EVI Global Group Developments Corp. has signed a non-binding letter of intent with Borganic Consulting Inc., which is focused on the commercial extraction of cannabidiol (CBD) from industrial hemp. Borganic has engineered a proprietary commercial-scale extraction technology that is more cost-efficient than other traditional extraction processes. Borganic has also secured an exclusive joint venture partnership with United Kingdom-based DragonFly Biosciences LLC to build a CBD extraction facility to service the European Union (EU). DragonFly's 2018 harvest of 420 hectares of CBD-rich hemp is expected to produce a minimum of 4.5 million grams of CBD. The extraction facility has the capability to produce over 18 million grams of CBD annually, making it one of the largest refineries of CBD in Europe. The company has also received multiple enquiries from other European Union-based hemp producers to extract CBD for them under contract. Cannabis News Wire projects that the worldwide CBD market will grow to more than a $2-billion industry within two years with a 39-per-cent compounded annual growth rate.
The letter of intent is for EVI to acquire all the issued and outstanding shares of Borganic for a purchase price consisting of 30 million shares of EVI, adjusted for any of Borganic's outstanding liabilities on the closing date. As a condition to closing the acquisition, EVI will close a financing to raise an aggregate of $3-million. Borganic has granted EVI a binding 60-day exclusivity period to execute a definitive agreement, complete due diligence and raise the required capital. The acquisition is anticipated to close in Q4 2018, assuming legal, regulatory and exchange approval of the transaction.
The company has arranged a non-brokered private placement offering of up to 12 million units at a price of 25 cents per unit for gross proceeds of up to $3-million. Management of the company may decide to increase the size of the financing by up to an additional $500,000. Each unit will consist of one common share and one-half of one common share purchase warrant. Each warrant will entitle the holder to purchase one common share of the company at a price of 50 cents for one year. The units issued in the offering are subject to a four-month hold period.
The company may pay finders' fees in connection with the financing to certain eligible finders in the form of cash and/or securities.
"The use of CBD in the EU far exceeds its use in North America and represents mostly untapped business opportunity. Borganic's partnership with DragonFly positions Borganic a year ahead of most competitors. This is the opportunity we've been looking for," exalted Jason Dussault, chief executive officer of EVI. "The anticipated closing of this strategic acquisition is expected to establish us as a market leader in the CBD manufacturing market within the EU."
About EVI Global Group Developments Corp.
EVI Global Group Developments is a natural resource company based in Vancouver, B.C., engaged in the acquisition, exploration and development of mineral properties, with its primary focus on its silica properties, located within British Columbia.
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