TORONTO, April 17, 2018 (GLOBE NEWSWIRE) -- MPX Bioceutical Corporation (“MPX” or the “Company”) (CSE:MPX) (OTC:MPXEF) is pleased to announce that it has signed a letter of intent (the “LOI”) to acquire 100% of the issued and outstanding shares (the “Canveda Shares”) of Canveda Inc. (“Canveda”), a Licensed Producer under Health Canada’s Access to Cannabis for Medical Purposes Regulations (“ACMPR”). Canveda is a private company operating in Peterborough, Ontario from a fully built-out facility that is ready to commence its first production run and is capable of producing approximately 1,000-1,200 kilograms of high quality cannabis flower annually.
MPX will acquire the Canveda Shares for a total purchase price of CDN$18 million which is comprised of the following consideration:
CDN$3,000,000 in cash;
CDN$15,000,000 satisfied through the issuance of 21,539,261 common shares in the capital of MPX (the “MPX Shares”) issued at a price of CDN$0.70 per MPX Share, representing the 10-day Volume Weighted Average Price (VWAP) calculated as of the date of the LOI;
and the issuance of 6,000,000 common share purchase warrants each exercisable into one (1) MPX Share at an exercise price of CDN$0.84 for a period of five (5) years from the date of issuance.
“We have always considered a Canadian presence to be a critical component of our business strategy,” said W. Scott Boyes, Chairman, President and CEO of MPX. “While we have never intended to build-out the massive cultivation facilities being constructed by some of the other Canadian Licensed Producers, we will be focussing on utilizing the advanced extraction and distillation processes developed by our U.S. operations to produce and market the MPX-branded, award-winning, concentrates in Canada, commencing with high-quality cannabis oils, followed by the broader range of MPX products as they become permissible under ACMPR rules. We are also excited about the import/export opportunities available to Canadian LP’s.”
Mr. Boyes added, “We also expect that this acquisition will accelerate our ability to secure a license to produce in Owen Sound and will be immediately accelerating its development. We intend to replicate, in Peterborough and in Owen Sound, and where permitted under Canadian regulations, our U.S. business model of vertical integration which includes production, manufacturing and, eventually, the retailing of our very strong brands to Canadians. We are currently exploring partnerships with potential operators of dispensaries in Western Canada which would provide an additional distribution channel for MPX products.”
Michael Arnkvarn, Executive Vice-President and CMO for Canada, stated: “Our brands have a proven track record in the U.S. and we will further develop these for the Canadian market. We also intend to expand our existing partner relationships into the Canadian market, including the production and marketing arrangement we have with leading Israeli pharmaceutical company, Panaxia, and we have already commenced the process of establishing product placement across the country. We strongly believe that our future is in the field of cannabis derivatives, produced for both the domestic and export markets and this will be our focus.”
Closing of the transaction is subject only to customary conditions, including the signing of definitive documents, completion of satisfactory due diligence, and applicable regulatory (including CSE) approvals, if required.
MPX has agreed to pay a finder’s fee equal to 1% of the purchase price in MPX Shares at the deemed price of $0.70 per MPX Share to Stoic Advisory Inc., an independent Toronto-based corporate finance advisory firm working with companies across the global cannabis industry, in MPX.
About MPX Bioceutical Corporation
MPX, an Ontario corporation, through its wholly-owned subsidiaries in the U.S., provides substantial management, staffing, procurement, advisory, financial, real estate rental, logistics and administrative services to three medicinal cannabis enterprises in Arizona operating under the Health for Life (dispensaries) and the award-winning Melting Point Extracts (high-margin concentrates wholesale) brands. The successful Health for Life brand operates in the rapidly growing Phoenix Metropolitan Statistical Area. With the acquisition of The Holistic Center, MPX adds another operating medical cannabis enterprise to its footprint in Arizona.
GreenMart of Nevada NLV, LLC (“GreenMart NV”) is an award winning licensed cultivation, production and wholesale business, licensed for both the medical and “adult use” sectors in Las Vegas, Nevada, and is already selling wholesale into the Nevada medical cannabis market. GreenMart NV has also optioned suitable locations and intends to enter the higher-margin retail arena by applying for at least two dispensary licenses in the Las Vegas market which will operate under the “Health for Life” brand.
In Massachusetts, MPX is building out and will operate a cultivation and production facility as well as up to three dispensaries and manages three full service dispensaries and one producer in Maryland.
The Company also leases a property in Owen Sound, Ontario, for which an application to Health Canada has been made for a cannabis production and sales license. In addition, the Company will continue its efforts to develop its legacy nutraceuticals business.
Cautionary Statement Regarding Forward-Looking Information
This news release includes certain “forward-looking statements” under applicable Canadian securities legislation that are not historical facts. Forward-looking statements involve risks, uncertainties, and other factors that could cause actual results, performance, prospects, and opportunities to differ materially from those expressed or implied by such forward-looking statements. Forward-looking statements in this news release include, but are not limited to, MPX’s objectives and intentions. Forward-looking statements are necessarily based on a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties and other factors which may cause 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 and social uncertainties; litigation, legislative, environmental and other judicial, regulatory, political and competitive developments; delay or failure to receive board, shareholder or regulatory approvals; those additional risks set out in MPX’s public documents filed on SEDAR at www.sedar.com; and other matters discussed in this news release. Although MPX believes that the assumptions and factors used in preparing the forward-looking statements are reasonable, undue reliance should not be placed on these statements, which only apply as of the date of this news release, and no assurance can be given that such events will occur in the disclosed time frames or at all. Except where required by law, MPX disclaims any intention or obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.