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Embark Health 11/12/2020

Embark Health Investment Update

MMJ Group Holdings Limited (ASX:MMJ) (“MMJ”), is an Australian-listed company whose core business is holding minority investments along the cannabis value-chain in Australia, Canada and Europe. MMJ is also able to make investments in sectors outside of cannabis, such as but not limited to, natural resources, pharmaceuticals and software services technology.

Embark Health Update

In the attached release Embark Health Inc. (“Embark” or the “Company”) announced that it has entered into a definitive agreement with Mesa Exploration Corp. (“Mesa”).

The agreement will govern the business combination between Mesa and Embark (the “Transaction”). As previously announced on 21 October 2020, the Transaction will result in a reverse take-over of Mesa by the shareholders of Embark.

The outside date for the Transaction is 31 March 2021 which would result in MMJ’s investment in Embark being valued using the listed TSXV price of the listed entity.

Embark Health Inc. is an emerging leader in cannabis extraction, with a focus on the formulation and production of advanced 2.0 products for the B2B and Adult-use markets. Embark continues to be at the forefront of production of solventless concentrate products including Bubble Hash, Traditional Pressed Hash, Rosin and Dry Sift. With the recent acquisition of Embark Nano (“Nano”, formerly, Axiomm Technologies Ltd.) Embark is preparing to launch the next generation of Cannabis 2.0 products. The acquired portfolio of products and formulations support the mass production and distribution of advanced 2.0 products including cannabis-infused beverages, topicals, edibles and water-soluble powders.

MMJ holds approximately 12.41% of Embark with a current book value of $13.6m (refer below).

Further detail on the operations of Embark Health may be found on the MMJ website www.mmjgh.com.au/portfolio/.

MMJ’s investment in Embark Health

MMJ was a foundation investor in Embark Health in July 2018 – the investment has a book value of $13.6m and now comprises:

  1. 3.697m ordinary shares (approximately 12.41% shareholding) in Embark Health with a book value of CAD2.44 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 1.8 times on its investment.

1 A Liquidity event is an initial public offering or a material sale event
2 Exercise price has based on MMJ book value of CAD2.44 per share


View the full investment report here

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