Vext Science, Inc. (“VEXT” or the “Company“) (OTCQX: VEXTF; CSE: VEXT) today announced the closing of an acquisition in the State of Arizona, the commencement of production in its joint venture in Oklahoma and provides a general reporting update.
Acquisition of 100% of RDF Management Company, LLC and Intellectual Property
Effective on April 6, 2020, VEXT closed the acquisition of an Arizona based company to provide exclusive turn-key services for the management, administration and operation of Organica Patient Group, Inc. (“Organica”), an Arizona not for profit corporation, which was issued and holds in good standing, a Medical Marijuana Dispensary Registration Certificate, by the Arizona Department of Health Services in the State of Arizona (collectively the “Transaction“). Such services includes but is not limited to the management, administration and operation of its medical marijuana dispensary, cultivation, extraction, kitchen and infusion operations.
Organica has been operational in the Arizona market since 2013, with its retail dispensary located and operational in Chino Valley, Arizona and its offsite cultivation facility located in and operational in Prescott Valley, Arizona. Organica cultivates and produces medical marijuana and medical marijuana product which is sold and distributed on a retail and wholesale basis in State of Arizona.
Consideration for the Transaction, included the following:
- Issuance of 67,000 Class A common shares of VEXT (the “Multiple Voting Shares“), each Multiple Voting Share carrying one hundred votes and subject to the appropriate terms and restrictions. Such Multiple Voting Shares: (i) do not trade on the Canadian Securities Exchange (the “CSE“), (ii) are subject to a Canadian hold period of four months and a day from the date of issuance, (iii) are subject to a US securities law legend and (iv) are subject to a coattail agreement designed to prevent transactions that otherwise would deprive holders of the Company’s subordinate Common Shares (which trade on the CSE) of rights applicable to take-over bid legislation to which they would have been entitled to if the Multiple Voting Shares had been Common Shares; and
- Issuance of a promissory note by VEXT in the aggregate sum of USD$5.5mm and along with other standard closing adjustments.
Commencement of Operations in Oklahoma
Additionally, the Company announced that its joint venture in Oklahoma has commenced production operations and is producing cannabis products for sale and distribution to the Oklahoma cannabis market as of the date of this news release. The Company’s joint venture with Texoma Processing and Extraction, LLC, an Oklahoma limited liability company, located in Madill, Oklahoma (“Texoma“) has received a Certificate of Operation from the state of Oklahomaand includes a licensed cannabis processing, extraction and production operation (collectively the “Processing Facility“), in addition to a licensed outdoor cannabis cultivation facility. The new, state-of-the-art Processing Facility is expected to commence operations, including the production of VEXT’s Vapen branded cannabis concentrates, edibles and extraction products, to be distributed to dispensaries in the State of Oklahoma in late April 2020.
The Company also entered into a nonbinding Letter of Intent with Appalachian Pharms Processing LLC (“Appalachian Pharms“), an Ohio limited liability company, located in Jackson, Ohio. Appalachian Pharms’ operations will commence in April, and subject to execution of additional contractual agreements and the approval of the Ohio Department of Commerce, the Vapen brand of products will be produced and distributed to the Ohio cannabis market.
Eric Offenberger, Chief Executive Officer of VEXT commented: “We are executing on our expansion strategy on multiple fronts. First, we have successfully expanded our presence in Arizona, our home market and the third largest medical only cannabis market in the U.S. With the closing of the Arizona Transaction and the associated rights to provide services to Organica’s vertically integrated cannabis operations, we have increased our presence in this fast-growing market and improving our access to quality source materials. Second, we have also expanded our presence in two new high-growth markets, Oklahoma and Ohio (subject to regulatory approval). As such, we are on track to have production and or sales of Vapen Branded Product in five (5) additional states, three (3) of which are joint ventures, with the goal of having seven (7) total joint venture and/or investment partnerships closed and operational by the end of calendar year 2020.”
