Invictus MD Strategies Corp. Invictus MD announces definitive option agreement with Late Stage Applicant under the ACMPR
Invictus MD Strategies Corp. (CSE: IMH; OTC: IVITF; FRA: 8IS) is pleased to announce that further to its news release dated February 7, 2017 it has successfully entered into a definitive option agreement with a Late Stage Applicant (“OptionCo”) under the Access to Cannabis for Medical Purposes Regulations (“ACMPR”) to acquire 100% of the outstanding shares of OptionCo from its current shareholders (the “Vendors”).
OptionCo had its Pre-license from Health Canada in early January 2017 and expects to receive a license to cultivate under the ACMPR in short order.
OptionCo has built 60,000 square feet of secured perimeter for its current production facility located on 150 acres (the “Property”) in the Province of Alberta. OptionCo has already submitted plans for additional buildings on the Property including a 30,000 square foot facility. Assuming OptionCo receives the requisite regulatory approval to cultivate, OptionCo has future expansion plans on the 150 acre Property to establish itself as a leader in the Canadian cannabis industry.
The Option will be exercisable at the sole option of Invictus MD within 30 days after OptionCo receives its license to cultivate under the ACMPR. The exercise price of the Option will be payable to the Vendors as follows: (i) cash payment of CDN$4 million; (ii) issuing 21 million common shares; and (iii) issuing 3 million warrants with an exercise price of $1.50 per warrant, of which: 1 million warrants will expire in 6 months following the date the Option is exercised; 1 million warrants will expire in 12 months following the date the Option is exercised, and 1 million warrants will expire in 18 months following the date the Option is exercised.
The Vendors stated, “OptionCo has built 60,000 square feet of secured perimeter for its current purpose-built production facility located on 150 acres. We have already submitted plans for additional buildings on the Property as part of our phase II plans including a 30,000 square foot state-of-the-art production facility with the option to add an additional 20,000 square foot second floor. OptionCo has future phase III expansion plans for our 150-acre property, up to 3 million square feet of buildable property, which has a footprint larger than 60 football fields; OptionCo is focused on establishing itself as a leader in the Canadian cannabis industry.”
“From day one, we have been very clear: to acquire production capacity under the ACMPR is a key driver to increasing shareholder value”, said Dan Kriznic, Chairman and CEO of Invictus MD. “Given our ability to aggressively expand the commercial scale of the OptionCo property, we will make key capital investments that enable us to rapidly ramp up production capability. With OptionCo and our combined long-term capacity from our 33.33% stake in AB Laboratories Inc., a Licensed Producer under the ACMPR, and our 33.33% stake in AB Ventures and binding LOI with PlanC BioPharm Inc., now in the late stages of the application process, we are very well positioned to become one of the largest producers of cannabis in the Canadian sector.”
According to a recent report from the consulting firm Deloitte “Recreational Marijuana – Insights and Opportunities,” the Canadian retail cannabis market is projected to be between $4.9 billion and $8.7 billion annually. In that same report, Deloitte further estimates that satisfying the recreational cannabis market will mean producing 600,000 kilograms of marijuana annually – far more than the existing licensed producers under the ACMPR grow for medicinal purposes.
Board of Directors
The Company announces the resignation of Byron Sheppard from the board of directors in order to focus his efforts on Future Harvest. The Company wishes to thank Mr. Sheppard for his dedication and service to the Company as a valuable member of the board of directors. Mr. Sheppard will continue in his role as a director of Future Harvest.
The Company also announces it has granted an aggregate of 600,000 stock options to directors, officers and consultants of the Company. Each option is exercisable at a price of $1.88 per share for a period of five years.
Restatement of Financial Statements
The Company also announces it has identified certain non-cash errors in its consolidated financial statements for the year ended January 31, 2016. The errors are related to inventory and the accounting for the acquisition of Future Harvest Development Ltd. The Company intends to correct these errors and restate its consolidated financial statements for the year ended January 31, 2016 when it files its fiscal 2017 consolidated financial statements which are due at the end of May 2017. The Company estimates that the errors may result in a decrease in net income of approximately $180,000 and a decrease in net earnings per share of $0.05 for the year ended January 31, 2016.
About Invictus MD Strategies Corp.
Invictus MD Strategies Corp. is focused on three main verticals within the burgeoning Canadian cannabis sector: Licensed Producers under the ACMPR including an investment in a fully licensed facility, AB Laboratories Inc.; Fertilizer and Nutrients through Future Harvest Development Ltd.; and Cannabis Data and Delivery, with its wholly owned subsidiary Poda Technologies Ltd.
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