Subversive Real Estate Acquisition REIT LP (OTCQX: SBVRF; NEO: SVX.U) ('SVX'), a special purpose acquisition company (SPAC), today announced its qualifying transaction to combine with InterCure Ltd. (dba Canndoc) (TASE: INCR), Israel's leading cannabis company (the 'Transaction'). Canndoc, a wholly owned subsidiary of InterCure Ltd., is Israel's largest licensed cannabis producer and one of the first to offer Good Manufacturing Practices (GMP) certified and pharmaceutical-grade medical cannabis products in pharmacies across the country.
With the largest distribution network, significant logistical capabilities, and a lucrative vertically integrated strategy, Canndoc is the fastest-growing and most profitable cannabis company in Israel, with a Q4 2020 expected EBITDA annualized run rate of greater than US$10 million and positive free cash flow. Furthermore, we believe that Canndoc is well-positioned to capitalize on the adult-use market in Israel, which is expected to be legalized in 2021 or 2022.
Michael Auerbach, Founder of Subversive Capital, said, 'We are excited to announce today's qualifying transaction, which, upon closing, will allow our shareholders to participate in the upside of the Israeli cannabis market. Canndoc has been a pioneer, leading the cannabis wave in Israel and capturing significant market share. We believe Canndoc possesses superior management, an optimized platform, and the brands and partnerships that set the stage for sustained, profitable growth in key medical and adult-use markets in Israel and beyond.' Click here to access Mr. Auerbach's video message further highlighting Canndoc's potential and growth outlook. Canndoc's Chairman and former Prime Minister of Israel, Ehud Barak, added, 'I'm extremely proud of the work we've done at InterCure and Canndoc, and I am looking forward to leading this new chapter. As we discover the scientific advantages in cannabis alongside new favorable legislation, the cannabis industry is unleashing its disruptive commercial potential. Israel became famous for its breakthroughs in cannabis research and has now become one of the leading medical cannabis markets in the world. Canndoc has proven its ability to execute a profitable growth strategy as it became the dominant force in Israel. Nowadays, we are well positioned to lead new emerging cannabis markets as legislative reform is spreading around the globe.' Click here for a video message from Mr. Barak. Canndoc's Chief Executive Officer, Alex Rabinovitch, added, 'We are thrilled to be partnering with Subversive Capital in this transaction. The SPAC structure facilitates our ability to access growth capital in a relatively short timeframe which, in turn, will support new strategic growth initiatives and drive shareholder value.'
SVX has also announced a US$65 million private placement, pursuant to which it will issue 6.5 million units at a price of US$10.00 per unit immediately prior to, and conditional on, completion of the Transaction (the 'Private Placement'). The proceeds of the Private Placement are intended to be used in connection with the Transaction and to fund the growth of Canndoc following closing. Based on sources and uses of capital, SVX will have sufficient cash to satisfy the Transaction's cash closing condition. It is a condition to closing that, upon closing, the combined company will commence trading on Nasdaq, which listing will be subject to approval from the exchange, and trade on the Tel Aviv Stock Exchange. Further details regarding the post-closing ticker symbol will be provided in advance of closing. SVX has filed today an investor presentation which describes Canndoc's business in more detail. Pursuant to the applicable rules, SVX will file with the Canadian securities regulatory authorities of each of the provinces and territories of Canada, except Quebec, a non-offering prospectus containing disclosure regarding the Transaction and InterCure assuming completion of the Transaction.
About SVX
SVX, is a special purpose acquisition corporation established under the laws of the Province of British Columbia for the purpose of effecting, directly or indirectly, a qualifying transaction within a specified period of time. Founded by Michael Auerbach and Leland Hensch, SVX is dedicated to investing in radical companies whose core missions subvert the status quo.
Forward Looking Statements
This press release may contain forward-looking information within the meaning of applicable securities legislation which reflects SVX's current expectations regarding future events. The words 'will', 'expects', 'intends' and similar expressions are often intended to identify forwardlooking information, although not all forward-looking information contains these identifying words. Specific forward-looking information contained in this press release includes, but is not limited to: statements concerning the completion and proposed terms of, and matters relating to, the Transaction and the Private Placement and the expected timing thereof, statements concerning the NASDAQ listing, the anticipated effects of the Transaction and the expected operations, financial results and condition of Canndoc following closing of the Transaction, including Canndoc's expected management team, business strategy, competitive strengths, goals and expansion and growth plans as well as statements regarding the growth rate of the medical cannabis market. Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond SVX's control, which could cause actual results and events to differ materially from those that are disclosed in or implied by such forward-looking information. Such risks and uncertainties include, but are not limited to: failure to complete the Transaction or the Private Placement, inability to obtain requisite regulatory or shareholder approvals, changes in general economic, business and political conditions, changes in applicable laws, the U.S. and Canadian regulatory landscapes and enforcement related to cannabis, changes in public opinion and perception of the cannabis industry, reliance on the expertise and judgment of senior management, as well as the factors discussed under the heading 'Risk Factors' in the Investor Presentation dated January 26, 2021 and those to be set out in the preliminary prospectus, which is or will be available on SEDAR at www.sedar.com. Subversive Real Estate Acquisition REIT LP undertakes no obligation to update such forwardlooking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable law.
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