Item 1.01 Entry into a Material Definitive Agreement
On January 7, 2021, CannapharmaRx, Inc. (the "Company") entered into a Purchase
and Sale Agreement (the "PSA") for a certain property in Alberta, Canada.
Pursuant to the PSA, the Company has entered into a definitive agreement to
purchase certain assets including the title to related fee simple lands and
facility required for the cannabis cultivation and production business, located
at and operated out of Cremona, Alberta. The transaction, subject to certain
closing conditions, is scheduled to close in February 2021.
The Company is purchasing the facilities, free and clear of all encumbrances
other than those agreed to in the Purchase and Sale Agreement. The 55,200 square
foot facility is capable of producing 5,200 kilograms of cannabis biomass per
year. The facility currently holds Health Canada licenses for cultivation and
sales of medical dried flower sale, as well as extract and edible sales.
Additionally, the facility currently holds EU GMP Certification. Substantial
floor space within the facility can be converted to incremental EU GMP drying,
curing and packaging facilities. The Company will apply to Health Canada for its
own licensing approvals for all cannabis related activities.
The Company will pay the "Purchase Price" for the facility which means the sum
of: (i) $12,000,000 and (ii) the Purchaser's Share of the Option Purchase Price,
not including Goods and Services Tax. The payment schedule for the Purchase
Price will be a deposit of $100,000 paid on execution of the PSA, the
$5,900,000.00, plus 50% of the Purchaser's Share of the Option Purchase Price,
plus the deposit, together with any Goods and Services Tax thereon, subject to
adjustments as hereinafter described, shall be paid to the Seller's solicitor on
or before the Closing Date; then $3,000,000 plus the remaining 50% of the
Purchaser's Share of the Option Purchase Price, together with any Goods and
Services Tax thereon, shall be paid within 3 Business Days of the Cultivation
Licensing Approval Date; and then $3,000,000, together with any Goods and
Services Tax thereon, shall be paid within 3 Business Days of the Processing
Licensing Approval Date. All denomination of dollars in this Form 8-K are in
Canadian Dollars.
The material the terms of the PSA are included in that certain Press Release
attached hereto and incorporated herein as if set forth as Exhibit 99.6.
The Company is seeking Confidential Treatment of the PSA from the Securities and
Exchange Commission and has therefore withheld the PSA at this time.
Item 7.01 Regulation FD Disclosure
Attached is a copy of a press release being issued by the Company relating to
the PSA, a copy of which is attached as Exhibit 99.6 and is hereby incorporated.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Number Exhibit
99.1 Press Release titled "CannapharmaRx, Inc. Announces the Acceptance of
its Offer to Purchase Assets and Facilities Located in Cremona AB , dated
January 12, 2021
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