Pure Extracts To Acquire PL Healthcare Management

Pure Extracts Technologies Corp. PRXTF PULL A has entered into a definitive business combination agreement dated May 1, 2023 with PL Healthcare Management Ltd. and 1411062 B.C. Ltd. ("subco"), a wholly-owned subsidiary of the company, pursuant to which the company will acquire all of the issued and outstanding shares of PLM.

In accordance with the terms and conditions of the definitive agreement, the transaction will be completed by way of a three-cornered amalgamation, whereby, among other things: subco will amalgamate with PLM to form an amalgamated company ("amalco"); each issued and outstanding common share of PLM will be exchanged for five common shares of the company; and amalco will become a wholly-owned subsidiary of the company. In advance of closing of the transaction, Pure will carry out a consolidation of its common shares on a 10:1 basis, such that, upon the completion of the transaction, it is expected that existing shareholders of the company will collectively hold approximately 6.2% of the common shares and that former shareholders of PLM will collectively hold approximately 93.8% of the common shares.

PLM, an arm's length party to the company, is a healthcare case management business focused on helping Canadians with health-service case management and related therapies, among other things. Following the completion of the transaction, the company plans to utilize cannabis biomass produced by PLM's micro-cultivator and supply its extracted cannabis products to PLM's clients thereby preserving the entire retail sales margin within the Pure Extracts-PLM group of companies. Additionally, Pure Extracts plans to add to its current 47 SKUs by selecting and manufacturing the most beneficial cannabis products from its over 30 proprietary formulations for PLM's clients, addressing such urgent conditions such as PTSD, anxiety and depression.

Subject to their prior resignation in connection with the bridge financing, following the completion of the transaction, and in accordance with the terms of the definitive agreement, Ben Nikolaevsky will step down as CEO and a director of the company and Yana Popova, Sean Bromley and Dwight Duncan will resign from the board of directors of the company. Shaun Good will be appointed as CEO and a director of the company and Gerry Abday will be appointed as president and a director of the company.

Bridge Financing

The company also announced a proposed bridge financing pursuant to which PLM would advance funds to the company prior to the completion of the transaction. The proceeds of the bridge financing would be used to permit the company to execute larger volumes of purchase orders. If completed, a condition of the first advance under the bridge financing would be the resignation of up to three existing directors of the company and their concurrent replacement with three nominees of PLM. It is anticipated that the first advance under the bridge financing would be made on or about May 31, 2023.

Photo: Benzinga edit with photos by Matthias Zomer on Pexels and squarefrog on Pixabay

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