Creso Pharma Plans NASDAQ Uplisting Following Mutual Termination of Red Light Holland Merger

• Creso Pharma is currently putting together a team of experienced global executives to assist in the NASDAQ uplisting as well as the company’s international expansion strategy
• Creso’s plan is to hold dual listings for the company’s shares on both the NASDAQ and the Australian Securities Exchange (ASX)

Creso Pharma (ASX: CPH) (OTC: COPHF) (FRA: 1X8) announced last week that the company and Red Light Holland (CSE: TRIP) (OTC: TRUFF) (FRA: 4YX) have decided to terminate its planned merger, originally announced on June 17, 2021. The decision to part ways with regards to the merger was mutual and will allow Creso to keep its Australian Securities Exchange (ASX) listing. The decision to mutually terminate the Deed follows Creso Pharma’s ongoing review of market conditions and consultation with shareholders and institutional investors, as well as COVID limitations.

Following ongoing discussions with Red Light Holland and challenges stemming from the impacts of COVID-19, both parties have mutually concluded that the merger would no longer be in the best interests of their respective shareholders. Creso Pharma’s Board of Directors and company executives believe that pending regulatory changes in the North American psychedelic and recreational cannabis sectors will provide ample opportunities in the near term for Creso Pharma, and remaining listed on the ASX will be in the best interests of its shareholders.

Whilst the merger will not progress, Creso Pharma and Red Light Holland remain committed to a strong working relationship, and both parties will remain working closely aligned as partners. As such, Red Light Holland has placed an order to purchase $170,000 of Creso Pharma’s hemp-based CBD products, which will be white-labelled through Red Light Holland brands and distributed across the group’s wholly-owned distribution company SR-Wholesale’s sales channels.

Over the last two months, Creso Pharma has come to work closely with Red Light Holland to understand its business and accomplishments. Creso management is very impressed with the counterparty and expects to work closely together on further synergistic transactions. ABN: 89 609 406 911 Suite 5 CPC, 145 Stirling Highway, | Nedlands, WA, 6009 | Australia Allmendstrasse 11 | 6310 Steinhausen | Schweiz CresoPharma.com (ASX: CPH) Creso Pharma management would like to thank Red Light Holland for their efforts with the proposed transaction and wish the company well in its future endeavours.

Creso Pharma will now shift its focus towards unlocking growth through a proposed NASDAQ dual listing. To assist with the dual listing process, the Company has secured agreements with a leading US group. Creso has retained the services of boutique corporate advisory firm, New York-based, EAS Advisors LLC (“EAS” or “EAS Advisors”) (www.easadvisors.com). As part of its agreement with EAS, the Company has issued 12,000,000 options ($0.15, 1 August 2024) and 12,000,000 options ($0.18, 1 August 2024) to the nominee of EAS as part of the consideration for its advisory services.

Pending legislative shifts will allow Creso Pharma to unlock value:

The Company expects several favourable regulatory shifts to materialize in North America, which will provide a favourable operating environment for Creso Pharma to expand into the US market.

Following the introduction of the Marijuana Opportunity Reinvestment and Expungement (MORE) Act, the Marijuana Regulation and Taxation Act (MRTA), and the Cannabis Administration and Opportunity Act, all aimed at legalizing, taxing and regulating recreational cannabis, Creso Pharma is confident that it will be positioned to capitalize on many opportunities through a US dual listing. The Company is assessing prospects in the 36 US states where cannabis has been legalized for medicinal and recreational use before potential federal legalization.

Creso has a major strategic advantage through its wholly-owned recreational cannabis subsidiary, Mernova Medicinal. Mernova is a licenced cannabis producer and operates a scalable facility to 200,000 square feet to service the US recreational cannabis market.

Creso Pharma’s initiatives in the psychedelic sector will also be buoyed by Senate Bill 519 (SB519), which seeks to legalize the use and possession of psilocybin and other psychedelic compounds in California.

The bill was introduced to progress a more health-focused approach to psychedelic compounds and address the current mental health crisis in the US. Should SB519 be passed into law, Creso Pharma is well-positioned to capitalize through its wholly-owned, Canadian psychedelic medicines subsidiary, Halucenex.

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Agreements to expedite NASDAQ dual listing:

Creso Pharma also announced that it has signed a corporate advisory agreement with private, New York-based firm EAS Advisors LLC. Founded in 2008, EAS provides a range of services to clients, including institutional market engagement, equity and debt raising and M&A advisory. Since its inception, EAS has participated in over US$6.5 billion of successful transactions.

