INTEGRATED CANNABIS ENTERS INTO DEFINITIVE AGREEMENT TO ACQUIRE CALIFORNIA CANNABIS MANUFACTURING BUSINESS
Further to its press release on May 27, 2019, Integrated Cannabis Company Inc. has entered into a share exchange agreement dated effective June 17, 2019, among the company, Ganja Gold Inc. (TargetCo) and the shareholders of TargetCo, pursuant to which the company will acquire all of the issued and outstanding shares of TargetCo. TargetCo is a California-based state and municipally licensed cannabis manufacturing business.
The acquisition of the manufacturing assets will allow Integrated Cannabis to directly participate in the California cannabis market in addition to further developing its X-Sprays products.
The proposed transaction
Pursuant to the terms of the definitive agreement, Integrated Cannabis will acquire all of the issued and outstanding securities of TargetCo in consideration for $12.4-million to be satisfied through the issuance of 40 million common shares of the company pro rata to shareholders of TargetCo at a deemed price of 31 cents per payment share upon closing of the proposed transaction. In addition, subject to the completion of certain milestones, the company may issue an additional 40 million payment shares pro rata to the former shareholders of TargetCo at a deemed price of 31 cents per payment share. The payment shares will be subject to a statutory hold period of four months and a day from the closing date as well as a voluntary hold period of 12 months from the closing date. The proposed transaction remains subject to certain closing conditions, including, without limitation: (a) the receipt by Integrated Cannabis of all necessary corporate and regulatory approval; and (b) each party's representations and warranties in the definitive agreement being true and correct in all aspects as of the closing date, and each party meeting its terms and conditions and completing its covenants and obligations as contained therein. There can be no guarantees that the proposed transaction will be completed as contemplated or at all. The proposed transaction is anticipated to close on July 5, 2019.
Subject to approval of the Canadian Securities Exchange, in connection with the proposed transaction, the company will issue 3.2 million common shares to an arm's-length third party finder at a deemed price of 31 cents per finder share. The finder shares will be subject to a statutory hold period of four months and a day from the closing date.
