Glance licenses mobile payment tech to Cannapay
2017-05-30 03:10 ET - News Release
Ms. Penny Green reports
GLANCE ENTERS MARIJUANA FINTECH MARKET WITH $1,000,000 LICENCE TO CANNAPAY FINANCIAL INC.
Glance Technologies Inc. has agreed to license its mobile payment technology to Cannapay Financial Inc. for $1-million, marking Glance's entry into the legal marijuana market.
"As Canada progresses towards legalization of marijuana, a multibillion-dollar industry in need of financial services is emerging," said Desmond Griffin, chief executive officer of Glance. "Cannapay Financial's technology licence from Glance will allow it to bring marijuana industry payments into the digital age by providing a wide variety of fintech solutions to all levels of the marijuana business, from suppliers to customers. This is in line with our strategy to monetize our robust and constantly advancing technology platform through strategic alliances to address markets that are not on our near-term operational road map. This deal allows our shareholders to benefit from both significant ongoing revenue, as well as equity upside, in this exciting space."
Pursuant to the licence agreement, Glance will grant to Cannapay a non-exclusive, worldwide licence to white label Glance's mobile payment processing platform and its proven anti-fraud technology, for legal business-to-business and business-to-consumer mobile payments in the marijuana industry. The licence will have an initial term of 10 years and will be renewable for two additional 10-year periods. As consideration for the licence, Cannapay will pay to Glance an initial fee of $1-million, payable in two payments of $200,000 each in cash and a third payment of $600,000 in cash or in common shares of Cannapay due within three years of signing the licence agreement, with the exception that if Cannapay completes an initial public offering at a price per offered security of 25 cents or higher, Cannapay will issue to Glance, contemporaneously with closing the IPO, at a price per security equal to the price per security under the IPO, as many voting shares in payment toward the $600,000 fee as results in Glance holding, in the aggregate, a maximum of 49 per cent of Cannapay's issued and outstanding voting shares immediately after closing the IPO. Any outstanding amounts to bring the full payment to $600,000 will be due and payable within three years of the date of the licence in cash or in common shares of Cannapay. Glance will also receive a 50-per-cent royalty on the revenue from all sublicences and will receive additional fees for any development work required for customization and operation of the Cannapay payment platform. In conjunction with the first two payments under the licence agreement, Glance will purchase an aggregate of eight million common shares of Cannapay at a price of five cents per share for a total investment of $400,000, with the result that Glance will own approximately 48 per cent of Cannapay, and Cannapay will be treated as a non-controlled partially owned subsidiary, over which Glance exerts significant influence. Separate financial statements for Cannapay will be maintained in accordance with IAS28.
According to a recent study disclosed in the Toronto Star, legalized recreational marijuana promises to spark a $22.6-billion industry in Canada, eclipsing combined sales of beer, wine and spirits. According to Business Insider, the legal weed market is growing as fast as broadband Internet in the 2000s with an annual projected growth rate of 25 per cent through 2021.
Fees from the licence agreement will be recorded in Glance's financial statements as a related-party transaction, as Penny Green is a director and president of both Glance and Cannapay.
