MPX International enters into Asset Purchase Agreement to Expand into the Alberta Retail Cannabis Market under the Retail Banner 'Strain Rec'
TORONTO, ONTARIO – TheNewswire - October 14, 2020 – MPX International Corporation (“MPX International”, “MPXI” or the “Corporation”) (CSE:MPXI); (CNSX:MPXI.CN); (OTC:MPXOF) is pleased to announce that its wholly-owned subsidiary, MPXI Alberta Corporation (“MPXI Alberta”), has entered into an asset purchase agreement (the “Agreement”) dated July 31, 2020 pursuant to which MPXI Alberta will acquire substantially all of the assets of Blaze 420 Today Inc. (“Blaze 420”), including the leasehold interests to three (3) locations across Alberta which each have received development permits to operate as retail cannabis stores (the “Assets”).
The Assets being acquired will enable MPXI to establish a cannabis retail platform in Alberta and open up to three (3) retail cannabis stores in the Edmonton, Alberta area, subject to the final approval from Alberta Gaming, Liquor & Cannabis ( “AGLC”), upon meeting all licensing requirements.
“The acquisition of the Blaze 420 Assets is another step forward in achieving our overall retail strategy in the Province of Alberta,” noted Michael Arnkvarn, Chief Operating Officer, Canada of MPXI. Canveda Inc., MPXI Alberta’s affiliate, recently entered into an agreement with AGLC to supply non-medical cannabis to retail outlets in the Province of Alberta, including AlbertaCannabis.org. In addition to the supply agreement with AGLC, opening our own retail storefronts in Alberta is expected to give MPXI the ability to showcase its branded products to Canadian consumers.”
Pursuant to the terms of the Agreement, MPXI Alberta will acquire the Assets for a total purchase price of up to $749,000.00 comprised of the following consideration and based upon the achievement of certain milestones as set out below:
(i)up to $283,333.00 as of the date of the official opening of the first (1st) retail store (“Milestone 1”) satisfied as follows: (a) $83,333.00 in cash; (b) $100,000.00 of common shares in the capital of MPXI (the “MPXI Shares”) to be issued at a fixed price of $0.25 per MPXI Share; and (c) $100,000.00 through the issuance of a promissory note (“Note 1”), less any outstanding principal amount and any accrued and unpaid interest owing by Blaze 420 to MPXI as of the Closing Date (as defined in the Agreement) pursuant to the promissory note between Blaze 420 and the Corporation dated June 27, 2019.
(ii)up to $183,333.00 as of the date of the official opening of the second (2nd) retail store (“Milestone 2”) satisfied as follows: (a) $83,333.00 in cash; and (b) $100,000.00 through the through the issuance of a promissory note (“Note 2”).
(iii)up to $283,333.00 as of the date of the official opening of the third (3rd) retail store (“Milestone 3”) satisfied as follows: (a) $83,333.00 in cash; (b) $100,000.00 of MPXI Shares to be issued at a price per share equal to the ten (10) day volume weighted average price of the MPXI Shares on the Canadian Securities Exchange; and (c) $100,000.00 through the through the issuance of a promissory note (“Note 3” together with Note 1 and Note 2, the “Notes”).
The Notes will be paid in quarterly increments with each payment equal to 20% of the Free Cash Flow generated in the previous quarter by the specific retail store operated by MPXI Alberta that the Note was issued in connection with. “Free Cash Flow” means, the cash that is produced after MPXI Alberta pays for all its operating expenses (including creditor payments, sales taxes, corporate taxes and interest payments) and provides for accrued but unpaid salaries, payroll taxes, sales taxes, corporate taxes and operating expenses and overdue creditor accounts. For the avoidance of doubt, the Free Cash Flow calculation for purposes of the Agreement will exclude: (A) the introduction of new capital; (B) any capital expenditure; and (C) proceeds from the disposal of any assets.
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 four continents in Canada, Switzerland, South Africa, Malta and Australia 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.
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 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, 2019 and 2018, its unaudited interim condensed consolidated financial statements for the three and six months ended March 31, 2020 and the corresponding annual 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, please contact:
MPX International Corporation
W. Scott Boyes, Chairman, President and CEO
NOT FOR DISTRIBUTION TO NEWSWIRE SERVICES IN THE UNITED STATES OR FOR DISSEMINATION IN THE UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF UNITED STATES SECURITIES LAWS.