EXMceuticals
Inc. (CSE:
EXM)
(FSE: A2PAW2) (the
"Company" or "
EXM"), a producer
of refined cannabis ingredients for the pharmaceutical,
medical, nutraceutical, and cosmetic industries, provides an update
on our operations, the first closing of a loan agreement and the
measures we have taken in response to the current COVID-19 global
pandemic. First and foremost, the health of our team members and
their families is of the utmost importance to our Company. Our
operation has moved quickly to protect our staff and make sure
their families are safe. We have also taken several proactive
measures to preserve and maximize working capital while keeping
operations as active as possible by having our teams work from
home. We are committed to managing working capital and will
adjust our plans as necessary.
As a result of the world situation and the
strategic review that has been conducted over the last few months,
the board of EXM has determined to focus on the further
establishment and expansion of its Portuguese and European
operations, in particular, the planned refinery south of Lisbon.
EXM will devote all of the Company's management time, attention and
resources to actively develop this opportunity.
Portuguese operations will continue to focus on
the life sciences aspect of EXM's business by developing, testing
and commercializing high-grade medical cannabis ingredients for the
global market. EXM will leverage its existing Portuguese research
and development competence into its planned refining and
manufacturing unit and capabilities. EXM has a clear path to
produce and distribute the highest quality medical cannabis
ingredients under license from the Portuguese authorities. The
Company will produce cannabinoid distillates, isolates and active
pharmaceuticals ingredients (API's) for distribution on a B2B basis
throughout Europe and beyond inside the next 12 months.
With ~750mn people Europe is twice the
population size of the USA and Canada combined and has the clear
potential to be the world's largest and most lucrative cannabis
market. The Company expects the EU market to expand exponentially
in the coming years as more European countries legalize cannabis
for medical purposes, and medical use becomes more established.
Regulation and consumer tastes will both increasingly require the
highest standard of cannabis ingredients. With EU-GMP certification
becoming a standard, there is a clear need for highly certified and
pure medical production. The Company's approach to innovation
through research, its capacity to produce high-quality ingredients
at scale, and its extraction and refining capacity will allow the
targeting of the largest medical and wellness markets in the world.
Demand for very high quality, standardised, consistent, and
completely safe API's is particularly increasing, while supply is
currently extremely scarce and highly valued.
EXM has a compelling opportunity to build an
industrial-scale commercial refining business targeting the high
margin pharmaceutical, medicinal and nutraceuticals markets. The
Company is in the final stages of the very detailed planning for
this industrial-scale EU-GMP extraction and refinery operation,
which it plans to have in commercial production before the end of
2020. This 1400 sqm facility will be operated to pharmaceutical
standards. The refinery will be able to process cannabis raw
material in all forms (biomass, extract and distillate) produced by
compliant domestic or international suppliers. All infrastructures
and processes inside the facility will meet the stringent
regulatory requirements of INFARMED, the Portuguese medicine's
regulator. This facility, once licensed, will produce a full range
of medical ingredients from pure individual API's to distillates on
a B2B basis globally. EXM management believes this planned facility
will currently be unique in continental Europe in terms of scale.
Negotiations are well advanced for securing the most advantageous
sources of cannabis supply for the refinery, both in terms of
pricing and logistics, but particularly the essential quality and
certification. The Company welcomes the opportunity to hear from
incremental third-party cultivators and suppliers of EU-GMP grade
flowers or distillate to supply the refinery.
The Company has already obtained the licence for
its Portuguese science subsidiary to perform cannabis research,
science and development from INFARMED in October 2019. This license
enables the Company to import, research and refine cannabinoids and
cannabis by-products in Europe for R&D purposes. EXM already
has a fully operational R&D laboratory in Lisbon, which
contains a pilot-scale refinery for the transformation of
cannabis-based ingredients, and which is now optimizing the
refining processes to be used in the industrial-scale facility. EXM
has already applied for funding for two new research projects under
the Portugal 2020 initiative, a development program with the
European Commission, and continues collaboration with Nova
University Lisbon, Lusófona University. Discussions are well
underway with leading Portuguese cosmetics company, and a prominent
Portuguese Food & Beverage companies. The R&D unit will now
begin to translate its research and science works into creating
real-life wellness products within a focused go-to-market
strategy.
While focusing all resources on its Portuguese
operations, EXM board will delay the further development of its EXM
Farming operations in Uganda at this time. Operations at
Prime Ranchers, EXM's majority-owned cultivation and extraction
company in Uganda, will be impacted by this delay pending a review
of financing and strategic alternatives, including the possible
involvement of new financial and operating partners. Comexaf, EXM's
existing joint-venture Company in the DRC, has an annual renewal
requirement which will not be pursued in April 2020.
