Cannasouth Limited (NZSE:CBD) signed a binding term sheet to acquire Eqalis Group New Zealand Limited from Eqalis shareholders for NZD 44.4 million on December 19, 2022. On April 3, 2023, Cannasouth Limited entered into the Share Sale Deed to acquire Eqalis Group New Zealand Limited from Eqalis shareholders. The transaction is in substance a "merger of equals". The transaction is to be structured as the purchase by Cannasouth of 100% of the shares on issue in Eqalis from the Eqalis shareholders. The notional sum of NZD 48.8 million will be satisfied by Cannasouth issuing 147,891,069 new ordinary fully paid Cannasouth shares, at an issue price of NZD 0.33 per share, to the Eqalis shareholders. The Consideration Shares to be issued will equal the existing number of shares on issue in Cannasouth. The transaction is based on the approval of shareholders of Eqalis, the Sale Deed, once it is signed by all parties, will be the principal agreement which documents the transaction. Therefore, in order for the transaction to advance, the Sale Deed must first be executed by Cannasouth and by the Eqalis shareholders. Cannasouth would undertake a capital raising initiative in conjunction with Eqalis to raise approximately NZD 9 million of new capital to fund the working capital of the merged group post completion of the transaction. The Eqalis shareholders shall be entitled to nominate three new directors to join the Cannasouth Board. Cannasouth CEO Mark Lucas will continue as Chief Executive of Cannasouth post completion of the merger. Certain Eqalis executives will be issued share options as part of Cannasouth's existing Employee Share option Plan – the details of which are still to be finalized. Eqalis Managing Director Greg Misson will be appointed Chief Innovation Officer of Cannasouth post completion of the merger. Both Cannasouth and Eqalis obtaining any regulatory approvals that may be required to the proposed merger. As of February 20, 2023, CBD anticipates that the Share Sale Deed will be executed by CBD and Eqalis shareholders early in March. CBD expects to receive regulatory approval in early March. The transaction is subject to satisfaction of the Merger conditions, and complete the Merger by April 19, 2023. On April 28, 2023, Shareholders of Cannasouth approved the proposed merger with Eqalis Group.

Cannasouth Limited (NZSE:CBD) completed the acquisition of Eqalis Group New Zealand Limited from Eqalis shareholders on May 30, 2023.