ANNOUNCES LETTER OF INTENT TO ACQUIRE A 70% INTEREST IN A REVIEW STAGE MARIJUANA PRODUCER APPLICANT
Matica Enterprises Inc. (MMJ.C) has signed a letter of intent for Matica to become a majority owner of a late-stage applicant under the access to cannabis for medical purposes regulation (ACMPR).
The target company is a Quebec-based applicant with a 10,000-square-foot facility under lease. The target company is a late-stage applicant with the goal of becoming a licenced producer under ACMPR, and has completed the security clearance stage and is now under review. The 10,000-square-foot facility is located in an industrial park outside of Montreal. Upon completion of due diligence, Matica and the sellers will proceed to a definitive agreement on or by April 5, 2017, which will allow Matica to acquire an initial 65-per-cent interest with the right to earn an additional 5 per cent.
Matica has paid the $50,000 due on signing, as directed by the sellers. After successful due diligence and signing of the definitive agreement, on or by April 5, 2017, Matica will pay an additional $135,000 in cash and issue six million common shares of Matica. After completion of the review stage, Matica will be required to provide financing of $2.2-million to complete the buildout of the medical marijuana facility in preparation for Health Canada inspection. This will earn Matica an initial 65-per-cent interest. Within 30 days of Matica receiving notification of licensing by Health Canada, Matica will pay an additional $400,000 and receive an additional 5-per-cent interest for a total 70-per-cent interest. After the completion of 12 months of production at the facility, Matica will make a final payment of $400,000.
Matica Enterprises chief executive officer Boris Ziger stated: "We have been kicking the tires on quite a few facilities over the past few months and are pleased with what we have seen in Quebec. Our past experience has shown that this industry is very much about the people, and we are confident that we have found a group that we can work with to build a successful business for our shareholders."