Delta 9 Closes Reverse Takeover and Financing

DELTA 9 CANNABIS INC. (TSXV: NINE) (formerly SVT Capital Corp.) (the “Company“) is pleased to announce that it has completed its previously announced reverse takeover transaction (the “Transaction“), pursuant to which the Company has acquired all of the issued and outstanding shares of Delta 9 Bio-Tech Inc. (“Delta 9“) by way of a three-cornered amalgamation among the Company, Delta 9 and 10240907 Canada Corp. (“Newco“). The Company expects to resume trading as a Tier 2 Industrial Issuer on the TSX Venture Exchange (the “TSXV“) under the symbol “NINE” at market open on Monday, November  6, 2017.

In connection with the closing of the Transaction (the “Closing“), the Company:

• changed its name to “Delta 9 Cannabis Inc.”;
• completed a brokered private placement offering (the “Concurrent Financing“) of 8 million common shares in the capital of the Company (each, a “Share“) at a price of $0.65 per Share for gross proceeds of $5.2 million;
• appointed John William (Bill) Arbuthnot III, John William (John) Arbuthnot IV and Nitin Kaushal as directors, and Bill Arbuthnot, John Arbuthnot and Brent Bottomley as officers of the Company; and
• retained Anthony Jackson as a director of the Company,

all as further described in this news release and in the Company’s filing statement dated October 25, 2017 (the “Filing Statement“) with respect to the Transaction, Delta 9, which was founded by the father and son team of Bill and John Arbuthnot in 2012, obtained a production license under the Marihuana for Medical Purposes Regulations in December 2013, followed by a license to distribute medical cannabis in March 2014. Since that time, Delta 9 has established itself in its approximately 80,000 square foot production facility in East Winnipeg and grown from 2 employees to approximately 28 full-time employees and 15 part-time employees. Delta 9 is focused on growing small batch, hand trimmed, high quality medical cannabis strains. Delta 9 currently has a rotation of approximately 20 different genetic strains of cannabis that are available to its over 2,000 medical patients across Canada.

“Closing of the Transaction represents a significant milestone for Delta 9 as we look to aggressively expand our domestic production facilities and international opportunities,” said the Company’s Chairman, President and director, Bill Arbuthnot.  “The capital raised under the Concurrent Financing will allow us to scale up our growing operations, enabling us to take advantage of the tremendous opportunities in the medical cannabis market. In doing so, we plan to become a premier choice for patients who want a consistent, high-quality, standardized product that they can rely on.”

Closing of Reverse Takeover

In connection with the Closing, Delta 9 amalgamated with Newco under the provisions of the Canada BusinessCorporations Act, with the amalgamated company being a wholly-owned subsidiary of the Company named “Delta 9 Bio-Tech Inc.”. The Company issued one Share  to each former shareholder of Delta 9, on a one for one basis. After giving effect to the completion of the Transaction and the Offering, there are 65,414,579 Shares issued and outstanding (on an undiluted basis), with approximately 57% of the Shares (on an undiluted basis) held by insiders.

In connection with the Closing, the Company paid a finder’s fee of $300,000, comprised of a cash payment of $150,000and the issuance of 230,769 Shares at a deemed issue price of $0.65 per Share (the “Issue Price“) to Deep Incite Consulting Ltd., as compensation for introducing Delta 9 and the Company.

New Board of Directors and Management Team

In connection with the Closing, the Company welcomes a new board of directors and management team. The Company will be led by Bill Arbuthnot, who has agreed to act as Chairman, President and a director of the Company, John Arbuthnot, who has agreed to act as Chief Executive Officer and a director of the Company, Brent Bottomley who has agreed to act as Chief Financial Officer and Secretary of the Company, and Nitin Kaushal, who has agreed to act as a director of the Company. Anthony Jackson has agreed to remain as a director of the Company. Von Torres and Kenneth Tollstam have resigned as directors of the Company and the Company thanks them for their service in bringing the Company to completion of the Transaction.

Closing of Concurrent Financing

Immediately prior to the Closing, the Company completed a brokered private placement pursuant to which it sold an aggregate of 8,000,000 Shares at the Issue Price for gross proceeds of $5,200,000.

As previously announced, Canaccord Genuity Corp. (the “Agent“) acted as agent in respect of the Concurrent Financing, in consideration for: (i) a commission of $364,000, comprised of a cash payment of $192,400 and the issuance of 264,000 Shares, (ii) a corporate finance fee of $150,000, comprised of a cash payment of $75,000 and the issuance of 115,385 Shares, (iii) the issuance to the Agent of an aggregate of 560,000 warrants, each of which entitles the holder to acquire one Share at the Issue Price until October 31, 2019, and (iv) the reimbursement of the Agent’s reasonable expenses in connection with the Offering.

Grant of Stock Options

In connection with the Closing, the Company also agreed to grant, effective as of the date of the TSXV’s Final Exchange Bulletin (the “Bulletin“) with respect to the Transaction, an aggregate of 5,116,258 stock options (each, an “Option“) to certain directors, officers, employees and consultants of the Company, as further described in the Filing Statement, and in accordance with the Company’s 2017 stock option plan. Each Option will be exercisable into one Share at the Issue Price for a period of five years from the date of grant, and the Options will vest over two years, with 25% vesting every six months, commencing on the date that is six months following the Bulletin.

No securities of the Company (including, for greater certainty, the Shares) have been or will be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act“), or the securities laws of any state, district or commonwealth of the United States (as defined in Regulation S under the U.S. Securities Act). Accordingly, these securities may not be offered or sold, directly or indirectly, within the United States or to or for the account or benefit of any “U.S. Person” (as defined in Regulation S under the U.S. Securities Act), absent an exemption from the registration requirements of the U.S. Securities Act and applicable state securities laws. This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities described in this news release in the United States or any jurisdiction where such offer or sale would be unlawful, or for the account or benefit of any U.S. Person or person within the United States.

ON BEHALF OF THE BOARD OF DIRECTORS

“John William (Bill) Arbuthnot III”

John William (Bill) Arbuthnot III
Chairman, President and Director