Kariana closes buy of Canna Delivery, changes name

2015-05-01 19:33 ET - News Release

Mr. David Velisek reports
KARIANA RESOURCES INC. CLOSES ACQUISITION OF CANNA DELIVERY SYSTEMS INC. AND CHANGES NAME TO LIFESTYLE DELIVERY SYSTEMS INC.
Further to its press release dated March 20, 2015, Kariana Resources Inc. has completed the acquisition of all the issued and outstanding shares of Canna Delivery Systems Inc. pursuant to a share exchange agreement dated March 20, 2015.

Canna's film-strip technologies produce an oral delivery system that can be used for energy elixirs, herbal remedies, and 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. The company will license the technology to licensees, which will in turn manufacture CannaStrips where the legal use of marijuana is allowed. Canna chief executive officer Brad Eckenweiler commented: "I believe that the acquisition of Canna Delivery Systems by Kariana Resources is extremely well timed; as the world view of cannabis is changing and the areas of marketability are expanding, the benefit of a smokeless and discreet method of delivery is increasingly more desirable. The benefits of the public market and the expanded visibility that it brings will accelerate the branding and marketing efforts for the CannaStrips technology."

Pursuant to the terms of the agreement, the company has issued to Canna's shareholders, pro rata, a total of 7.8 million common shares of the company at a deemed price of 15 cents per performance share. The performance shares are subject to escrow provisions pursuant to the agreement and will be released upon achieving certain future financial milestones. In connection with the transaction, the company issued 83,333 common shares of the company to an arm's-length finder for assistance in closing the transaction. The company has agreed to issue, and has reserved for issuance, an additional 565,000 finder shares upon achieving certain future financial milestones.

In addition, the company has settled certain debt with creditors of the company by converting the debt payable into shares of the company at a conversion price of 15 cents per share. A total of $177,450 of debt was extinguished and 1,183,000 shares of the company were issued. Further to the company's press release dated April 7, 2015, with respect to the completion of the company's non-brokered private placement financing of 5,168,757 subscription receipts, as the release condition of the completion of the transaction has now been met, the subscription receipts have been automatically converted into 5,168,757 common shares and 2,584,379 common share purchase warrants. In connection with the financing, the company issued 254,768 units to arm's-length finders. Each finder unit consists of one common share and one-half of one non-transferable common share purchase warrant, which entitles the finder to purchase an additional common share until May 1, 2016, at a price of 30 cents per share and at a price of 45 cents until May 1, 2017. All securities issued in connection with the financing are subject to a four-month hold period that expires on Aug. 3, 2015.

In connection with the transaction, the company is pleased to announce the appointment of Mr. Eckenweiler to the board of directors of the company. Mr. Eckenweiler is an executive with worldwide business experience in operations, corporate finance and global securities markets. Mr. Eckenweiler was a director and CEO of Canna and was recently a director and CEO of Triton Emission Solutions Inc., a company engaged in the business of emissions abatement and control technologies for the marine industry. The transaction was a fundamental change under the policies of the Canadian Securities Exchange. As such, completion of the transaction was subject to a number of customary conditions, including approval of the CSE. Trading of the company's shares on the CSE has been halted in connection with the announcement of the transaction, and is expected to resume when the CSE issues its final approval. Pursuant to CSE requirements, the transaction has been approved by the majority of the shareholders of the company.

In connection with the transaction, the company changed its name to Lifestyle Delivery Systems Inc. and its trading symbol to LDS (formerly KAA) to better reflect the company's new business.