GTEC Extends Agreement to Facilitate Acquisition of Cannabis Genetics and Provides Updates on Other Corporate Matters
24 Dezembro 2019 - 7:30PM
GTEC Holdings Ltd. (TSX-V:GTEC) (OTC:GGTTF) (FRA:1BUP)
(“
GTEC” or the “
Company”) is pleased to announce that
it has extended and revised its agreement with an Okanagan-based
cannabis consulting firm (the “
Consultant”) to facilitate
acquisition and cultivation of cannabis genetics
(“
cultivars”), via its wholly owned subsidiary, Tumbleweed
Farms Corp.As previously announced, the parties originally signed
an agreement dated October 19, 2018 and amendments dated October
19, 2018 and January 8, 2019, and revised terms (the
“
Amendment”) to: i) replace former royalty payments; ii)
extend exclusivity commitments with respect to a broader array of
cultivars supplied under the agreement; iii) grant to GTEC a
limited right of first refusal on future cultivars developed by the
Consultant, and (iv) limit the term of the agreement to June 30,
2023 (the “
Term”).On or about July 8, 2019, a GTEC licenced
subsidiary received a number of unique cultivars, utilizing
services provided by the Consultant (the “
Delivery”).
Further to execution of the Amendment, the Company has agreed to
issue 1,900,000 common shares of GTEC (the “
Common Shares”)
to the Consultant as compensation for the Delivery. 271,429 Common
Shares will be issued and released immediately, and the remainder
will be held in escrow pending achievement of GTEC sales volumes of
flower derived from specified cultivars, as set out below
(collectively, the “
Targets”):
- Target 1 271,429 shares issued upon
signing of the consulting agreement
- Target 2 271,429 shares released from
escrow upon achieving 1,000 KG in flower sales
- Target 3 271,429 shares released from
escrow upon achieving 5,000 KG in flower sales
- Target 4 271,429 shares released from
escrow upon achieving 10,000 KG in flower sales
- Target 5 271,429 shares released from
escrow upon achieving 15,000 KG in flower sales
- Target 6 271,429 shares released from
escrow upon achieving 20,000 KG in flower sales
- Target 7 271,429 shares released from
escrow upon achieving 25,000 KG in flower sales
This Amendment and issuance of Common Shares thereunder are
subject to final approval of the TSX Venture Exchange
(“TSXV”). The Common Shares will be issued at a deemed value
of $0.21 per share and subject to a statutory hold period of four
months and one day from the date of issuance thereof. Targets
not achieved by the end of the Term will cause escrowed shares to
be returned to GTEC for cancellation. The terms of escrow release
act as a warranty for the cultivars provided by the Consultant and
as security that the Consultant will comply with the exclusivity
and right of first refusal provisions set out in the
agreement.Debt Repayment - UpdateAs reported in the
Company’s Third Fiscal Quarter 2019 Results, GTEC had entered into
an agreement to make an early payment of $800,000 to its $5 million
senior secured convertible debenture holder. The payment was
completed on December 11, 2019, and the principal balance of the
loan has been reduced to $4.2 million.Recreational Cannabis
Sales - UpdateAs announced on December 2, 2019, the Company had
debuted its recreational cannabis brands; BLK MKT and Tenzo in
Provincial Sales Channels, with a subsequent follow-on
purchase order received from the BCLDB. The Company had fulfilled
its second purchase order from the BC LDB during the week of
December 2, 2019 which was made available for purchase to wholesale
distribution and public consumers on December 6, 2019 and promptly
sold out within days. The Company has now received its third
purchase order from the BCLDB and a follow-on order from its
wholesale distributor in Saskatchewan. Both purchase orders are
currently being fulfilled and are expected to be delivered in the
coming weeks.Sale of Interest in Saskatchewan Retail
ApplicationThe Company wishes to announce that as part of its
strategy to focus on the cultivation of premium indoor flower, it
has divested its 75% interest in the joint applicant entity,
GreenTec Retail SK Inc., to its partner which held the other 25%
interest. The sale was made further to a purchase and sale
agreement dated November 29, 2019, for a total consideration of
$365,000.Extending Investor Relations ServicesGTEC has
extended its engagement of MariCom Inc. (“MariCom”), a firm
based out of Montreal, Quebec that specializes in providing fully
