(TheNewswire)
ASHKELON, Israel and VANCOUVER, British Columbia –TheNewswire – (July 19, 2024) - BYND Cannasoft Enterprises Inc.(Nasdaq: BCAN) (“ BYNDCannasoft ” or the “ Company ”) providesadditional information for consideration by shareholders in connectionwith the meeting scheduled for August 1, 2024 (the “ Meeting ”). At the Meeting,“minority approval” (as that term is defined in Ontario Securities Commission Rule 56-501 Restricted Shares ) will be sought tothe creation of a new class of shares, referred to in the informationcircular for the Meeting 1 as the‘Enhanced Shares’; in addition, “minorityapproval” (as that term is defined in Multilateral Instrument 61-101 Protection of MinoritySecurity Holders in Special Transactions (“ MI 61-101 ”) ) will be sought to theissuance of Enhanced Shares to Yftah Ben Yaackov (the “ Founder ”), adirector of the Company and its chief executive officer, as describedbelow. The approvals sought are collectively referred to as the“ Resolution ”. The 1,282,390 common s hares held by the Founder asat the record date for the Meeting will be excluded from voting on theResolution.
This news release should be read together with theinformation circular for the Meeting. Capitalized terms used but not defined in this news releasehave the meanings given to them in the informationcircular.
The Founder’s request for votingcontrol over the Company (the “ Request ”), with no other material terms, was made at a meeting ofthe Board held on April 7, 2024. The Request was made to providevoting control to allow management to focus on maximizing shareholder value by implementing its businessplan and lessening the risk of distraction and diversion of scarceCompany resources posed by opportunistic parties threatening hostiletakeover bids . For several months, the Company’sdirectors had become concerned with the possibility of opportunistic parties threatening hostile takeoverbids given the advancement of the Company’sEZ-G device in which the Company has made large investments. The Boardimplemented a shareholder rights plan earlier this year followingreceipt of shareholder approval as a result of such concerns.
The Special Committee, comprised ofStefania Szabo and Harold Wolkin (directors of the Company) was taskedwith considering the Request, assessingthe advantages and drawbacks to the Company and its shareholders ofthe Request, and exploring alternatives to the Request. If the SpecialCommittee determined it appropriate, it was to recommend a plan to theBoard.
The Special Committee discussed alternatives such asissuing the Founder common shares but that was considered damaging tothe shareholders as it would result in substantial dilution. Anotheralternative considered was the issuance of a substantial number ofrestricted share units but this was rejected for the same reason andalso because the intention was not to provide additional compensationto the Founder. The Special Committee ultimately decided that it wasin the best interests of the Company and its shareholders to give theFounder voting control for a limited period of time to provide a levelof control to be able to carry out the Company’s mission formedthrough the Founder’s vision by creating a new class of multiplevoting shares that do not carry any economic benefit and that do notdilute shareholders. The Special Committee’srecommendation was that shareholders be asked to approve the issuanceof 150,000 non-transferable and non-participating Enhanced Shares,each carrying the right to 50 votes and to be automatically redeemedon the earlier to occur of the third anniversary of the date of theirissuance, or upon the Founder ceasing to hold office as theCompany’s chief executive officer. It was determined that a fairissuance price was US$0.35 per Enhanced Share which reflected a 60%discount from the market price of the common shares at that time,which was considered appropriate in light of the fact that there is noeconomic benefit in these shares and that their issuance istemporary.
The Special Committee identified two potential adverseimpacts, being that the Founder’s voting power will limit influenceof other shareholders over most corporate matters for up to threeyears and that the issuance of the Enhanced Shares may have ananti-takeover effect, but determined that the advantages surpass thepotential adverse impacts.
During the discussion at the subsequent Board meetingto consider the Special Committee’s recommendation, a concern arosethat issuing 150,000 Enhanced Shares would give the Founder more than50% of the voting rights in the Company which seemed too high. Afterdiscussion, a consensus was reached to reduce the number of EnhancedShares to 75,000 which, when added to the voting rights represented bythe Founder’s current shareholdings, would then reflectapproximately 34% of the aggregate voting interest in the Company (andnot the 45.65% stated in the information circular).
If Enhanced Shares are issued, the existing class ofcommon shares would become ‘restricted shares’ pursuant toapplicable securities laws and will be referred to as ‘subordinatevoting shares’.
