Savanna Capital Corp. Announces Proposed Acquisition of Varianz Corp. and Related Financing Transaction

Not for distribution to United States newswire services or for release publication, distribution or dissemination directly, or indirectly, in whole or in part, in or into the United States.

TORONTO, June 05, 2019 (GLOBE NEWSWIRE) -- SAVANNA CAPITAL CORP. (“Savanna”) (TSX-V: SAC.P), a capital pool company as defined under Policy 2.4 – Capital Pool Companies (the “CPC Policy”) of the TSX Venture Exchange (the “Exchange”), is pleased to announce that it has entered into a binding letter of intent (the “Letter Agreement”) with Varianz Corp., a Colombia-based privately held corporation existing under the laws of the Province of Ontario (“Varianz Corp”), which outlines the general terms and conditions pursuant to which Savanna and Varianz Corp have agreed to complete a transaction (the “Transaction”) that will result in a reverse take-over of Savanna by the current shareholders of Varianz Corp. The Letter Agreement was negotiated at arm’s length and entered into as of May 30, 2019.

Varianz Bio Lab S.A.S (“Varianz Bio Lab”), a wholly-owned subsidiary of Varianz Corp. (Varianz Bio Lab and Varianz Corp. are collectively referred to hereinafter as “Varianz”), is a biotechnology company focused on the medicinal cannabis industry, with headquarters in Bogotá, Colombia. Varianz intends to establish a vertically integrated operation to control a broad-scope value chain process from planting to processing cannabis, and ultimately producing high-quality medical cannabis oil extracts and other derivative products with rich CBD content.


Terms of the Transaction and Financing Matters

It is currently anticipated that the proposed Transaction will be effected by way of a plan of arrangement, triangular merger, share exchange or other mechanism deemed to be the most effective, as determined by the mutual agreement of Savanna and Varianz. The Transaction will be considered a “Qualifying Transaction” pursuant to the CPC Policy. Savanna and Varianz will enter into a definitive merger, amalgamation, arrangement or share exchange agreement (the “Definitive Agreement”) pursuant to which the combined entity of Savanna and Varianz (the “Resulting Issuer”) will continue to carry on the business of Varianz under its name and will list its securities on the Exchange.

The obligations of Savanna and Varianz Corp. pursuant to the Letter Agreement shall terminate in certain specified circumstances, including in the event that the Definitive Agreement is not entered into on or before June 14, 2019 (unless extended by mutual agreement of the parties). The proposed Transaction is subject to requisite regulatory approvals and standard closing conditions, including the approval of the directors of each of Savanna and Varianz Corp. of the Definitive Agreement, as well as the conditions described below. Upon completion of the Transaction, it is the intention of the parties that the Resulting Issuer will continue to focus on the current business and affairs of Varianz.

Concurrent Offerings

Savanna has no material liabilities, approximately $200,000 in cash, 4,600,000 common shares (the “Savanna Common Shares”) and 443,200 options (the “Savanna Options”) issued and outstanding. Prior to the completion of the Transaction, Savanna will complete a non-brokered offering of 8,000,000 common shares at a price of C$0.10 per share (the “Savanna Offering”) for gross proceeds of approximately C$800,000.00.

Prior to the completion of the Transaction, it is anticipated that Varianz Corp will complete a non-brokered private placement of approximately 16,000,000 units (the “Target Units”) at a price of C$0.05 per Target Unit for gross proceeds of approximately C$800,000.00 (the “Varianz Offering”). Each Target Unit shall entitle the unitholder to receive, upon satisfaction of certain escrow release conditions, and without payment of additional consideration, one common share in the capital of Varianz Corp (a “Varianz Common Share”) and one common share purchase warrant (a “Target Warrant”) exercisable for 24 months from the date of the issuance at a price of C$0.10 per Target Warrant. Upon completion of the Varianz Offering, Varianz Corp will have approximately 156,000,000 common shares and 16,000,000 Target Warrants issued and outstanding.

Pre-Transaction Reorganization

On or prior to the completion of the Transaction, but (a) after the completion of the Savanna Offering; and (b) before the Consolidation (as defined below), Savanna will have 12,600,000 common shares outstanding and will split its shares on a 3.2911508 new for one old share basis (the “Share Split”), resulting in approximately 41,468,500 common shares of Savanna being issued and outstanding.

