Building upon a previously announced proposal to combine businesses, POCML 4 (TSX-V: POCM) and privately held MediPharm Labs, have taken the next step, announcing a definitive agreement Monday morning to join forces.
The agreement is structured as an all-stock reverse takeover to bring MediPharm public. Per the deal, POCML will effect a 1-for-2 reverse split ahead of the completion of the transaction. Subsequently, MediPharm will merge with a wholly owned subsidiary of POCML via POCML acquiring all the shares of MediPharm on the basis of 12.68 POCM shares for each share of MediPharm issued and outstanding.
From its headquarters in Barrie, Ontario, MediPharm is a medicinal cannabis company specializing in the pharmaceutical production of oil products as a Licensed Manufacturer from Health Canada under the Access to Cannabis for Medical Purposes Regulations and soon to be licensed under the Office of Drug Control in Australia.
MediPharm has the distinction of being the first Canadian company to become a licensed producer for cannabis oil production without first receiving a cannabis cultivation license.
In June, MediPharm began construction of a leading-edge extraction facility in the South Gippsland region of Wonthaggi, about 130 kilometres southeast of Melbourne, Australia.
The business combination has been in the works for months. Setting up for the deal, MediPharm last month completed a private placement raising C$22.32 million through the issuance of 2.07 million units at a price of C$10.7878 each.
Each unit consisted of one common share of MediPharm and one-half of a warrant to buy another share at a price of C$15.216 over the next two years.
These shares will be swapped for post-consolidation shares of POCM upon completion of the acquisition. When the math is completed, one full warrant will entitle the holder to buy an additional share of POCM for C$1.20.
Shares of POCM, which started trading publicly in February, have been under a trading halt at the company’s request since May 7 as it evaluated an acquisition under the capital pool company program of the TSX Venture. At the time of the trade suspension, shares were trading at 50 cents. No commentary was provided today regarding the resumption of trading.
