- Myconic Capital (MEDI) is set to acquire contract research outfit KGK Science from Auxly Cannabis Group (XLY) for C$16.5 million
- In 2020, KGK generated approximately $4.4 million in revenues for Auxly, which is expected to grow in 2021
- Myconic intends to expand KGK’s scope of services to include ketamine and other psychedelic drugs
- Auxly is a vertically integrated cannabis company dedicated to bringing branded cannabis products to market that consumers love and trust
- Myconic Capital is an investment issuer with diversified holdings in high-tech, real estate, cannabis, mining and health & wellness
- Auxly Cannabis Group (XLY) is down by 3.7 per cent and is currently trading at $0.39 per share
- Myconic Capital (MEDI) is trading flat at $1.70 per share
Myconic Capital (MEDI) is set to acquire contract research outfit KGK Science from Auxly Cannabis Group (XLY) for C$16.5 million.
KGK is a North American contract research organization based in London, Ontario. It primarily provides clinical research trials focused on nutraceutical, cannabis and emerging psychedelic industries.
In 2020, KGK generated approximately $4.4 million in revenues for Auxly, which is expected to grow in 2021.
Pursuant to the definitive share purchase agreement, Myconic will pay a base amount of $12.5 million to Auxly in the form of:
- $1.5 million in cash on closing
- $1.0 million in cash payable six months after closing
- $10 million in Myconic common shares
Should KGK achieve $8 million in revenue in any 12-month period during the two years following the closing date, Myconic will issue Auxly a milestone payment of $1.5 million in either cash or common shares, at its option.
The company has also agreed to grant Auxly a 10-year, $2.5 million service credit towards any services that Auxly engages KGK to perform.
Myconic intends to expand KGK’s scope of services to include special and compassionate access trials using ketamine and other psychedelic drugs.
Robert Meister, Myconic’s CEO, commented,
“The investment that Myconic is making to acquire KGK is very exciting and I look forward to welcoming the KGK team and their valuable expertise to our company.”
Hugo Alves, Auxly’s CEO, added,
“This agreement with Myconic is a win-win for Auxly and its shareholders in both the short and long-term, as the additional capital can be deployed into our core business and accelerates Auxly’s path to profitability, while continuing our long-standing relationship with KGK.”
Auxly is a vertically integrated cannabis company dedicated to bringing branded cannabis products to market that consumers love and trust.
Myconic Capital is an investment issuer with a diversified portfolio focused on emerging companies in high-tech, real estate, cannabis, mining and health & wellness.
Auxly Cannabis Group (XLY) is down by 3.7 per cent and is currently trading at $0.39 per share as of 9:33 am ET.
Myconic Capital (MEDI) is trading flat at $1.70 per share as of 9:33 am ET.