Post-Transaction Capital Structure

Upon the completion of the Transaction, the Resulting Issuer shall consolidate its shares on a two old for one new share basis (the “Consolidation”), resulting in approximately 98,734,250 Resulting Issuer common shares being issued and outstanding (undiluted), derived as follows:

  • Shareholders of Savanna (including those common shares issued pursuant to the Savanna Offering) – 20,734,250

  • Existing shareholders of Varianz – 70,000,000

  • Subscribers to the Varianz Offering – 8,000,000

Additionally, there will be approximately 8,000,000 Resulting Issuer warrants (from the Varianz Offering) exercisable at C$0.20 and approximately 729,319 Savanna Options exercisable at C$0.061 issued and outstanding. Subject to expenses incurred with regard to the Transaction and the establishment of Varianz’s business in Colombia, upon closing of the Transaction, the Resulting Issuer will have cash of approximately $1,800,000.

Conditions to Transaction

Completion of the Transaction is subject to a number of conditions of closing that are customary for a transaction of this nature, including, without limitation:

  • Savanna shall obtain receipt of requisite shareholder approvals in connection with the following matters: (i) the Share Split; (ii) a change of name to a name as may be requested by Varianz and acceptable to applicable regulatory authorities (the “Name Change”); (iii) the election of the directors of the Resulting Issuer to replace the current directors of Savanna immediately following the completion of the proposed Transaction; and (iv) the approval of the Transaction, if required by regulatory authorities;

  • Completion of the Savanna Offering and the Varianz Offering;

  • Savanna and Varianz Corp entering into the Definitive Agreement;

  • Receipt by Varianz Bio Lab of the Psychoactive Crop License and the Transformation License (both defined below) from the applicable Colombian regulatory authorities in form and substance satisfactory to Savanna and the required approval of any other third parties; and

  • The common shares of the Resulting Issuer having been approved for listing on the Exchange.

The Definitive Agreement, once executed, will be filed under Savanna’s issuer profile on SEDAR at

Shareholder Approval

Savanna and Varianz are at arm’s length, and accordingly, the Transaction is not a “Non-Arm’s Length Qualifying Transaction” (as such term is defined by the Exchange). As such, Savanna will not be required to obtain shareholder approval of the Transaction. In addition, the Transaction is not “related party transaction” as such term is defined by Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions and is not subject to Policy 5.9 of the Exchange. As a result, no meeting of the shareholders of Savanna are required pursuant to Policy 2.4 of the Exchange or securities laws.

However, Savanna plans to hold a special meeting of shareholders whereat, among other things, the shareholders of Savanna will be asked to approve: (i) the Share Split; (ii) the Name Change; (iii) the appointment of a new slate of directors, conditional upon completion of the Transaction; and (iv) the Consolidation. It is anticipated that the Transaction and the Definitive Agreement will be put before the shareholders of Varianz for their approval.


Insiders, Officers and Board of Directors of the Resulting Issuer


Two principal shareholders of Varianz, Ribagorza Investment S.A. and Landsons Investments Corporation (both Panamanian companies) are each expected to own approximately 30% of the common shares of the Resulting Issuer after giving effect to the Transaction, but before any subsequent financings, and therefore each is expected to become an insider of the Resulting Issuer by virtue of its shareholdings.

Management of the Resulting Issuer

At closing of the Transaction, all of the existing directors and officers of Savanna will resign and the board of directors of the Resulting Issuer shall be composed of a minimum five (5) and a maximum of ten (10) directors. 

More details of the number and identity of the proposed officers and directors of the Resulting Issuer will be disclosed in a further news release.

About Varianz

With local experience, relationships and access to excellent infrastructure, Varianz Bio Lab is well-positioned to continue the expansion of its operations and commence cultivation of cannabis and production of medicinal cannabis oil extracts on its approximately 20 hectares of lands located in Flandes, Tolima, Colombia (the “Varianz Lands”). Varianz Bio Lab has the ability to expand its cultivation and production operations to include 200 additional hectares at the same location as the Varianz Lands.