In the past 24 months, there has been one “priorvaluation” (as defined in MI 61-101) prepared. It was prepared inAugust 2022 in connection with the Company’s acquisition of certainpatent applications (through its acquisition ofZigi Carmel Initiatives and Investments Ltd.), the value of which thevaluator determined to be approximately US$34,100,000 The technologycovered by these patent applications is critical to the Company’sEZ-G device. A copy of the prior valuation is available under theCompany’s profile on SEDAR+ (www.sedarplus.ca), can be viewed at2264 East 11 th Ave., Vancouver, BC V5N 1Z6 and will be sent to a securityholder upon request made to the Company’s corporate secretary, GabiKabazo (gabi@cannasoft-crm.com) for a nominal charge sufficient tocover printing and postage.
Proxies for the Meeting will be accepted fromregistered shareholders of record up to 4 p.m. (Pacific) on July 31,2024.
About BYNDCannasoft Enterprises Inc.
BYND Cannasoft Enterprises is an Israeli-basedintegrated software company. BYND Cannasoft owns and markets"Benefit CRM", a proprietary customer relationshipmanagement (CRM) software product enabling small and medium?sizedbusinesses to optimize their day?to?day business activities suchas sales management, personnel management, marketing, call centeractivities, and asset management.
BYND Cannasoft owns the patent-pending intellectualproperty for the EZ-G device. This therapeutic device uses proprietarysoftware to regulate the flow of low concentrations of CBD oil, hempseed oil, and other natural oils into the soft tissues of the femalereproductive system to potentially treat a wide variety of women'shealth issues. The EZ-G device includes technological advancements asa sex toy with a more realistic experience and the prototype utilizessensors to determine what enhances the users' pleasure. The user cancontrol the device through a Bluetooth app installed on a smartphoneor other portable device. The data will be transmitted and receivedfrom the device to and from the secure cloud using artificialintelligence (AI). The data is combined with other antonymic userpreferences to improve its operation byincreasing sexual satisfaction. Commercialization of the EZ-G deviceis subject to receipt of regulatory approvals.
The devices described in this news release are conceptdevices that are in the first stage of development and will be subject to testing, experimentsand regulatory approvals and therefore there is no certainty that theywill eventually be marketed.
For further information please refer to informationavailable on the Company’s website: www.cannasoft-crm.com, and onSEDAR+: www.sedarplus.ca .
Gabi Kabazo
Chief Financial Officer
Tel: (604) 833-6820
e?mail: ir@cannasoft-crm.com
Cautionary NoteRegarding Forward-Looking Statements
This press release includes certain statements that maybe deemed “forward-looking statements” within the meaning ofSection 27A of the U.S. Securities Act of 1933, as amended, andSection 21E of the U.S. Securities Exchange Act of 1934, as amendedand under Canadian securities laws. When used in this press release,the words “may”, “would”, “could”, “will”,“intend”, “plan”, “anticipate”, “believe”,“estimate”, “expect” and similar expressions are intended toidentify forward?looking statements. Such statements are subject tocertain risks and uncertainties, and actual circumstances, events orresults may differ materially from those projected in suchforward-looking statements.
Although the Company believes the expectationsexpressed in such forward-looking statements are based on reasonableassumptions, such statements are not guarantees of future performance,and actual events or developments may differ materially from those inforward-looking statements. Such forward-looking statementsnecessarily involve known and unknown risks and uncertainties, whichmay cause the Company’s actual performance and financial results infuture periods to differ materially from any projections of futureperformance or results expressed or implied by such forward-lookingstatements. Such statements reflect the Company's current views withrespect to future events and are subject to such risks anduncertainties. Many factors could cause actual results to differmaterially from the statements made, including future financialperformance, unanticipated regulatory requests and delays, finalpatents approval, and those factors discussed in filings made by theCompany with the Canadian securities regulatory authorities, including(without limitation) in the Company's management's discussion andanalysis for the year ended December 31, 2023, which is availableunder the Company's profile at www.sedarplus.ca, and in theCompany’s Annual Report on Form 20-F for the year ended December 31,2023 that was filed under the Company's profile at www.sedarplus.ca on April 2, 2024 and with the U.S. Securities and ExchangeCommission on April 3, 2024. Should one or more of these factorsoccur, or should assumptions underlying the forward-looking statementsprove incorrect, actual results may vary materially from thosedescribed herein as intended, planned, anticipated, or expected. We donot intend and do not assume any obligation to update theseforward?looking statements, except as required by law. Any suchforward-looking statements represent management's estimates as of thedate of this press release. While we may elect to update suchforward-looking statements at some point in the future, we disclaim any obligation to do so, even ifsubsequent events cause our views to change. Shareholders arecautioned not to put undue reliance on such forward?lookingstatements.
1 See the Company’sinformation circular dated June 21, 2024 filed under its profile onSEDAR+ ( www.sedarplus.ca ) on July 4, 2024 under Particulars of Matters to be Acted Upon– Creation and Issuance of a New Class of Shares .
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