EAS was founded by Edward “Eddie” Sugar. Prior to EAS, Mr. Sugar was a Managing Director of Jefferies & Co. in New York from 1999 until 2008. During this time, he was responsible for international equity sales and trading.

The group has established networks in the US and a deep understanding of capital markets, allowing Creso Pharma to progress its dual listing successfully. EAS will provide access to equity research providers to secure North American research coverage, generate global investor awareness with potential strategic investors in the USA, Europe, Asia and Australia and assist in financial modelling, presentation preparation, external data room maintenance and advise on additional M&A opportunities.

Discussions with additional investment banks are well progressed. Creso has garnered significant interest from US investment groups and expects to make an additional appointment in the coming months. The Company is also exploring a number of opportunities with its partner to uplift from the OTCQB market to the NASDAQ and is targeting a listing on the NASDAQ Stock Exchange in H1 CY2022. Creso Pharma remains very well funded to progress these initiatives.

NASDAQ dual listing – strategic rationale:

The Company is confident that a dual listing will provide access to deeper pools of capital and access to North American investors. Further, the secondary listing is expected to provide North American investors with accessibility and liquidity to invest in an established cannabis and psychedelics medicines business. This also has the potential for a revaluation of Creso Pharma in line with international peers.

Creso Pharma operates advanced cannabis and psychedelic medicines research and development divisions. It is expected that a NASDAQ listing will provide opportunities for the Company to grow these verticals, recognize the additional value as milestones are achieved and significant value for longstanding and loyal Australian shareholders. A secondary listing will also allow for more efficient M&A activity, as well as expedite potential partnerships with North American groups.

Creso Pharma’s management believes that a dual listing will allow it to act quickly on potential legislative changes, which positively affect the recreational cannabis industry and the use of psychedelic compounds as an alternative therapy route.

Creso also intends to leverage the vast experience, deep industry relationships and sector expertise of its strategic advisor, founder and former CEO of Canopy Growth (TSX: WEED) (NASDAQ: CGC) (FRA: 11L1) Bruce Linton to move forward with its development initiatives in America. The company will also look to engage with large institutional investors throughout North American.

The Creso Pharma group has made significant progress in recent months, highlighted by:

• Record revenue growth of 451% across all subsidiaries (Q2 CY21 vs Q2 CY20)
• Halucenex securing its Controlled Drugs and Substances Dealer’s Licence from Health Canada, allowing it to fast track phase II clinical trials
• Creso’s wholly-owned subsidiary Mernova being awarded Craft Designation by the Ontario Cannabis Store (OCS) for its Ritual Green Products
• The Company is confident that several other milestones will materialize in the coming months, which will support its trajectory towards a secondary listing on the NASDAQ.

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Executive Commentary:

Commenting on the news, Creso Pharma’s Non-Executive Chairman Adam Blumenthal stated:

“The mutual and strategic decision to terminate our agreement with Red Light Holland follows extensive due diligence, as well as in-depth market reviews and consultation with many investors in the US and Australia. We will maintain a strong working relationship with Red Light Holland in the future and look forward to progressing agreements that will unlock value for both parties. We are now shifting our resources and focus to the proposed NASDAQ dual listing. The Company anticipates that this development will allow for easier comparisons to our North American listed peers and allow Creso Pharma to be valued accordingly. Following potentially favourable legislative shifts, a NASDAQ listing will also provide us with access to the world’s largest recreational cannabis market and a growing psychedelic medicines sector. Pleasingly, a dual listing opportunity will also allow Creso Pharma to retain its ASX listing, which we believe is in the best interests of our longstanding and faithful shareholders. The Company remains well-capitalized, with considerable financial flexibility to pursue these initiatives. The Company has achieved a number of milestones in recent months, which set a very strong foundation for growth. We look forward to progressing a number of corporate and operational developments and unlocking value for our shareholders.”

Edward Sugar, Principal of EAS Advisors added the following:

“We look forward to working with Creso Pharma’s management team and assisting them through a NASDAQ dual listing, which could potentially unlock significant value for shareholders. After following Creso Pharma’s story for some time, I have been extremely impressed with management’s progress. As a firm, we are extremely excited to be engaged by Creso Pharma to assist with achieving such a milestone.”

Creso Pharma (OTC: COPHF) Stock Chart

Learn more about Creso Pharma: Website | IR Website | Investor Deck | CPH Chart

•  Australia – ASX: CPH
•  United States | OTC: COPHF
•  Germany | FRA: 1X8

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