"These strategic developments means EXM will
focus primarily on its existing science and refining operations,
inside Portugal, creating product formulations and cannabis
molecules for end buyers. EXM is seeking funds or partners in order
to build a sizeable state-of-the-art pharmaceutical-grade factory,
and every aspect of the project has been exhaustively detailed. The
business opportunity this refinery facility represents is immense
and the modelled financial outcomes for the refinery are extremely
attractive. EXM also has a fantastic local management team already
in place in Portugal, which can really deliver this facility," said
Jonathan Summers, EXM's CEO. "We feel this focus is clearly the
best future path for the Company to proceed along.
Building multiple businesses simultaneously is extremely
difficult, so we are focusing on what we think is clearly the
biggest and most compelling economic opportunity that we can see
available to the Company."
Loan Agreement
EXM announces that it has entered into loan
agreements with various arms-length parties (the
"Lenders") for the aggregate principal amount of
$2,356,000 (the "Loan"). The Loan is
repayable within eighteen months and bears an interest rate of 12%
per annum. Any interest that has accrued on the principal
amount of the Loan will be payable in common shares of the
Company. The price per common share will be the market price
on the Canadian Securities Exchange (the "CSE") as
at the date such Interest is payable, less the maximum available
discount permitted pursuant to the rules of the CSE. The
Company will use the proceeds from the Loan for general working
capital purposes.
As additional consideration for the Loan, the
Company has agreed to issue to the Lenders common shares equal in
value to 20% of the principal amount at a deemed price of $0.50 per
common share (the "Bonus Shares"). The
issuance of the Bonus Shares is subject to the closing of a private
placement financing by the Company in which the Lenders will have
subscribed for and acquired common shares of the Company at an
aggregate subscription price of no less than the principal amount
of the Loan (the "Qualifying Financing"). In
the event the Lenders do not participate in a Qualifying Financing
the Bonus Shares will not be issued.
ON BEHALF OF THE BOARD OF DIRECTORS OF
EXMCEUTICALS INC.
Jonathan Summers, Chairman and Chief Executive
Officer
For further information contact:
Investor Relations
Email: investors@exmceuticals.com
Media Enquiries:
Email: media@exmceuticals.com
FOR MORE UPDATES ON THE
COMPANY
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https://www.linkedin.com/company/exmceuticalsinc/
ABOUT EXMCEUTICALS
EXM is targeting the medical applications of
cannabis. EXM's activities are focused on the production of
high-grade cannabis and hemp ingredients for the
pharmaceutical,medical, nutraceutical and cosmetic
industries. The Company proposes to sell the produced
ingredients to international markets. EXM was recently granted the
required authorizations and permits in Portugal for its existing
laboratory and pilot refinery for cannabis research. EXM has
previously completed research projects with its university
partners, Universidade Nova de Lisboa and Universidade Lusofona as
well as applying for P2020 research grants. Following receipt of
these unique Portuguese cannabis authorizations and permits, EXM is
proceeding with its planned R&D program, lab work and testing.
In addition to this more scientific mandate, EXM is now projecting
and building a significantly larger refining facility in Portugal
which once complete and licensed will be used by EXM as its base
for distribution for the international legal cannabis
ingredients. In addition EXM holds and interest in a cannabis
farming operation in Uganda.
CSE:
EXM| FSE:
A2PAW2
Neither the CSE nor the FSE has approved nor
disapproved of the contents of this news release. Neither the
CSE nor the FSE accepts responsibility for the adequacy or accuracy
of this release.
Certain information contained herein may
constitute "forward-looking information" under Canadian securities
legislation. Generally, forward-looking information can be
identified by the use of forward-looking terminology such as, "will
be", "expected", "proposes", "intends" or variations of such words
and phrases or statements that certain actions, events or results
"will" occur. Forward-looking statements regarding the Company's
business operations, the extraction of cannabis ingredients and the
exportation of the extracts, the results of testing at our
facilities established for the European market, future laws and
regulations governing the sale of our products in Europe and
elsewhere, and the potential to generate sales, and completion of a
Qualifying Financing, are subject to known and unknown risks,
uncertainties and other factors that may cause the actual results,
level of activity, performance or achievements of EXM to be
materially different from those expressed or implied by such
forward-looking statements or forward-looking information.
There can be no assurance that such statements will prove to be
accurate, as actual results and future events could differ
materially from those anticipated in such statements. Accordingly,
readers should not place undue reliance on forward-looking
statements and forward-looking information. EXM will not update any
forward-looking statements or forward-looking information that is
incorporated by reference herein, except as required by applicable
securities laws.
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