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Umbral to Acquire Additional 25% of Late Stage ACMPR Applicant

July 5, 2017

 

Earlier today, Umbral Energy Corp. (CSE:UMB)(OTC:UMBBF) announced that the company has entered into an definitive agreement to acquire an additional 25% of late-stage ACMPR applicant PhyeinMed. Umbral currently owns 50% of PhyeinMed and upon completion of the agreement, Umbral will own 75% of PhyeinMed with Estek Ventures Corp. owning the remaining 25%. 

 

Deal Terms 

 

  • Umbral will pay a total of $120,000 CAD in three separate payments upon the completion of milestones. $50,000 has already been paid, another $50,000 will be paid on closing, and the final $20,000 will be paid when the company has completed equity financings with gross proceeds of at least $1,500,000 CAD.

  • Umbral will issue 7,000,000 common shares (that are subject to the required four month hold period). Additionally, the shares will be subject to a voluntary escrow period pursuant to which 10% of the Shares will be released on Closing and an additional 15% of the Shares will be released every six months thereafter.

  • Upon PhyeinMed's receipt of an ACMPR production license the company will issue another 4,000,000 shares.

  • The Company will grant 2,000,000 stock options to PhyeinMed's CEO, Debra Senger at an exercise price no higher than $0.09 per Share as well as 2,400,000 restricted stock units.

  • Umbral will grant an additional 1,600,000 RSU's to eligible recipients

  • The company will commit up to an additional $3,000,000 to fund PhyeinMed's efforts in the medical marijuana business.

 

Management Commentary

 

Umbral Energy's President and Chief Executive Officer, Jag Bal

 

"This definitive agreement is the completion of yet another milestone for Umbral as it continues to build tangible value for shareholders. Our meaningful forward progress, as well as recent changes announced by Health Canada for the marijuana industry, make us extremely excited about our future with PhyeinMed, and assisting them in becoming a licensed producer in Canada in the very near future."

 

PhyeinMed's CEO and Estek Ventures Owner, Debra Senger

 

"This transaction creates greater alignment between Umbral and Estek as we combine our efforts within PhyeinMed towards becoming a Licensed Producer of cannabis in Canada. The entire PhyeinMed team and I are very encouraged by the recent progress being made by Health Canada to streamline the licensing process to meet the expected high future demand."

 

Market Reaction

 

After Umbral resumed trading this afternoon (after being halted more than a week in anticipation of this release) shares are relatively quiet. In late trading Wednesday, shares of Umbral are flat on both the CSE and the OTC Markets. We'll be watching to see if volume and volatility picks up in Umbral as the day goes on given this news.

 

Conclusion

 

We'll be sure to keep readers up to date regarding developments at Umbral, PhyeinMed and the cannabis industry more broadly. Be sure to subscribe to one or more of our free newsletters so you never miss an important update. Also, don't forget to connect with The Daily Marijuana Observer on Facebook, Twitter, and Instagram.

 

D/M/O

 

Disclaimer
 
Investing in nanocap, microcap, and small cap stocks is highly speculative. The publishers of DailyMarijuanaObserver.com are not registered as Investment Advisors or Broker-Dealers in any jurisdiction whatsoever. The information contained on DailyMarijuanaObserver.com (“this site”) has been prepared solely for informational purposes. Nothing on the site is an offer or solicitation to buy or sell securities. Investors should seek financial advice regarding the appropriateness of investing in any securities mentioned from their financial advisor.

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