(TheNewswire)
Vancouver, B.C. / TheNewswire / December 17, 2018 –
HERITAGE CANNABIS HOLDINGS CORPORATION (CSE: CANN) (“Heritage” or “Company”) is pleased to announce that further to its press release dated December 7, 2018, the
Company has completed the acquisition (the “Acquisition”) of all of the issued and
outstanding shares of Purefarma Solutions Inc. (“Purefarma”), a private British
Columbia company, pursuant to the terms of definitive agreements dated December 7, 2018 (together, the “Definitive Agreement”).
Pursuant to the Definitive Agreement and in consideration for the Acquisition, as of the date hereof
Heritage issued an aggregate of 33,333,333 common shares of the Company (the “Payment
Shares”) at a deemed price of $0.195 per Payment Share.
In addition, pursuant to the terms of the Definitive Agreement, Heritage will issue additional
common shares of the Company (the “Earn Out Shares”) to certain former shareholders
of Purefarma subject to Purefarma obtaining certain cumulative gross margin targets over the next four calendar years (beginning in
2019). Based on these gross margin targets, the company will calculate the amount of Earn Out Shares owed on an annual basis, being
awarded within 120 days of the year end, in conjunction with the annual audit being completed. If fully achieved, a maximum of
21,100,000 Earn Out Shares will be issued, which would require Purefarma to earn $100 million in cumulative gross margin by
December 31, 2023.
Finally, pursuant to the Definitive Agreement and in exchange for a future royalty stream over the
next four years (beginning in 2019), Heritage will pay an annual royalty based on that fiscal year’s gross margin. The royalty is
set at 12% for the first year, diminishing to 9%, 6% and 3% each year following.
In connection with the Acquisition, the Company also issued 1,200,000 common shares to an arm’s
length third party at a deemed price of $0.195 per common share as an advisory fee. These shares are subject to a statutory hold
period ending on April 15, 2019.
About Purefarma Solutions Inc.
Purefarma, based in Kelowna, BC, brings an experienced extraction team, which is a key aspect to the
overall growth strategy for Heritage. The Purefarma team will expand its premium CBD and THC oil offerings within the PhyeinMed and
CannaCure Licensed Producer infrastructure, as both LPs intend to obtain amended licenses to include extraction in the near future.
Purefarma has an existing supply agreement for 1,600 acres of hemp available through partner farmers, which has been harvested this
season and available for the 2019 consumer market.
About Heritage Cannabis Holdings Corp.
The Company is focused on becoming a vertically integrated cannabis provider that currently has two
Health Canada approved licensed producers, through its subsidiaries PhyeinMed Inc. and CannaCure Corp. both regulated under the
Cannabis Act Regulations, and its subsidiary Purefarma Solutions, which will be providing extraction services within the Company.
Heritage is focused on advancing its scale and technology footprint to compete both domestically and
internationally.
ON BEHALF OF THE BOARD OF DIRECTORS OF HERITAGE CANNABIS HOLDINGS CORPORATION
“Clint Sharples”
Clint Sharples
Chairman and interim CEO
For more information contact:
Clint Sharples
Tel: 416-705-8529
info@heritagecann.com
The Canadian Stock Exchange does not accept responsibility for the adequacy or accuracy of this
release.
This news release contains forward-looking information, which involves known and unknown risks, uncertainties
and other factors that may cause actual events to differ materially from current
expectation. Important factors - including the availability of funds, the results of financing efforts, the results of exploration
activities -- that could cause actual results to differ materially from the Company's expectations are disclosed in the Company's
documents filed from time to time on SEDAR (see www.sedar.com). Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of this press release. The company disclaims any intention or
obligation, except to the extent required by law, to update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise.
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