GTEC Announces Satisfaction of Tumbleweed Milestone
February 26th, 2020
Kelowna, BC, Feb. 25, 2020 (GLOBE NEWSWIRE) — GTEC Holdings Ltd. (TSX-V:GTEC) (OTC:GGTTF) (FRA:1BUP) (“GTEC” or the “Company”) is pleased to announce that, with the aim to mitigate the dilution to shareholders resulting from the issuance of shares in connection with certain milestone payments, it has entered into an amending agreement on February 4, 2020 (the “Amending Agreement”) with the vendors of Tumbleweed Farms Corp. (“Tumbleweed”) amending certain terms and conditions of the definitive share purchase agreement, dated August 12, 2017, as amended (the “Tumbleweed SPA” and together with the Amending Agreement, the “Agreement”).
Among other things, the Amending Agreement raised the floor price of the Common Shares to be issued in connection with the first four harvests to a deemed price per share equal to the greater of (A) the 5-day volume-weighted average trading price of the Common Shares ending on the day preceding this press release and (B) $0.18. The Amending Agreement also reduced the fifth harvest, which is the final milestone payment, from $300,000 to $150,000 and amended the milestone to provide that upon the Company’s fifth harvest having reached full flower, the Company shall issue $150,000 worth of common shares of GTEC (the “Common Shares”) at a deemed price per share equal to the greater of (A) the 5-day volume-weighted average trading price of the Common Shares ending on the day preceding this press release and (B) $0.18.
As such, in connection with the Agreement, the Company intends to issue an aggregate of $1,350,000 of Common Shares in satisfaction of the above-mentioned milestone payments. Accordingly, the Company will issue 7,500,000 Common Shares to the arms-length vendors of Tumbleweed (the “Tumbleweed Vendors”), at a deemed price of $0.18 per share. The issuance of these shares will be the final share issuances relating to milestone payments for the Tumbleweed acquisition and there will be no further payments to the Tumbleweed Vendors, whether in cash or shares.
The Amending Agreement and the issuance of Common Shares pursuant to the Agreement are subject to final approval of the TSX Venture Exchange (“TSXV”). The Common Shares will be subject to a statutory hold period of four months and one day from the date of issuance thereof. Fifty percent of the Common Shares shall be subject to a 6-month escrow.
The Company is currently taking steps to further mitigate dilution to shareholders by renegotiating future milestone payments for previously reported acquisitions and by eliminating or reducing certain related party obligations.
GTEC Holdings Ltd. is a specialized cannabis company which produces and distributes highly sought-after ultra-premium cannabis products in Canada. The Company has four licensed and operational assets and is currently distributing cannabis through medical and recreational sales channels. GTEC’s products are currently achieving amongst the highest gross margins and retail pricing within its sector in Canada (A).
GTEC’s exclusive cultivar collection includes rare and unique cultivars, which are not currently available from other Licenced Producers. GTEC’s premium and ultra-premium product portfolio includes; BLK MKT™, Tenzo™, GreenTec™, Cognōscente™ and Treehugger™.
The Company wholly owns operations in BC, Alberta and Ontario, and is licensed by Health Canada for the following: sales into recreational supply chains, direct sales to medical patients, extraction, and analytical testing.
GTEC is a publicly traded corporation, listed on the TSX Venture Exchange (GTEC), OTCQB Venture Market (GGTTF) and Frankfurt Stock Exchange (1BUP). The Company’s headquarters is based out of Kelowna, British Columbia. To learn more about the company or to request our most recent corporate presentation, please visit our website at www.gtec.co
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 forward-looking 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 products will continue achieving amongst the highest gross margins and retail pricing within its sector in Canada, or that the TSXV will approve the Amending Agreement or the issuance of shares to the Tumbleweed Vendors in satisfaction of debt or that the Company will be able to mitigate dilution to its shareholders. 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.
Note (A): This analysis is based on the most recently available Financial Statements on SEDAR from publicly listed Licenced Producers (including GTEC), as of November 19, 2019. Companies included, were those listed on New Cannabis Ventures Canadian Cannabis LP Index, that currently produce in a; greenhouse, indoor operation, or a combination of both, with quarterly sales greater than $1 million. Those with outdoor operations were excluded from the analysis. Based on the analysis GTEC had the third highest gross margin in the sector, and the no.1 highest based on those solely with indoor operations.
For additional information, please contact: GTEC Holdings Ltd. 1-800-351-6358 [email protected]
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