World High Life Plc Announces Closing of Love Hemp Acquisition and Closing of an Initial Tranche of £2m (CAD $3.3M) Financing

World High Life Plc (NEX:LIFE) is pleased to announce that the Company’s previously announced agreement to acquire Love Hemp Ltd. (“Love Hemp”) has closed successfully (“Completion”). The Company’s Directors believe that this first investment by the Company provides World High Life with a platform to expand Love Hemp’s already significant business throughout the UK and more extensively into Europe. The Company has also completed a £2 million (CAD $3.3 million) convertible debenture fundraising (the “Fundraising”). The Company will continue with its financing round and expects to close a second tranche of convertible debenture financing in the coming weeks.

Highlights:

• World High Life has acquired Love Hemp for a consideration of between £9 million and £10 million (between CAD $15.2 million and CAD $16.9 million)
• Completion of a £2 million (CAD $3.3 million) fundraise by the issue of convertible debentures
• The funds raised will be utilised by the Company to part fund the acquisition of Love Hemp and provide working capital for due diligence and further investments in accordance with the Company’s investment policy
• Love Hemp is a London-based industry leading supplier of a range of CBD and hemp products
• Distribution agreements already in place with leading UK supermarkets and health food stores
• The expertise brought by World High Life will focus on Love Hemp’s expansion across the United Kingdom and Europe, with particular attention on Germany over the course of 2020
• It will give World High Life access to an online distribution network and a significant presence in 1,200 convenience stores in the UK, including leading high street brands such as Ocado, Holland & Barrett and WH Smith

Mr. David Stadnyk, President and Chairman, World High Life stated:

“We are delighted to have closed our first deal. Love Hemp is one of the UKs leading providers of CBD and hemp products and we believe that this investment will enable Love Hemp to expand its planned acceleration and, with our support, achieve its ultimate goal of becoming one of the most significant CBD companies in the world.

“We continue to access new opportunities within this exciting, growing sector and look forward to updating the market of our progress in due course.”

Mr. Tony Calamita, Love Hemp founder, commented:

“Love Hemp has experienced rapid growth from inception and our ambition is to become the most recognisable and sought-after CBD brand in the world. To achieve this goal, we needed the right partners and we are confident that we have found this in World High Life, whose experience and success in the sector will be invaluable to us as we continue to grow.”

The Fundraising

Under the Fundraising, World High Life has issued a first tranche of £2,007,151 (CAD $3,311,800) nominal of convertible debentures (the “Debentures”) that will pay interest of 10% annually, and will be convertible into ordinary shares of 1p each in the Company (“Ordinary Shares”) at a price of £0.10 per share, subject to the Company’s right to force conversion upon 30 days’ notice in the event that the Ordinary Shares trade at £0.30 or higher for a 10 day period.

In addition, the Company has issued 20,071,510 warrants to the subscribers for the Debentures, each warrant entitling the holder to subscribe for an additional Ordinary Share at a price £0.15 per share for two years, subject to the Company’s right to accelerate the maturity date upon 30 days’ notice in the event that the Ordinary Shares trade at £0.25 or higher for a 10 day period.

The Debentures will mature in two years plus one day from the closing of the Fundraising.

The funds will be utilised by the Company to part fund the acquisition of Love Hemp and to conduct due diligence on further investment opportunities in accordance with the Company’s investment policy and for general corporate and working capital purposes.

Terms of the Acquisition

All the shares of Love Hemp have been purchased, free from all encumbrances, under the following terms for a minimum consideration of £9 million (CAD $ 15.2 million). The Company announced on 23 September 2019 indicative deal terms which have been updated to remove the earn out performance criteria but to permit the satisfaction of the deferred consideration in Ordinary Shares, as set out below:

• £3 million (CAD $5.07 million) of the consideration paid in cash on Completion
• £3 million (CAD $5.07 million) satisfied by the issue of 30,000,000 Ordinary Shares on Completion
• A further earn out of up to a maximum of £4 million (CAD $6.76 million) to be paid as follows:
  • £1,500,000 (CAD $2,535,000) in cash on the date falling six months and one day from the date of completion, provided that at the Company’s election it can alternatively pay to the sellers an amount of £2,000,000 (CAD $3,380,000) to be satisfied by the issue of Ordinary Shares calculated on a 10% discount to the 10 day VWAP preceding the date of the issue of those shares
  • £1,500,000 (CAD $2,535,000) in cash on the date falling twelve months and one day from the date of completion provided that at the Company’s election it can alternatively pay to the sellers an amount of £2,000,000 (CAD $3,380,000) to be satisfied by the issue of Ordinary Shares calculated on a 10% discount to the 10 day VWAP preceding the date of the issue of those shares

Tony Calamita and Thomas Rowland are the founders and principal vendors of Love Hemp and will remain as key executives within World High Life following Completion, committed to staying with the business for at least three years. As consideration for the acquisition of Love Hemp, Mr Calamita and Mr Rowland have been allotted a total of 27,000,000 Ordinary Shares, and each now has an interest in 13,500,000 Ordinary Shares, representing in each case 9.6% of the Company’s enlarged issued share capital.

The Ordinary Shares allotted to Mr Calamita and Mr Rowland are expected to be admitted to trading on the NEX Exchange Growth Market on 23 October 2019 (“Admission”). Mr Calamita and Mr Rowland have agreed not to dispose of any interest in the Ordinary Shares held by them for a period of 12 months following Admission and then for the following 12 months not to dispose of their Ordinary Shares without first consulting the Company and Peterhouse Capital Limited in order to maintain an orderly market for the Shares.

Following the issue of the Ordinary Shares, the Company’s has 140,898,091 Ordinary Shares in issue, each share carrying the right to one vote. The figure of 140,898,091 should be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the Company under the Financial Conduct Authority’s Disclosure and Transparency Rules.

Note: Currency conversions to Canadian dollars have been calculated using the current exchange rate as at the date of the release and are subject fluctuation.

About Love Hemp

Love Hemp is one of the UK’s leading CBD and Hemp product suppliers and has more than 40 product lines, comprising oils, sprays and vapes and a variety of edible and water-based CBD products. Love Hemp has established relationships with over 1,200 stores in the UK, including leading brands such as Ocado, Holland & Barrett and WH Smith.

About World High Life

World High Life was established by the founders of Supreme Cannabis (TSX: FIRE), and 1933 Industries (CSE: TGIF), both companies at the forefront of the legalised cannabis industry. LIFE was established to take advantage of the huge opportunities available in the UK and European legal cannabis space, which is set to be the largest in the world within five years.

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Market Abuse Regulation (MAR) Disclosure

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.

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