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Kelowna, BC – February 28, 2019 – GTEC Holdings Ltd. (TSXV: GTEC) (OTCQB: GGTTF) (FRA: 1BUP) (“GTEC” or the “Company”) is pleased to announce that it has closed the first tranche of its previously announced upsized private placement offering led by Sprott Capital Partners LP (the “Agents”) pursuant to which the Company issued 11,126,753 units of the Company (each a “Unit” and collectively, the “Units”) at a price of $0.55 per Unit for gross proceeds of $6,119,714.15. The Company intends to raise up to $8,000,000 pursuant to both closings of this offering (the “Offering”). The Agents have the option to increase the size of the Offering by up to 25% (the “Agents’ Option”) for additional gross proceeds of up to $2,000,000, which Agents’ Option is exercisable, in whole or in part, at any time up to 48 hours prior to the final closing date of the Offering.

“We are extremely pleased with the growing demand from investors and the results of this financing” said Norton Singhavon, Founder, Chairman & CEO of GTEC. “With the proceeds of this financing, we are fully funded to execute on our 2019 plans to increase our capacity to 14,000kg this year. We are also excited to take on new shareholders offering long-term institutional support as we continue to execute on our vision to produce, market and distribute ultra-premium cannabis and its derivatives to Canadian consumers.”

Each Unit issuable under the Offering consists of one common share of the Company (the “Common Shares”) and one-half of one common share purchase warrant (each whole common share purchase warrant, a “Warrant” and collectively, the “Warrants”), with each Warrant exercisable at $0.90 for a period of 24 months from the date of issuance. The Warrants are subject to an acceleration clause that allows the Company to accelerate the expiry date of the Warrants to 30-days from delivery of such notice, in the event that the volume weighted average price of the Common Shares on the TSX Venture Exchange (the “Exchange”) equals or exceeds $1.50 for 20 consecutive trading days.

The Company has agreed to pay the Agents, other than in respect of certain purchases, (i) a cash commission equal to 6% of the gross proceeds of the Offering and (ii) broker warrants (each a “Broker Warrant”) in a number equal to 6% of the number of Units sold under the Offering. Each Broker Warrant is exercisable to acquire one Unit at $0.55 for a period of two years from the closing date of the Offering.

The net proceeds of the Offering will be used for general corporate and working capital purposes. The second tranche close of the Offering is expected to occur on or about March 19, 2019 (the “Closing Date”) and is subject to receipt of all necessary regulatory approvals, including the approval of the Exchange.

All securities issued pursuant to the Offering will be subject to a statutory hold period lasting four months and one day following the closing date of each tranche.

Insiders of the Company subscribed for an aggregate of 873,869 Units. Norton Singhavon, Co-Founder, President and Chief Executive Officer of the Company subscribed for an aggregate of 280,869 Units (91,741 Units were subscribed through a holding company owned by Mr. Singhavon) and Michael Blady, the Co-Founder and Vice-President of the Company subscribed for 500,000 Units. In addition, David Lynn, the Chief Operating Officer and Aaron Dow, a director of the Company subscribed for 20,000 and 73,000 Units respectively. Such participation is considered a related party transaction within the meaning of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”). The related party transaction is exempt from minority approval, information circular, and formal valuation requirements pursuant to the exemptions contained in Sections 5.7(a) and 5.5(a) of MI 61-101, as neither the fair market value of the gross securities issued under the Offering nor the consideration paid by the insiders exceed 25% of the Company’s market capitalization.

 

About GTEC

GTEC Holdings is a specialized cannabis company dedicated to cultivating ultra-premium quality cannabis in purpose-built indoor facilities.  The company is vertically integrated across all major sectors of the Canadian cannabis industry and is currently licensed by Health Canada for Standard Cultivation, Standard Processing and Analytical testing. The management team is comprised of a diverse skill set sourced from leading global food & beverage and premium alcohol companies. GTEC has completed three cultivation facilities and is currently cultivating and selling cannabis.  The Company has two additional facilities coming on stream in the latter half of 2019, which will increase annual capacity from 4,000 kg to 14,000 kg. GTEC’s retail division is pursuing licensing for over 35 recreational cannabis stores across Western Canada. GTEC’s ultra-premium indoor flower will be marketed and sold under its flagship trademarked brands; BLK MKT ™, Tenzo ™, GreenTec ™, Cognōscente ™, FN ™, and Treehugger ™. The Company is actively pursuing sales and distribution opportunities across all major business channels: medical, recreational, B2B and export. GTEC is a publicly traded corporation, listed on the TSX Venture Exchange, OTCQB Venture Market and Frankfurt Stock Exchange. The Company is headquartered in Kelowna, British Columbia.
To view more about the company or to request our most recent corporate presentation, please visit our website at www.gtec.co

On behalf of the board,

Norton Singhavon
Founder, Chairman & CEO
ns@gtec.co

Michael Blady
Co-Founder & Vice President
mb@gtec.co

For additional information please contact:
GTEC Holdings Ltd.
1-800-351-6358
contact@gtec.co

 

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

The securities of the Company have not been and will not be registered under the United States Securities Act of 1933, as amended and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirement. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

 

 

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION: This news release includes certain “forward-looking statements” under applicable Canadian securities legislation. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the 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, competitive, political and social uncertainties; delay or failure to receive board, shareholder or regulatory approvals, where applicable and the state of the capital markets. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.