EXMceuticals
Inc. (CSE:
EXM)
(FSE: A2PAW2), (the
"Company" or "
EXM") is pleased to
announce that it has completed the sale of 5,180,000 units on a
private placement basis at a price of $0.20 per unit for total cash
proceeds of $1,036,000 (the “
Private
Placement”). Each unit consists of one common share
of the Company and one share purchase warrant. Each warrant
entitles the holder to purchase one additional common share of the
Company at an exercise price of $0.30 per share for a period of 18
months from closing of the Private Placement. The proceeds from the
oversubscribed Private Placement will be used for general working
capital and ongoing R&D and refinery project development at the
Company’s Portugal based operations. All shares are issued subject
to a four month hold period.
In connection with the Private Placement, the
Company agreed to issue 71,400 units as finder’s fees, with the
units having the same terms as the Private Placement units.
Each finders warrant entitles the holder to purchase one
common share of the Company at an exercise price of $0.30 per share
for a period of 18 months. The securities issued pursuant to
the Private Placement are subject to a statutory four month hold
period expiring on November 23, 2020.
The Company also announces that pursuant to
certain loan agreements previously entered into between the Company
and certain lenders, such lenders may participate in a qualifying
equity financing for no less than the full amount of the principal
under the applicable loan agreement, provided that such amount
would be for shares only (no warrants). The Private Placement
constitutes a qualifying equity financing, and as such lenders may
subscribe for up to 23,050,855 common shares at a price of $0.20
per share for gross proceeds of up to $4,610,171, being an amount
equal to the principal outstanding under such loan
agreements. Upon closing, if the lender has participated in
acquiring shares, the principal amount of their loan will be deemed
repaid in full. In addition, the participation of the lenders
would trigger the conversion of special warrants into shares, that
were previously issued as a loan bonus under the loan
agreements. Completion of the participation right is subject
to lenders entering into subscription agreements as described
above. Any shares issued are issued subject to a four month hold
period.
Loan Updates
The Company further announces that Mr. Summers
agreed to refinance amounts due and owing under a loan agreement
dated June 7, 2019 in the principal amount of $600,000 to the
Company (the “June Loan”). The June Loan was
due and payable on December 7, 2019. Mr. Summers has agreed
to enter into a new loan agreement to refinance the obligations
under the June Loan in the amount of $664,500 as at July 1,
2020. In addition, the new loan (the “2020
Loan”) will include accrued and unpaid expenses of Mr.
Summers in the amount of $25,671, and accrued and unpaid interest
on the July Loan Facility Agreement (defined below) in the amount
of $164,000 as at July 1, 2020. The total principal
amount of the 2020 Loan is $854,171. The 2020 Loan will be
for a term of 6 months, and bear interest at 10% per annum.
In connection with the 2020 Loan, the Company agreed to issue
427,085 bonus special warrants, with each such special warrant
being convertible into a common share of the Company for no
additional consideration, subject to the principal amount of the
loan being applied to a subsequent equity financing.
The Company previously entered into a separate
loan facility agreement dated July 5, 2019 (the “July
Loan”) with Mr. Summers, for the principal amount of
$1,400,000, which was fully advanced to the Company. The July
Loan is due and payable on January 5, 2021 and bears an interest
rate of 12% per annum until the July Loan maturity date. Mr.
Summers received 207,407 special warrants in connection with the
July Loan. Pursuant to the July Loan Mr. Summers is also
entitled to receive share purchase warrants exercisable at $1.35
per share on the maturity date with the number of warrants being
based on coverage ranging from 10% and 50% of the principal amount
using $1.35 per share, with the percentage depending on the fair
market value of the shares of the Company as at that maturity
date. In connection with the agreement of Mr. Summers to
include $164,000 of interest due under the July Loan as part of the
2020 Loan, the Company agreed to amend the warrant coverage to
700,000 bonus warrants exercisable at a price of $0.40 per share
for a period of 5 years until July 4, 2024.
Pursuant to Multilateral Instrument 61-101
Protection of Minority Security Holders in Special Transactions
(“MI 61-101”) the Company advises that the loan
agreements and the Private Placement are related party transactions
under MI 61-101 and are exempt from the formal valuation and
minority shareholder approval requirements of MI 61-101 pursuant to
section 5.5(a) and section 5.7(1)(a) of the instrument.
Other Share Transactions
The Company further announces that it has issued
an aggregate of 251,096 common shares of which 220,859 shares were
issued to Luminous Capital Inc. for financial services provided to
the Company, and 30,237 were issued in total to multiple parties to
correct errors on a prior private placement. All shares are
issued subject to a 4-month hold period.
The Company also announces that pursuant to the
terms of an employment agreement with Mr. Jonathan Summers in
connection with his agreement to act as an executive officer of the
Company, it had agreed to grant incentive stock options to purchase
up to 5,000,000 common shares of the Company, which have now been
granted at a price of $0.40 per share for a period of 5 years.
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
Follow us on Twitter:
https://twitter.com/EXMceuticals
Follow us on LinkedIn:
https://www.linkedin.com/company/exmceuticalsinc/
ABOUT EXMCEUTICALS
EXM is an emerging bio-sciences company
targeting the wellness and medical applications of cannabinoids and
terpenes. EXM Portugal 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 Portugal
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 and
additional facility in Portugal which will operate as an EU-GMP
refinery. Once complete and licensed this industrial refinery will
be used by EXM as its base for the distribution of cannabis
ingredients in the EU and North America on a commercial
basis. EXM’s activities are focused on the production of
high-grade cannabis and hemp ingredients for the pharmaceutical,
therapeutical, nutraceutical and cosmetic industries. The
Company proposes to sell the produced ingredients to international
markets. EXM is not a recreational cannabis company.
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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