PUF gets into the e-cig game.
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Chlormet to acquire VapeTronix for seven million shares
2015-04-02 15:58 ET - News Release
Mr. Yari Nieken reports
CHLORMET TO PURCHASE VAPETRONIX, A REVENUE GENERATING VAPE AND E-CIG COMPANY
Chlormet Technologies Inc. has signed a formal share exchange agreement for the acquisition of all of the shares of VapeTronix Inc., subject to Canadian Securities Exchange (CSE) approval.
VapeTronix, Inc. is a Canadian vaporizer ("Vape") and Electronic Cigarette ("E-Cig") company registered under the province of Ontario. VapeTronix owns the exclusive rights to the "1313" E-Cig brand, a medicinal marijuana mobile application technology and several research and development projects within the Vape and E-Cig space. VapeTronix was formed to capitalize on opportunities and technology related to the rapidly growing Vape and E-Cig sectors, a market that is expected to be worth $3.5 billion globally in 2015, according to Bonnie Herzog, Wells Fargo Securities' senior tobacco and beverage analyst.
Highlights of the VapeTronix business and acquisition are:
- 1313's flavoured E-Cigs are currently being sold in Ontario with Canada wide expansion planned
- 1313's nicotine E-Cigs are ready for planned roll-out into US markets
- Additional products in queue to enhance revenue opportunities for Chlormet
- VapeTronix principals will remain engaged by Chlormet and will assist with product branding and sales roll-out
- VapeTronix will merge its marketing and development team with Chlormet to work with the company on leveraging various synergies between the medicinal marijuana mobile application and vaporizer technology with the anticipated MMPR license to be issued to AAA Heidelberg.
"With the acquisition of VapeTronix, Chlormet will differentiate itself from other companies that have a MMPR license pending. I am very excited about the expansion potential for the 1313 brand and the further development of the proprietary mobile application aimed at Canadian medical marijuana users," stated CEO Yari Nieken.
"We are pleased to team up with Chlormet and immediately add a tangible product with a growing revenue stream to the company as both of our teams have identified strong synergies in all that we at VapeTronix envision for the future of the company and look forward to working together in delivering further value to all Chlormet shareholders," added Mr. Ivany, principal of VapeTronix.
About VapeTronix :
1313 is an emerging player in the burgeoning E-Cigarette market. 1313 E-Cigs are disposable electronic cigarettes that contain between 500 and 650 "puffs" and are packaged for convenience. A single 1313 E-Cig is the equivalent of two and a half packs of traditional cigarettes. VapeTronix has assembled a strong portfolio of unique flavours that have been tested and approved for commercial production. Initial commercial roll-out of 1313 E-Cigs has begun in Ontario. Select convenience stores and nightclub establishments in the Greater Toronto Area are already selling the nicotine-free 1313 E-Cig products with watermelon, vanilla, peach and green apple flavours. VapeTronix plans to continue sales expansion of 1313 E-Cigs to major urban centres across Canada in 2015 and beyond. A unique line of "E-Shisa" flavours that are aimed at appealing to the North American and Middle Eastern hobbyist hookah smoker are also in test phase. 1313 has begun test trials in US markets for its nicotine products and plans to further pursue this market opportunity.
In addition to the 1313 E-Cig brand, VapeTronix has incubated a development stage medicinal marijuana mobile application tracking technology that synchronizes a vaporizer device to a smart phone and will be aimed at the Canadian medical marijuana user. The medical marijuana mobile application will track a variety of metrics for patients and physicians alike such as cannabis usage data, the efficacy of certain strains, side effects as well as several other features. The VapeTronix team will work in conjunction with Chlormet and AAA Heidelberg to implement additional features in the technology, prior to releasing a commercial version to the public.
The development of the medicinal marijuana mobile application has many potential synergies with AAA Heidelberg as it is planned to greatly help AAA Heidelberg with its Doctor Outreach Program (see news release dated June 23rd, 2014) that plans on creating relationships with the doctors and clinics in southern Ontario that are pro medical marijuana in advance of the issuance of a MMPR license.
Terms of the acquisition:
This is an arms-length transaction as the companies have no directors, officers and management in common. Chlormet will issue the shareholders of Vapetronix an aggregate of seven million (7,000,000) shares in exchange for a 100% interest in VapeTronix. Of the 7,000,000 shares 1,500,000 will be held by the Company in escrow and released subject to VapeTronix reaching certain milestones. The remaining shares to be issued will be released over a six month timeframe.
Cautionary Statements:
Investors are advised that, although Chlormet is very enthusiastic regarding the potential business, there are inherent risks associated with start-up companies and that there are no assurances that VapeTronix will become a significant player in the E-Cig market. Ongoing development of the 1313 brand and the mobile application will rely on funds provided by Chlormet and as such will be dependent on market conditions.
The Company cannot guarantee nor estimate the timing for the issuance of a MMPR license to AAA Heidelberg.
Financing:
In conjunction with the acquisition of VapeTronix, Chlormet wishes to announce a non-brokered private placement offering of up to 10,000,000 units (each, a "Unit") at a price of $0.05 per Unit for gross proceeds of $500,000 (the "Offering").
Each Unit will consist of one previously unissued common share and one transferable purchase warrant (a "Warrant) of the Company. Each Warrant will entitle the holder, on exercise, to purchase one additional common share of the Company (a "Warrant Share") for a period of 36 (thirty six) months from the date of issue of the Warrant. The Warrants will be exercisable at a price of $0.075 per share. The warrants will have an acceleration clause such it, if after the required hold period, the shares in the Company trade above $0.15 for 10 consecutive trading days, the Company will notify the warrant holders that they have 30 days to exercise the warrants.
Chlormet intends to use the proceeds of the private placement for development of VapeTronix, general working capital and corporate purposes. The Company may, in appropriate circumstances, pay a finder's fee in connection with the sale of the Units.
Closing of the Offering is subject to customary conditions including CSE approval. Any securities issued pursuant to the Offering will be subject to a hold period of four months and one day after closing of the Offering under applicable Canadian securities laws. |
