Skye Bioscience, Inc. (OTCPK:SKYE) entered into term sheet to acquire Emerald Health Therapeutics, Inc. (CNSX:EMH) from Emerald Health Sciences Inc. and others for CAD 24.4 million on February 18, 2022. Skye Bioscience, Inc. entered into a definitive agreement to acquire Emerald Health Therapeutics, Inc. from Emerald Health Sciences Inc. and others for CAD 24.4 million on May 11, 2022. As per the terms of the transaction, Skye would acquire all of the issued and outstanding shares of Emerald in a share for share transaction. Skye shall issue Emerald shareholders 1.95 shares of Skye's common stock in exchange for each Emerald share. All stock options and warrants of Emerald will be exchanged for replacement options and warrants of Skye on identical terms, as adjusted in accordance with the Exchange Ratio. As a result of the transaction, Skye stockholders would own approximately 54% of the common stock of Skye and former shareholders of Emerald would own approximately 46% of Skye's common stock. As of October 18, 2022, Emerald Health Therapeutics, Inc. has provided a short-term bridge loan of $700,000 (CAD 964,413) to Skye Bioscience, Inc. ("Skye") in order to provide Skye with additional working capital until the closing of the transaction. At the time VPA was engaged by the Company, the EHT Board considered whether establishing a special committee was appropriate and determined, in light of the small size of the EHT Board, the previous decision to wind down the Company's cannabis operations and the early stage of the transaction review process. The combined company would continue to operate under the name Skye Bioscience, Inc. with its existing management team. Sukhwinder Rai shall join Skye's Board of Directors. Skye shall pay Emerald a termination fee of CAD 0.5 million and Emerald shall pay Skye a termination fee of CAD 0.5 million.

The transaction is subject to approval by Emerald and Skye common shareholders, receipt of all required regulatory approvals, including acceptance by the Canadian Securities Exchange of Skye's listing on the CSE and Supreme Court of British Columbia, Canada approval. The Board of Directors of each of Emerald and Skye has unanimously approved the deal and recommend that respective shareholders vote in favor of the transaction. The shareholders meeting of Emerald is scheduled on August 19, 2022. As of August 4, 2022, certain shareholders of Emerald Health Therapeutics Inc. announced that they oppose the announced plan of arrangement between Emerald and Skye Biosciences Inc. As of August 19, 2022, the shareholders of Emerald Health Therapeutics, Inc. has approved the deal. As of August 25, 2022, the Supreme Court of British Columbia issued a final order approving the deal. Completion of the Arrangement remains subject to approval by the shareholders of Skye, which is expected to be obtained at a meeting of Skye shareholders to be held no later than October 4, 2022. The shareholders of Skye Bioscience have approved the transaction on September 30, 2022. As of November 7, 2022, parties waived the condition that Skye obtain a conditional approval to list its shares on the Canadian Securities Exchange prior to closing the transaction. The transaction is expected to close in the third quarter of 2022. Upon receiving Skye shareholder approval, the transaction is expected to close no later than October 15, 2022. The Arrangement is anticipated to close in the fourth quarter of 2022. The transaction is expected to close in early to mid-November 2022. As of November 7, 2022, the transaction is expected to close on or about November 10, 2022. The funds resulting from closing of the arrangement will be utilized in Skye's Phase 1 clinical trial, which is expected to begin before the end of 2022.

Scalar Partners, LLC acted as financial advisor and fairness opinion provider to Skye in connection with the deal. Neil Kravitz, Barbara Miller, Rhonda Grintuch, Marc Rodrigue, Ryan Rabinovitch and Monica Dingle of Fasken Martineau DuMoulin LLP acted as Skye's Special Committee legal advisor and Steve Rowles of Morrison & Foerster LLP is acting as Skye's legal advisor. Fasken Martineau DuMoulin LLP also acted as due diligence provider to SKYE Special Committee. Vantage Point Partners acted as financial advisor and Evans & Evans, Inc. acted as financial advisor and fairness opinion provider to Emerald in connection with the deal. James Beeby, Lisa Kakoske and Devon A. Luca of Bennett Jones LLP and Dorsey and Whitney LLP are acting as Emerald's legal advisors. Computershare Investor Services Inc. acted as depository bank and transfer agent to Emerald. The transfer agent for the SKYE Shares will be ClearTrust, LLC. Computershare Trust Company of Canada acted as Depositary in the transaction. In addition, SKYE has retained the services of Alliance Advisors to solicit proxies for a fee of approximately CAD 20,290.

Skye Bioscience, Inc. (OTCPK:SKYE) completed the acquisition of Emerald Health Therapeutics, Inc. (CNSX:EMH) from Emerald Health Sciences Inc. and others on November 10, 2022. In addition, Emerald Health Sciences Inc. has also entered into agreements to divest its remaining cannabis assets and licenses, including its Quebec cannabis production facility on November 10, 2022. Post-closing, Skye's Board of Directors comprises existing directors including Punit Dhillon, Chief Executive Officer & Chair, Margaret Dalesandro, Praveen Tyle, and Keith W. Ward, the latter three all possessing extensive experience in the ocular drug space. Newly appointed to Skye's board is Bobby Sukhwinder Rai, who was a member of Emerald's Board of Directors. Skye's executive team remains unchanged, consisting of Punit Dhillon, Chief Executive Officer, Kaitlyn Arsenault, Chief Financial Officer, and Tu Diep, Chief Development Officer.