Creso Pharma and Red Light Holland Merge to Introduce The HighBrid Lab (TM), a Leading Global Psychedelics x Cannabis Company, Specializing in Recreational Products, Applied Science, Technology and Innovation
Red Light Holland to Host a Live Stream on the Company's Social Media Handles, Including www.youtube.com/redlightholland at 8:30 am Eastern Time on Thursday, June 17th
2021-06-16 08:08 ET - News Release
? Creso Pharma and Red Light Holland have entered into a definitive agreement to merge their businesses and create The HighBrid Lab
? The HighBrid Lab is expected to have an implied pro forma equity value of C$347 million (A$371 million) based on the closing price of the shares of Creso Pharma and Red Light Holland on June 15th, 2021
? Transaction results in a reverse takeover of Red Light Holland by Creso Pharma, with an implied premium to Red Light Holland Shareholders of 29.9% based on the 30-day VWAP of both companies as of June 15th, 2021
? Mr. Bruce Linton, leading cannabis and psychedelics entrepreneur, expected to join as Non-Executive Chairman of The HighBrid Lab's board of directors
? Combined Company is expected to have a cash balance of approximately C$45 million (A$48 million), providing considerable financial flexibility to progress its growth strategy
? The Combined Global Company will trade on the Canadian Securities Exchange ("CSE") under the ticker symbol TRIP
? The HighBrid Lab will focus on several key growth areas:
? Expanding market and brand leadership in recreational psilocybin, supported by education, telecounseling and technology as new markets open
? Applied science and innovation supporting long-term opportunities in psychedelics with both naturally occurring and pharmaceutical grade drug discovery aiming for advanced and approved product offerings through controlled lab environments via the pending acquisitions of Halucenex and Mera Life Sciences
? Scaling recreational cannabis offering in North America by focusing on increasing market share in Canada and taking advantage of the Combined Company's CSE listing to progress the introduction of products into the US, as well as leveraging industry leading expertise to execute US cannabis acquisitions in the near term (the US is the world's largest cannabis market, expected to reach US$41Bn/A$53Bn by 2025)
? Enhanced European distribution of Creso Pharma's researched and developed human and animal CBD products through SR Wholesale, Red Light Holland's wholly owned Netherlands based distribution company
? Introducing unique, innovative and eye-catching recreational product offerings under existing Red Light Holland brands with innovative applied science including combined CBD and mushroom products and ready to drink products with mushrooms, CBD and THC, while focusing on adding adjacent iMicrodose product lines with ingredients including CBD, THC and functional mushrooms, as and where permitted to do so, and promoting responsible use via education and information
? Creation of Red Light Farms, increasing exposure to growing operations; adding to the Combined Company's already impressive line-up including The Red Light Truffle Farm in the Netherlands, Happy Caps Gourmet Mushroom Farm and Mernova Medical in Nova Scotia
? Increasing vertical integration strategies from growing, harvesting, packaging, branding and distribution to potential brick and mortar stores for increased sales focused on higher margins
? Expanding e-commerce presence and online store initiatives to help boost future sales of CBD, THC, psilocybin, and functional mushroom products, where permissible
? Using biometric movement and scientific data and technology from Radix Motion to help find optimal dose and protocol for individuals, and to work with regulatory agencies towards expanding the legal, responsible use of psilocybin, THC and CBD in emerging countries focused on stricter controls
? Continuing to grow one of the world's most recognizable legal recreational psilocybin brands while crossing over into the cannabis sector with a focus on increasing creative and experiential marketing, brand development and added influencer support
? Sustainable approach with consideration for the long term social, environmental, and economic impacts
? Red Light Holland's current Chief Executive Officer, Todd Shapiro, will lead the Combined Company as CEO and Director. The Combined Company's board of directors will consist of seven members, three of which, including Mr. Shapiro, will be current directors of Red Light Holland, and three of which, will be directors or nominees of Creso Pharma. Mr. Bruce Linton is expected to be the seventh member, as non-executive Chairman
? Mr. William Lay, previously Associate Director, M&A at Canopy Growth appointed Executive Vice President and Chief Strategy Officer to assist in growth trajectory - Mr. Lay has overseen and/or supported over C$5Bn in cannabis M&A transactions
? Newly formed company can be accessed online at www.HighBrid.co
Sydney, Australia & Toronto, Ontario--(Newsfile Corp. - June 16, 2021) - Creso Pharma Limited ("Creso Pharma") (ASX: CPH) (FSE: 1X8) (OTCQB: COPHF), a producer of cannabis products designed to better the lives of people and animals, and Red Light Holland Corp. ("Red Light Holland") (CSE: TRIP) (FSE: 4YX) (OTC Pink: TRUFF), an Ontario-based corporation engaged in the production, growth and sale of magic truffles to the legal, recreational market within the Netherlands, are pleased to advise that they have entered into a definitive scheme implementation deed (the "Deed") to combine businesses and create The HighBrid Lab (the "Combined Company" or "The HighBrid Lab"), a leading global psychedelics and cannabinoid company.
