KELOWNA, BC, Oct. 25, 2018 /CNW/ - GTEC Holdings Ltd. (TSXV:
GTEC) (OTC: GGTTF) ("GTEC" or the "Company") is
pleased to announce that it has entered into a Definitive Agreement
with F-20 Developments Corp. ("F-20") (the
"Agreement") pursuant to the terms of the previously
announced binding letter of intent dated July 10, 2018.
In connection with the transaction, the Parties have established
a joint venture company 3PL Ventures Inc. ("3PL"), where
pursuant to the shareholders' agreement, F-20 shall own 51% of the
issued and outstanding Common Shares on a fully diluted basis,
whereas GTEC shall own 49% of 3PL.
GTEC, through a wholly owned operational subsidiary will apply
for, and transfer to 3PL, such licenses to allow 3PL to become a
Health Canada Licensed Producer (the "Production Facility").
3PL will also make an application for a Dealer's License under the
Narcotics Control Act or such other license to enable 3PL to
import and export cannabis and cannabis products to and from
Canada. Upon GTEC successfully
completing a License Transfer Agreement, F-20 shall be obligated to
sell to GTEC an additional 1% of 3PL.
"Canada's cannabis supply
shortage has been caused by an uptick in demand that can be
attributed to legalization last week. The shortages experienced in
Provinces across Canada create an
opportunity for GTEC and our partners," said Norton Singhavon,
Chairman and CEO of GTEC. "With this joint venture, GTEC will be
operating over 120,000 sq ft. of cultivation space once
construction is completed. Initial feedback from consumers and
Provincial supply chains is validating the demand for premium craft
cannabis in Canada and
internationally – a demand that this increased capacity will allow
us to serve."
On July 11th, 2018 the
Parties had announced the Production Facility would have an initial
phase operation size of 60,000 sq. ft. with a second phase of
180,000 sq. ft, totaling a completed operation size of 240,000 sq.
ft. Upon completion of the final architectural designs, the Parties
have determined the Production Facility would allow for a 134,000
sq. ft. second phase without applying for a variance. For an
aggregate operation size of roughly 194,000 sq. ft. Subject to 3PL
pursuing a variance, and furthermore, the respective municipality
approving the application, the Company remains confident in a
180,000 sq. ft. second phase, maintaining an aggregate size of
240,000 sq. ft.
In consideration of F-20 entering into the Shareholders'
Agreement, and the services to be provided by F-20 pursuant to the
terms therein, GTEC has agreed to issue such number of Common
Shares (the "Consideration Shares") in the authorized
capital of GTEC to F-20 (calculated at a 10-day Volume Weighted
Average Trading Price) in accordance with the following
milestones:
- such number of Consideration Shares with an aggregate GTEC
Share Value of $1,250,000.00 upon the
full execution of legally binding agreements;
- such number of Consideration Shares with an aggregate GTEC
Share Value of $416,666.67 upon the
issuance of a building permit by the respective Municipality in
respect to the improvements to the Production Facility, in
accordance with the requisite building plans and
specifications;
- such number of Consideration Shares with an aggregate GTEC
Share Value of $416,666.67 upon the
substantial completion of the Production Facility, in accordance
with the requisite building plans and specifications, for the
purposes of submitting an evidence package to Health Canada
including, without limitation, installation of equipment required
by Health Canada, security system, storage areas, and HVAC
("Substantial Completion"); and
- such number of Consideration Shares with an aggregate GTEC
Share Value of $416,666.67 upon
Health Canada confirming there are no deficiencies with respect to
the Production Facility including construction thereof and security
systems therefor.
Notwithstanding the above, one hundred percent (100%) of the
Consideration Shares contemplated above will be issued to F-20 upon
either of the following events:
- F-20 funding 3PL by way of a shareholder loan of at least
$5,000,000 and 3PL having expended at
least $5,000,000 in respect of the
construction of a Production Facility; or
- if GTEC fails to submit a final evidence package to Health
Canada addressing all deficiencies with respect to the Production
Facility within ninety (90) days of Substantial Completion.
The Agreement is subject to approval by the TSX Venture
Exchange.
About F-20
F-20 is a privately held British Columbia corporation whose principals
have been involved in the financing, construction, and development
of licensed cannabis cultivation facilities in Canada and the U.S.
About GTEC
GTEC was founded in 2017 to capitalize on
opportunities in the nascent and rapidly growing legal cannabis
industry. GTEC is a public corporation listed on the TSX Venture
Exchange and based in Kelowna, British
Columbia. GTEC is focused on growing premium quality craft
cannabis in purpose-built indoor facilities. GTEC currently holds a
100% interest in GreenTec Bio-Pharmaceuticals Corp., Grey Bruce
Farms Inc., Zenalytic Laboratories Ltd., Falcon Ridge Naturals
Ltd., Alberta Craft Cannabis Inc. and Tumbleweed Farms Corp. To
view more about the company or to request our most recent corporate
presentation, please visit our website at www.gtec.co.
On behalf of the board,
Norton Singhavon
Founder, Chairman & CEO
778-760-8288
ns@gtec.co
Michael Blady
Co-Founder & Vice President
604-720-3474
mb@gtec.co
Neither 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 such statements will prove to be accurate, as
actual results and future events could differ materially from those
anticipated in such statements. 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.
SOURCE GreenTec Holdings