MPX Signs Definitive Agreement to Expand Its Footprint in Arizona

 Melting Point Extractions

Melting Point Extractions

TORONTO, March 05, 2018 (GLOBE NEWSWIRE) — MPX Bioceutical Corporation (“MPX” or the “Company”) (CSE:MPX) (OTC:MPXEF) is pleased to announce that the Company, through its wholly-owned U.S. subsidiary CGX Life Sciences Inc. (“CGX”), has entered into a definitive limited liability membership interest and asset purchase agreement, dated and effective March 1, 2018 to, acquire 100% of the membership units of ABACA, LLC (“ABACA”), Ambary, LLC, Tarmac Manufacturing, LLC (“Tarmac”) and Tower Management Holdings, LLC.  ABACA is a fully-integrated medical marijuana business licensed under the provisions of the Arizona Medical Marijuana Act, A.R.S. Title 36, Section 28.1 (the “AMMA”) operating a dispensary under the trade name “The Holistic Center” in Phoenix, Arizona as well as certain real estate interests located at 21035 North Cave Creek Road, Phoenix, Arizona.

Closing of the transaction will proceed in due course according to the rules and policies of the Canadian Securities Exchange.

The Company will hold an investor call at 10:00 AM Eastern Standard Time on Thursday, March 8th to discuss this acquisition and MPX’s third quarter results. Conference call details will be announced in a press release to follow.

“This acquisition represents a solid addition to our industry and presence in Arizona, a State that offers MPX one of the best-regulated, yet industry-supportive markets in the country,” said W. Scott Boyes, MPX’s Chairman, President and CEO. “The entities being acquired have recorded trailing 12-month revenues of US$15 million and EBITDA of approximately US$3.5 million and its results will be immediately accretive to MPX earnings. Furthermore, the acquired companies are well-managed and will allow both parties to share best practises and benefit from the ability to share purchase economies. With the pending opening of our Apache Junction dispensary, the addition of the Holistic Center, will bring the number of dispensaries managed by MPX in the greater Phoenix market to four, will more than double our cultivation capacity and will materially complement our management team in the State. Adding to our critical mass of operations, this acquisition will add to MPX’s ability to benefit from purchasing economies, spread the administrative overhead costs over a larger revenue base and provide cash flows to support additional growth.”

“The Holistic Center began operations in October 2013 and has consistently been ranked as one of the top ten dispensaries in the State of Arizona,” said Bill Abbott, one of the founding partners.” All of our employees are extremely thrilled to be part of this new alignment with MPX and we look forward to adding value to the Company.”

Mr. Abbott will continue to oversee the operation of the acquired companies as Senior Vice President.

The Company is paying an aggregate of US$15,000,000 comprised of the following consideration:

  1. US$12,000,000 in cash;
  2. US$3,000,000 satisfied through the issuance of 5,704,479 common shares in the capital of MPX issued at a price of CAD$0.67. The Company determined the number of common shares issuable to the sellers by deeming the United States dollar / Canadian dollar currency conversion rate applicable for the issuance of Common Shares as 1.2740 Canadian dollars for each US$1.00 resulting in approximately CAD$3,822,000 for the US$3,000,000 portion of the purchase price to be satisfied by the issuance of common shares in the capital of MPX; and
  3. The issuance of 4,700,000 common share purchase warrants each exercisable into one (1) common share at an exercise price of CAD$0.67 for a period of five (5) years from the date of issuance.

In addition, CGX has a contingent liability of up to US$6,000,000 payable to the sellers solely out of the proceeds of the revenue generated from the contract between Tarmac and Timeless Select, LLC which is in the business of developing, producing and manufacturing essential oils and selling vaporizers and other marijuana products on behalf of ABACA.

 

Victor Madril