Last Updated on Tuesday, 13 August, 2019 at 10:59 am by Christian Keszthelyi
MPXI Malta Property Ltd agreed to purchase all outstanding shares of Alphafarma Operations Ltd from Alpha Farma Ltd, under a definitive agreement Canada-based MPX International Corporation signed, according to a press statement. MPXI Malta also signed a letter of intent (LOI) with Malta Enterprise (ME). MPXI Malta is owned by MPX International (80%) and Malta-based Bortex Group (20%).
Alpha Farma is transferring the lease for the “GMP-ready” facility located in capital Valletta, as well as the GMP certification to Alphafarma, newly-created subsidiary of the vendor, in exchange for the payment of €1.5m in cash and the issuance of 1,000,000 common shares and 300,000 common share purchase warrants to acquire additional MPXI shares at an exercise price of $0.63 per MPXI Share for a period of five years, according to the press statement.
Select staff from the current tenant of the facility will remain with MPXI Malta, the companies say in the press statement. The availability of such qualified personnel, the companies believe, will also shorten and facilitate the GMP certification process and allow MPXI to more quickly secure final license approval and commence operations.
MPXI International is expected to invest approximately €3m for refurbishing the facility, extraction, processing and packaging equipment and working capital.
“This is an important step in our European expansion plan. Malta not only provides a strategic gateway to the emerging EU markets but also upholds high pharmaceutical standards and a strong regulatory framework. We look forward to combining our cannabis expertise and intellectual property with some of Europe’s leading pharmaceutical talent,” said Daniel Fryer, MPXI’s Head of European Development.
MPXI International will issue to Green Goblin Ventures Limited 423,142 MPXI shares as consideration for the preparation of the application for the licence and 114,511 MPXI shares as consideration for identifying and facilitating the acquisition of Alphafarma and the transfer of the GMP certification.
As part of the partnership agreement whereby Bortex will provide oversight of and support to MPXI’s Maltese operations and as consideration for assistance with setting up the local manufacturing facility in the newly acquired Alphafarma site, MPXI International shall issue to Bortex 637,238 MPXI shares.
First step for operations in Malta
Under the LOI signed with the Malta Enterprise, the Maltese company would be able to receive a licence to import, extract, produce finished products and distribute cannabis and cannabis derivatives for medicinal use in Malta and export to certain international markets, such as the European Union.
Receipt of the LOI is the first step of the application process in the country, which many believe is strategically located in the Mediterranean Sea and could soon become a key commercial entry point for the European market.
The formal licence is issued by the Malta Medicines Authority upon completion and EU-GMP certification of a cannabis processing facility. Upon receipt of the formal licence, MPXI will produce EU-GMP quality cannabis oils and cannabis derivative products and pursue regulated medical cannabis distribution opportunities in the European Union through its wholly-owned medical brand, Salus BioPharma Corporation.
“Typically, Malta Enterprise allocates a property to the licensee which must then be subject to planning and design approval and build-out. It can then take up to eighteen months to finalise and commence production,” said W. Scott Boyes, Chairman, President and Chief Executive Officer of MPXI.
“We have been extremely fortunate to have been able to identify a 1,200 sqm ‘GMP-ready’ facility in Valletta which can quickly be adapted and certified for EU-GMP cannabis production. Planning is already underway to upgrade and equip the premises with operations potentially commencing later this year. We believe this will allow MPX International to be among the earliest licensed cannabis producers to move cannabinoid-based medicines into the European Union from Malta,” the CEO added.