Omni Commerce Corp. Provides Update on Change of Business

Omni Commerce Corp. (TSXV:OMNI, FRA:0MZA) (“Omni” or the “Company”) is pleased to announce that, further to its news release of June 1, 2018, the Company has entered into a binding letter agreement dated July 30, 2018 (the “Agreement”) with PureKana LLC (“PureKana”), a limited liability company organized under the laws of the State of Arizona, and Cody Alt and Jeff Yauck (together, the “Members”), pursuant to which the Company has agreed to acquire 100% of the outstanding membership interests in PureKana from the Members (the “Transaction”). PureKana is recognized as a market leader for quality, affordable health and wellness products made from CBD-rich industrial hemp and is generating unaudited revenues in excess of $1.8-million per month. Additionally, PureKana’s unaudited financials show gross margins over 50% and net margins as 19% for the period January to May 2018. PureKana is poised to enter international markets in 2018 with the initial expansion goal of partnering with a Canadian LP offering strong distribution to become the trusted CBD brand for the Canadian market.

The Transaction, which is subject to receipt of required regulatory approvals and other conditions, will represent Omni’s first foray into the hemp cannabidiol (“CBD”) and cannabis sectors in connection with its previously announced change of business (the “Change of Business”).

The Transaction will be an arms’ length transaction. Because PureKana is engaged in CBD activities in the United States, it is anticipated that, in connection with the closing of the Transaction (the “Closing”), the Company will de-list its common shares (the “Shares”) from the TSX Venture Exchange (“TSXV”) and list the Shares on the Canadian Securities Exchange (the “CSE”). In connection therewith, the Company will seek the approval of the majority of the Company’s minority shareholders for the Change of Business and the migration of the listing of the Shares from the TSXV to the CSE.

Because the Company intends to acquire all of PureKana, such that, following the Closing, PureKana will be a wholly-owned subsidiary of the Company, the business of the Company following the Closing will be that of PureKana rather than that of an investment issuer as described in the Company’s June 1, 2018 news release.

The Transaction

Pursuant to the terms of the Agreement, the Company will acquire 100% of the outstanding membership interests in PureKana in exchange for the issuance of an aggregate of 25,333,334 Shares (on a post-Consolidation (as defined herein) basis) (the “Consideration Shares”) and an aggregate cash payment of USD$4.6 million (the “Cash Consideration”) to the Members. In addition, the Company has agreed to issue up to an additional 12 million Shares, on a post-Consolidation basis, to the Members upon the achievement of certain sales-based milestones.

Completion of the Transaction will be subject to the satisfaction of various conditions, including the completion of the Concurrent Financing (as defined herein), the completion of the Consolidation, the satisfaction or waiver of all applicable conditions precedent, and the receipt of conditional approval from the CSE for the proposed listing of the Shares on the CSE.

Management Changes

In connection with the Closing, it is contemplated that the board of directors of Omni (the “Omni Board”) will be reconstituted to be comprised of five members, to be agreed upon by the Members and the Company, that have requisite industry, financing, accounting and public company experience. In this regard, each of the Members are expected to become members of the Omni Board in addition to their appointments as President and Vice-President of the Company, respectively.

Consolidation

Prior to the Closing, it is expected that Omni will complete a consolidation of the Shares on the basis of one post-consolidation Share for each four pre-consolidation Shares (the “Consolidation”). As there are presently 39,553,203 Shares outstanding, there are expected to be approximately 9,888,300 Shares outstanding following the completion of the Consolidation, but prior to giving effect to the issuance of the Share Consideration and the completion of the Concurrent Financing.

Concurrent Financing

In conjunction with the completion of the Transaction, it is anticipated that Omni will complete a private placement to raise minimum gross proceeds of $7,000,000, (the “Concurrent Financing”), terms of such financing will be disclosed as they are determined. The proceeds of the Concurrent Financing will be used by the Company to fund the Transaction, expand into international markets and for general working capital purposes.

