KELOWNA, BC, Aug. 30, 2018 /CNW/ - GTEC Holdings Ltd. ("GTEC" or the "Company") (TSXV: GTEC) (OTCPK: GGTTF) is pleased to announce that it has entered into a binding Letter of Intent with Invictus MD Strategies Corp. ("Invictus") (TSXV: GENE; OTCQX: IVITF; FRA: 8IS1) to provide GTEC with a non-revolving unsecured convertible loan (the "Loan Facility") in an amount up to $2,000,000, and an interest rate of prime plus 5%. Subject to regulatory approvals, all or a portion of the principal and accrued interest on the Loan Facility may be convertible into common shares of GTEC, at the option of Invictus, at any time prior to or on the last business day immediately preceding the Maturity Date, as defined below, at a conversion price equal to $1.50 per common share (the "Conversion Price"). Upon mutual agreement of both parties prior to the Maturity Date, Invictus may increase the amount of the Loan Facility up to $6,000,000.
The proceeds from the Loan Facility will be used by GTEC for working capital and to further execute GTEC's cannabis retail expansion strategy in Western Canada and Ontario. GTEC expects to have a minimum of 15 Cannabis Cowboy retail stores open by October 17, 2018, in Alberta, as well as 1 location in Saskatchewan, complemented by an e-commerce platform that will serve the entire Province.
The definitive agreement (the "Definitive Agreement") will also provide Invictus with a right of first refusal to fill up to thirty percent (30%) of any cannabis purchase order domestically and internationally (whether for flower or oil) that GTEC, or its wholly-owned subsidiaries, are seeking to purchase from third party Licensed Producers for a period of two years. The Invictus products will be sold under one of four recreational brands: Dukes, Zooey, Sterling & Hunt, and Sinister, each designed to target a specific audience and his or her lifestyle.
"As we continue to build out our national retail distribution strategy, we are extremely pleased at this partnership with Invictus." said Norton Singhavon, Chairman and CEO of GTEC. "Having access to a diverse range of indoor premium flower fits within our mandate to curate, develop and distribute craft cannabis products within our retail channels. Furthermore, this partnership with Invictus allows GTEC to immediately access increased capacity to support our international initiatives."
"This new partnership is designed to extend Invictus' Western footprint for cannabis distribution, which already includes supply agreements in British Columbia and Alberta," said Dan Kriznic, Chairman and CEO of Invictus. "We are actively working to establish new channels that will enhance our sales network and ensure retailers maintain adequate supply of high quality cannabis as the adult recreational market evolves over time."
The Loan Facility shall have a term that commences on the date of the execution and delivery of a definitive agreement (the "DefinitiveAgreement") and ends on a date that is two years following the date of the first draw (the "Maturity Date"). The Loan Facility shall be due and payable in full by GTEC to Invictus on the Maturity Date. GTEC will be entitled to prepay all or a part of the Loan Facility at any time, from time to time, without bonus or penalty. Upon mutual agreement of both parties prior to the Maturity Date, Invictus may increase the amount of the Loan Facility up to $6,000,000 in aggregate, and further extend the term of the Loan Facility. The agreement is subject to approval from the respective Board of Directors for each company, the TSXV, and certain holders of convertible debentures of GTEC.
Invictus is a global cannabis company offering a selection of products under a wide range of lifestyle brands. Our integrated sales approach is defined by five pillars of distribution including medical, adult-use recreational, 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, and global branding agency Authentic Brands Group. Invictus is expanding its cultivation footprint, with two cannabis production facilities fully licensed under ACMPR in Canada and a third awaiting approval, featuring 100,000 square feet of available grow space today with 200,000 expected by January 2019 and 1 million by end of 2019. The Company will earmark 50 per cent of production to the medical and recreational markets, respectively. 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, recreational, international and retail. For more information visit www.invictus-md.com.
About GTEC Holdings Ltd.
GTEC was founded in 2017 to capitalize on opportunities in the nascent and rapidly growing legal cannabis industry. GTEC is focused on growing premium quality craft cannabis in purpose-built indoor facilities. The Company also has a number of retail cannabis initiatives in Western Canada. GTEC currently holds a 100% interest in GreenTec Bio-Pharmaceuticals Corp., Tumbleweed Farms Corp., Falcon Ridge Naturals Ltd., Alberta Craft Cannabis Inc., Grey Bruce Farms Inc., Zenalytic Laboratories Ltd. and Spectre Labs Inc. GTEC is a publicly-traded corporation based in Kelowna, British Columbia. The Company's shares are listed on the TSX Venture Exchange and OTC Pink Sheets.
To view more about the company or to request our most recent corporate presentation, please visit our website at www.gtec.co.
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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 STATEMENT REGARDING FORWARD-LOOKING INFORMATION: This press release contains forward-looking information based on current expectations. These statements should not be read as guarantees of future performance or results. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from those implied by such statements. Although such statements are based on management's reasonable assumptions, Namaste assumes no responsibility to update or revise forward-looking information to reflect new events or circumstances unless required by law. Although the Company believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because the Company can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. These statements speak only as of the date of this press release. Actual results could differ materially from those currently anticipated due to a number of factors and risks including various risk factors discussed in the Company's disclosure documents which can be found under the Company's profile on www.sedar.com. This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E the Securities Exchange Act of 1934, as amended and such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The TSXV has neither reviewed nor approved the contents of this press release.