Medicine Man Technologies, Inc. (OTCMKTS:MDCL) Files An 8-K Completion of Acquisition or Disposition of Assets
Item 2.01. Completion of Acquisition or Disposition of Assets.
On March 2, 2021, to the applicable APA, the Company and the Purchaser closed on the acquisition of (i) Starbuds Aurora LLC, (ii) Store 3 – SB Arapahoe LLC, (iii) Citi-Med LLC, (iv) Starbuds Louisville LLC and (v) Store 9 – KEW LLC. The aggregate purchase price for the assets of the Starbuds Group acquired on March 2, 2021 was approximately $71.8 million and was paid to each applicable Starbuds Company and the Members as a combination of cash, an aggregate of 15,228.45 shares of Preferred Stock, together with an aggregate of 2,687.37 shares of Preferred Stock to be held in escrow to the terms, and subject to the conditions, set forth in Omnibus Amendment No. 2 and warrants to purchase an aggregate of 3,359,215.32 shares of the Company’s common stock at exercise price equal to $1.20 per share (the “Transaction Warrants”). The Company funded the aggregate cash portion of the purchase price for each Starbuds Company who was acquired on March 2, 2021 from the net proceeds of the transactions disclosed in the Company’s Current Report on Form 8-K filed with the SEC on March 4, 2021. Mr. Brian Ruden, a member of the Board of Directors of the Company, has an ownership interest in each Starbuds Company that was acquired on March 2, 2021.
The description of Omnibus Amendment No. 2 contained in Item 1.01 of the Company’s Current Report on Form 8-K filed on December 22, 2020 (the “Prior 8-K”) is incorporated herein by reference. The summary of Omnibus Amendment No. 2 and the transactions contemplated thereby contained in the Prior 8-K does not purport to be complete and is subject to, and qualified in its entirety by, the full text of Omnibus Amendment No. 2 filed as Exhibit 2.1 to the Prior 8-K, which is incorporated herein by reference.
Item 3.02. Unregistered Sales of Equity Securities.
The information contained in Item 2.01 above is incorporated herein by reference.
The Preferred Stock and the Transaction Warrants have not been registered under the Securities Act of 1933, as amended (the “Act”), or state securities laws. The issuances of the Preferred Stock and the Transaction Warrants were exempt from the registration requirements of the Act to Section 4(a)(2) of the Act and Rule 506 of Regulation D promulgated thereunder (“Regulation D”), made only to and with an “accredited investor” as defined in Regulation D. This Current Report on Form 8-K shall not constitute an offer to sell, nor the solicitation of an offer to buy, the securities described herein, nor shall there be any offer, solicitation or sale of the securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such state.
Item 8.01. Other Events
On March 3, 2021, the Company issued a press release relating to the completion of the acquisition. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K.
Item 9.01 Financial Statements and Exhibits
(a) Financial Statements of Businesses Acquired
The audited financial statements of each Starbuds Company required by this item will be filed by amendment to this Current Report on Form 8-K no later than 71 calendar days after the date on which this Current Report on Form 8-K was required to be filed.
(b) Pro Forma Financial Information
The pro forma financial information reflecting the Purchase, to the extent required by this item, will be furnished by amendment to this Current Report on Form 8-K no later than 71 calendar days after the date on which this Current Report on Form 8-K was required to be filed.