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VANCOUVER, British Columbia, May 11, 2021 (GLOBE NEWSWIRE) — EXMceuticals Inc. (CSE: EXM) (FSE: A2PAW2) (the “Company” or “EXM”), an emerging bio-sciences company specializing in the production of unique cannabinoid formulations, is very pleased to announce: (i) the signing of the definitive business combination agreement (the “Merger”) with Global Cannabinoids (“GC”), a leading B2B US distributor of bulk and wholesale hemp derived cannabinoids and finished products; and (ii) a best-efforts, private placement (the “Private Placement”) of up to C$6.0 million (collectively, the “Transaction”). This Business Combination fueled by new capital will create a company (the “Combined Company”) in the fast-growing business segment of hemp and cannabinoid-based products distribution. Following the completion of the Business Combination, the Combined Company will operate under GC’s corporate name.

The Business Combination brings together GC, which is a US-based online platform for the production, manufacture and distribution of premium wholesale hemp oil, extract, isolates and finished products with EXM, which will allow the Combined Company to expand globally with EXM’s existing Portugal hub to import, research, refine and export cannabinoids and cannabis-based products into and throughout the European Union.

“We are excited to have reached agreement on the definitive terms of our merger with EXM, and this will accelerate our expansion. Over the last three years Global Cannabinoids has grown into a meaningful company, with a material customer roster, distributing many different Hemp products. The US market offers us enormous room to grow further from here, and we can now also push quickly into other rapidly growing markets for additional sales, in particular Europe. We are committed to making the combined company a significant part of the emerging multi-billion dollar CBD and cannabis market opportunity ” stated GC’s Chief Executive Officer Kelly Ann Lewis-Bortman.”

“The combination with GC is clearly a transformational transaction for EXM. The enlarged Global Cannabinoids will benefit from an accelerated expansion into European distribution, as well as a business footprint encompassing both hemp and cannabis.” commented Jonathan Summers, CEO of EXM.

With a new global focus and reach, the Combined Company will focus on expanding their footprint worldwide catering to hemp, CBD and ultimately cannabis-based products. The combined team’s deep global network will complement the organic cost saving synergies of the Business Combination as the Combined Company continues to pursue market share in the projected $123 billion CBD market by 2027.¹

Proposed Transaction

GC has signed a definitive business combination agreement (the “BCA”) effective May 4, 2021 with EXM. The Definitive Agreement provides for the creation of a partnership between EXM and GC (“Global-EXM”) and the contribution by EXM and GC of all of their respective assets and liabilities (including all subsidiaries) to the Global-EXM in exchange for units of Global-EXM. The units (the “Global-EXM Exchangeable Units”) issued to the members of GC in exchange for the contribution of GC’s assets shall be exchangeable at the option of such holders, from time to time, for an aggregate of 168,000,000 common shares of EXM (“EXM Shares”). Prior to any exercise, EXM shall issue to the members of GC, 168,000 proportionate voting shares of EXM (the “Proportionate Voting Shares”) where each Proportionate Voting Share shall carry 100 votes at any meeting of the shareholders of EXM, no economic interest in EXM and shall be cancelled on a proportionate basis upon any exchange of the Global-EXM Exchangeable Units for EXM Shares.

The Transaction will result in EXM holding approximately 33% of Global-EXM and the members of GC holding approximately 66% of Global-EXM. After giving effect to Definitive Agreement and not including any securities to be issued pursuant to the Private Placement, the holders of GC will hold 66% of the votes at EXM (through the Proportionate Voting Shares) on a pro forma basis and existing EXM shareholders will hold approximately 33% of the votes at EXM (through their continued ownership of EXM Shares) on a pro-forma basis. EXM and GC expect to close the Transaction before the end of the year.

The Transaction has been unanimously approved by the Board of Directors of EXM and the members of GC. The BCA provides for certain customary provisions, including covenants in respect of non-solicitation of alternative transactions, a right to match superior proposals, US$500,000 reciprocal termination fees under certain circumstances.

The Transaction is an arm’s length transaction and is subject to a number of conditions customary to transactions of the nature of the Transaction, including, but not limited to: (i) the receipt of required regulatory approvals, including, but not limited the approval of the Canadian Securities Exchange (the “CSE”); (ii) the completion of a change in the name of EXM to “Global Cannabinoids Ltd” or such other name as may be requested by GC and acceptable to the application regulatory authorities; and (iii) the completion of the Board and Management reconstitution (as further described below).

There can be no assurance that any one or more of the matters to be undertaken in connection with the transaction will be completed as proposed or at all. In particular, the proposed CSE listing is subject to meeting the initial listing requirements and obtaining the approval of the CSE. Additional details of the Transaction will be available in materials to be communicated in the listing statement being prepared in connection with the Transaction and any meeting materials should a meeting of the EXM Shareholders be required to approve any matters in connection with the Transaction. Readers are cautioned that, except as disclosed therein, any information released or received with respect to the Transaction may not be accurate or complete and should not be relied on.

