MPX International's Thailand Subsidiary Closes US$10 Million Financing and Provides Project Update
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TORONTO, ONTARIO, and BANGKOK THAILAND – TheNewswire - October 4, 2021 – MPX International Corporation (CSE:MPXI) (CNSX:MPXI.CN) (OTC:MPXOF) (“MPX International”, “MPXI” or the “Corporation”), a multinational diversified cannabis company, and its subsidiary, Salus International Management Ltd. (“SIM”), a management company currently focussed on operations in Southeast Asia, are pleased to announce that SIM has completed its US$10 million (C$12,748,000) private placement (the “SIM Financing”) which is being used to complete the build-out, acquire equipment and commence operations of a state-of-the art, EU-GMP-compliant cultivation, extraction, processing, testing and packaging facility capable of extracting 750 kgs of biomass and producing 30kgs of CBD/THC distillate/isolate each day.
SIM has entered into a management agreement with Salus Bioceutical (Thailand) Co. Ltd. (“Salus Thailand”), a Thailand-based medical cannabis company jointly owned by SIM and a consortium of Thai business people, whereby it is providing design, construction and technical support services, and ongoing management support of the project in exchange for management and other fees for the provision of its services. SIM’s partners in Salus Thailand consist of a consortium of Thai business people who will play an active role in government relations, negotiation and maintenance of supply relationships with medical and commercial institutions throughout the country and will be working closely with the Rajamangala University of Technology Isan Sakonnakhon Campus (the “University”) and Sarapee Community Enterprise Green and Clean (the “Community Enterprise”) to ensure optimal benefits to local interests within Chiang Mai province.
The extraction/distillation structure includes a uniquely-designed, highly-automated, computer-monitored mobile extraction unit designed by Canada-based extractX Inc. incorporating the most modern extraction and distillation equipment and processes. The Board of SIM believes the facility will be capable of producing more CBD/THC distillate and isolate than any current or near-term potential competitor and at a much lower cost per unit than producers employing conventional extraction methods. The extractX unit was specially configured for the Thailand facility, has already been installed in the Chiang Mai facility and is expected to become operational in mid-October.
Initial production will be focussed on the production of CBD distillate/isolate from hemp supplied by locally-contracted hemp farms. Current prices for CBD distillate/isolate range from US$8,000 to US$12,000 per kg. Salus Thailand already has letters of intent for the purchase of over 6,000 kg of CBD distillate/isolate from several Thailand-based cosmetic, food and beverage manufacturers.
Construction of an ISO 17025 compliant testing and calibration facility is expected to be completed in mid-November which will allow Salus Thailand to facilitate and accelerate testing and validation procedures mandated by the Thai FDA.
Planning is currently underway for the erection of a 12,000 square foot indoor cultivation building, deploying a 3-tier hydroponic growing system, capable of producing 10,000 kgs of cannabis biomass. This will be used for the processing of THC-based medical-grade cannabis distillate which will be sold to Thai public and private hospitals and clinics expected to begin in Q2 of 2022.
MPXI’s entrance into the Southeast Asia market has further diversified its opportunity to participate in global cannabis markets, complementing its European projects in Switzerland and Malta, cultivation in South Africa, distribution plans in Australia and its current and growing operations in Canada.
Cannabis in Thailand
Cannabis has been used extensively in Thailand as part of “Traditional Thai Medicine” for hundreds of years. Now with the support of the Thai Government, its use is being expanded into the public hospital system. Cannabis and cannabis derivatives must be prescribed by a medical practitioner and delivered through a hospital or medical clinic. There is concern that such products must be grown and processed in accordance with Thai GMP standards and that adequate supply be available to support the rapidly increasing demand for cannabis oils, topicals etc. With its population of almost 70 million and its history of using cannabinoid-based medicines, Thailand could quickly become one of the world’s largest medical cannabis markets.
“Salus Thailand and SIM management have consulted extensively with our University partners at Rajamangala University of Technology, the Thai FDA, the federal Government Pharmaceutical Office (the “GPO”), government representatives, hospital directors, clinics and others within Thailand to ensure that our proposed operations will be able to meet the expectations of all parties while remaining sensitive to the culture, regulatory environment and expectations of the University, the Thai government and the Thai medical community,” commented W. Scott Boyes, Chairman, President and CEO of MPXI. We believe that we are the first North American medical cannabis company to enter the Thai market and are delighted to be able to contribute to the rapid growth of the cannabis industry in Thailand and, with exports now permitted by the Thai government, potentially, expand sales to the ASEAN community of nations and the entire Southeast Asia region. We see the emerging markets in Europe and Asia to be formidable with each one potentially larger than the projected size of that in North America and are actively establishing a foothold in both; a strategy that will add near-term value to the Corporation and its shareholders.”
Tanadee Pantumkomon, COO of Salus Thailand, observed, “Our focus is on producing high quality products for the domestic market, and possibly future export to the ASEAN region and beyond. Initially, however, there is a significant and growing demand for such products within Thailand and we expect this growth to continue to accelerate. MPXI, SIM and Salus Thailand have assembled a strong management and advisory team that will collectively contribute to the success of this enterprise.” (See MPXI’s Press Release dated June 3, 2021 MPX International's Thailand Venture Announces Board and Advisory Appointments - MPX International Corporation (MPXI).
