Skye Bioscience Signs Arrangement Agreement With Emerald Health Therapeutics, Here Are The Details

Skye Bioscience, Inc. SKYE and Emerald Health Therapeutics, Inc. EMHTF EMH have entered into a definitive agreement with respect to a transaction to be completed by way of a plan of arrangement whereby Skye would acquire all of the issued and outstanding shares of Emerald in a share-for-share-transaction.

Skye is a San Diego-based pharmaceutical company developing proprietary, synthetic cannabinoid derivatives to treat glaucoma and other diseases with significant unmet needs. Emerald possesses cash and non-cash assets that Skye would acquire through the arrangement. The proposed arrangement is subject to approval by each company’s common stockholders and by the Supreme Court of British Columbia, Canada.

As a result of the arrangement, current Skye stockholders would own approximately 54% of the common stock of Skye and former shareholders of Emerald would own approximately 46% of Skye’s common stock.

Skye possesses patented technology and know-how focused on enabling, enhancing and clinically validating therapeutic outcomes of uniquely modified and synthetically manufactured cannabinoid-derivative molecules. This outcome has already been shown in preclinical studies that have demonstrated notable advantages of Skye’s lead therapeutic drug, SBI-100 Ophthalmic Emulsion, over the established clinical standard of care for treating glaucoma and potentially represents a new and necessary class of therapeutic for the world’s leading cause of irreversible blindness. Through the completion of this transaction, Skye expects to have funding for a Phase 2 study it is planning to start in the fourth quarter of 2022, following a Phase 1 study beginning in the second quarter of 2022.

Details Of The Proposed Arrangement

Under the arrangement, Skye will issue Emerald shareholders 1.95 shares of Skye’s common stock in exchange for each Emerald share. Based on the number of outstanding shares as of the date of this press release, it is expected that Skye would issue approximately 416M Skye shares to Emerald shareholders. All stock options and warrants of Emerald will be exchanged for replacement options and warrants of Skye on identical terms, as adjusted in accordance with the exchange ratio.

The boards of directors of Emerald and Skye have unanimously approved the arrangement and recommend that their respective shareholders vote in favor of the arrangement.

Evans & Evans, Inc. provided an opinion to the board of directors of Emerald stating that as of the date of the opinion and based upon and subject to the assumptions, limitations, and qualifications set forth therein, the exchange ratio to be received by the holders of Emerald common shares pursuant to the arrangement is fair from a financial point of view to such holders.

The completion of the arrangement is subject to customary terms and conditions, including the following:

• Approval of the arrangement by special resolutions of disinterested Skye and Emerald shareholders;

• Court approval of the arrangement;

• Receipt of all required regulatory approvals, including acceptance by the Canadian Securities Exchange of Skye’s listing on the CSE.

The arrangement is anticipated to close in the third quarter of 2022. Skye expects to file a proxy statement and supporting materials on Schedule 14A and will hold a special meeting of stockholders to seek approval of the arrangement and related stockholder proposals. Emerald expects to file an information circular required for Emerald’s shareholder meeting to seek approval of the arrangement.

Upon completion of the transaction, the combined company would continue to operate under the name Skye Bioscience, Inc. with its existing management team. Sukhwinder (Bobby) Rai, BSc. Biochem, BSc. Pharm, RPh., from Emerald’s board of directors would join Skye’s board of directors.

Photo: Courtesy of Skye Bioscience, Inc.

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