Canadian CANNAINVESTOR Magazine April 2017 - Page 67

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•On March 2, 2017 Invictus MD announced that it had closed its previously announced bought deal private placement with Canaccord Genuity Corp. and Eventus Capital Corp., including a portion of the over-allotment option, for aggregate gross proceeds of $16,218,065. A total of 9,829,130 units, including those pursuant to the exercise of the over-allotment option, were issued at a price of $1.65 per Unit.

•On March 14, 2017 the Company completed its final commitment with a cash transaction of CAD$2,000,000 to acquire 33.33% of AB Laboratories Inc. (“AB Labs”), a Licensed Producer under the Access to Cannabis for Medical Purposes Regulations (“ACMPR”) which maintains a 16,000 square foot facility located in Hamilton, Ontario. Invictus MD has the right of first refusal to arrange any initial public offering, reverse take-over or other going public transaction of AB Labs.

•AB Labs had successfully conducted test crops and is currently operating at half capacity, with full production capacity scheduled by the end of May 2017. They have also acquired a number of different strains and are negotiating numerous others for R & D purposes. AB Labs has already received a number of direct inquiries from patients, which underscores the continuously growing demand.

•AB Ventures Inc.’s, a newly incorporated company formed to develop a second licensed expansion facility through it’s common ownership with AB Labs, 100-acre acquisition is scheduled to close on May 1, 2017, and once licensed under the ACMPR, will be used for future cannabis cultivation. Invictus MD made a commitment to invest $5.5 million, which was in addition to the $2 million already funded for the land acquisition plus working capital, and will provide Invictus MD with a 33.33% interest in AB Ventures. Funds will be used for the costs of licensing approval under the ACMPR, and constructing the initial 42,000 square foot cultivation facilities, with plans to construct an additional five production facilities on the new land totalling 100,000 square feet. In preparation for a fully compliant application, AB Ventures will be using AB Labs respective persons in charge that have already been cleared by Health Canada, reducing the amount of time to get a secondary license, as security clearance is a lengthy process under the ACMPR approval process. With licensing in place as expected, production at AB Ventures is anticipated to start as early as December 2017.

•Considering the magnitude of AB Ventures’ land acquisition and future production facilities, and assuming AB Ventures obtains a license to produce the quantity forecasted for the proposed facility, the combined production capacity of both AB Labs and AB Ventures is expected to exceed 25,000 kilograms in 2020.