OTTAWA, ONTARIO--(Marketwired - June 22, 2016) - GrowPros Cannabis Ventures Inc. ("GrowPros" or the "Company") (CSE:GCI) is pleased to announce the acquisition of the assets of Laboratoires Holizen Inc. ("Holizen") for $450,000. The acquisition will be funded by the $600,000 private placement (see below). These assets will be part of the Company's new wholly-owned subsidiary Agro-Tek Inc. and will form a new division of GrowPros' that specializes in the distribution of Natural Health Products ("NHP") and cosmetics. The transaction will provide the Company with an established product line and allow GrowPros to rapidly commercialize and distribute new NHPs and cosmetics through Holizen's strong distribution network.
GrowPros will be required to make a payment of $325,000 on signing the agreement, $50,000 on the 12 month anniversary of the agreement, $50,000 on the 24 month anniversary of the agreement and a final payment of $25,000 on the 36 month anniversary of the agreement. The Agro-Tek team has already commenced applications with different government institutions to access investment funds for developing a strategic growth plan for the sale and distribution of Holizen products to the rest of Canada and the United States in the next year.
GrowPros has acquired Holizen's existing customer base, inventory and natural product registration numbers.
The acquisition of Holizen's assets by GrowPros will not change Holizen's daily activities. The current President of Holizen, Mrs. Francine St-Sauveur, and all of the company's employees and consultants will be retained by GrowPros. Mrs. St-Sauveur will assume the role and responsibility of the Chief Operating Officer of Agro-Tek. In her new role, Mrs. St-Sauveur will be responsible for day-to-day operations and client relations including the company's network of retail stores. Mr. André Rancourt was appointed as Chief Executive Officer of Agro-Tek and will take over the management of all of its divisions and partnerships. "The Board of Directors and I are delighted that Mr. Rancourt has agreed to accept this responsibility," said André Audet, Chairman. "He is someone with tremendous experience in the NHP retail market, his unquestioned work ethic, and integrity will prove to be of great value to the growth of the Company". Mr. Rancourt has worked in the food and NHP market for over 20 years and has established an extensive network of contacts. André will be responsible for the overall commercial strategy of Agro-Tek, licencing of innovative technologies, and future acquisitions to expand the Company's product lines and distribution capabilities. Holizen products are currently distributed in over 200 Natural health stores in Quebec. The company plans to launch an aggressive expansion to try and grow its market share of the 11.3 Billion dollar FFNHP (functional foods and Natural Health Products) market Place *stats Canada.
Holizen was created in 2002 and has been producing and distributing high quality NHP and cosmetic products. In addition to its NHP line, Mrs. St-Sauveur created alliances with several highly reputable European laboratories to offer Egyptian spagyria products, certified organic skincare products, and a line of silicon-based supplements and gels. "Holizen owes its fame to the absolute quality and efficiency of its products, a long and established network of clients, and the dedication of its employees to serve clients with respect and promptness," stated Mrs. St-Sauveur. "The acquisition by GrowPros will allow the company to rapidly expand the distribution of its product lines across all of North America and continue to offer its clients innovative, effective, and high quality NHP and cosmetic products."
The acquisition and recent creation of the multiple subsidiaries will provide GrowPros with a diversified portfolio of companies operating in independent yet related fields. PhytoPain Pharma Inc. will focus on pharmaceutical development, Agro-Tek will focus on retail product distribution and Grow Pros MMP will focus on cultivation and production of medicinal plants including Cannabis for which the company requires an approval under the Marijuana for Medical Purposes Regulation ("MMPR").
"This platform should allow GrowPros to evolve into a fully integrated Pharmaceutical and Natural Health product development, production, and distribution company. This strategy provides multiple revenue streams across various industry segments and sub segments and insulates the company from the uncertainty that results from solely focusing on an MMPR application," stated Ryan Brown, GrowPros CEO.
The Company also announces a non-brokered private placement of 12,000,000 units at a price of $0.05 per unit for aggregate gross proceeds of up to $600,000. Each unit will consist of one common share and one non-transferable warrant, with a whole warrant entitling the holder to purchase one common share at a price of $0.07 for a period of 12 months following the closing date.
In connection with the private placement, the Company may pay a cash finder's fee equal to 8% of the gross proceeds raised and may issue non-transferable finder's warrants equal to 8% of the number of common shares issued under the private placement. Each finder's warrant will entitle the holder to purchase one common share of the Company at a price of $0.07 per share for a period of 12 months following the closing of the private placement.
The securities issued pursuant to the private placement will be subject to a four-month hold period from the closing date. The Company may pay a commission in connection with the private placement, subject to compliance with the policies of the Exchange. Completion of the private placement and the payment of any commissions remain subject to the receipt of all necessary regulatory approvals, including the approval of the Exchange.
The proceeds of the private placement will be used to fund the acquisition of the assets of Holizen as well as general working capital.
The Canadian Securities Exchange (CSE) has not reviewed this news release and does not accept responsibility for its adequacy or accuracy.
Some statements in this release may contain forward-looking information. All statements, other than of historical fact, that address activities, events or developments that the Company believes, expects or anticipates will or may occur in the future (including, without limitation, statements regarding potential acquisitions and financings) are forward-looking statements. Forward-looking statements are generally identifiable by use of the words "may", "will", "should", "continue", "expect", "anticipate", "estimate", "believe", "intend", "plan" or "project" or the negative of these words or other variations on these words or comparable terminology. Forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond the Company's ability to control or predict, that may cause the actual results of the Company to differ materially from those discussed in the forward-looking statements. Factors that could cause actual results or events to differ materially from current expectations include, among other things, without limitation, the inability of the Company, through its wholly-owned subsidiary, GrowPros MMP Inc., to obtain a licence for the production of medical marijuana; failure to obtain sufficient financing to execute the Company's business plan; competition; regulation and anticipated and unanticipated costs and delays, and other risks disclosed in the Company's public disclosure record on file with the relevant securities regulatory authorities. Although the Company has attempted to identify important factors that could cause actual results or events to differ materially from those described in forward-looking statements, there may be other factors that cause results or events not to be as anticipated, estimated or intended. Readers should not place undue reliance on forward-looking statements. The forward-looking statements included in this news release are made as of the date of this news release and the Company does not undertake an obligation to publicly update such forward-looking statements to reflect new information, subsequent events or otherwise unless required by applicable securities legislation.