Financing
MPXI has been issued with 10 million SIM Units (as defined below) with each SIM Unit representing one SIM Share (as defined below) and one half of one SIM Warrant (as defined below) as described in more detail below.
SIM has now raised US$10 million (C$12,748,000) through the issue of 10 million new SIM Units at US$1.00 per SIM Unit which represents a 50% interest in the share capital of SIM (including the SIM Shares issued to MPXI as described above).
Consequently, there are now 20 million SIM Units issued, with MPXI holding a 50% stake in SIM.
As set forth above, SIM completed a private placement financing (the “SIM Financing”) of US$10 million (C$12,748,000) of units (the “SIM Units”) of SIM at a price of US$1.00 (C$1.27) per SIM Unit from investors primarily in Thailand, Europe and Canada. SIM is using the proceeds to fully fund the first two phases of the development of a Thai GMP compliant research, cultivation and processing facility in Thailand’s Chiang Mai province (the “Thai Facility”). Each SIM Unit in the SIM Financing consists of one (1) common share (a “SIM Share”) in the capital of SIM and one-half of one common share purchase warrant (a “Warrant”). Each Warrant entitles the holder thereof to acquire one SIM Share at a price of US$1.50 (C$1.91) for a period of twenty-four (24) months from the date of issue, subject to adjustment and acceleration in certain circumstances.
SIM may pay a cash placement fee equal to not more than 5% of the aggregate gross proceeds paid by each subscriber of SIM Units that are invested in the SIM Financing.
In addition, SIM may issue that number of common share purchase warrants (the “Compensation Warrants”) equal to not more than 2.5% of the aggregate number of SIM Shares issued as part of the SIM Units and underlying the Warrants as if exercised as of the closing date. The Compensation Warrants shall be exercisable at the Exercise Price for a period of two (2) years from the applicable closing date of the SIM Financing.
The cash placement fee will only be payable and the Compensation Warrants will only be issuable to third parties that have been formally engaged in order in order to assist with fund raising efforts.
About MPX International Corporation
MPX International Corporation is a multinational diversified cannabis company focused on developing and operating assets across the international cannabis industry with an emphasis on cultivating, manufacturing and marketing products which include cannabinoids as their primary active ingredient. With current operations spanning five continents in Canada, Switzerland, South Africa, Malta, Australia and Thailand as well as evolving partnership and distribution opportunities in other jurisdictions, MPXI continues to position itself as an emergent global participant in the cannabis industry.
SIM
SIM is a private Ontario corporation and a partially-owned subsidiary of MPX International Corporation along with a group of private shareholders. SIM was incorporated to provide design, planning, financing, training, and on-going operational support to cannabis initiatives, partnerships, and joint ventures in Southeast Asia. Its revenue is generated primarily from fees charged for the supply of management services.
Salus Thailand
Salus Thailand is a Thai company involved in the cultivation, processing and distribution of high-quality medical cannabis products to the medical community in Thailand, operating for the benefit of the health and well-being of the Thai people.
Cautionary Statement Regarding Forward-Looking Information
This news release includes certain “forward-looking statements” under applicable Canadian securities legislation that are not historical facts. Forward-looking statements involve risks, uncertainties, and other factors that could cause actual results, performance, prospects, and opportunities to differ materially from those expressed or implied by such forward-looking statements. Forward-looking statements in this news release include, but are not limited to, MPX International’s objectives and intentions. Forward-looking statements are necessarily based on a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties and other factors which may cause actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: general business, economic and social uncertainties; litigation, legislative, environmental and other judicial, regulatory, political and competitive developments; delay or failure to receive board, shareholder or regulatory approvals; the Corporation’s ability to effectively deal with the restrictions, limitations and health issues presented by the COVID-19 pandemic; future cannabis pricing; cannabis cultivation yields; costs of inputs; its ability to market products successfully to its anticipated clients; reliance on key personnel and contracted relationships with third parties; the regulatory environment in Australia, Canada, Malta, South Africa, Switzerland and other international jurisdictions; the ability to complete any future potential transactions and the terms and conditions thereof; the application of federal, state, provincial, county and municipal laws; and the impact of increasing competition; those additional risks set out in MPX International’s public documents filed on SEDAR at www.sedar.com, including its audited annual consolidated financial statements for the financial years ended September 30, 2020 and 2019, and the corresponding management’s discussion and analysis; and other matters discussed in this news release. Although MPX International believes that the assumptions and factors used in preparing the forward-looking statements are reasonable, undue reliance should not be placed on these statements, which only apply as of the date of this news release, and no assurance can be given that such events will occur in the disclosed time frames or at all. Except where required by law, MPX International disclaims any intention or obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.
For further information about MPXI, please contact:
MPX International Corporation
W. Scott Boyes, Chairman, President and CEO
T: +1-416-840-4703
info@mpxinternationalcorp.com
or visit one our websites:
Salus International Management Ltd.
Tanadee Pantumkomon
tanadee@salusinternational.com
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