Invictus MD Strategies (CSE:IMH) is a small public company founded in 2014 to take advantage of opportunities in the cannabis space.
The company was founded by Dan Kriznic, a Vancouver-based entrepreneur and Chartered Accountant. Dan previously helped build one of the largest private education and real estate investment firms in Canada as an acquisitions-focused Executive Vice-President and CFO. He is a past Business in Vancouver Top 40 under 40 honoree and also the CFO of Lithium X Energy.
The plan for Invictus was to roll up various opportunities in the sector, and try to build a large business.
Over the last year, Invictus acquired a 75% interest in Future Harvest Development Ltd., a 20-year-old hydroponic supply company, for a total of $1.875 million. Future Harvest makes lights and fertilizer products for indoor growers.
Yesterday, Invictus announced that Future Harvest is selling its lighting division for approximately $4.8 million.
The purchaser advanced a $50,000 deposit, and must pay $3 million on closing today. Future Harvest is selling roughly $900,000 worth of inventory to the purchaser and expects that money in the next 30 days. Future Harvest will continue to manage the business until June 30, 2016, when a final payment of roughly $850,000 is due.
Invictus’s share of the proceeds will help Future Harvest grow its Plant Life Products fertilizer division in the U.S. Kriznic says Plant Life Products have low heavy metal content and help increase yields.
Kriznic sees Future Harvest building “the next General Hydroponics,” which fetched a roughly US$130 million takeout last year.
Invictus is also developing a new disposable aromatherapy vaporizer product called Edison Vape — currently in “stealth mode” — with few publicly available details. Kriznic says to expect further news from Edison Vape soon. He also plans to split Future Harvest and Edison Vape into separate companies.
Net of management fees from Future Harvest to Invictus, Kriznic says the monthly burn rate is roughly $15,000.
“We run a skeleton crew and do the accounting and administration ourselves.”
On why he sold the lighting business, Kriznic said it was simple.
“The price was right.”
Invictus MD Strategies Corp trades on the CSE under the symbol IMH. The company has roughly 37.55 million shares outstanding and last fetched 6 cents, for a roughly $2.253 million market cap. Assuming the sale goes through, Invictus should have a little more than that left in cash, the fertilizer business, and we’ll see what they can come up with Edison Vape.
Here’s a link to today’s news release: Invictus Announces Sale of Product Line for Approximately $4.8 Million Cash Consideration