Varianz Bio Lab has successfully obtained from the Colombian Ministry of Justice and the Colombian Agricultural Institute, as applicable, licences that:

  1. recognize Varianz Bio Lab as a cannabis seed producer in Colombia;

  2. allow Varianz Bio Lab to trade cannabis seeds; and

  3. allow Varianz Bio Lab to harvest non-psychoactive cannabis for: (a) seed production for crops; (b) production of non-psychoactive cannabis derivatives (including sowing, transformation and disposition); (c) industrial sale of non-psychoactive cannabis derivatives (excluding third party disposition and storage); and (d) scientific disposition of non-psychoactive cannabis derivatives (excluding third party disposition and storage).

Varianz Bio Lab has also applied, and is awaiting approval, for a transformation licence, which will allow Varianz Bio Lab to manufacture, produce, commercialize and export psychoactive and non-psychoactive cannabis derivatives for national, international and research purposes (the “Transformation License”). The Transformation Licence is a pre-requisite to Varianz Bio Lab receiving its Psychoactive Crop Licence (as defined below).

As of the date hereof, Varianz Bio Lab has received conditional approval of a psychoactive crop licence that will allow Varianz Bio Lab to harvest psychoactive cannabis for: (a) seed production for crops; (b) production of psychoactive cannabis derivatives (including sowing, production of clones, storage, trading, distribution, exportation and final sale to third parties); (c) industrial sale; and (d) scientific disposition (the “Psychoactive Crop License”). Varianz Bio Lab anticipates that it will receive the Psychoactive Crop Licence and the Transformation Licence in July of 2019.

Inter-Company Relationships

Officers, directors and principal shareholders of Savanna may own common shares of Varianz and may subscribe for Target Units in the Varianz Offering. Similarly, officers, directors and principal shareholders of Varianz may own common shares of Savanna and may subscribe for common shares of Savanna in the Savanna Offering.

Sponsorship for Qualifying Transaction

Sponsorship of a qualifying transaction of a capital pool company is required by the Exchange unless exempt in accordance with the policies of the Exchange. Subject to applying and receiving a waiver, Savanna will engage a sponsor to satisfy the sponsorship requirements pursuant to the policies of the Exchange.

Filing Statement

In connection with the Transaction and pursuant to the requirements of the Exchange, Savanna anticipates filing a filing statement (the “Filing Statement”) on its issuer profile on SEDAR (, which will contain details regarding the Transaction, the Savanna Offering, the Varianz Offering and the Resulting Issuer.

About Savanna

Savanna is a Capital Pool Company (as defined in the policies of the TSX Venture Exchange) listed on the Exchange.

Further Information

For further information regarding the proposed Transaction, please contact:

Savanna Capital Corp.
Kenny Choi
Tel: (416) 861-2262

Varianz Corp.
Alejandro Jimenez
Tel: (+57) 314 220-5410

All information contained in this news release with respect to Savanna and Varianz was supplied by the parties respectively for inclusion herein, and each party and its directors and officers have relied on the other party for any information concerning the other party.

Completion of the Transaction is subject to a number of conditions, including but not limited to, Exchange acceptance. Where applicable, the transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the transaction, any information release or received with respect to the transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.

The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this news release


This news release contains “forward-looking information” and “forward-looking statements” (collectively, “forward-looking statements”) within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as “expects”, or “does not expect”, “is expected”, “anticipates” or “does not anticipate”, “plans”, “budget”, “scheduled”, “forecasts”, “estimates”, “believes” or “intends” or variations of such words and phrases or stating that certain actions, events or results “may” or “could”, “would”, “might” or “will” be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements. In this news release, forward-looking statements relate, among other things, to: the terms and conditions of the proposed Transaction; the terms and conditions of the proposed Offering; receipt of all regulatory licenses required for the cultivation, production, domestic distribution and international export cannabis and cannabis related products; use of proceeds raised in the Offering, the proposed officers and directors of the Resulting Issuer; and the business and operations of the Resulting Issuer after the proposed Transaction. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: general business, economic, competitive, political and social uncertainties; and the delay or failure to receive board, shareholder or regulatory approvals. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this news release.

Readers should not place undue reliance on the forward-looking statements and information contained in this news release. Savanna and Varianz assume no obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change, except as required by law.

The securities to be offered in the Offering have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the “U.S. Securities Act”) or any U.S. state securities laws, and may not be offered or sold in the United States or to, or for the account or benefit of, United States persons absent registration or any applicable exemption from the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws. This news release shall not constitute an offer to sell or the solicitation of an offer to buy securities in the United States, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.