Kariana to Acquire Canna Delivery Systems Inc. Proposes Private Placement of Units and Obtains Loan

 
 

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KARIANA RESOURCES INC.

Suite 1980, 1075 West Georgia Street Vancouver, British Columbia, V6E 3C9 Telephone: (604) 688-9588; Fax: (778) 329-9361

PRESS RELEASE
Kariana to Acquire Canna Delivery Systems Inc. Proposes Private Placement of Units and Obtains Loan

Vancouver, British Columbia, Canada, December 16th, 2014, Kariana Resources Inc. (CSE: KAA) (“Kariana” or the “Company”) and Canna Delivery Systems Inc. (“Canna”) are pleased to announce that they have entered into a binding term sheet (the “Term Sheet”) pursuant to which the Company will acquire all of the issued and outstanding common shares of Canna (the “Transaction”). As consideration for the Transaction, Kariana will issue to the Canna’s shareholders pro rata, an aggregate of 7,800,000 Kariana common shares (the “Performance Shares”) at a deemed price of $0.06 per share. The Performance Shares will be escrowed and released upon achieving certain future financial milestones.

In addition, following the execution of this Term Sheet, Kariana will seek approval of the CSE, if applicable, for an advance of US$150,000 as an unsecured loan.

Canna Delivery Systems Inc.

Canna Delivery Systems produces a smokeless alternative option to medical and recreational users of cannabis. Canna’s technology produces infused strips (similar to breath strips) that are not only a safer, healthier option to smoking but also a new way to accurately meter the dosage and assure the purity of the product. From start to finish, the CannaStrip production process test for quality and composition of all the ingredients used in each and every CannaStrip, resulting in a delivery system that is safe, consistent and effective.

Brad Eckenweiler, CEO states: “The entire CannaStrips team is excited for the opportunity that our new relationship as part of Kariana Resources Inc., will afford us, both in the ability for geographic expansion of CannaStrip licenses and a much more aggressive research and development schedule for our new products”

Concurrent Financing

In connection with the Transaction, Kariana intends to complete a concurrent financing (the “Concurrent Financing”) by way of a non-brokered private placement of 3,333,334 units (the “Units”) at a price of $0.15 per Unit for minimum gross proceeds of $500,000. Each Unit will be comprised of one Kariana common share and one half of one common share purchase warrant (each a “Warrant”). Each whole Warrant will entitle the holder to purchase one additional Share at a price of $0.30 for the first year and $0.45 for the second year from the closing of the Concurrent Financing. The Warrants expire two years from the closing of the Concurrent Financing.

In connection with the Concurrent Financing and the Transaction, the Company intends to pay finder’s fees in cash, securities or a combination of both, up to the maximum permitted by the policies of the CSE.

The completion of the Transaction is subject to a number of additional conditions, including, but not limited to, approval of the Transaction by the board of directors and, if required, security holders of each of Kariana and Canna, and the approval of the CSE.

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All securities issued in connection with the Concurrent Financing are subject to a four month hold period in accordance with applicable securities legislation. The net proceeds of the Concurrent Financing will be used for Kariana’s working capital purposes.

Promissory Note

Kariana also announces that it intends to sign a promissory note with an arm’s length lender (the “Lender”), in the principle amount of $120,000 (the “Loan”), due one year from the date of closing (the “Maturity Date”). The Loan will accrue interest at a rate of 15% per annum and is payable on the Maturity Date. As partial consideration for the Loan, the Company has agreed to issue to the Lender common shares in the capital of the Company (the “Fee Shares”) equal to 20% of the loan amount at a deemed price of $0.10 per Fee Share. Accordingly, Kariana will issue to the Lender 240,000 Fee Shares. The Fee Shares will be subject to a hold period of four months and a day from issuance.

In addition, subject to regulatory approval, the Company will pay finder’s fees of 8% on a portion of the Loan (the “Finder’s Fees”) which are payable in shares at a deemed price of $0.10 per share.

Proceeds of the Loan will be used for general working capital. The Loan, the issuance of the Fee Shares and the payment of the Finder’s Fees are subject to the acceptance of the Canadian Securities Exchange.

On behalf of the board of directors of Kariana Resources Inc.

“David Velisek”

David Velisek CEO & Director

FOR MORE INFORMATION, PLEASE CONTACT:

David Velisek

david.velisek@barongroupintl.com

604-688-9588

The CSE has neither approved nor disapproved the information contained herein and does not accept responsibility for the adequacy or accuracy of this release.

This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.