Revive Therapeutics Ltd., a Canadian company developing cannabinoid-based products, signed a non-binding letter of intent to merge with Herman Holdings Ltd.
Under the terms of the letter, Revive will consolidate its common shares on a 1-for-2.5 basis upon completion of the merger.
The shareholders of Herman Holdings will receive two common shares of Revive for each common share of Herman they hold, including Herman Holdings shares from the company's proposed C$2.5 million private placement. Revive will also issue replacement convertible securities of the resulting issuer to holders of Herman Holdings convertible securities in the same ratio as the common shares.
For purposes of the deal, the deemed value of Revive's issued and outstanding shares at the time of closing shall be about C$6,750,000. The value of issued and outstanding shares of Herman Holdings at closing shall be about C$18.3 million, plus gross proceeds of C$2.5 million from the proposed placement.
The transaction is subject to a definitive agreement between the companies, completion of due diligence, as well as approvals from shareholders, regulators and the Canadian Securities Exchange, among other conditions.
In February, Revive entered into a binding letter of intent to establish a joint venture with Herman Holdings that would extract and market of cannabis oils.
Herman Holdings is an investment company focused on the cannabis sector.
Toronto-based Revive received approval to list on the CSE in July.