The transaction will be carried out by way of statutory schemes of arrangement under the Corporations Act 2001 (Cth), pursuant to which Red Light Holland will acquire (i) all of the issued fully paid ordinary shares of Creso Pharma (the "Scheme"), and (ii) all of the issued listed options of Creso Pharma (the "Option Scheme") in exchange for the issue of common shares of Red Light Holland ("Red Light Holland Shares") on the terms and conditions set forth in the Deed. Under the terms of the Deed, the shareholders of Creso Pharma (the "Creso Pharma Shareholders") will receive 0.395 of a Red Light Holland Share for each fully paid ordinary share of Creso Pharma (each, an "Creso Pharma Share") held immediately prior to the effective time of the Scheme. In addition, (i) holders of listed options of Creso Pharma (the "Creso Pharma Listed Optionholders") will receive 0.257 of a Red Light Holland Share for each listed option of Creso Pharma (each, a "Creso Pharma Listed Option") and (ii) holders of the various other classes of unlisted Creso Pharma securities will be offered Red Light Holland options or warrants based on ratios detailed in the Deed.
Upon implementation of the Scheme and the Option Scheme (together, the "Schemes"), it is expected that the former Creso Pharma securityholders will own approximately 57.4% of the pro forma issued and outstanding Red Light Holland Shares, resulting in a reverse takeover of Red Light Holland by the Creso Pharma security holders. Following implementation of the Schemes, the Combined Company is expected to have a cash balance of approximately C$45 million (A$48 million), providing considerable financial flexibility to progress its growth strategy.
About Red Light Holland
Red Light Holland strives to move towards safe and trustworthy access to psychedelic compounds for all, and is engaged in the production, growth and sale, through existing Smart Shops and an ecommerce platform, of premium magic truffles to the legal, recreational market in the Netherlands. Activities are undertaken in accordance with the highest standards and compliance with all applicable laws.
Red Light's directors and advisory board members are all highly skilled executives with extensive expertise in growing, mass-producing, compliance, distribution, marketing and supply chain management, which will allow the Combined Company to become a leader in an emerging market segment.
About Creso Pharma
Creso Pharma brings pharmaceutical expertise and methodological rigor to the cannabis world and strives for the highest quality in its products. The company develops cannabis and hemp derived therapeutic, nutraceutical, and lifestyle products with wide patient and consumer reach for human and animal health. Creso Pharma uses GMP (Good Manufacturing Practice) development and manufacturing standards as a reference of quality excellence with initial product registrations in Switzerland. It has worldwide rights for several unique and proprietary innovative delivery technologies, which enhance the bioavailability, and absorption of cannabinoids. The company is also progressing expansion opportunities into the North American recreational cannabis market through its wholly-owned subsidiary Mernova Medical Inc. ("Mernova Medical"), as well as the emerging psychedelics sector through target acquisition company, Halucenex Life Sciences Inc. ("Halucenex").
