Supreme Pharmaceuticals Inc. Announces Second Acquisition Target
May 13 2014 - 10:00AM
Marketwired
Supreme Pharmaceuticals Inc. Announces Second Acquisition Target
VANCOUVER, BRITISH COLUMBIA--(Marketwired - May 13, 2014) -
Supreme Pharmaceuticals Inc. ("Supreme" or the "Company")
(CSE:SL)(OTCBB:SPRWF) is pleased to report that the Company has
signed a letter of intent ("LOI") to acquire a green house facility
and 100% of a Southern Ontario based company (the "Target Company")
that has been approved for a pre-build Marijuana for Medical
Purposes Regulations license ("MMPR Licence"). Under the terms of
the MMPR License, the Target Company can build out and operate a
342,000 square foot facility that can produce up to 24,000,000
grams (24,000 kilograms) of medicinal marijuana per year. Supreme
has made an initial $250,000 payment under the terms of the LOI,
and must, by May 22nd, 2014 advance to the Target Company an
additional $750,000, at which time Supreme will own the Facility,
as described below. The transaction terms contained in the LOI are
binding on the parties, subject to final documentation. Supreme
currently has the necessary funds on hand to close this portion of
the transaction.
The Target Company has the option to purchase an Ontario
facility that is a state of the art 342,000 square foot facility
covering approximately 7 acres that was originally built by
Agriculture Canada ("the Facility"). The Target Company has placed
in trust with the vendor of the Facility the initial down payment
of $250,000 to buy the Facility, and upon Supreme providing the
balance of the closing payment of $750,000, the Facility will be
fully owned by Supreme. who will have a two-year period to pay to
the vendor another $4,500,000. Upon closing of the acquisition of
the Facility, year one will be an interest free period, and year
two will bear interest of 7%.
To complete the licensing requirement and move from pre-build
status to MMPR, the Target Company must complete the installation
of the required security measures. Once Health Canada completes its
final inspection of the Facility, the Target Company will be
granted an MMPR licence. It is anticipated that initial production
could commence by the fourth quarter of 2014. The Target Company
anticipates it will take 90 days after taking over the Facility to
construct and implement the required security measures.
Health Canada has stated that as of 2013 there were 40,000 users
of medical marijuana and that by 2024 there could be over 450,000.
The industry is evolving rapidly as Supreme looks to become a
commercial producer in Canada.
Terms of the Target Company Acquisition
Following the closing of the purchase of the Facility, Supreme
has agreed to buy all of the issued and outstanding shares of the
Target Company in exchange for that number of shares representing
45% of the current issued and outstanding common shares of Supreme,
subject to regulatory approval. Neither control or the board of
Supreme shall not change.
Management stated: "This new acquisition is in line with
Supreme's goal of becoming a national company with its potential
acquisitions in both British Columbia and Southern Ontario. We
believe this transaction could provide significant upside potential
for our shareholders. We have made this strategic acquisition to
build long-term value for our shareholders."
FORWARD LOOKING INFORMATION
This news release contains forward-looking statements. The use
of any of the words "anticipate", "continue", "estimate", "expect",
"may", "will", "project", "should", "believe" and similar
expressions are intended to identify forward-looking statements.
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. This news release includes forward-looking
statements with respect to the acquisition of the Facility, the
timing on completetion of the MMPR License conditions and the start
of production. 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 news 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 and such factors as the Company failing to
exercise the option, acquire the Facility and put the same into
production in accordance within the terms of the MMPR license. This
news 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
harbour provisions of the Private Securities Litigation Reform Act
of 1995.
Zach StadnykInvestor Relations(647)
340-6744info@supremepharmaceuticals.comwww.supremepharmaceuticals.com