GaiaCann Inc. entered into letter of intent to acquire ONEnergy Inc. (TSXV:OEG) in a reverse merger transaction on June 20, 2019. It is anticipated that the transaction will proceed through a share exchange by way of a plan of arrangement, amalgamation or other similar form of transaction. Specifically, the letter of intent contemplates resulting issuer will issue an aggregate of 136.2 million common shares to the shareholders of GaiaCann. It is contemplated that as part of the transaction, ONEnergy will transfer, to a newly incorporated subsidiary (“Newco”), certain assets and liabilities other than its loss carryforward tax attributes. Newco will issue common shares to ONEnergy in exchange for the transfer of the spin out assets and will complete a new listing application with the TSX Venture Exchange and will become a reporting issuer. At the time of closing of transaction, there will be 160.2 million common shares of the resulting issuer issued and outstanding of which the shareholders of GaiaCann will hold an aggregate of 136.2 million shares, representing 85%, and the current shareholders of ONEnergy will hold an aggregate of 24 million common shares, representing approximately 15% in the resulting issuer. Following the transaction, the current shareholders of ONEnergy will hold both ONEnergy common shares and resulting issuer common shares. In a related transaction, GaiaCann also announced its intention to complete a non-brokered private placement of up to CAD 10 million in unsecured convertible debentures that will mature two years from closing and will bear interest at 10% per annum, payable in cash or, at the option of the subscriber, in common shares of GaiaCann subject to certain conditions. The debentures will be convertible at the option of the holder into two GaiaCann common shares beginning 12 months after their issuance but before maturity. Subscribers will receive one common share purchase warrant for each CAD 0.001 million of principal amount of Debenture. Each warrant will entitle the holder to acquire two GaiaCann common shares for CAD 0.001 million per GaiaCann common shares beginning on that date which is 12 months from the issuance date and ending on that date which is two years from the issuance date. Upon a change of control of GaiaCann, the Debentures and all outstanding interest thereon shall convert into GaiaCann common shares at the conversion rate. Prior to or concurrently with completion of the transaction, and subject to TSX Venture Exchange approval, the resulting issuer expects to complete a private placement financing of subscription receipts. The net proceeds from the proposed financing are expected to be used to finance transaction costs and provide additional capital to support growth going forward. It is expected that the combined entity, after completion of the transaction, will qualify as a Life Sciences Issuer pursuant to the requirements of the TSX Venture Exchange. ONEnergy will continue to hold only its loss carryforward tax attributes, certain liabilities and will be delisted from the TSX Venture Exchange. The transaction will result in a change of business of ONEnergy into that of Newco and then the business of GaiaCann, with the corporate name of the resulting issuer being changed to GaiaCann Medical Inc. or such other name acceptable to GaiaCann and the applicable regulatory authorities. The letter of intent also contemplates that the Board of Directors of the resulting issuer will be comprised of nominees of GaiaCann and that Jeffery Scharf of GaiaCann will become the Chief Executive Officer of the resulting issuer. Completion of the transaction will be subject to several conditions, including, the negotiation and execution of the definitive agreement, which will include customary prohibitions on material changes to the business and operations of the parties, the completion of the proposed financing, the receipt of all regulatory, corporate and third party approvals, including the approval of the shareholders of ONEnergy, and other conditions precedent customary for the transaction. GaiaCann Inc. cancelled the acquisition of ONEnergy Inc. (TSXV:OEG) in a reverse merger transaction on October 15, 2019. Negotiations between ONEnergy Inc. and GaiaCann did not result in a definitive agreement.