Kelowna, BC, Oct. 08, 2019 (GLOBE NEWSWIRE) —
GTEC Holdings Ltd. (TSX-V:GTEC) (OTCQB:GGTTF) (FRA:1BUP) (“GTEC” or the “Company”), is pleased to announce that pursuant to the sale of certain assets, as previously announced on September 4, 2019 (the “Transaction”), between Cannabis Cowboy Inc (“CCI”) and Fire & Flower Inc., a wholly owned subsidiary of Fire & Flower Holdings Corp. (“FFHC”) (TSX:FAF), that the Transaction has been completed.
Upon the closing of the Transaction, CCI has settled GTEC’s outstanding $4.06 million debt, in a cash repayment (the “Repayment”). The Repayment will strengthen GTEC’s balance sheet as the Company continues its near-term initiatives of completing the development of its two facilities currently under construction, with the expectation to increase its annual production output from its current 4,000 kg output to approximately 9,000 kg in 2020. The Repayment also reinforces GTEC’s ability to fulfill its debt obligations due in the second half of 2020.
“This transaction exemplifies our dedication to strengthening our balance sheet with a disciplined and non-dilutive approach, while realizing profits from non-core assets. This strategy demonstrates management’s commitment to be aligned with our shareholders,” said Norton Singhavon, Founder, Chairman and CEO of GTEC. “We are confident that the strengthened balance sheet will accelerate the development of our core cultivation business and accelerate our transition to profitability.”
Cannabis Cowboy Divestment
Concurrent to the Transaction, GTEC and Cannabis Cowboy had entered into a Share Purchase Agreement where CCI would repurchase all of GTEC’s interest, equal to 25% of CCI (the “Divestment”). As consideration for the Divestment, CCI will pay GTEC a sum of $1 million, payable as follows: (i) $800,000 in shares of FFHC at 10-day volume weighted average price leading to the signing of the definitive agreements related to the aforementioned Transaction; and (ii) a $200,000 Promissory Note to be re-paid in cash. The Promissory Note will have a two-year term and bear an interest rate of 8% per annum and is secured against Cannabis Cowboy’s BC assets. The shares of FFHC will be subject to a statutory 4 month and a day hold. The Divestment is expected to close on or about October 10, 2019.
As previously announced, GTEC is divesting of non-core/non-operational assets to strengthen its balance sheet, while focusing the organization’s resources on the cultivation and extraction of premium indoor flower and its derivatives, with the mandate to establish long-term brand equity and consumer loyalty by distributing premium quality cannabis products.
GTEC Holdings is a specialized cannabis company dedicated to cultivating ultra-premium quality cannabis in purpose-built indoor facilities. The company is vertically integrated across all major sectors of the Canadian cannabis industry and currently holds the following licences issued by Health Canada pursuant to the Cannabis Act and Regulations: three Standard Cultivation licences, two Standard Processing licences (for adult-use sales into the Provincial & Territorial supply chains), two Medical Sales licences (for direct to medical patients), Standard Processing (for extraction), and Analytical Testing.
The management team is comprised of diverse experts from senior roles at leading global food & beverage, CPG and premium alcohol companies. GTEC has completed three cultivation facilities and is currently cultivating and selling cannabis. GTEC’s genetic portfolio is comprised of over 30 unique cultivars which is expected to deliver a sustainable competitive advantage and provide favourable gross margins. GTEC’s ultra-premium indoor flower will be marketed and sold under its flagship trademarked brands; BLK MKT™, Tenzo™, GreenTec™, Cognōscente™ and Treehugger™.
GTEC is actively pursuing sales and distribution opportunities across all major business channels: medical, recreational, B2B and export. GTEC is a publicly traded corporation, listed on the TSX Venture Exchange, OTCQB Venture Market and Frankfurt Stock Exchange. The Company is headquartered in Kelowna, British Columbia.
To view more about the company or to request our most recent corporate presentation, please visit our website at www.gtec.co
On behalf of the board,
Founder, Chairman & CEO
Co-Founder & Vice President
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION:
This news release includes certain “forward-looking statements” under applicable Canadian securities legislation. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the 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, competitive, political and social uncertainties; delay or failure to receive board, shareholder or regulatory approvals, where applicable and the state of the capital markets. 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. For instance, there can be no assurance that the Company’s combined annual output will be approximately 4,000 kilograms or more nor can there any assurance that the Company’s genetic portfolio will deliver a sustainable competitive advantage and provide favourable gross margins or that the Company will be able to establish long-term brand equity and consumer loyalty. Accordingly, readers should not place undue reliance on forward-looking statements. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
For additional information, please contact: GTEC Holdings Ltd. 1-800-351-6358 [email protected]