As both medical and economic concerns have increased over the past two weeks, regarding the spreading and impact of the novel coronavirus known as “COVID-19”, the Company wants to assure its shareholders that it is taking all the necessary steps to protect employees and customers, ensuring full compliance with established guidelines. The safety of our employees and customers have been a primary focus.
About Vext Science, Inc.
Vext Science, Inc. is a US-based Cannabis THC and Hemp cannabinoid products company manufacturing THC cartridges, concentrates, edibles and accessories under the Vapen™ Brand, and Hemp based products under the Pure Touch Botanicals brand as well as the Vapen CBD brand. Based in Arizona, Vext Science, Inc. has one of the leading THC concentrates, edibles, and distillate cartridge brands sold in most of the state’s 100+ dispensaries. Herbal Wellness Center is one of Arizona’s leading dispensaries and we execute all aspects of the cultivation, extraction, edibles infusion and manufacturing processes which insures a product of the highest quality and purity. Product quality and purity are core to our marketing strategy. Vext Science, Inc. is executing its business growth by leveraging experience and expertise in extractions, product manufacturing, and marketing to expand in the U.S. and internationally through revenue and profit-sharing joint venture partnerships. For more information visit our website at www.VextScience.com.
COVID-19 Risk Factor
VEXT may be impacted by business interruptions resulting from pandemics and public health emergencies, including those related to COVID-19. An outbreak of infectious disease, a pandemic, or a similar public health threat, such as the recent outbreak of COVID-19, or a fear of any of the foregoing, could adversely impact VEXT by causing operating, manufacturing, supply chain, and project development delays and disruptions, labor shortages, travel, and shipping disruption and shutdowns (including as a result of government regulation and prevention measures). It is unknown whether and how VEXT may be affected if such a pandemic persists for an extended period of time, including as a result of the waiver of regulatory requirements or the implementation of emergency regulations to which VEXT is subject. Although VEXT has been deemed essential and/or has been permitted to continue operating its facilities in the states in which it operates during the pendency of the COVID-19 pandemic, there is no assurance that the Company’s operations will continue to be deemed essential and/or will continue to be permitted to operate. VEXT may incur expenses or delays relating to such events outside of its control, which could have a material adverse impact on its business, operating results, financial condition and the trading price of the Company’s Common Shares.
Forward Looking Statements
Statements in this news release that are forward-looking statements are subject to various risks and uncertainties concerning the specific factors disclosed here and elsewhere in VEXT’s periodic filings with Canadian securities regulators. When used in this news release, words such as “will, could, plan, estimate, expect, intend, may, potential, believe, should,” and similar expressions, are forward- looking statements.
Forward-looking statements may include, without limitation, statements related COVID-19, to future developments and the business and operations of VEXT, the proposed operational timeline for the joint venture with Texoma and the Processing Facility, and revenue and profit contribution for VEXT’s operations.
Although VEXT has attempted to identify important factors that could cause actual results, performance or achievements to differ materially from those contained in the forward-looking statements, there can be other factors that cause results, performance or achievements not to be as anticipated, estimated or intended, including, but not limited to: dependence on obtaining regulatory approvals; being engaged in activities currently considered illegal under U.S. Federal laws; change in laws; reliance on management; requirements for additional financing; competition; hindered market growth and state adoption due to inconsistent public opinion and perception of the medical-use and adult-use marijuana industry and; regulatory or political change.
There can be no assurance that such information will prove to be accurate or that management’s expectations or estimates of future developments, circumstances or results will materialize. Because of these risks and uncertainties, the results or events predicted in these forward-looking statements may differ materially from actual results or events.
Accordingly, readers should not place undue reliance on forward-looking statements. The forward- looking statements in this news release are made as of the date of this release. VEXT disclaims any intention or obligation to update or revise such information, except as required by applicable law, and VEXT does not assume any liability for disclosure relating to any other company mentioned herein.
The Canadian Securities Exchange has not reviewed, approved or disapproved the content of this news release.
Chief Executive Officer