Announces Satisfaction of Tumbleweed Milestone GTEC is pleased to announce that, with the aim to mitigate the dilution to shareholders resulting from the issuance of shares in connection with certain milestone payments, it has entered into an amending agreement on February 4, 2020 with the vendors of Tumbleweed Farms Corp. (“Tumbleweed”) amending certain terms and conditions of the definitive share purchase agreement, dated August 12, 2017, as amended (the “Tumbleweed SPA” and together with the Amending Agreement, the “Agreement”).
Among other things, the Amending Agreement raised the floor price of the Common Shares to be issued in connection with the first four harvests to a deemed price per share equal to the greater of (A) the 5-day volume-weighted average trading price of the Common Shares ending on the day preceding this press release and (B) $0.18. The Amending Agreement also reduced the fifth harvest, which is the final milestone payment, from $300,000 to $150,000 and amended the milestone to provide that upon the Company’s fifth harvest having reached full flower, the Company shall issue $150,000 worth of common shares of GTEC (the “Common Shares”) at a deemed price per share equal to the greater of (A) the 5-day volume-weighted average trading price of the Common Shares ending on the day preceding this press release and (B) $0.18.
As such, in connection with the Agreement, the Company intends to issue an aggregate of $1,350,000 of Common Shares in satisfaction of the above-mentioned milestone payments. Accordingly, the Company will issue 7,500,000 Common Shares to the arms-length vendors of Tumbleweed (the “Tumbleweed Vendors”), at a deemed price of $0.18 per share. The issuance of these shares will be the final share issuances relating to milestone payments for the Tumbleweed acquisition and there will be no further payments to the Tumbleweed Vendors, whether in cash or shares.
The Amending Agreement and the issuance of Common Shares pursuant to the Agreement are subject to final approval of the TSX Venture Exchange (“TSXV”). The Common Shares will be subject to a statutory hold period of four months and one day from the date of issuance thereof. Fifty percent of the Common Shares shall be subject to a 6-month escrow.
The Company is currently taking steps to further mitigate dilution to shareholders by renegotiating future milestone payments for previously reported acquisitions and by eliminating or reducing certain related party obligations.