News on Fidelity
EVIO, Inc. Launches EVIO Canada, Signs Binding Agreement to Acquire Cannabis Testing Facility, Keystone Labs Inc.
BEND, Ore., April 19, 2018 (GLOBE NEWSWIRE) -- via NetworkWire – EVIO, Inc.(EVIO) , a leading provider of cannabis testing and scientific research for the regulated cannabis industry, is pleased to announce the establishment of a new and wholly-owned subsidiary, EVIO Canada, which will serve as the parent company for the Company’s Canadian operations. Concurrently, EVIO Canada announced today that it has entered into a binding agreement to acquire 50% of Keystone Labs Inc. (“Keystone Labs”), a privately-held, independent contract-testing laboratory specializing in quality testing for regulated industries located in Edmonton, Alberta.
Founded in 2005 by Jodi McDonald, President of Keystone Labs, the company provides a full array of high quality analytical and microbiological analyses to pharmaceutical, biotechnological, medical device and natural health product industries according to Good Manufacturing Practices (“GMP”).
“We are thrilled to partner with EVIO Labs. This is an incredible opportunity for Keystone Labs to expand our quality testing services into the cannabis market by supporting the production of safe cannabis for Canadians,” said McDonald. “With the leadership and expertise of EVIO’s highly successful management team working with our experienced team, we are confident in our ability to seize the growing opportunities in regulated cannabis testing and innovation and become a market leader in Canada.”
Beginning in 2018, it is expected that adult recreational cannabis will be available to Canada’s population of approximately 36.3 million. With the Canadian cannabis industry projected to reach C$8.7 billion, according to a Deloitte report titled Recreational Marijuana: Insights and Opportunities, in size over the coming years, this strategic acquisition will expand EVIO’s footprint into the market as well as provide the Company with diversification into other testing fields.
“As the country prepares for adult recreational sales in the coming months, the need for credible and comprehensive cannabis testing is greater than ever. Keystone Labs is one of 37 laboratories licensed by Health Canada and one of only three laboratories that hold both a Dealer’s License and a GMP Drug Establishment License for cannabis testing,” said William Waldrop, CEO and co-founder of EVIO(EVIO). “This acquisition is a significant milestone for EVIO(EVIO) as it will mark our first foray into an international market. Our goal is to increase consumer safety and confidence, while further pursuing our aggressive expansion plans for 2018.”
Transaction Details:
In consideration for the 50% acquisition of Keystone Labs, EVIO Canada, Inc. will pay a cash purchase price of an aggregate of CDN$2,495,000. This purchase price will be split as to CDN$2,035,000 to the shareholders of Keystone Labs to purchase 45% of the issued and outstanding shares of the company and as to CDN$460,000 to Keystone Labs to purchase shares of Keystone Labs equal to an additional 5% of the issued and outstanding shares directly from treasury. EVIO(EVIO) will provide a line of credit to Keystone Labs up to a maximum principal amount of CDN$1,000,000 to support operations. In connection with and immediately following the completion of the foregoing transactions, the shareholders of Keystone Labs shall subscribe for an aggregate of 1,291,391 of common shares in the capital of EVIO(EVIO) for an aggregate purchase price of CDN$1.95M on a private placement basis. The proposed transaction is subject to customary closing conditions, including both parties completing due diligence and obtaining any approvals from applicable local authorities. Contingent upon completion of final agreements and documents, the transaction is expected to close on or about May 1, 2018.
