For Holders of MGC, page-5

Just been looking at the Cannaglobal deal as outlined in the announcement. While short on details - it is only an announcement - there are some interesting items.

1) The revised deal states that the delay was due to Cannaglobal closing off other acquisitions. I read somewhere (believe it was a small cap report but can't recall the actual source) that they had 5 cannabis related businesses. What these where was not detailed just the number. It could be that the 10% equity MXC has with Cannaglobal has been underestimated and missed in the discussions over the last week.

Completion of the Definitive Agreement with final commercialterms follows CannaGlobal’s recent closing of key corporate actions in relationto other cannabis related business opportunities, and financing by itscornerstone investor

2) The original deal proposed $9mil equity in Cannaglobal (plus a total of $3.5mil equity based on sales volume). The announcement states that the equity in Cannaglobal is 10%. That would have to mean that Cannaglobal has a total value of at least $100mil - just using mathematical asumptions. If that is so, then I wonder what makes up that value - mix of available cash and the other businesses acquired - what the value split is. 

MXC will hold an increased equity holding in CannaGlobal aspart of a new private company structure, in comparison to the CannaGlobalequity consideration under the original binding term sheet that included aCanadian stock exchange listing

3) Puzzled by the addition of the statement on the 5% finders fee if Cannaglobal were to find a buyer for MXC. Not sure if that is just put in there on the off-chance that an opportunity arises - maybe based on the fact that there are predictions than Canada's cannabis space is set to boom in 2019 - and there is now very stiff competition for global market share OR whether MXC sees the sale to a larger entity as part of its future.

The Definitive Agreement also stipulates that, if within 12months of completion, MXC enters into a transaction to a third party introducedby CannaGlobal or any of its directors, which results in a change of control ofMXC, or the sale of its assets - the Company must pay CannaGlobal anintroduction fee of 5% of the transaction value.

I am hoping that more information comes out at the AGM on the deal - and it should anyway. They have noted the 30th of November as the date that the deal should be finalised so maybe we will get another more detailed explanation at that time.

Considering the above in context of MXC's current operations, I can see the current depressed SP as being the result of other issues not central to MXC's business and, maybe with reference to the potential future sale in particular, the SP has a lot of potential o rise. Those who have held their nerve could well get rewarded over the next 12 months. Anyone looking at this agreement would be hard pressed to find a lot wrong with it. Cannaglobal is the key of course - it has to be successful in the long run for the sale of MXC derma to be the pivotal move by MXC.