MJ Harvest, Inc. Announces a Letter of Intent to Merge with Cannabis Sativa Inc.

Rhea-AI Summary

MJ Harvest, Inc. (OTCQB:MJHI) has signed a non-binding Letter of Intent to merge with Cannabis Sativa, Inc. (CBDS). Under the proposed terms, MJHI shareholders will receive 2.7 shares of CBDS for each MJHI share. After the merger, MJHI shareholders would own approximately 72% of the combined entity, which will shift CBDS’s focus from telehealth to cannabis operations. The merger is expected to result in the elimination of around $3.3 million in related party debt. A shareholder meeting is anticipated in mid-July 2022 to approve the merger.

Positive

• MJHI shareholders to receive 2.7 shares of CBDS for each MJHI share.
• MJHI shareholders expected to own approximately 72% of the combined company.
• Merger anticipated to eliminate approximately $3.3 million in related party debt.
• Expanded operations across seven states post-merger.

Negative

• Potential dilution of CBDS shareholders due to increased authorized shares to 500 million.
• Integration challenges between telehealth and cannabis operations.

LAS VEGAS, NV / ACCESSWIRE / May 11, 2022 / MJ Harvest, Inc. ("MJHI") (OTCQB:MJHI) announced that it has signed a Letter of Intent ("LOI") to merge with and into Cannabis Sativa, Inc. The LOI provides for MJHI shareholders to receive 2.7 shares of CBDS common stock for each one share of MJHI common stock held immediately prior to the merger. The LOI is non-binding except as to certain terms covering due diligence investigations, break-up provisions (including a $50,000 termination penalty), and a requirement that both companies operate in the ordinary course of business pending merger.

Upon completion of the merger on the terms described in the LOI, it is anticipated that MJHI shareholders would own approximately 72% of the surviving company. The LOI contemplates that CBDS will be the surviving company in the merger and that following the merger, MJHI will cease to exist as a separate corporate entity.

MJHI and CBDS management have agreed to a maximum 60-day due diligence period on completion of which the companies will execute a definitive merger agreement. The definitive merger agreement will then be submitted to both Companies' shareholders for approval. It is anticipated that the issuance of shares in the merger will be registered with the United States Securities and Exchange Commission ("SEC") and that the prospectus for the registration will include proxy materials to be distributed to the shareholders. Both Companies have agreed to work together to facilitate the preparation and filing of the registration statement and plan on holding a joint shareholder meeting for approval of the transaction as soon as all of the preliminary steps can be completed. Management estimates that the shareholder meeting for the merger will be held in mid-July 2022.

In order to consummate the merger, CBDS shareholders will be asked to approve an increase in the number of authorized shares of Common Stock of CBDS to 500,000,000 shares. Following the merger there would be approximately 160,000,000 shares outstanding with approximately 44,000,000 shares held by the original CBDS shareholders, and approximately 116,000,000 shares held by the MJHI shareholders that receive stock in the merger.

The merger, if consummated, represents a shift in the operations of CBDS from its current telehealth business, PrestoDoctor, toward a focus on the vertically integrated cannabis business being developed by MJHI. MJHI currently operates an extraction and consumable products manufacturing business in Denver Colorado and expects to close on an extraction and manufacturing facility in Cathedral City California before the end of the month. Both the Denver and Cathedral City locations include cannabis licenses for manufacturing and distribution operations and the licenses will be transferred to the surviving company in the merger or a subsidiary upon approval of the licensing authorities. MJHI also has a 25% ownership interest in PPK Investment Group, Inc. ("PPK") which operates under the Country Cannabis Brand in the states of Oklahoma, South Dakota, and Arizona and is in the process of opening manufacturing facilities in New York and Florida.

The combined business following the merger will have operations in seven states, and a comprehensive product line that includes the Country Cannabis Brand plus licensing arrangements for the Weedsy, BLVK, Chronic, and Sublime Brands. MJHI also holds 10% investments in WDSY, LLC and Blip Holdings, LLC, the companies that own the Weedsy and BLVK brands, respectively. MJHI's current product offerings and the Brands represented are reflected on the MJHI web site at www.mjhi.com.

