KELOWNA, BC, Nov. 16, 2018
/CNW/ - GTEC Holdings Ltd. (TSXV: GTEC) (OTC: GGTTF) ("GTEC"
or the "Company") is pleased to announce that it has entered
into a non-binding Letter of Intent (the "Agreement") with
Invictus MD Strategies (TSXV:GENE; OTC:IVITF; FRA:8IS1)
("Invictus") for the acquisition by Invictus of all of the
issued and outstanding shares in the capital of GTEC in an
all-share transaction valued at approximately $100 million (the "Transaction"), forming
Western Canada's largest indoor
vertically integrated cannabis company.
Under the terms of the proposed Transaction, holders of GTEC
common shares will receive approximately 40% of the issued and
outstanding shares of Invictus post closing. Concurrently with the
closing of the Transaction, the holders of options and warrants in
the capital of GTEC will receive a proportionate number of options
and warrants of Invictus.
Assuming completion of the Transaction, the issuance of Invictus
shares to the current GTEC shareholders represents an approximate
25% premium to the 30-day volume weighted average trading price of
the common shares of both GTEC and Invictus on the TSX Venture
Exchange ("TSXV") as of November 15,
2018.
The combined entities would provide a robust vertically
integrated cannabis company, focused on producing premium flower
and a complementary product portfolio, and cultivated in
purpose-built indoor facilities complemented with superior
genetics. The Transaction would produce the following assets:
- 400,000 square feet of funded purpose-built indoor cultivation
which spans across British
Columbia, Alberta and
Ontario;
- a robust and diverse range of products and brands, complemented
with a genetic portfolio of over 80 strains;
- an EU-GMP certified facility to meet the rigorous requirements
of the European Union markets;
- 30+ retail stores located across British Columbia, Alberta and Saskatchewan;
- an e-commerce website to service the non-medical market in
Saskatchewan;
- two purpose-built state of the art extraction labs;
- an analytical testing lab; and
- a combined senior management team with pedigree from some of
the world's largest food & beverage, wine & spirits and
tobacco companies, including Phillip Morris International, Diageo
Plc and Saputo Inc.
For the six months ended July 31,
2018, Invictus generated unaudited revenue and net loss
before income tax, depreciation and amortization of $1.8 million and $9.3
million, respectively. Invictus had $10.7 million in cash as at July 31, 2018. For the nine months ended
August 31, 2018, GTEC had no revenue
and unaudited net loss before income tax, depreciation and
amortization of $7.2 million. GTEC
had $4.4 million in cash as at
August 31, 2018.
"As we now see the cannabis industry shift into non-medical use
in Canada, and further medical
markets expanding globally, this merger is synergistic and
complementary. Combined, we offer a much stronger team with aligned
visions on executing a pathway to become a global leader within the
cannabis industry," said Norton Singhavon, Chairman and CEO of
GTEC.
"We have been pleased with the continued execution of the team
and business strategy at GTEC," said George
E. Kveton, CEO of Invictus. "The dedication to producing a
premium product medical and adult-use recreational portfolio for
the industry has always been our relentless pursuit. This merger
allows for both companies to leverage the combined core
competencies to further execute our vision to be at the forefront
of the Canadian cannabis industry and beyond."
The Transaction will require approval by at least 66 2/3% of the
votes cast by shareholders of GTEC at a special meeting of the
shareholders of GTEC. It is anticipated that the Directors,
Officers and insiders of GTEC and Invictus will enter into support
agreements pursuant to which they will agree to vote their shares
in favour of the Transaction.
The Transaction will be effected by way of a plan of arrangement
completed under the Business Corporations Act (British Columbia). The Transaction remains
subject to board approval of both parties, shareholder approval,
regulatory approval from the TSXV and court approval, as
applicable. The Agreement remains subject to approval of the board
of Invictus.
Subject to TSXV approval, Invictus will advance an amount equal
to $500,000 of a non-revolving
unsecured convertible loan at an interest rate of prime plus 8%
(the "Convertible Debenture"). The Convertible Debenture is
part of an up to $6,000,000 loan
facility provided by Invictus to GTEC as previously disclosed on
August 30, 2018, October 19, 2018 and October 23, 2018.
Further information regarding the Transaction will be included
in the information circular that GTEC will prepare, file and mail
in due course to its shareholders in connection with the special
meeting to be held to consider the Transaction. This document will
be filed on the SEDAR profile of GTEC at www.sedar.com. It is
anticipated that GTEC and/or Invictus will hire financial advisors
in connection with the Transaction. The appointment of such
advisors will be disclosed at such time.
None of the securities to be issued pursuant to the Transaction
have been or will be registered under the United States Securities
Act of 1933, as amended (the "US Securities Act"), or any state
securities laws, and any securities issued in the Transaction are
anticipated to be issued in reliance upon the exemption from such
registration requirements provided by Section 3(a)(10) of the US
Securities Act and applicable exemptions under state securities
laws. This news release does not constitute an offer to sell or the
solicitation of an offer to buy any securities.
