Pursuant to a share exchange agreement dated December 7, 2016, as amended, the Company acquired from Phyto UK all of the Purchased Shares. In consideration for the Purchased Shares, Phyto UK received $33,180,997 payable by way of a combination of $2,000,000 in cash and issuance of 41,574,662 Common Shares at $0.75 per Common Share (the "Phyto UK Share Consideration"). In consideration for the assumption by Harvest of certain intercorporate debts of United Greeneries and Satipharm owed to MMJ, MMJ received $8,819,003 payable to MMJ by way of the issuance 11,758,671 Common Shares (the "MMJ Share Consideration", and together with the Phyto UK Share Consideration, the "Share Consideration").
As a result of the acquisition of the Share Consideration, MMJ beneficially owns approximately 59.9% of the issued and outstanding Common Shares after giving effect to the Offering and the Acquisition, with approximately 13.2% held directly as a result of the MMJ Share Consideration, and approximately 46.7% held beneficially through Phyto UK, its wholly-owned subsidiary, as a result of the Phyto UK Share Consideration.
The Share Consideration was acquired for investment purposes. MMJ may increase or decrease its beneficial ownership in the Company in the future, depending on, among other factors, market conditions and other factors relevant to MMJ's investment decisions. Other than the Purchased Shares, MMJ has no current intention to increase its beneficial ownership of, or control or direction over, additional securities of the Company.
The Share Consideration held by MMJ is subject to a TSX Venture Exchange Tier 1 Value Security Escrow Agreement.
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About MMJ PhytoTech Ltd
MMJ PhytoTech Limited (ASX:MMJ) is focused on becoming a large-scale cannabis producer, targeting direct supply to the growing Canadian medical and recreational markets which will have an estimated combined value of C$8-9 billion by 2024.
The Company controls operations across the entire medicinal cannabis value chain through its ~60% interest in TSX-V listed Harvest One Cannabis Inc (CVE:HVST) and its 100% interest in Israeli research and development subsidiary, PhytoTech Therapeutics Ltd, both of which are strategically located in favourable jurisdictions with supportive regulatory frameworks in place.
MMJ PhytoTech Ltd