MJ Harvest Signs Letter Of Intent To Merge With Cannabis Sativa, Inc.

MJ Harvest, Inc. MJHI signed a letter of intent to merge with Cannabis Sativa, Inc. CBDS The LOI provides for MJHI shareholders to receive 2.7 shares of CBDS common stock for each 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. Management estimates that the shareholder meeting for the merger will be held in mid-July 2022.

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

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 website.

Upon signing the definitive merger agreement, both MJHI and CBDS expect to convert related party debt to equity resulting in the elimination of approximately $1.9 million and $1.42 million 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. The telehealth operations will be integrated into the cannabis operations to provide synergies where appropriate.

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