Complementary Management and Board Capabilities with Industry Leading Experience
A strong management team and board of directors will lead the Combined Company, which will also have access to a world-class group of advisors. Upon completion of the Schemes, Red Light Holland's current CEO, Todd Shapiro, will lead the Combined Company as Chief Executive Officer and Director. The board of directors of the Combined Company will consist of seven members, three of which, including Mr. Shapiro, will be current directors of Red Light Holland, and three of which, will be directors or nominees of Creso Pharma. Leading cannabis entrepreneur Bruce Linton is also expected to join the board of directors of the Combined Company as non-executive Chairman.
Creso Pharma's management team brings a wealth of scientific experience and pharmaceutical background, while Red Light Holland's team has significant expertise in marketing, branding and recreational product offerings. Additionally, William Lay will lead the Combined Company's overall corporate strategy development and will work on identifying and executing potential M&A opportunities in his capacity as Executive Vice President & Chief Strategy Officer.
Creso Pharma and Red Light Holland are confident that the leadership team and proposed board of directors of the Combined Company will provide a strong foundation for The HighBrid Lab to drive shareholder value. Additional senior leadership positions at the Combined Company will be confirmed in due course.
Management Commentary
"Having worked with both the Creso Pharma and Red Light Holland teams closely in the past, I am really excited by the potential this combination brings. As a merged company, The HighBrid Lab has access to four of the highest growth industry segments around, and the team, board and advisory group to make real progress within these verticals. I'm really looking forward to rolling up my sleeves and helping The HighBrid Lab get to work!" said Bruce Linton, who is expected to join the Combined Company's board as non-executive Chairman.
"Red Light Holland has significant capital and expertise, and is motivated for growth. The company understands the sensitive complexities of the ingredients we deal with, while ensuring we continue to make a bold yet careful push to provide and increase access for immediate revenue generation and brand expansion. Our core principle is to compliantly lead with edgy consumer packaged goods focused on positive outcomes, while balancing a responsible, regulated and educational use approach through technology and innovation," said Todd Shapiro CEO and Director of Red Light Holland. "Merging with Creso Pharma, who also has significant cash on hand, and formulating The HighBrid Lab, with Bruce Linton as Chair of the Board, means we can expand our premium product offerings globally in the high growth CBD, THC and psychedelic sectors. Together we are bullish on developing world class products with naturally occurring ingredients in clever and innovative ways for both humans and pets, which completely aligns with Creso Pharma's R&D and sales approach. The HighBrid Lab ramps up our objectives for near and long term growth targets, while potentially being a part of positive change. Together we are not shy, as our goal continues to be the People's Company, dedicated to providing global access to each of these naturally occurring ingredients while understanding that education, careful use, sustainability and data collection with consent are the keys to future success as regulations open up. The HighBrid Lab is a perfect name combining psychedelics and cannabis coupled with recreational use, science and technology. This is a monumental day for all of our shareholders and now their pets!"
Creso Pharma's Non-Executive Chairman, Mr. Adam Blumenthal said: "We are very excited to have entered into this agreement with Red Light Holland and to create a company that has the potential to become a world leading psychedelic, CBD and recreational and medicinal cannabis company. The transaction follows a considerable amount of due diligence undertaken by both parties, highlighting the strength of both Creso Pharma's and Red Light Holland's operations and abilities across a number of key international markets. There are a number of synergies across the businesses, which will allow the Combined Company to considerably scale up operations in the near term. Red Light's CSE-listed vehicle will allow the Combined Company to enter the lucrative US market and we anticipate that product sales through our recreational cannabis and CBD subsidiaries will scale up significantly in the short term, underpinning early cash generation and provide additional financial flexibility across the business."
"To oversee this rapid growth phase, the The HighBrid Lab will be led by an experienced board of directors and strategic advisors, who are expected to bring a wealth of knowledge to building successful cannabis, recreational products and psychedelics companies. Creso Pharma is very confident that Red Light Holland's established operations including a distribution arm and market understanding will provide a number of value catalysts. We look forward to working with the group to immediately refine our supply chain, increase brand awareness through North America and progress opportunities across the recreational and therapeutic psychedelics sectors to unlock value for new and existing shareholders."
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