Ayurcann Inc. entered into a letter of intent to acquire Canada Coal Inc. (TSXV:CCK.H) in a reverse merger transaction on October 22, 2020. Ayurcann Inc. entered into a definitive business combination agreement to acquire Canada Coal Inc. (TSXV:CCK.H) in a reverse merger transaction on November 24, 2020. Under the terms of the transaction, Canada Coal will consolidate all of its common shares on the basis of two shares for each one post-consolidation share. Holders of outstanding class “A” common shares in the capital of Ayurcann shall receive a number of Canada Coal's post-consolidation shares for each share of Ayurcann held in accordance with the exchange ratio and the shares of Ayurcann will be cancelled. If Ayurcann has received a sale for medical purposes licence from Health Canada prior to closing (First Earn-Out Trigger), then the exchange ratio will be equal to 1.4695 post-consolidation shares of Canada Coal for each share of Ayurcann, and if the First Earn-Out Trigger has not been met, then the exchange ratio will be 1.2858 post-consolidation shares of Canada Coal for each share of Ayurcann. In addition, Canada Coal will also be required to pay an earn-out to the holders of shares of Ayurcann if certain events occur within a five year period following the closing date. The transaction will result in a reverse takeover of Canada Coal. The transaction will be effected by way of a three cornered amalgamation involving Ayurcann and a wholly-owned subsidiary of Canada Coal. Post-completion, the resulting issuer will operate under the name of Ayurcann Holdings Corp.

The resulting issuer that will exist upon completion of the transaction intends to apply to the Canadian Securities Exchange (CSE) for approval for listing its common shares on the CSE. Under the transaction, Canada Coal will change its name to “Ayurcann Inc.” or such other similar name as determined by Ayurcann and acceptable to the relevant regulatory authorities and the Resulting Issuer will carry on the business of Ayurcann under the new name. Upon completion, Canada Coal will delist its shares from the NEX board of the TSXV and list the post-consolidation shares on the CSE. Under the transaction, Canada Coal will reconstitute its board of directors and upon closing of the transaction, all of Canada Coal's current directors and executive officers will resign and the board of directors and executive officers of the resulting issuer will be comprised of the nominees of Ayurcann. The transaction includes a number of conditions, including but not limited to, the requisite approval of the Ayurcann Inc. Shareholders for the Amalgamation shall have been obtained, and the requisite approval of the Canada Coal Shareholders for the Business Combination shall have been obtained, the approval by the respective board of directors, Canada Coal shall have affected the Name Change and Consolidation, Canada Coal will have cash, net of all liabilities but exclusive of any fees Canada Coal may pay to the CSE in connection with the Business Combination, of CAD 0.8 million, each of the directors and officers of Canada Coal shall have tendered their resignations, the Convertible Note has converted into Ayurcann Inc. shares in accordance with its terms, conditional approval for delisting Canada Coal's shares from the TSX Venture Exchange and approval for listing on the CSE, approvals of all regulatory bodies having jurisdiction in connection with the transaction, all corporate approvals and other closing customary conditions. As of March 19, 2021, has been conditionally approved to list on the Canadian Securities Exchange subject to completion of customary listing requirements of the CSE, including receipt of all required documentation. As a result of receiving CSE conditional listing approval, and in anticipation of closing the Transaction, Canada Coal has commenced the process of delisting of its common shares from the NEX Board of the TSX Venture Exchange. Grant Duthie of Garfinkle Biderman LLP served as legal advisor to Ayurcann Inc. Tom Fenton of Aird & Berlis LLP served as legal advisor to Canada Coal.