EXMCeuticals Inc. Update on Proposed Acquisition in the Republic of Malawi

Vancouver, British Columbia--(Newsfile Corp. - June 11, 2019) - EXMceuticals Inc. (CSE: EXM) (FSE: EXM), a cultivator and producer of medical grade cannabis extracted ingredients, for the pharmaceutical, nutraceutical, therapeutical and cosmetic industries, is pleased to provide an update on the proposed acquisition of MM (Operations) Ltd. ("MM Ltd"), as announced on 7 May 2019, an established agro-processing business in the Republic of Malawi.

EXM's business and legal due diligence is progressing well, and EXM and the shareholders of MM Ltd. continue to work toward a definitive transaction structure and agreement. The two parties have agreed to a transaction value of USD $30 million, which is expected to be satisfied by EXM paying (i) USD$5 million in cash and (ii) USD$25 million in securities of EXM, which is to be structured as a convertible debt security. This convertible debt security can be converted into the equity of EXM at a strike price very significantly in excess of the current share price. This conversion can only occur when the share price is meaningfully in excess of this agreed strike price. EXM has already advanced a sum of USD$500,000 as partial payment of the cash portion of the proposed transaction.

The deal team at EXM is currently working on structuring and sourcing financing for the balance of the consideration, which would only become payable upon satisfaction of the conditions precedent to the transaction, including receipt of applicable corporate and regulatory licensing and approvals, including that of the CSE, as well as the signature of the definitive agreement.

If and when the transaction completes it will add a substantial facility totalling c.2000 ha to EXM's portfolio. MM Ltd has 280 ha of securely fenced and operational fully drip-irrigated farmland, a state-of-the-art 4 ha greenhouse nursery (capable of growing 700,000 plants), as well as a modern 10,000m2 processing factory. The processing facility is certified by the British Retail Consortium, HACCP, Kosher, Halal and Rainforest Alliance. The property also consists of an additional c.1,700 ha of land for future expansion, 450 ha of which has been certified as organic for several years.

"It is hugely positive to see that the deal is progressing well. The acquisition of MM Ltd would provide an excellent platform for EXM to further expand and scale its cannabis extracted ingredients production strategy for the pharmaceutical, nutraceutical and cosmetic industries," said Michel Passebon, Chief Executive Officer of EXM.

ON BEHALF OF THE BOARD OF DIRECTORS OF EXMCEUTICALS INC.
Michel Passebon, Chief Executive Officer and Director
For further information contact:
EXM Investors Relations +1 345-232-1569 Email: investors@exmceuticals.com

Media enquiries
Jane Glover/ Jake Thomas/ Billy Clegg +44 (0) 203 757 4990 Email: exm@camarco.co.uk

Neither the CSE, nor the FSE has approved nor disapproved the contents of this press release. Neither the CSE, nor the FSE accepts responsibility for the adequacy or accuracy of this release.

About EXM

EXM's activities are focused on the sustainable cultivation of cannabis and hemp, and the production of high-grade and hemp ingredients for the pharmaceutical, therapeutical, nutraceutical and cosmetic industries. The Company proposes to sell the produced ingredients to international markets.

EXM is in the final stage of procuring the required authorizations and permits in Portugal for its laboratory for research, and center for processing and distribution, which are currently under construction. EXM has previously completed research projects with its university partners, Universidade Nova de Lisboa and Universidade Lusofona. Pending receipt of the authorizations and permits, EXM is proceeding with its R&D program, lab work and testing under the licenses that its university partners have already obtained for the initial research projects. In addition to its more scientific mandate, the facility being built is proposed to be used by EXM as its base for distribution in the EU and North America.

EXM, through its subsidiary and in-country partner, holds the rights to a cannabis license in the Kuba Kingdom, Mweka, Kasai Province, Democratic Republic of Congo, and the rights to a land concession for the cultivation of cannabis and hemp, and processing and export of high-grade cannabis extracted ingredients.

EXM has also submitted applications and undertaken negotiations with local governments and partners in Ethiopia, Malawi, Zambia, Eswatini and Burundi, in order to obtain licences to permit the cultivation of cannabis and hemp, as well as the processing, transformation and export of psychotropic and non-psychotropic cannabinoid ingredients. In Ethiopia, EXM is in its final stage of negotiation with the government for an agro-industrial park, of 4,000 hectares (9,880 acres) encompassing a free trade zone, for which EXM has already obtain land rights over 2,000 hectares (4,940 acres) in the Amhara region.

In addition, EXM is in the process of obtaining a license in Malawi, in partnership with a large local agro producer. Please see previous press releases for more information on EXM Malawi activities.

Forward-looking statements

Certain statements and information included in this press release that, to the extent they are not historical fact, constitute forward-looking information or statements (collectively, "forward-looking statements") within the meaning of applicable securities legislation. Forward-looking statements, including those identified by the expressions "anticipate", "believe", "plan", "estimate", "expect", "intend", "may", "should" and similar expressions to the extent they relate to the Company or its management. Forward-looking statements are based on the reasonable assumptions, estimates, analysis and opinions of management made in light of its experience and its perception of trends, current conditions and expected developments, as well as other factors that management believes to be relevant and reasonable in the circumstances at the date that such statements are made, but which may prove to be incorrect.

Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to differ materially from any future results, performance or achievements expressed or implied by the forward-looking statements. Such risks and uncertainties include, among others, the risk factors included in the Company's Filing Statement dated as of January 28, 2019, which is available under the Company's SEDAR profile at www.sedar.com. Accordingly, readers should not place undue reliance on any such forward-looking statements. Further, any forward-looking statement speaks only as of the date on which such statement is made. New factors emerge from time to time, and it is not possible for the Company's management to predict all of such factors and to assess in advance the impact of each such factor on the Company's business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. The Company does not undertake any obligation to update any forward-looking statements to reflect information, events, results, circumstances or otherwise after the date hereof or to reflect the occurrence of unanticipated events, except as required by law including securities laws. This news release does not constitute an offer to sell or a solicitation of any offer to buy any securities of the Company.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/45469