VANCOUVER, Jan. 16, 2019 /CNW/ - INVICTUS MD STRATEGIES
CORP. ("Invictus" or the "Company") (TSXV: GENE; OTCQX: IVITF; FRA:
8IS1) is pleased to provide an update on its binding
letter of intent ("LOI") to create a joint venture with Cannamerica
Brands Corp. ("CannAmerica") (CSE: CANA) (OTCQB: CNNXF) and
CBDistribution Company Ltd. ("CBDC") (collectively the "Joint
Venture") that was previously announced on January 7, 2019 with the intention of acquiring
hemp biomass for extraction into CBD isolate using purpose-built
facilities for large scale CBD extraction.
The Joint Venture has entered into a binding LOI with Z3
Sciences, LLC ("Z3") to purchase 80% of the membership interests of
Z3 for aggregate consideration, including performance incentives,
of USD$42.25 million. Z3 is
expected to provide the Joint Venture with existing extraction
contracts from extracting Hemp biomass into CBD isolate. The
current wholesale cost for CBD Isolate is in the range of
USD$5,000 to USD$7,000 per kilogram. Z3 existing extraction
contracts range from USD$20 to
USD$30 per input pound of hemp
biomass plus USD$1 to USD$2 per finished gram of CBD isolate. The
current facility has the capacity to process up to 50,000 lbs of
hemp biomass per month with a yield of approximately 2,500 kg's of
CBD isolate per month.
The existing management team at Z3 consists of experienced
operators that are expected to continue to operate the extraction
facilities in Colorado where Z3
currently resides. The Z3 team includes:
- Jacob Tupper, Co-Founder and
Chairman, specializes in structuring contracts and creating large
scale CBD deals to open expansion opportunities;
- Ben Metzker, Co-Founder, has
founded multiple companies ranging from digital marketing,
software, consulting and most recently manufacturing and production
of CBD from hemp. He has helped companies and people to grow their
personal and professional brands resulting in over USD$100 million in increased revenue and
profits;
- Winston Cook, CEO, is an
experienced C-level executive with a demonstrated history of
working in the marketing and advertising industry with digital
strategy, search engine optimization, customer acquisition,
advertising, and sales; and
- Chris Mansfield, COO, has over
15 years of experience in all operations of the information
technology solutions, systems integration, and professional
services industries;
Subject to Board approval, stock exchange approval and
completion of satisfactory due diligence, the Joint Venture and Z3
intend to enter into a definitive purchase agreement on or before
March 17, 2019. Consideration for the
acquisition consists of:
1)
|
Common shares of CANA
having an aggregate value of USD$3.75 million;
|
2)
|
Common shares of
Invictus having an aggregate value of USD$3.75 million;
|
3)
|
USD$5 million in cash
payable over a period of 240 days from the closing date;
and
|
4)
|
USD$1.5 million in
cash for Z3 to purchase equipment and use for working capital
purposes.
|
The consideration also includes performance incentives subject
to Z3 achieving gross revenue targets throughout 2020 that consist
of:
1)
|
Common shares of CANA
having an aggregate value of USD$1.25 million and common shares of
Invictus having an aggregate value of USD$1.25 million if Z3
achieves gross revenue of USD$10 million for the four months ended
April 30, 2020;
|
2)
|
Common shares of CANA
having an aggregate value of USD$1.25 million and common shares of
Invictus having an aggregate value of USD$1.25 million if Z3
achieves gross revenue of USD$10 million for the four months ended
August 31, 2020;
|
3)
|
Common shares of CANA
having an aggregate value of USD$1.25 million and common shares of
Invictus having an aggregate value of USD$1.25 million if Z3
achieves gross revenue of USD$10 million for the four months ended
December 31, 2020;
|
4)
|
A total of USD$1.75
million in cash to be paid to the shareholders in equal proportions
on January 2021 and June 2021; (ii) common shares of the Company
having an aggregate value of USD$1 million; and (iii) common shares
of Invictus having an aggregate value of USD$1 million if Z3
achieves each of the above listed gross revenue goals, totaling
minimum of USD$30 million for the 12 months ended December 31,
2020;
|
5)
|
USD$8.5 million in
cash and USD$4.25 million in shares of CANA and USD$4.25 million in
shares of Invictus to be paid to the shareholders in 2021 if Z3
achieves USD$80 million in the 12 months ended December 31,
2020.
|
"This acquisition represents the next step forward in our
partnership with CannAmerica and CBDC as we progress toward
extracting CBD isolate for the United
States market," said George E. Kveton, President and CEO of
Invictus.
"From the beginning, our goal has been to own the entire process
from supply to distribution in order to ensure only the best
products come from our facility and end up safely in the hands of
consumers and patients around the world. We're poised to take an
important step in achieving this goal in 2019 and our new
partnerships will only fuel additional growth as we aim to educate
and serve the masses," said Jacob
Tupper, Co-founder and Chairman of Z3 Sciences. "With this
new partnership and expansion in our Colorado facility we anticipate extracting
more than 50,000 pounds (22,700 kgs) per month." added Ben Metzker, Co-founder of Z3 Sciences.
