VANCOUVER: Liberty Leaf Holdings Ltd. (LIB) has entered into an agreement with Nova Mentis Biotech Corp. (NOVA), pursuant to which LIB will acquire, by way of share exchange, 100 per cent of all of the issued and outstanding securities of NOVA.

Pursuant to the Agreement, LIB will acquire 100 per cent of the issued and outstanding shares in the capital of NOVA in exchange for 115 million common shares in the capital of LIB at a deemed price per share equal to $0.05.

In connection with the Transaction, certain NOVA shareholders have agreed to a voluntary hold period pursuant to which 43.907 million LIB Consideration Shares will be subject to trading restriction. Specifically, 21.953 million LIB Consideration Shares will be released on the three (3) month anniversary of closing the Transaction, and 21.953 million LIB Consideration Shares will be released on the six (6) month anniversary of closing the Transaction.

LIB also announces that it plans to consolidate all of the Company’s issued and outstanding common shares on the basis of four (4) pre-consolidated shares for every one (1) post-consolidated share (the “Consolidation”). After giving effect to the Transaction, LIB will have 243,526,132 common shares issued and outstanding. Upon completion of the Consolidation, LIB will have 60,881,533 common shares issued and outstanding. Further, in connection with the Consolidation, the Company intends to change its name to “Nova Mentis Life Science Corp.” with a corresponding symbol change to “NOVA”.

NOVA is a research and development driven company that is focused on investigating the anti-inflammatory effects of psilocybin in underexplored metabolic indications such as obesity and diabetes. NOVA is of the view that its target indications represent vast and growing segments of the population. For example, in the United States, more than 10.5% of the population has Diabetes, which represents approximately 34.2 million people.

Diabetes treatment can bare significant economic burden to patients with the average out of pocket monthly cost being estimated at $360 USD.

According to a report by Fortune Business Insights, the global diabetes drug market size was valued at USD $48 Billion in 2018 and is projected to reach USD $78 Billion by 2026. Increasing societal prevalence of sedentary lifestyles coupled with vast access to inexpensive and nutritionally void food options are likely to contribute to further incidence of obesity and diabetes in the future.

According to the National Center for Health Statistics, 39.8% of the US population aged 20 and over were considered obese in 2016, with an additional 31.8% being considered overweight. Obese individuals have a significantly higher incidence of depression (close to 30%) compared to the general population.

Bidirectionally, according to the CDC, about 43% of depressed people are obese.

The strong therapeutic potential of psilocybin has emerged for a wide range of disorders, primarily mental health related.

NOVA is focusing on a cohort group that has been very difficult to treat, both acutely and also in a sustainable way.

This group of individuals have an overlap in two widespread and very important indications, obesity and depression.

These comorbid conditions share inflammation as an important common mediator. NOVA’s pre-clinical scientific study thus far is focused on targeting the gut-brain axis to modulate inflammation in this context. The aim is to utilize the unique properties of psilocybin to address both physiological and behavioural factors in obesity and comorbid depression.

“Recent scientific advancement coupled with shifting opinions amongst, both the medical and general communities, at large regarding psychedelics including psilocybin make it a sector worthy of investment,” stated Will Rascan, President and CEO of LIB.

“Since our shift into cannabis in 2014, and our subsequent investment in Just Kush Enterprises Ltd, – now a holder of three Health Canada Cannabis Licenses – we have focused on emerging trends and shifting public awareness of natural based compounds for health and wellness, I believe this acquisition compliments our current legal cannabis portfolio and provides stakeholders with an early entrance in a new flourishing market.”