Mr. Norton Singhavon of GTEC reports
GTEC SUBSIDIARY CANNABIS COWBOY ANNOUNCES THE SALE OF CERTAIN ASSETS AND $4 MILLION DEBT REPAYMENT TO GTEC
GTEC Holdings Ltd.'s 25-per-cent-owned subsidiary, Cannabis Cowboy Inc. (CCI), has signed a definitive agreement to sell assets relating to eight of its non-operational retail store locations to Fire & Flower Inc., a wholly owned subsidiary of Fire & Flower Holdings Corp.
GTEC invested $4-million into Cannabis Cowboy by way of shareholder loans and owns a 25-per-cent equity stake in CCI. The use of funds is to develop up to 27 recreational cannabis stores in the province of Alberta. CCI had 23 municipal development permits issued, which were required in order to apply for a retail cannabis storefront with the Alberta Gaming and Liquor Commission (AGLC). The retail locations are currently non-operational and in the licensing application stage with the AGLC.
Pursuant to the terms of the transaction, an aggregate purchase price of $5.65-million, with $4.52-million payable in cash and, $1.13-million payable in common shares of Fire & Flower at a price equal to the 10-day volume-weighted average price leading to the closing of the transaction. The transaction is expected to close on or about Oct. 1, 2019, subject to closing conditions which are customary for similar transactions.
Shareholder loan repayment
Upon the closing of the transaction, CCI will immediately settle its outstanding debt to GTEC in the sum of $4-million, strengthening GTEC's balance sheet. GTEC will retain its 25-per-cent equity stake in CCI, which upon the closing of the transaction, will have 16 locations remaining with municipal development permits issued in the province of Alberta.
As part of GTEC's growth strategy, the company is divesting of non-core/non-operational assets to strengthen its balance sheet. GTEC will focus 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.
About Fire & Flower Holdings Corp.
Fire & Flower is a leading purpose-built, independent adult-use cannabis retailer poised to capture significant Canadian market share. The company guides consumers through the complex world of cannabis through education-focused, best-in-class retailing while the Hifyre digital platform connects consumers with cannabis products. The company's leadership team combines extensive experience in the cannabis industry with strong capabilities in retail operations.
About GTEC Holdings Ltd.
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 estimated to produce 4,000 kg of indoor flower annually, two standard processing licences (for adult-use sales into the provincial supply chains), two medical sales licences (for direct to medical patients), standard processing (for extraction) and analytical testing.
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