About PureKana

Based in Los Angeles, California, PureKana is a top source for quality, affordable health and wellness products made from CBD-rich hemp. PureKana’s CBD products contain less than 0.3% THC (the psychoactive ingredient in cannabis) and are used in foods and as nutritional additives. PureKana products are non-GMO and contain no pesticides, solvents, herbicides or chemical fertilizer. PureKana’s mission is to educate the world on the benefits of hemp CBD and to lead the industry in bringing affordable hemp CBD products to the marketplace. The Members, both of whom are resident in Los Angeles, California, are the sole owners and managers of PureKana.

About Omni

Omni is a publicly listed company currently listed on the TSXV, trading under the symbol “OMNI”. Omni is headquartered in Vancouver, British Columbia and is a reporting issuer in British Columbia, Alberta and Ontario. On May 31, 2018, trading in the Shares was halted in connection with the Company’s announcement of the proposed Change of Business and is expected to remain halted until the Closing.

Other Information

Completion of the transaction described herein is subject to a number of conditions, including Exchange acceptance and disinterested shareholder approval. The transactions cannot close until the required shareholder approval is obtained. There can be no assurance that these transactions will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the Filing Statement to be prepared in connection with the transaction, any information released or received with respect to the Change of Business may not be accurate or complete and should not be relied upon. Trading in the securities of the Company should be considered highly speculative.

Neither the TSX Venture Exchange nor its Regulatory Services Provider has in any way passed or expressed an opinion upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.

ON BEHALF OF THE BOARD

OMNI COMMERCE CORP.

Per: “Anthony Srdanovic”

Anthony Srdanovic, CEO

For further information, please contact:

Anthony Srdanovic, CEO
Phone: (604) 506-0949
Email: anthony@omnicommercecorp.ca

Neither TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this news release.

Disclaimer for Forward-Looking Information

This press release contains “forward-looking information” and “forward-looking statements” within the meaning of applicable securities laws, including: statements regarding the future strategy of the Company; the proposed terms of the Transaction; the reconstitution of the Omni Board; the proposed terms of the Concurrent Financing; the proposed Consolidation; the sectors in which the Company is considering operating; the potential transfer of listing of the Shares to the CSE; the possible approval of matters by shareholders of the Company; and the potential expansion of PureKana into international markets such as Canada. These forward-looking statements address future activities, events, plans, developments and projections. The unaudited financial and other information concerning PureKana in this news release was provided to the Company by PukeKana and has not been audited, reviewed or independently verified. Readers are cautioned not to place undue reliance on such statements. All statements, other than statements of historical fact, constitute forward-looking statements and are frequently identified by words such as “may”, “will”, “should”, “anticipate”, “plan”, “expect”, “believe”, “estimate”, “intend” and similar terminology, and reflect assumptions, estimates, opinions and analysis made by management in light of its experience, current conditions, expectations of future developments and other factors which management believes to be reasonable and relevant. Forward-looking information and statements involve known and unknown risks and uncertainties that may cause actual results, performance and achievements to differ materially from those expressed or implied by the forward-looking information and statements and, accordingly, undue reliance should not be placed thereon. Risks and uncertainties that may cause actual results to vary include, but are not limited to, failure by the Company to obtain shareholder approval for the proposed Change of Business, if required; failure to obtain approval of the Company’s shareholders for the transfer of listing of the Shares to the CSE; failure to obtain regulatory approval of the TSXV or the CSE, as applicable, for the Transaction, the transfer of the Shares, the Concurrent Financing and/or the Consolidation; risks related to the acquisition of PureKana and the Company’s investment and operation in the cannabis sector in the United States; risks related to the potential expansion of PureKana into the Canadian market; and other factors beyond the Company’s control, as well as the risks and uncertainties which are more fully described in our annual and quarterly management’s discussion and analysis and in other filings made by the Company with Canadian securities regulatory authorities under the Company’s profile at www.sedar.com. The Company disclaims any obligation to update or revise any forward-looking information or statements except as may be required by applicable laws.

SOURCE: Omni Commerce Corp.