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Savanna Capital Corp. Enters Into Definitive Agreement With Varianz Corp.

TORONTO, Aug. 30, 2019 (GLOBE NEWSWIRE) -- Savanna Capital Corp. (“Savanna”), 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 business combination agreement (the “Agreement”) with Varianz Corp. (“Varianz”), which outlines the terms and conditions pursuant to which Savanna and Varianz agree to effect the combination of their respective businesses and assets by way of a “three-cornered amalgamation” among Savanna, a wholly-owned subsidiary of Savanna (“Subco”) and Varianz. 

Subject to regulatory approval, shareholder approval and other conditions set out in the Agreement, Savanna will become the resulting issuer, a medicinal cannabis producer with the name “Varianz Group Corp.” or such other similar name as may be accepted by the relevant regulatory authorities and approved by its board of directors (the “Resulting Issuer”).


Savanna and Varianz intend to carry out the proposed business combination whereby Savanna will acquire all of the issued and outstanding shares of Varianz by means of a three-cornered amalgamation among Savanna, Varianz and Subco under the provisions of the Ontario Business Corporations Act and related transaction steps as Savanna’s “Qualifying Transaction” pursuant to the CPC Policy (the “Transaction”).

Prior to the completion of the business combination contemplated herein, Varianz intends to engage an agent (the “Agent’) to assist in the completion of a brokered private placement (the “Varianz Brokered Offering”) of subscription receipts of Varianz (each being a “Brokered Varianz Subscription Receipt”), the aggregate number and price of which shall be determined by Varianz, Savanna and the Agent acting reasonably. Each Brokered Varianz Subscription Receipt shall entitle its holder to acquire, upon the satisfaction of certain conditions and for no additional consideration or effort on the part of the holder thereof, Varianz securities, which will in turn be exchanged for equivalent securities in the capital 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 27% of the common shares of the Resulting Issuer after giving effect to the Transaction, but before the Varianz Brokered Offering or any subsequent financings, and therefore each is expected to become an insider of the Resulting Issuer by virtue of its shareholdings.

If the necessary approvals of the shareholders of Varianz and the TSXV are received, the Transaction is expected to be completed on or about November 30, 2019.

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.

The relevant professional experience of the currently proposed directors and officers of the Resulting Issuer is set out below:

Alejandro Jiménez Ramírez


Alejandro Jiménez Ramírez has over 15 years of experience in corporate affairs providing advice to various companies relating to corporate law, environmental regulation, social responsibility, government engagement, communications, and sustainability matters. Mr. Ramirez is currently a Partner and Director at Aventtus, a consulting firm engaged in the Cannabis and Renewable Energy sectors. He concurrently serves as a Partner at Qvartz Capital Partners, an entity offering financial solutions and business development services for businesses in the resource, cannabis and renewable energy industries. Mr. Ramírez holds a law degree (J.D) and LL.M from the Universidad de los Andes (Colombia) and a Master of Business Administration (MBA) from Georgetown University – McDonough School of Business.

Alfredo Morales


Alfredo Morales has 30 years of experience working in the “Fast Consumer Goods Sector” in Latin America serving companies such as Indega, Colgate Palmolive and the Energizer Battery Company. He currently serves as the President of Henkel KGAA (“Henkel”) for the Andean Region and as Vice President of the Henkel’s Beauty Retail business for Latin America. Working with Henkel, Mr. Morales has led the acquisition of several brands in Latin America. He is also the founder and owner of Iverpack, a company that designs packaging for flowers destined for export. Mr. Morales is currently a board member of a leading Colombian insurance company, Seguros Colmena, and the German-Colombian Chamber of Commerce. Mr. Morales has professional experience in sales development, marketing, trade marketing, general management supply chain management throughout Latin America, including areas of R&D, purchasing, and pack development. He holds a chemical engineering degree from Universidad Del Valle in Cali Colombia and an MBA and Master of Management from Tulane University in New Orleans, USA.

Juan José Martinez


Juan José Martinez is an industrial engineer and holds a Master of Finance degree from the Universidad de los Andes (Colombia). He is currently acting as a Vice President in the “Fuels” sector for Primax Colombia. Mr. Martinez developed oil and gas industry experience over the past 20 years while working for ExxonMobil in the areas of downstream global marketing, retail and commercial businesses and strategic planning. During his time at ExxonMobil, Mr. Martinez worked on assignments in Argentina, Brazil, the United States and Colombia. He also has 5 years of experience in the flower industry, growing and exporting Colombian flowers for Magna Flowers where he assisted in the exportation of roses from Colombia to markets in the United States, Canada, Russia and Argentina.

