilution to shareholders. Due to Unified’s existing stake in the Company, the reduction in valuation was achieved by their desire to minimize dilution and ultimately increase the overall value of the Company. All other terms of the proposed transaction remain unchanged. The integration of the Unified platform with Mota Ventures and its experienced team of professionals will allow the Company to successfully launch new products and enter into new natural health markets.
“Through beneficial negotiations we were able to secure a favourable reduction on the valuation of Unified by US$35 million, plus a reduction on the bonus payment of US$10 million. The reduction in dilution for existing Mota shareholders was important to our team and I am pleased that we were successful. The acquisition of Unified is a significant step in executing our strategy to further our reach in the natural health products sector. This additional step will allow Mota to expand into new product sectors and control the technology behind the brands” stated Ryan Hoggan, Chief Executive Officer of Mota Ventures.
“We are dedicated to long term growth with Mota Ventures and see the revised terms as beneficial to all parties. I don’t believe the current market value truly represents the value of the business and have confidence that with continued execution by Mota Ventures’ CEO Ryan Hoggan and President Joel Shacker, we will be rewarded in the market,” stated Kevin Keranen, Chairman of Unified.
The Letter of Intent contemplates that the Company would acquire Unified in consideration for US$10,000,000, which will be satisfied through the issuance of common shares of the Company (the “Consideration Shares”). The Consideration Shares will be issuable at a deemed price (the “Transaction Price”) equivalent to the greater of: (i) the volume-weighted average closing price of the common shares of the Company on the Canadian Securities Exchange in the ten trading days prior to the entering into of a definitive agreement in respect of the acquisition, and (ii) Cdn$0.40.
In addition to the Consideration Shares, Unified will be entitled to receive a one-time bonus payment of US$5,000,000 (the “Bonus Payment”) in the event the Company achieves gross revenue in excess of US$5,000,000 from the Unified business in the twelve-month period following closing of the acquisition. The Bonus Payment will be payable in common shares of the Company (the “Bonus Shares”), at the Transaction Price.
The Consideration Shares and the Bonus Shares will be subject to a thirty-six month time-release pooling arrangement, during which time they may not be transferred, assigned, pledged or otherwise traded. The shares will be released from the pooling arrangement in tranches, of which twenty percent will be released upon issuance, and the balance in six equal tranches every six months thereafter.
Following completion of the acquisition, the Company will contribute at least US$1,000,000 of working capital to the business of Unified on or before Friday, November 13, 2020.
Completion of the proposed acquisition of Unified remains subject to a number of conditions, including, but not limited to, satisfactory completion of due diligence, negotiation of definitive documentation and the receipt of any required regulatory approvals. The acquisition cannot be completed until these conditions are satisfied and there can be no assurance that the acquisition will be completed at all.
The proposed acquisition is not expected to constitute a fundamental change for the Company, nor is it expected to result in a change of control of the Company, within the meaning of applicable securities laws and the policies of the Canadian Securities Exchange. The Company will provide further information regarding the proposed acquisition, as that information becomes available.
This press release is available for investor discussion on the Company’s AGORACOM Discussion Forum, a moderated social media platform that enables civilized discussion and Q&A between management and shareholders.
About Mota Ventures Corp.
Mota Ventures is an established natural health products and eCommerce technology Company focusing on the CBD and psychedelic medicine sectors. The Company has a strong presence in both North America and Europe. In the United States, Mota Ventures offers a CBD hemp-oil product line derived from hemp grown and formulated in the US through its Nature’s Exclusive brand. Within Europe, the Company’s Verrian operations are currently conducting clinical studies utilizing proprietary products for the treatment of opioid addiction. The highly skilled Verrian team also manages Mota Ventures’ 110,000 square foot manufacturing facility in Radebeul, Germany. In addition, Mota Ventures’ Sativida brand of award winning 100% organic CBD oils and cosmetics are sold throughout Spain, Portugal, Austria, Germany, France and the United Kingdom. The Company is also seeking to acquire additional revenue-producing natural health product brands and operations in both Europe and North America with the goal of establishing an international distribution network utilizing its eCommerce technology platform.
About Unified Funding LLC
Founded in 2015 by partners with more than a decade of eCommerce and technology experience, Unified has rapidly grown into a formidable organization focused on aggressive expansion in the natural health products market. Powered by its proprietary technology platform, the company has created an eCommerce ecosystem to scale its brands and achieve profitability targets through data analysis, strategic customer acquisition and supply chain management.
ON BEHALF OF THE BOARD OF DIRECTORS
MOTA VENTURES CORP.
Chief Executive Officer
Neither the Canadian Securities Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Canadian Securities Exchange) accepts responsibility for the adequacy or accuracy of this press release, which has been prepared by management.
Cautionary Note Regarding Forward-Looking Statement
All statements in this press release, other than statements of historical fact, are “forward-looking information” with respect to the Company within the meaning of applicable securities laws, including with respect to the completion of the proposed acquisition of Unified, the Company’s plans to acquire revenue-producing CBD brands and operations in Europe and North America, and establishing itself as an international distribution network for CBD products. The Company provides forward-looking statements for the purpose of conveying information about current expectations and plans relating to the future and readers are cautioned that such statements may not be appropriate for other purposes. By its nature, this information is subject to inherent risks and uncertainties that may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate, that assumptions may not be correct and that objectives, strategic goals and priorities will not be achieved. These risks and uncertainties include but are not limited those identified and reported in the Company’s public filings under the Company’s SEDAR profile at www.sedar.com. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. The Company disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise unless required by law.