Embark Health – Investment Update

MMJ Group Holdings Limited (ASX:MMJ) (“MMJ”), is an Australian-listed company that specialises in managing a portfolio of investments along the cannabis value-chain in Australia, Canada and Europe.

Embark Health Update

In the attached release Embark Health Inc. (“Embark” or the “Company”) announced that they have entered into a binding letter of intent dated June 29, 2020 with Mesa Exploration Corp. (TSXV: MSA) (“Mesa” or the “Company”), pursuant to which Mesa and Embark intend to complete a business combination or other similarly structured transaction which will constitute a reverse take-over of Mesa (the “Transaction”). A comprehensive news release will be issued by Mesa and Embark setting out the terms of the Transaction, which shall include information about Mesa upon closing of the Transaction and the proposed financing of Embark in connection with the Transaction (the “Concurrent Financing”).

MMJ has a minority holding in Embark (refer below).

MMJ will update its investors as additional information regarding the Transaction is released to Embark shareholders.

Further detail on the operations of Embark Health may be found on the MMJ website.

MMJ’s investment in Embark Health

MMJ was a foundation investor in Embark Health in July 2018 – the investment now comprises:

1. 3.425m ordinary shares (approximately 12.7% shareholding) in Embark Health with a book value of CAD2.40 per share.
2. Warrants that provide the option for MMJ to acquire a further 1.0m shares at CAD1.75 each up with maturity date of two years after a Liquidity Event¹.
3. Warrants that provide the option for MMJ to acquire a further 1.2m shares at CAD1.20² each up with maturity date of two years after a Liquidity Event.
4. Warrants that provide the option for MMJ to acquire a further 1.125m shares at CAD4.80 each up with maturity date of two years after a Liquidity Event.
5. MMJ had generated a total return³ of 2 times on its investment.

Read the full ASX Release here

¹ A Liquidity event is an initial public offering or a material sale event

² Exercise price has based on MMJ book value of CAD2.40 per share

³ The return comprises all cash income, sale proceeds, accrued income and fair value of investment at date of calculation