VANCOUVER, June 1, 2017 /CNW/ - Standard
Graphite Corp. (TSXV: SGH) Standard Graphite Corporation
(the "Company" or "Standard") is pleased to announce
that it has entered into a letter of intent (the "LOI") to
acquire Marapharm Inc. ("Marapharm"), a licensed producer
(LP) applicant under Health Canada's "Access to Cannabis for
Medical Purposes Regulations" (ACMPR).
Private Placement
The Company also announces that it is undertaking a
non-brokering private placement to raise $1,000,000 of units at price of $0.15 per unit. Each unit will consist of one
common share of the Company and one-half of one common share
purchase warrant. Each full warrant will be exercisable into one
common share of the Company at $0.25
per share for 18 months. Proceeds are to be used for general
corporate purposes and the evaluation of opportunities in the
cannabis market, including the proposed acquisition of Marapharm.
All securities issued in connection with the private placement will
be subject to a 4 month hold period. Closing of the placement is
subject to TSX Venture Exchange acceptance.
About Marapharm
Marapharm, which is an advanced stage LP applicant under the
ACMPR, began assembling people and the proposed build out and
property, located in Kelowna, British
Columbia, for its LP application in 2014. The proposed 11
acre parcel in Kelowna, British
Columbia was confirmed by the Provincial government to be
legally zoned as proper use for medical marijuana production. The
property can accommodate a two story, 40,000-square-foot facility,
with the requisite parking area and green space. The construction
contract is currently being prepared to build a Phase I,
20,000-square-foot production facility with an additional 20,000
square feet of additional space planned for year two. It is
anticipated that the production facility will be operational six
months following receipt of the building permits. Subject to
completion of the acquisition and requisite financing, the Company
will cause Marapharm to submit such permit applications after
closing of the acquisition.
Acquisition Terms
Pursuant to the terms of the LOI and as consideration for the
acquisition of Marapharm, Standard will issue to the sole
shareholder of Marapharm, namely Marapharm Ventures Inc., the
following:
- 35,100,000 common shares of Standard (the "Standard
Shares") in escrow, subject to release therefrom as follows:
10% on closing and thereafter the balance over 36 months; and
- a $2,500,000 convertible note of
Standard, such note to be, at Standard's option, either: (i) paid
in cash on the twentieth trading day ("Trigger Date") after
the public dissemination of a news release announcing the receipt
of a cannabis LP under the ACMPR; or (ii) converted into common
shares of Standard valued using the 20 day volume-weighted average
trading price of Standard shares on the Trigger Date.
The proposed acquisition is subject to customary conditions,
including satisfaction with diligence investigations, entering into
a definitive agreement, necessary corporate approvals and
applicable exchange acceptance. A portion of the proceeds of the
private placement is intended to be used in furtherance of the
Company's diligence investigations and negotiation of a definitive
agreement.
The Cannabis Market
According to a recent report from the consulting firm Deloitte,
the Canadian retail cannabis market is projected to be between
$4.9 billion and $8.7 billion
annually. Deloitte estimates that satisfying the recreational
cannabis market will mean producing 600,000 kilograms of marijuana
annually - far more than the existing licensed producers under the
ACMPR grow for medicinal purposes.
"Chris Bogart"
President & CEO
The TSX Venture Exchange has in no way passed upon the
merits of the proposed transaction and has neither approved
nor disapproved the contents of this press release.
Forward-looking information
This news release contains forward-looking information
relating to the Company's proposed acquisition, private placement
and other statements that are not historical facts. Forward-looking
information relates to management's future outlook and anticipated
events or results, and include statements or information regarding
the future plans or prospects of the Company. Although management
of the Company has attempted to identify important factors that
could cause actual results to differ materially from those
contained in forward looking information, there may be
other factors that cause results not to be as anticipated,
estimated or intended.
Forward looking-information is subject to certain factors,
including risks and uncertainties that could cause actual results
to differ materially from what is currently expected. These factors
include risks and uncertainties associated with the results of
diligence investigations, developments in the cannabis sector and
the mining sector, exploration results, delays resulting from or
inability to obtain required regulatory approvals and ability to
access sufficient capital from internal and external sources,
reliance on key personnel, regulatory risks and
delays and other risks and uncertainties discussed in
the management discussion and analysis section of the Company's
interim and most recent annual financial statement or other reports
and filings made with the applicable Canadian securities
regulators. There can be no assurance that such information 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 information.
The forward-looking statements contained in this news release
are made as of the date of this news release. Except as required by
law, the Company disclaims any intention and assumes no obligation
to update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise.
Additionally, the Company undertakes no obligation to comment on
the expectations of, or statements made by, third parties in
respect of the matters discussed above. There can be no
assurance that the proposed acquisition will be completed as
proposed or at all.
SOURCE Standard Graphite Corporation