Highlights of The Transaction

Management believes the terms of the Business Combination are accretive to the Combined Company and expect that revenue from combined operations will position the Combined Company to be a global participant in the hemp-based CBD wholesale market and beyond.

• Market Opportunity: Positions the Combined Company to capitalize on the expected $123 billion global CBD industry by 2027² with a digital platform for the global distribution of cannabinoid-based products.
• Global Focus: GC’s sales channels combined with EXM’s existing assets and licenses in Portugal establishes growing global revenue capabilities and vertical supply chains in the emerging EU cannabinoid markets.
• Online CBD Presence: GC currently services approximately 60,000 customers across the US with over 1,000 product SKUs in 2020.
• Customer Focused Data: Distribution network for bulk wholesale and nationally recognized CBD brands across a wide array of customers provides valuable data, consumer insights, and product knowledge as global companies look to enter the cannabis & cannabinoid marketplace.
• Strong Sales Profile: GC generated sales of approximately $13 million in 2020 (unaudited) despite the disruptive effects of the global pandemic.

Luminous Capital acted as corporate financial advisors to both GC and EXM on the Transaction.

Combined Company Leadership Team

The Combined Company will be led by a management team and Board of Directors, with strong track records in consumer packaged-goods, distribution, and cannabis experience globally. Upon completion of the Business Combination, GC’s current Chief Executive Officer, Kelly Ann Lewis-Bortman, will lead the Combined Company and management team as the Chief Executive Officer. Jonathan Summers will be appointed the Chairman of Combined Company. The combined Board of Directors will consist of a total of five members, three of which, including Mrs. Bortman, are current GC directors and two of which will be from EXM, one of which will be Jonathan Summers. EXM’s Chief Financial Officer, Mike Kinley, will continue as the Chief Financial Officer of the combined entity.

Additional senior leadership positions at the Combined Company will be named at a later date.

Forward Looking Statements

This press release contains certain statements or disclosures relating to the parties that are based on the expectations of management as well as assumptions made by and information currently available to the parties which may constitute forward-looking statements or information (“forward-looking statements”) under applicable securities laws. All such statements and disclosures, other than those of historical fact, which address activities, events, outcomes, results or developments that the parties anticipate or expect may, or will occur in the future (in whole or in part) should be considered forward-looking statements. In some cases, forward-looking statements can be identified by the use of the words “expect,” “anticipate,” “may,” “propose,” “believe,” “will” and derivatives of such words and other similar expressions. In particular, but without limiting the foregoing, this press release contains forward-looking statements pertaining to the following: completion of the Transaction (including the terms and timing thereof, if at all), the receipt of all required approvals, including the CSE, the timing for completing the Transaction, the requirement to prepare and deliver to shareholders of a management information circular, the Combined Company future success if the proposed Transaction closes, and the pro forma and other potential future combined metrics of the Combined Company.

The forward-looking statements contained in this press release reflect several material factors and expectations and assumptions of the parties including, without limitation: that the parties will continue to conduct their operations in a manner consistent with past operations; the general continuance of current or, where applicable, assumed industry conditions; availability of debt and/or equity sources to fund the Combined Company’s capital and operating requirements as needed; and certain cost assumptions.

The parties believe the material factors, expectations and assumptions reflected in the forward-looking statements are reasonable at this time but no assurance can be given that these factors, expectations and assumptions will prove to be correct. The forward-looking statements included in this press release are not guarantees of future performance and should not be unduly relied upon. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements including, without limitation: general economic, market and business conditions; increased costs and expenses; reliance on industry partners; access to appropriate capital, risks related to cannabis price fluctuations and a significant expansion in COVID-19 restricting or prohibiting the Combined Company operations or significantly impacting the Combined Company’s supply chain. Readers are cautioned that the foregoing list of factors is not exhaustive and are cautioned not to place undue reliance on these forward-looking statements.

The forward-looking statements contained in this press release are made as of the date hereof and the parties undertake no obligations to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

This press release is not an offer of the Private Placement securities for sale in the United States. The securities to be issued in the Private Placement have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or applicable exemption from U.S. federal and state registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

No stock exchange nor IIROC accepts responsibility for the adequacy or accuracy of this release.

ON BEHALF OF THE BOARD OF DIRECTORS OF EXMCEUTICALS INC.

Jonathan Summers, Chairman and Chief Executive Officer

For further information, contact:

Investor Relations

Email: [email protected]

Tel : 1-403-554-1562

Media Enquiries:

Email: [email protected]

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¹ CBD Oil & CBD Consumer Health Market Size, Share & Trends Analysis Report by Product, by Distribution Channel, by Region (North America, Europe, Asia Pacific, Latin America, MEA), and Segment Forecasts, 2020 – 2027
² CBD Oil & CBD Consumer Health Market Size, Share & Trends Analysis Report by Product, by Distribution Channel, by Region (North America, Europe, Asia Pacific, Latin America, MEA), and Segment Forecasts, 2020 – 2027