Gallagher Security Corp. (CNSX:GLL) entered into a letter of intent to acquire 50% of the issued and outstanding securities of MyCelium Warehouse Ltd. for $0.6 million on February 17, 2021. As per the transaction, purchase consideration of $0.6 million to be paid to MyCelium in consideration for common shares of MyCelium which represent up to 50% of the issued and outstanding shares of MyCelium based on the following payment amounts; $0.2 million cash for 20% equity of MyCelium; $0.2 million cash for a further 20% equity of MyCelium; and $0.2 million cash for a further 10% equity of MyCelium. If Gallagher Security completes the cash payments and consequently acquires 50% of the issued and outstanding securities of MyCelium, then the company may acquire the remaining 50% of MyCelium by issuing common shares of the company on a pro rata basis to the shareholders of MyCelium based on an exchange ratio of one common share of the company for each common share of MyCelium that is not already owned by the company for the purposes of acquiring the remaining 50% equity interest of MyCelium, such that the company will own and control 100% of the issued and outstanding securities of MyCelium. As of May 3, 2021, Gallagher Security Corp has completed its $0.6 million payment obligation with MyCelium Warehouse Ltd.

The transaction is conditional upon, (i) the parties will have received all necessary regulatory and third-party consents, approvals and authorizations as may be required in respect of the transaction, including, but not limited to, acceptance of the transaction by the Exchange; (ii) completion of due diligence to the satisfaction of the parties; (iii) completion of audited financial statements of MyCelium; (iv) approval by the board of directors of each of the company and MyCelium to the final terms and conditions of the transaction as set forth in the Definitive Agreement and all other necessary matters related thereto prior to the signing of the Definitive Agreement; and (v) shareholder approval (as required) of the transaction. Upon completion of the transaction, the resulting entity will carry on the business currently conducted by MyCelium and will cease to carry on the business currently being conducted by the company. The Board of Directors of the company shall be restructured through resignations and appointments, so that it shall consist of four directors with MyCelium selecting two board members and the company selecting two board members. There can be no assurance that the potential transaction with MyCelium will be completed.

Gallagher Security Corp. (CNSX:GLL) cancelled the acquisition of a 50% stake in MyCelium Warehouse Ltd for $0.75 million on April 11, 2022.