Khiron Life Sciences Corp. (TSXV:KHRN) (OTCQX:KHRNF) (Frankfurt:A2JMZC) has completed the acquisition of Pharmadrug Production GmbH from Pharmadrug Inc. (OTCQB:LMLLF) (CSE:PHRX). The acquisition was previously announced on May 31, 2022, and was completed in accordance with its disclosed terms.

With the completion of the acquisition, Khiron has expanded its presence in Europe with an EU GMP-certified manufacturer and wholesaler and has gained a European manufacturing and distribution center for pharmaceuticals. The acquisition is an optimal complement for Khiron in Europe and is in-line with its economic asset-light strategy. As Khiron Europe's own wholesaler, the target will promote and sell Khiron's products directly to German pharmacies, which enables Khiron to control the whole value chain within the country and recognize an increased gross margin.

With this acquisition, Khiron is able to accelerate the expansion of its medical product portfolio with additional flower varieties which are in demand in the market and a THC-dominant full spectrum extract that combines the medicinal properties and areas of application of the established THC isolate formulations (dronabinol) with the specific advantages of a full-spectrum extract. Additional new products are already in the pipeline, that will comprise the entire spectrum of therapies with medical cannabis to be able to offer the right therapy for every patient, and more details will follow soon.

Pursuant to the terms of the acquisition, in consideration for the acquisition of all of the issued and outstanding shares of the target, Khiron issued to Pharmadrug 5.5 million common shares of the company and an additional 468,750 common shares in connection with certain closing adjustments for a total of 5.96 million common shares, as well as a non-interest bearing promissory note that was adjusted downward pursuant to certain closing adjustments to an aggregate principal amount of $974,137. The promissory note is payable one year from the date of issue in cash or, at Khiron's option, by the issuance of additional Khiron shares. Any issuance of Khiron shares on conversion of the promissory note will be subject to the prior approval of the TSX Venture Exchange.

A total of 5 million Khiron shares issued in connection with the closing are subject to a lockup agreement, pursuant to which Pharmadrug may not transfer such shares without Khiron's consent, with a quarter of the total number of shares subject to lock-up being released every 90 days following the closing date.

Photo by Jeff W on Unsplash

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