About Invictus
Invictus is a global cannabis company offering a selection of
products under a wide range of brands. Our integrated sales
approach is defined by five pillars of distribution including
medical, adult-use, international, Licensed Producer to Licensed
Producer and retail stores.
Invictus has partnered with business leaders to convey our
corporate vision, including KISS music legend and business mogul
Gene Simmons as our Chief Evangelist
Officer. To meet growing demand, Invictus is expanding its
cultivation footprint, with two cannabis production facilities
licensed under the Cannabis Act and Cannabis Regulations in
Canada and a third awaiting
approval. To accommodate international sales, Invictus'
wholly-owned subsidiary, Acreage Pharms Ltd. ("Acreage Pharms"),
has designed and is currently building its Phase 3 purpose-built
cultivation facility to be European Union Good Manufacturing
Practices ("EU-GMP") compliant. The Company is targeting up to 50
per cent of production to medical cannabis. To ensure consistency
in quality and supply, Invictus maintains all aspects of the
growing process through its subsidiary, Future Harvest Development
Ltd., a high-quality Fertilizer and Nutrients manufacturer.
Invictus drives sustainable long-term shareholder value through a
diversified product portfolio with over 69 Health Canada approved
strains and a multifaceted distribution strategy including medical,
adult-use, international, Licensed Producer to Licensed Producer
and retail stores. For more information visit
www.invictus-md.com.
About GTEC
GTEC is an emerging vertically integrated, diversified cannabis
company founded in 2017. 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.,
Alberta Craft Cannabis Inc. Grey Bruce Farms Inc., Tumbleweed Farms
Corp., Zenalytic Laboratories Ltd., and Spectre Labs Inc.
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. The securities of the
Company have not been and will not be registered under the United
States Securities Act of 1933, as amended and may not be offered or
sold in the United States absent
registration or an applicable exemption from the registration
requirement. This press release shall not constitute an offer to
sell or the solicitation of an offer to buy nor shall there be any
sale of the securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful.
Cautionary Note Regarding Forward-Looking Statements: This
release includes certain statements and information that may
constitute forward-looking information within the meaning of
applicable Canadian securities laws or forward-looking statements
within the meaning of the United States Private Securities
Litigation Reform Act of 1995. All statements in this news release,
other than statements of historical facts, including statements
regarding future estimates, plans, objectives, timing, assumptions
or expectations of future performance, including the proposed
Transaction will receive the requisite corporate and regulatory
approvals, the proposed Transaction will successfully close as
anticipated by management, the holders of GTEC will receive an
approximate 25.5% premium to their 30 day VWAP, the directors,
officers and insiders of GTEC and Invictus will enter into support
agreements to vote in favor of the proposed Transaction and GTEC
and Invictus will hire financial advisors are forward-looking
statements and contain forward-looking information. Generally,
forward-looking statements and information can be identified by the
use of forward-looking terminology such as "intends" or
"anticipates", or variations of such words and phrases or
statements that certain actions, events or results "may", "could",
"should", "would" or "occur". Forward-looking statements are based
on certain material assumptions and analysis made by the Company
and the opinions and estimates of management as of the date of this
press release, including that the proposed Transaction will receive
the requisite corporate and regulatory approvals to close, the
proposed Transaction will successfully close on the timeline and on
the terms as anticipated by management, market conditions will
remain similar to present market conditions, so that GTEC
shareholders will receive an approximate 25.5% premium to their 30
day VWAP, that the directors, officers and insiders of GTEC and
Invictus will not object to signing an agreement to vote their
shares in favor of the proposed Transaction, GTEC and Invictus will
hire financial advisors and Invictus will reach full production
capacity on the timeline anticipated by the Company. These
forward-looking statements are subject to known and unknown risks,
uncertainties and other factors that may cause the actual results,
level of activity, performance or achievements of the Company to be
materially different from those expressed or implied by such
forward-looking statements or forward-looking information.
Important factors that may cause actual results to vary, include,
without limitation, the proposed Transaction will not receive
either the requisite corporate or regulatory approval to close, the
proposed Transaction will not close on the timeline or on the terms
as anticipated by management, market conditions will dramatically
change and result in the GTEC shareholders receiving an
unanticipated premium or loss to their current 30 day VWAP, that
the directors, officers and insiders of GTEC and Invictus will
object to signing an agreement to vote their shares in favor of the
proposed Transaction, GTEC and Invictus will not hire financial
advisors and Invictus will not reach full production capacity on
the timeline anticipated by the Company. Although management of the
Company has attempted to identify important factors that could
cause actual results to differ materially from those contained in
forward-looking statements or forward-looking information, there
may be other factors that cause results not to be as anticipated,
estimated or intended. 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 and forward-looking information. Readers
are cautioned that reliance on such information may not be
appropriate for other purposes. The Company does not undertake to
update any forward-looking statement, forward-looking information
or financial out-look that are incorporated by reference
herein, except in accordance with applicable securities
laws.
SOURCE GreenTec Holdings