"The acquisition of a top-quality extractor is expected to give
our partnership the ability to immediately generate revenue, fill
current and new orders for CBD products, and meet the growing
demand for high quality CBD products in the United States. While Z3 does have existing
contracts for its CBD isolate CannAmerica plans to eventually use
Z3 produced CBD isolate in CannAmerica branding products as well as
create an entire line of CBD products," said Dan Anglin, CEO and Co-Founder of
CannAmerica.
For more information, please visit www.invictus-md.com.
On Behalf of the Board,
George E. Kveton
Chief Executive Officer and Director
Jessica Martin
Vice President, Public Relations and Regulatory Affairs
(833) 879-4363
About Invictus
Invictus is a global cannabis company offering a selection of
products under a wide range of brands. Our integrated sales
approach is defined by five pillars of distribution including
medical, adult-use, 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. To meet growing demand, Invictus is expanding its
cultivation footprint, with three cannabis production facilities
licensed under the Cannabis Act and Cannabis Regulations in
Canada. To accommodate
international sales, Invictus' wholly-owned subsidiary, Acreage
Pharms Ltd. ("Acreage Pharms"), has designed and is currently
building its Phase 3 purpose-built cultivation facility to be
European Union Good Manufacturing Practices ("EU-GMP") compliant.
The Company is targeting up to 50 percent of production to medical
cannabis. To ensure consistency in quality and supply, Invictus
maintains all aspects of the growing process through its
subsidiary, Future Harvest Development Ltd. ("Future Harvest"), a
high-quality fertilizer and nutrients manufacturer. Invictus drives
sustainable long-term shareholder value through a diversified
product portfolio with over 70 Health Canada approved strains and a
multifaceted distribution strategy including medical, adult-use,
international, Licensed Producer to Licensed Producer and retail
stores. For more information visit www.invictus-md.com.
About CannAmerica Brands Corp.
CannAmerica Brands is a U.S. marine veteran founded and operated
portfolio of cannabis brands with licensing agreements in the
states of Colorado, Nevada and Maryland. The Company aims to maximize the
value of its brands by employing strong brand management teams,
marketing and licensing the brands through various distribution
channels, including dispensaries, wholesalers and distributors, in
the United States and
internationally. The Company's core strategy is to enhance and
monetize the global reach of its existing brands, and to pursue
additional strategic acquisitions to grow the scope and diversity
of its brand portfolio. For more information, please visit
www.cannamericabrands.com.
Cautionary Note Regarding Forward-Looking Statements: This
release includes certain statements and information that may
constitute forward-looking information within the meaning of
applicable Canadian securities laws or forward-looking statements
within the meaning of the United States Private Securities
Litigation Reform Act of 1995. All statements in this news release,
other than statements of historical facts, including statements
regarding future estimates, plans, objectives, timing, assumptions
or expectations of future performance, including the Company's plan
to enter into a definitive joint venture agreement and the joint
venture's ability to extract CBD isolate from hemp biomass are
forward-looking statements and contain forward-looking information.
Generally, forward-looking statements and information can be
identified by the use of forward-looking terminology such as
"intends" or "anticipates", or variations of such words and phrases
or statements that certain actions, events or results "may",
"could", "should", "would" or "occur". Forward-looking statements
are based on certain material assumptions and analysis made by the
Company and the opinions and estimates of management as of the date
of this press release, including that the Company's joint venture
will be successful in extracting CBD isolate from hemp biomass and
that the Company will be successful in entering into a definitive
joint venture agreement. These forward-looking statements are
subject to known and unknown risks, uncertainties and other factors
that may cause the actual results, level of activity, performance
or achievements of the Company to be materially different from
those expressed or implied by such forward-looking statements or
forward-looking information. Important factors that may cause
actual results to vary, include, without limitation, the joint
venture will not be successful in extracting CBD isolate from hemp
biomass and/or the Company will not be successful in reaching a
definitive joint venture agreement. Although management of the
Company has attempted to identify important factors that could
cause actual results to differ materially from those contained in
forward-looking statements or forward-looking information, there
may be other factors that cause results not to be as anticipated,
estimated or intended. There can be no assurance that such
statements will prove to be accurate, as actual results and future
events could differ materially from those anticipated in such
statements. Accordingly, readers should not place undue reliance on
forward-looking statements and forward-looking information. Readers
are cautioned that reliance on such information may not be
appropriate for other purposes. The Company does not undertake to
update any forward-looking statement, forward-looking information
or financial out-look that are incorporated by reference herein,
except in accordance with applicable securities laws.
Neither the Canadian Securities Exchange nor its Regulation
Services Provider accepts responsibility for the adequacy or
accuracy of this release.
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SOURCE Invictus MD Strategies