XPhyto Therapeutics Closes Acquisition Of Vektor Pharma TF GmbH

VANCOUVER, CANADA / ACCESSWIRE / September 17, 2019 / XPhyto Therapeutics Corp. (CSE:XPHY)(FSE:4XT) (“XPhyto” or the “Company”) is pleased to announce that it has closed both the definitive share purchase agreement (the “Agreement”) with Vektor Pharma TF GmbH (“Vektor”) and the equipment purchase agreement (the “Equipment Agreement”) entered into with an affiliated company of Vektor, both of which were previously announced by the Company on August 26, 2019.

Vektor is a German narcotics manufacturer, importer, and researcher located approximately 170 kilometers west of Munich. For over a decade, the company and its team have been leaders in the design, testing and manufacture of thin-film drug delivery systems, particularly transdermal patches and sub-lingual (oral) strips for the clinical management of pain. Vektor holds a number of valid narcotics licences pursuant to EU GMP certification and other governing regulations: Import Permit for drug dosage forms; Import Permit for cannabis; Manufacturing Permit for clinical samples; Manufacturing Permit for final drug product release; Analytical Permit for chemical and physical testing; Permit to handle narcotic drugs; and a Permit to handle animal tissue. Vektor’s various narcotics licences include authorizations related to conventional and cannabis-related prescription medications, including but not limited to: Buprenorphine, cannabis, Dronabinol, Fentanyl, Hydromorphone, Oxycodone, and THC.

“The Vektor transaction will accelerate XPhyto’s medicinal cannabis import into Germany and its drug delivery expertise, both of which are a critical part of our near-term revenue generation strategy,” said Hugh Rogers, CEO of XPhyto. “Further, with vape-based delivery systems now associated with significant potential health risks, XPhyto is extremely pleased to combine assets and expertise with Vektor, a specialist in thin-film drug delivery systems. XPhyto is well positioned to capitalize on the next generation of cannabis investment opportunities, primarily clinical validation of safe and effective medicine and emerging European markets.”

Pursuant to the Agreement and the Equipment Agreement, the consideration is as follows: 1) 350,000 € cash due upon closing; 2) 200,000 common shares due upon closing; 3) 400,000 € units in the capital of the Company at CAD $1.00 per unit (the “Payment Units”) due upon closing. Each Payment Unit consists of one common share and one common share purchase warrant. The common shares are subject to a three-year escrow matrix. The warrants are exercisable into one common share of the Company at an exercise price of CAD $1.00 per share for a period of three years from closing; 4) 200,000 € in a convertible debenture with a maturity date that is six months from closing bearing an annual interest rate of 2.5%. The debenture is convertible into Payment Units at the option of the holder, at any time prior to the maturity date. Accrued interest will be paid in cash. Each common share purchase warrant is exercisable into one common share at an exercise price of CAD $1.00 per share for a period of three years from the conversion date; and 5) 150,000 € in a convertible debenture with a maturity date that is twelve months from closing bearing an annual interest rate of 2.5%. The debenture is convertible into Payment Units at the option of the holder, at any time prior to the maturity date. Accrued interest will be paid in cash. Each common share purchase warrant is exercisable into one common share at an exercise price of CAD $1.00 per share for a period of three years from the conversion date.

Pricing of the securities set out in the Agreement and Equipment Agreement was established pursuant to a price reservation filed with the Canadian Securities Exchange on August 6, 2019.

In connection with the transaction, a consulting fee of 200,000 common shares will be paid to an arms-length consultant on closing.

About XPhyto Therapeutics Corp.

XPhyto is a science-based cannabis company focused on medical formulation, clinical validation, and emerging European markets. XPhyto’s 100% owned German subsidiary, Bunker Pflanzenextrakte GmbH, has been granted a unique German cannabis cultivation and extraction licence for scientific purposes by the German Federal Institute for Drugs and Medical Devices (BfArM). XPhyto is pursuing additional opportunities in Germany including cultivation, processing, manufacturing, import, and distribution. In Canada, two exclusive 5-year engagements with the Faculty of Pharmacy at a major Canadian university provide certified extraction, isolation, and formulation facilities, drug research and development expertise, as well as commercial analytical testing capability.

For further information, please contact:

Hugh Rogers
CEO & Director
+1.780.818.6422
info@xphyto.com
www.xphyto.com

Robert Barth
VP European Corporate Development
+49 8331 99481 10
info@xphyto.com
www.xphyto.com