Toronto, Ontario–(Newsfile Corp. – July 15, 2020) – Red Light Holland Corp. (CSE: TRIP) (FSE:4YX) (“Red Light Holland” or the “Company“), an Ontario-based corporation positioning itself to engage in the production, growth and sale of a premium brand of magic truffles to the legal, recreational market within the Netherlands, is pleased to announce that it has entered into a securities exchange agreement dated July 14, 2020 (the “Securities Exchange Agreement“) with PharmaDrug Inc. (CSE: BUZZ) (“PharmaDrug“).
Under the terms of the Securities Exchange Agreement, PharmaDrug has agreed to issue 9,333,333 units to the Company (the “PharmaDrug SEA Units“) at deemed price of $0.075 per unit, in consideration for the issuance by Red Light Holland of 4,242,424 RLH Units (as defined below) at a deemed price of $0.165 per unit to PharmaDrug. Each PharmaDrug SEA Unit consists of (i) one common share of PharmaDrug (a “PharmaDrug Share“), (ii) 0.9 of a PharmaDrug common share purchase warrant, each whole warrant entitling the holder thereof to acquire one common share of PharmaDrug at a price of $0.13 for a period of 48 months (each whole warrant, a “Class A PharmaDrug Warrant“), and (iii) 0.1 of a PharmaDrug common share purchase warrant, each whole warrant entitling the holder thereof to acquire one common share of PharmaDrug at a price of $0.08 for a period of 48 months (each whole warrant, a “Class B PharmaDrug Warrant“). In addition, the Company will make a cash investment for $200,000 of units of PharmaDrug (the “PharmaDrug Subscription Units“) at a price of $0.075 per unit, each PharmaDrug Subscription Unit consisting of (i) one PharmaDrug Share, and (ii) one Class B PharmaDrug Warrant.
Each RLH Unit will consist of one common share in the capital of the Company (a “RLH Share“) and one common share purchase warrant (a “RLH Warrant“) of the Company. Each RLH Warrant entitles the holder to purchase one additional RLH Share at an exercise price of $0.26 at any time for a period of 48 months, subject to an accelerated expiry option. If, following the date that is four months and one day following the date hereof, the volume weighted average trading price of the RLH Shares on the Canadian Securities Exchange (the “CSE“) for any 10 consecutive trading days equals or exceeds $0.50, the Company may, upon providing written notice to the holders of RLH Warrants, accelerate the expiry date of the RLH Warrants to the date that is 30 days following the date of such written notice.
“We are very pleased to be making a strategic investment into PharmaDrug. It only makes sense, as we would want to house our microdose products in their planned Smart Shops anyway. This expedites our partnership and now we’re pretty much guaranteed prime shelf space when they arrive, as both of our companies shine a light on the Magic Truffles market, in the Netherlands. We look forward to educating and eventually selling to the legal recreational market together,” said Todd Shapiro, the Company’s Chief Executive Officer and Director.
Closing of the transactions contemplated herein is expected to occur on or about July 16, 2020, and is subject to, among other things, the satisfaction of customary closing conditions for transactions of this nature.
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 state in which such offer, solicitation or sale would be unlawful. The securities being offered have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the United States Securities Act of 1933, as amended, and applicable state securities laws.
About Red Light Holland Corp.
The Company is an Ontario-based corporation positioning itself to engage in the production, growth and sale (through existing Smart Shops operators and an advanced e-commerce platform) of a premium brand of magic truffles to the legal, recreational market within the Netherlands, in accordance with the highest standards, in compliance with all applicable laws.
About PharmaDrug Inc.
PharmaDrug Inc. is building an international controlled substance and natural medicine company with a focus on Europe. The Company owns 80% of PharmaDrug GmbH, a German medical cannabis distributor, with a Schedule I European Union narcotics license allowing for the importation and distribution of medical cannabis to pharmacies in Germany and throughout the EU. The Company also owns 100% of Super Smart, an early-stage retail company focused on consolidating the fragmented Dutch smartshop market. Smartshops are retail establishments in The Netherlands that specialize in the sale of psychoactive substances including psychedelic truffles.
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