Varianz and Savanna are currently seeking additional candidates for directors. More details of the number and identity of such directors will be disclosed in a further news release as it becomes available.

Management Services Agreement

Upon completion of the Transaction, the Resulting Issuer and an affiliate of Savanna (the “Savanna Consultant”) shall enter into a management services agreement (the “Management Services Agreement”) for a renewable term of one (1) year, whereby the Savanna Consultant will provide regulatory support services to the Resulting Issuer, including but not limited to, ensuring the completion of accurate and timely financial reporting, regulatory filings and all other TSXV and Canadian disclosure requirements. The Resulting Issuer will pay a fee to the Savanna Consultant for services provided under the Management Services Agreement, the amount of which shall be agreed to by Varianz and Savanna prior to the completion of the Transaction.

Engagement of WD Capital

Pursuant to a letter agreement dated August 30, 2019 (the “Engagement Letter”) WD Capital Markets Inc. (“WD Capital”) will provide certain advisory services to Varianz in connection with but not limited to: (a) general business and financial advice; and (b) financial advice in connection with the Transaction. Pursuant to the Engagement Letter the parties agreed that WD Capital will be paid a fee for services rendered thereunder equal to 3% of the imputed value of the Resulting Issuer on a pre-completion of the Transaction basis, payable in equity of the Resulting Issuer upon completion of the Transaction.   


Varianz Corp.

Varianz is a Colombia-based privately held corporation existing under the laws of the Province of Ontario. Varianz Bio Lab S.A.S (“Varianz Bio Lab”), a wholly-owned subsidiary of Varianz (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.

Varianz Bio Lab has obtained from the Colombian Ministry of Justice and the Colombian Agricultural Institute, as applicable, licenses 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: (i) seed production for crops; (ii) production of non-psychoactive cannabis derivatives (including sowing, transformation and disposition); (iii) industrial sale of non-psychoactive cannabis derivatives (excluding third party disposition and storage); and (iv) 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 license, 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 License is a pre-requisite to Varianz Bio Lab receiving its Psychoactive Crop License (as defined below).

As of the date hereof, Varianz Bio Lab has received conditional approval of a psychoactive crop license 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 License and the Transformation License in September of 2019.

Relevant unaudited financial information for Varianz Bio Lab is summarized below:

AS AT DECEMBER 31, 2018*

  Cash and cash equivalents 1,632.03  
  Trade debtors and other payables 16,945.00  
Total current assets 18,577.07  
Property, plant and equipment 6,120.28  
Intangibles (Licences) 44,358.94  
Total non-current assets 50,468.41  
Total assets 69,050.65  
Trade and other payables 80,716.05  
Total current liabilities

Total non-current liabilities 0  
Total liabilities 80,716.05  
Share Capital 1,631.72  
Income for the period (13,306.30 )
Total equity (11,674.42 )
Total liabilities and equity 69,050.65  

*Converted to Canadian Dollars from Colombian Pesos using exchange rate of COP 2456.81259 to CDN $1.00 effective on July 8, 2019.

About Savanna

Savanna is a Capital Pool Company (as defined in the policies of the Exchange) listed on the Exchange. Savanna has no material liabilities, approximately $150,000 in cash, 4,600,000 common shares and 443,200 options (the “Savanna Options”) issued and outstanding.

Further Information

For further information regarding the proposed Transaction, please contact:

Savanna Capital Corp.
Kenny Choi
Tel: (416) 861-2262
E-mail: Kenny.choi@fmresources.ca 

Varianz Corp.
Alejandro Jimenez
Tel: (+57) 314 220-5410
Email: IR@varianz.co

Certain statements in this release are forward-looking. Forward-looking statements consist of statements that are not purely historical, including any statements regarding beliefs, plans, expectations or intentions regarding the future. Such statements are subject to risks and uncertainties that may cause actual results, performance or developments to differ materially from those contained in the statements. No assurance can be given that any of the events anticipated by the forward-looking statements will occur or, if they do occur, what benefits the Company will obtain from them. These forward-looking statements reflect management's current views and are based on certain expectations, estimates and assumptions which may prove to be incorrect. A number of risks and uncertainties could cause our actual results to differ materially from those expressed or implied by the forward-looking statements, as well as other factors beyond the Company's control. The Company does not undertake to update any forward looking information, except in accordance with applicable securities laws.