bilingual investor relations services, and entered into a
consulting agreement dated December 9, 2019 (the
“Agreement”). MariCom will work with GTEC to further develop
and deploy the Company’s comprehensive capital markets strategy and
campaign (the “Services”) in accordance with TSXV policies
and applicable securities laws and regulations.Pursuant to the
Agreement, MariCom will continue to provide the Services to the
Company for 12 months. In consideration for the Services, the
Company will issue to MariCom 200,000 options (“Options”) to
purchase common shares in the capital of the Company. The Options
are exercisable at a price of $0.30 per share for a term of two
years and will vest in equal installments quarterly. MariCom
currently holds 200,000 Options and 100,000 common shares of the
Company. MariCom reserves the right to acquire any additional
securities of the Company. The Agreement is subject to approval of
the TSXV.About GTECGTEC Holdings Ltd. is a specialized
cannabis company which produces and distributes highly sought-after
ultra-premium cannabis products in Canada. The Company has four
licensed and operational assets and is currently distributing
cannabis through medical and recreational sales channels. GTEC’s
products are currently achieving amongst the highest gross margins
and retail pricing within its sector in Canada (A).GTEC’s exclusive
cultivar collection includes rare and unique cultivars, which are
not currently available from other Licenced Producers. GTEC’s
premium and ultra-premium product portfolio includes; BLK MKT,
Tenzo, GreenTec, Cognōscente and Treehugger.The Company wholly owns
operations in BC, Alberta and Ontario, and is licensed by Health
Canada for the following: sales into recreational supply chains,
direct sales to medical patients, extraction, and analytical
testing.GTEC is a publicly traded corporation, listed on the TSX
Venture Exchange (GTEC), OTCQB Venture Market (GGTTF) and Frankfurt
Stock Exchange (1BUP). The Company’s headquarters is based out of
Kelowna, British Columbia. To view more about the company or to
request our most recent corporate presentation, please visit our
website at www.gtec.coNeither the TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release.CAUTIONARY STATEMENT
REGARDING FORWARD-LOOKING INFORMATION:This news release
includes certain “forward-looking statements” under applicable
Canadian securities legislation. Forward-looking statements are
necessarily based upon a number of estimates and assumptions that,
while considered reasonable, are subject to known and unknown
risks, uncertainties, and other factors which may cause the actual
results and future events to differ materially from those expressed
or implied by such forward-looking statements. Such factors
include, but are not limited to: general business, economic,
competitive, political and social uncertainties, delay or failure
to receive board, shareholder or regulatory approvals, where
applicable, and the state of the capital markets. There can be no
assurance that forward-looking statements will prove to be
accurate, as actual results and future events could differ
materially from those anticipated in such statements. For instance,
there can be no assurance that the Targets will be achieved, that
the Company will fulfil all debt obligations, that there will be no
further equity dilution or need to renegotiate debenture conversion
price and terms, that purchase order deliveries will occur as
expected or that current gross margins or retail pricing are
sustainable. Accordingly, readers should not place undue reliance
on forward-looking statements. The Company disclaims any intention
or obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise,
except as required by law.Note (A): This analysis is based on the
most recently available Financial Statements on SEDAR from publicly
listed Licenced Producers (including GTEC), as of November 19,
2019. Companies included, were those listed on New Cannabis
Ventures Canadian Cannabis LP Index, that currently produce in a;
greenhouse, indoor operation, or a combination of both, with
quarterly sales greater than $1 million. Those with outdoor
operations were excluded from the analysis. Based on the analysis
GTEC had the third highest gross margin in the sector, and the no.1
highest based on those solely with indoor operations.
For additional information, please contact:
GTEC Holdings Ltd.
1-800-351-6358
contact@gtec.co
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