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Invictus MD Strategies Corp. has written off the entire value of Gene-Etics Strains Co., a company it acquired from Gene Simmons in 2018, when it brought the Kiss frontman on as “chief evangelist officer” and changed its stock ticker to GENE.

Invictus, a licensed producer based in Vancouver, has taken a $4.6-million impairment charge on the intangible intellectual property related to Gene-Etics, according to financial statements filed on Friday. The company now accords zero value to the Gene-Etics asset.

Invictus paid Mr. Simmons US$2.5-million in cash and issued him over 6.5 million shares to acquire Gene-Etics.

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Mr. Simmons was also given a US$200,000 a year contract to provide marketing and promotional services to Invictus. At the time of agreement in March 2018, Invictus said that “Simmons will play a vital role as the company marches into this historic year for Canada and cannabis.”

Mr. Simmons “abdicated” his position with the company last month.

“It has been a pleasure to work with Gene. He has been a valuable asset to the Company,” said Invictus CEO Trevor Dixon, in an Aug. 12 news release.

“I have enjoyed my time with Invictus… I remain a big fan!” Mr. Simmons said in the same release.

Invictus described Gene-Etics as “a privately held company incorporated in the state of Delaware, which includes certain licensed characteristics, promotional materials and other intellectual property, personality rights and publicity right.”

Despite changing its ticker to GENE and having the teetotaling rockstar appear at events to promote the company and its stock, Invictus was unable to make use of Mr. Simmons’ personal brand to sell cannabis due to strict rules against celebrity endorsement and lifestyle branding.

The $4.6-million writedown on Gene-Etics contributed to a quarterly net loss of $12.3-million for the three months ending July 31, 2019. Invictus sold $1.68-million worth of cannabis in the quarter and $791,000 worth of fertilizer.

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Alongside the Gene-Etics impairment charge, Invictus also recorded a loss of $4.3-million on the sale of its subsidiary Canandia Bioceuticals, which it sold to "reduce operational costs and streamline the Company’s capital expenditures,” the company said.

Invictus also recognized an “inventory production loss” of $951,659. This had a significant impact on gross margins in the quarter, bringing them down to 21 per cent from 35 per cent in the same quarter a year ago.

The nature of the crop loss is not clear in the company’s filings, and Invictus did not respond to requests for comment.

The company’s stock price has declined 90 per cent over the past year.

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