- Epsilon Healthcare (EPN) enters an exclusive partnership with Canadian-based cannabis product manufacturer The Valens Company by executing an Interim Implementation Deed
- The partnership will see Valens cover expenses at Epsilon’s Southport facility in return for access of up to 85 per cent of operational capacity
- Epsilon will retain a royalty on sales revenue generated by Valens and will pay Valens a management fee on products manufactured for its own customers
- A three month trial has been set with certain performance conditions, including a $2 million sales target for Valens
- Shares are trading 7.55 per cent higher today at 5.7 cents each
Epsilon Healthcare (EPN) has entered an exclusive partnership with Canadian-based cannabis product manufacturer The Valens Company by executing an Interim Implementation Deed.
The partnership will see Valens cover budgeted operational and capital expenditures at Epsilon’s Southport facility.
EPN expects to receive a payment of $230,000 from Valens to cover its March operational expenditure within the next couple of days.
In return, it will receive preferential access of up to 85 per cent of the operational capacity.
Epsilon will retain a royalty of between 2.5 and four per cent on sales revenue generated by Valens for products manufactured at the Southport facility.
EPN will pay Valens a management fee on all products manufactured for its own customers.
A three month trial has been set with certain performance conditions, including a $2 million sales target for Valens.
If these conditions are not met during the time period, the partnership may be terminated with 30 days notice.
If the sales target is met, Epsilon expects EBITDA to be positive on a go forward run rate basis, following the three month trial.
Shares were trading 7.55 per cent higher today at 5.7 cents each at market close.