Invictus MD Strategies Corp. has acquired 40 per cent of the common shares of the Edison Vape Co., a Vancouver-based company, by way of subscribing 40,000 shares at a price of 0.1 of a cent per common share for a cash consideration of $40 and, simultaneously, providing a shareholder's loan of $40,000. Edison Vape is a newly formed corporation engaged in the design, development, patenting, manufacture, and distribution of a new and improved system for smoking medicinal marijuana and other herbal materials using vaporizer technology with disposable marijuana cartridges. The founders of Edison Vape have a combined 11 years of experience designing, developing, patenting, manufacturing, and distributing innovative products and accessories geared toward the medicinal marijuana industry.
Pursuant to the transaction, upon the completion of a six-month development period, and for a period of 120 days following the completion of the development period, Invictus MD will have the option to purchase the remaining 60 per cent of the common shares of Edison Vape. The option to purchase will have a fixed price of $1.2-million plus a 3-per-cent perpetual royalty based on gross sales once Edison Vape has achieved a minimum of $500,000 in cumulative gross sales. The fixed price will be payable, at the election of Invictus MD, either in cash or by way of a combination of cash and common shares of Invictus MD.
If Invictus MD elects to pay the fixed price in cash, the remaining Edison shares will be immediately transferred to Invictus MD at the time of payment. If Invictus MD elects to pay the fixed price by way of a combination of cash and Invictus shares, Invictus MD shall deliver the following total cash payments and share issuances to the inventors, on a pro rata basis based on the number of Edison shares held by such inventor, in accordance with the following schedule:
- $20,000 will be paid to the inventors in cash with 50 per cent payable upon receipt of patent search results and legal confirmation to proceed with development, and the remaining 50 per cent to be payable 30 days thereafter;
- $180,000 worth of Invictus shares (calculated based on the average closing market price of the Invictus shares during the two weeks prior to and the two weeks following the closing date) will be issued to the inventors 15 days following the date Invictus MD delivers notice to the inventors of its election to purchase the remaining Edison shares, 50 per cent of which will be issued 15 days following the closing date, with the remainder issued four months thereafter;
- $500,000 worth of Invictus shares (calculated based on the last closing market price of the Invictus shares on the date of such issuance) will be issued to the inventors on the last day of the month in which Edison Vape achieves $2.5-million in cumulative gross sales;
- $500,000 worth of Invictus shares (calculated based on the last closing market price of the Invictus shares on the date of such issuance) to be released to the inventors on the last day of the month in which Edison Vape achieves $12.5-million in cumulative gross sales.
- A total of 9,600 remaining Edison shares on the first payment date;
- A total of 25,200 remaining Edison shares on the second payment date;
- The remaining 25,200 remaining Edison shares will be transferred to Invictus MD on the third payment date.