The company said the merger will create a leading company in the distribution of hemp and cannabinoid-based products, which will operate under the Global Cannabinoids corporate name following completion
EXMceuticals Inc. (CSE:EXM) (FRA:A2PAW2) has announced a proposed merger with Global Cannabinoids (GC), a leading B2B US distributor of bulk and wholesale hemp-derived cannabinoids and finished products., and has also launched a best-efforts, private placement for up to C$6.0 million.
The company said the merger will create a leading company in the distribution of hemp and cannabinoid-based products, which will operate under the Global Cannabinoids corporate name following completion, and which can conceivably expand beyond the US and import, export, research and refine cannabinoids and cannabis-based products through EXMceuticals' Portugal hub into the European Union.
READ: EXMceuticals joins The Portuguese Association of the Pharmaceutical Industry as it builds out cannabis extraction facility in Portugal
In a statement, Jonathan Summers, CEO of EXMceuticals said: "EXM could not be more excited to be combining operations with GC. As pioneers in the industry, the management team at GC have built a very impressive business footprint and distribution network while generating meaningful revenue. GC provides B2B customers with products and services that deliver an unmatched level of consistency and quality in the fastest possible time. We feel enormous growth opportunities exist in the US marketplace and beyond, with EXM’s operations in Portugal providing an immediate springboard to access the entire emerging European marketplace, for all legal cannabinoids."
“The team at EXM shares the same vision for the future as we do. GC’s commitment to quality, consistency and best in class pricing, combined with EXM’s global reach, will allow for rapid expansion to customers in emerging markets. We are incredibly excited for the opportunities ahead!” added Global Cannabinoids’ chief executive officer Kelly Ann Lewis-Bortman.
Together, the US and Vancouver based companies will be focusing on expanding their footprint worldwide catering to hemp, CBD and ultimately cannabis-based products. The combined teams deep global network will complement the organic cost-saving synergies of the merger as well as continue to pursue market share in the projected $123 billion CBD market by 2027, the groups noted.
Proposed Transaction
EXMceuticals said the definitive merger agreement is expected to be actioned through the issuance of an aggregate of 168,000,000 of its common shares to Global Cannabinoids.
In that event, the holders of GC will own approximately 66% of EXMceuticals’ issued and outstanding shares on a pro forma basis and existing EXMceuticals shareholders will hold approximately 33%.
EXMceuticals said its management believes the terms of the merger are highly accretive to the resulting company and will lead it to establish strong revenue and cash flow from operations positioning it as a global leader in the hemp-based CBD wholesale market and beyond.
Upon completion of the merger, Lewis-Bortman will lead the merged company and management team as the chief executive officer, while Summers will be appointed chairman. The combined board of directors will consist of a total of five members, three of which, including Lewis-Bortman are current Global Cannabinoids directors, and two of which will be from EXMceuticals one of which will be Summers. EXMceuticals’ chief financial officer, Mike Kinley, will continue as the chief financial officer of the combined entity.
Private Placement
Concurrent with the merger, EXMceuticals said it is conducting the private placement of units on a best-efforts basis at a price of C$0.15 each for aggregate gross proceeds of up to C$6.0 million.
Each unit will consist of one EXMceuticals share and one half of an EXMceuticals share purchase warrant. Each warrant will entitle the holder to purchase an EXMceuticals share at an exercise price of C$0.25, at any time up to 24 months following the date of issuance, subject to an acceleration right should the volume-weighted average trading price of EXMceuticals common shares on the CSE be greater than C$0.50 for 10 consecutive trading days.
The net proceeds of the private placement are expected to be used to fund the merger, the pro forma business plan of the resulting company and for general corporate purposes.
Contact the author at jon.hopkins@proactiveinvestors.com
