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Empower Clinics Inc
Symbol CBDT
Shares Issued 227,810,340
Close 2020-12-31 C$ 0.285
Recent Sedar Documents

Empower Clinics closes acquisition of GTA clinics

2021-01-04 06:06 ET - News Release

Mr. Steven McAuley reports

EMPOWER CLINICS CLOSES AGREEMENT TO ACQUIRE CANADIAN CLINICS, ANNOUNCES SIGNIFICANT DISCUSSIONS WITH NATIONWIDE ROLLOUT PARTNERS AND PROCEEDS FROM EXERCISE OF WARRANTS NOW EXCEEDING $6,900,000 TO CONCLUDE ITS MOST SUCCESSFUL YEAR EVER

Empower Clinics Inc. has closed the agreement to acquire Lawrence Park Health and Wellness Clinic Inc. and 1100900 Canada Inc., doing business as Atkinson.

Steven McAuley, chairman and chief executive officer of Empower, stated: "The closing of this acquisition is a significant milestone for both Empower and its shareholders that will provide Empower with both a growing accretive business as well as a winning business model with plans for immediate expansion across the Greater Toronto Area, the province of Ontario and then nationwide with at least 30 clinics in very rapid succession. This nationwide expansion plan is already taking shape with discussions for new locations with significant partners already at advanced stages. With this acquisition now officially complete, I am confident that we will have developments to report regarding our Canadian expansion in the very near future."

In closing the acquisition and filing notice of an amended share purchase agreement, Empower elected to exclude the four Momentum Health Inc. locations that were structured as joint ventures with fixed royalty payments only and, therefore, did not fit the company's new Canadian national expansion model. The exclusion was so inconsequential that it did not impact the final terms of the agreement as stated in the company's press release of Dec. 17, 2020.

Acquisition includes three clinics in Greater Toronto Area with immediate plans to expand clinics-in-clinics model across Canada

The acquisition includes paramedical clinics in the Greater Toronto Area of Ontario, Canada, with immediate access to in excess of 20,000 patients.

More importantly, expansion will deploy a very attractive and cost-effective model of opening clinics within clinics or clinics within facilities in which the company proposes to partner with large care facilities to provide paramedical clinics inside the physical location of the primary care facility. This model results in a win-win for both Empower and the primary care facility partner as follows:

  1. Substantially improved care for patients of the primary care facility;
  2. Significantly reduced start-up costs for Empower;
  3. Immediate access to the large patient base of the primary care facility;
  4. Immediate rental income for the primary care facility.

With this proven winning model, the nationwide rollout is planned to commence immediately with expansion in the Greater Toronto Area, followed by expansion throughout Ontario and then west and east through all provinces with a standardized brand and technology platform.

Performance incentives to open 30 additional locations

The acquisition also includes long-term performance incentives for Dr. Rabinowitz and Dr. Tsimerman, the two co-founders of the target corporations, to open an additional 30 clinics across Canada.

Proceeds from the exercise of warrants now exceed $6.9-million. Empower ends 2020 as the most successful year in company history and anticipates greater growth in 2021.

On Dec. 14, 2020, Empower announced the receipt of in excess of $5.5-million from the exercise of warrants up to Dec. 11, 2020. The company is pleased to announce an update amount that now exceeds $6.9-million up to Dec. 31, 2020. The proceeds were generated as a result of strong equity market support for the company and serves as an indication of the strength of Empower's growing shareholder base.

Mr. McAuley added: "The combination of this acquisition and the receipt of nearly $7-million from warrant proceeds to end 2020 has the double impact of closing our most successful year ever as well as positioning Empower to deliver the same magnitude of growth for our great shareholders in 2021. Along with the rapidly growing demand for our KAI Medical Laboratory COVID-19 testing solutions, the launch of our FDA EUA-approved KAI saliva test and our Tier 1 Bubble partnerships, Empower is heading into its biggest-ever growth phase with the war chest to back it up."

Pursuant to the terms of the agreement, Empower will pay the vendors of the target corporations $275,000 cash at closing (including $44,648 to settle an outstanding debt) with an additional $75,000 to be withheld as a holdback for adjustments, for an aggregate cash payment of $350,000. In addition, at closing, Empower will issue Dr. Jordan Rabinowitz and Dr. Aviv Tsimerman 5,128,204 common shares in the capital of Empower (at a deemed price of 9.75 cents per share), 2,564,102 of which will be subject to contractual resale restrictions resulting in them being released quarterly from the date of closing in eight equal instalments.

If, within 18 months from the closing date, the company, the target corporations or its affiliates have opened and have operating an aggregate of 10 new clinic locations in Canada, each of Dr. Rabinowitz and Dr. Tsimerman shall be entitled to receive incentive stock options of Empower to purchase 1,875,000 common shares of Empower, vesting as follows:

  1. One-third immediately;
  2. One-third upon of the company or its affiliates having opened and operating an aggregate of 20 new clinic locations in Canada;
  3. One-third upon of the company or its affiliates having opened and operating an aggregate of 30 new clinic locations in Canada.

Additional details

Empower has agreed to enter into employment agreements with Dr. Rabinowitz and Dr. Tsimerman on closing of the acquisition to lead the Canadian clinic expansion strategy.

About Empower Clinics Inc.

Empower is an integrated health care company that provides body and mind wellness for patients through its clinics, with digital and telemedicine care and world-class medical diagnostics laboratories. Supported by an experienced leadership team, Empower is aggressively expanding its clinical and digital presence across North America. Its health and wellness and diagnostics and technology business units are positioned to positively impact the integrated health of patients while simultaneously providing long-term value for shareholders.

We seek Safe Harbor.

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