1933 industries Inc. (OTCMKTS:TGIFF) has announced that it has entered a Membership Interest Definitive Agreement with Infused MFG LLC for the purchase of the remaining 9% of outstanding membership interest. 1933 Industries is the holder of a majority of the issued and outstanding stake of Infused LLC.
7 million shares to be issued
According to the terms of the arrangement, the purchase price allows 1933 industries to pay CDN £1.248 million through the issuance of a promissory note whose principal value is the US $940,000. The agreement stipulates the maturity date to be 1 December 2019 and the issuance of the 7 million common shares in the capital of Infused will be based on an estimated share price of CDN $0.45.
The issued Note has a 6.0% annual interest rate and the payments of interest only shall be due on the first of every month until they are fully repaid. However, the maturity date of the Note may get fast-tracked if among other things the company manages to complete a capital raise that generates over $10 million in gross proceeds.
The company has indicated that the note will get a 7% security through Infused’s Issued and outstanding membership interest. However, the membership interest is subject to a four month and one day hold period as required by relevant Canadian securities laws. Equally, there might be additional restrictions applicable relative to the securities laws of the U.S. but that will not be subject to escrow.
The agreement includes non-transferable warrants
Included in the purchase process is also the issuance of 1 million non-transferable share purchase warrants by the company whose strike price matches the markets price at the end of the trading session immediately following the closing date. The warrants are however expected to expire after two years from the date of closing.
CEO and President, Brayden Sutton stated that the acquisition of the remaining 9% of the membership interest of Infused was a significant milestone for the company. He added that it positions the company well to benefit from the potential growth of infused in the future. The anticipated closing date is 29 March 2019 subject to regulatory approval from Canadian Securities Exchange.
