Quinto Resources Inc. (TSXV:QIT) entered into share purchase agreement to acquire Verdelite Sciences, Inc. and Verdelite Property Holdings, Inc. from Emerald Health Therapeutics, Inc. (TSXV:EMH) for CAD 21 million on July 30, 2020. The purchase price is subject to a 90-day working capital adjustment and certain other adjustments including adjustment for cash and long-term debt of Verdelite Sciences and Verdelite Property and for working capital of Verdelite Sciences and Verdelite Property at closing above or below a target amount. The purchase price will be subject to a CAD 0.75 million holdback for the working capital adjustment and as an indemnity for certain pre-existing litigation. Upon closing, Emerald will continue to sell own products in Quebec, subject to certain restrictions over 75 days, and will retain exclusive rights to its Souvenir™ brand. Quinto expects to finance the acquisition through a combination of private placements and bridge financing including two debt bridge financings of approximately CAD 5 million each, a brokered private placement of approximately CAD 12 million and CAD 5 million financing from the original founders group of the Verdelite Sciences, Inc. and Verdelite Property. As a result of the transaction Verdelite Sciences and Verdelite Property will become wholly-owned subsidiaries of Quinto and Quinto will continue the business of Verdelite Sciences and Verdelite Property. The annual total assets reported by Verdelite Sciences, Inc. and Verdelite Property Holdings, Inc. were CAD 26.3 million and total revenues were CAD 4.13 million and the net loss was CAD 11 million respectively. Pursuant to the closing of the transaction the following persons will constitute the principals and insiders of Quinto: Philippe Frère, Marcel Bergeron and Michael Curtis. Management of Quinto will propose the election of two additional directors who will both be independent in order to create a five-person Board of Directors.

The transaction is subject to approval of TSX Venture Exchange and Quinto shareholders. The proceeds of the transaction will be used in a targeted and well-defined manner to improve Emerald Health's working capital position, including eliminating the deferred payment in entirety and reducing accounts payable, as well as reducing the long-term debt. Quinto will call a shareholder meeting to approve the transaction. The transaction is expected to close on or before August 31, 2020. As of September 1, 2020, the transaction is expected to close in fourth quarter of 2020. René Branchaud of Lavery, De Billy acted as legal advisor to Quinto Resources while James D. Beeby of Bennett Jones LLP acted as legal advisor to Emerald Health.