Upon signing the definitive merger agreement, both MJHI and CBDS expect to convert related party debt to equity resulting in the elimination of approximately $1,900,000 and $1,425,000 in related party debt on the books of MJHI and CBDS, respectively. Following the merger, all operations will be consolidated in the surviving company. It is anticipated that the surviving company will report its financial results on a calendar year basis. It is also anticipated that the shareholder meeting to approve the merger will result in changes in the Board of Directors and officers of the surviving company, and a strong commitment to the cannabis industry. The existing PrestoDoctor telehealth operations of CBDS will be included in the combined results of operations following the merger, and the telehealth operations will be integrated into the cannabis operations to provide synergies where appropriate.

Patrick Bilton, Chairman and Chief Executive Officer of MJ Harvest Inc. summarized his thoughts, "We view this transaction as a key initiative in our growth strategy of building depth, scale, and distribution in our key markets. The resulting entity will be much stronger, and this merger should be a big win for both companies' shareholders."

CBDS's President & CEO David Tobias stated, "We believe the agreement is a win-win for both companies, establishing CBDS as a multi-state operator with solid brands in established areas and emerging markets with strong sales projections."

About MJ Harvest Inc.

MJHI cultivates, harvests, manufactures and sells cannabis products through its growing relationship with PPK. PPK sells and markets cannabis flower and edibles throughout Oklahoma and through a joint venture relationship with the Flandreau Santee Sioux Tribe in Flandreau, South Dakota. MJHI currently owns 25% of PPK with options to acquire up to 100% of PPK Investment Group at any time prior to March 31, 2023.

MJHI also acquires and markets products and technologies that are designed to benefit growers and processors in the horticultural and agricultural industries. MJHI launched www.procannagro.com to provide a professionally designed and maintained web-based marketing outlet for the company's brands and technologies.

About Cannabis Sativa, Inc.

Cannabis Sativa, Inc. ("CBDS") is engaged in telehealth through its 51% owned subsidiary, and the licensing of cannabis-related intellectual property, marketing and branding for cannabis-based products and services, operation of cannabis-related technology services, and ancillary business activities. CBDS holds a U.S. patent on the Ecuadorian Sativa strain of Cannabis, a U.S. Patent for a marijuana lozenge; a Cannabis-based pharmaceutical composition for the treatment of hypertensive disorders by submucosal delivery and trade secret formulas and processes and operates subsidiary PrestoDoctor®. Cannabis Sativa IP includes the "hi" and "White Rabbit" brands, and domain name portfolio including cbds.com and cannabissativa.com.

Forward-Looking Statements

This press release contains forward-looking statements and information. Although the forward- looking statements in this release reflect the good faith judgment of management, forward- looking statements are inherently subject to known and unknown risks and uncertainties that may cause actual results to be materially different from those discussed in these forward-looking statements. Readers are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. No assurances are, or can be given, that the parties will enter into a definitive merger agreement, that if such agreement is entered into, the transaction would close, if at all, on the terms set forth in this release, or that the merged business would be successful. Certain conditions to any closing of a potential merger would likely be outside of our control. The Company assumes no obligation to update any forward-looking statement to reflect any event or circumstance that may arise after the date of this release.

CONTACT:
MJ Harvest, Inc.
9205 West Russell Rd., Ste. 240
Las Vegas, NV 89148
Telephone: 954.519.3115
Tcktsllc@earthlink.net
@HARVESTMJ

SOURCE: MJ Harvest, Inc.

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FAQ

What is the purpose of the merger between MJHI and CBDS?

The merger aims to shift CBDS's focus to a vertically integrated cannabis business, leveraging MJHI's existing operations.

When is the shareholder meeting for the MJHI and CBDS merger?

The shareholder meeting to approve the merger is anticipated to be held in mid-July 2022.

How many shares will MJHI shareholders receive in the merger?

MJHI shareholders will receive 2.7 shares of CBDS for each MJHI share they hold.

What impact does the merger have on the debt of both companies?

The merger is expected to eliminate approximately $3.3 million in related party debt for both MJHI and CBDS.

What will be the new structure of the combined company post-merger?

Post-merger, CBDS will be the surviving entity with MJHI ceasing to exist as a separate corporate entity.