GROWGENERATION CORP (OTCMKTS:GRWG) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01. Entry Into a Material Definitive Agreement
On January 26, 2019, GrowGeneration Corp. (the “Company”) entered into an asset purchase agreement (the “Palm Springs Purchase Agreement”) through its wholly-owned subsidiary, GrowGeneration California Corp., to purchase the assets from Palm Springs Hydroponics, Inc. (“Palm Springs Hydroponics”) located in Palm Springs, California.
The assets subject to the sale under the Purchase Agreement included inventories, fixed assets, tangible personal property, intangible personal property and contracts. As consideration for the assets, the Company agreed to pay Palm Springs Hydroponics a total of (i) cash payment of approximately $452,500 for the inventory, (ii) cash payment of $25,000 for the fixed assets, (iii) cash payment of $322,500 for the intangible assets and goodwill, and (iv) 75,000 shares of restricted common stock of the Company.
In connection with the purchase of the assets, the Company also entered into a commercial lease agreement with a term of five years and three months, effective from February 7, 2019 to April 30, 2024, to rent the premises where the assets are located to open a new store.
The foregoing descriptions of the terms of the Palm Springs Purchase Agreement and the lease do not purport to be complete and are qualified in their entirety by reference to the full text of the forms of them filed herewith as Exhibits 99.1 and 99.2, respectively.
On January 26, 2019, the Company entered into another asset purchase agreement (the “Reno Purchase Agreement”) through its wholly-owned subsidiary, GrowGeneration Nevada Corp., to purchase the assets from Reno Hydroponics, Inc. (“Reno”) located in Reno, Nevada.
The assets subject to the sale under the Purchase Agreement included inventories, fixed assets, tangible personal property, intangible personal property and contracts. As consideration for the assets, the Company agreed to pay Reno a total of (i) cash payment of approximately $238,000 for the inventory, (ii) cash payment of $25,000 for the fixed assets, (iii) cash payment of $262,000 for the intangible assets and goodwill, and (iv) 75,000 shares of restricted common stock of the Company.
In connection with the purchase of the assets, the Company also entered into a one-year commercial lease agreement, effective from February 1, 2019 to January 31, 2020, to rent the premises where the assets are located to open a new store.
The foregoing descriptions of the terms of the Reno Purchase Agreement and the lease do not purport to be complete and are qualified in their entirety by reference to the full text of the forms of them filed herewith as Exhibits 99.4 and 99.5, respectively.
Section 2 – Financial Information
Item 2.01. Completion of Acquisition or Disposition of Assets
Disclosures under Item 1.01 above are incorporated hereunder in their entirety.
Section 7 – Regulation FD
Item 7.01. Regulation FD Disclosure
On February 7, 2019,the Companypublished a press release regarding the purchase of assets from Palm Springs Hydroponics. A copy of the press release is attached hereto as Exhibit 99.3.
On February 11, 2019,the Companypublished a press release regarding the purchase of assets from Reno. A copy of the press release is attached hereto as Exhibit 99.6.
The information contained herein and the exhibits attached herewith shall be deemed furnished and not filed.
Section 9 – Financial Statements and Exhibits
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
| ExhibitNo. | Description |
| 99.1 | Form of Asset Purchase Agreement, dated January 26, 2019, by and among GrowGeneration Corp., GrowGeneration California Corp. and Palm Springs Hydroponics, Inc. |
| 99.2 | Form of Commercial Lease Agreement, dated February 1, 2019, by and between GrowGeneration California Corp. and RSM Arbours, LP |
| 99.3 | Press Release, dated February 7, 2019 |
| 99.4 | Form of Asset Purchase Agreement, dated January 26, 2019, by and among GrowGeneration Corp., GrowGeneration Nevada Corp. and Reno Hydroponics, Inc. |
| 99.5 | Form of Commercial Lease Agreement, dated February 6, 2019, by and between GrowGeneration Nevada Corp. and Stan Lucas |
| 99.6 | Press Release, dated February 11, 2019 |
GrowGeneration Corp. Exhibit
EX-99.1 2 f8k020719ex99-1_growgen.htm FORM OF ASSET PURCHASE AGREEMENT,…
To view the full exhibit click here
About GROWGENERATION CORP (OTCMKTS:GRWG)
GrowGeneration, Corp. operates retail hydroponic and organic specialty gardening retail outlets. The Company owned and operated a chain of approximately eight retail hydroponic/gardening stores located in the states of Colorado and California at November 9, 2015. The Company is also engaged in the development of a branded e-commerce portal at www.GrowGeneration.com. The Company’s stores offer supplies to the hydroponic and gardening industry, including medium (farming soil), hydroponic equipment, lighting, plant nutrients and various additional products used by professional growers and specialty cultivation operations. The Company’s target market segments include home growers of organic vegetable and fruit growers (small farms, home garden growers, restaurants growers and farmer markets), the do-it yourselfers (home flower and plant growers, or mass market and growers in the cannabis related market (dispensaries, cultivators and caregivers).