Medicine Man Technologies, Inc. (OTCMKTS:MDCL) Files An 8-K Entry into a Material Definitive Agreement
ME Staff 8-k
Medicine Man Technologies, Inc. (OTCMKTS:MDCL) Files An 8-K Entry into a Material Definitive Agreement Item 1.01 Entry into a Material Definitive Agreement.
On September 9, 2019 (the “Execution Date”), Medicine Man Technologies (the “Company”), a Nevada corporation, entered into a binding term sheet (the “Term Sheet”) with Canyon, LLC (“Canyon”) and It Brand Enterprises (“It Brand” and together with Canyon, the “Targets”) to which the Company will purchase 100% of the capital stock or assets of Canyon and certain assets of It Brand (the “Acquisition”).
As consideration, the Company shall pay a total purchase price of $5,130,000 (the “Purchase Price”) consisting of (i) a cash component, which will be calculated at the time the Long-Form Agreement (as defined below) is executed, but in no case will be greater than $2,565,000, and (ii) an equity component, which will consist of shares of the Company’s common stock, par value $0.001 per share, for the balance of the Purchase Price. The number of shares that make up the equity component will be determined by dividing the balance of the Purchase Price by the average closing price of Company’s common stock for the five (5) days prior to September 7, 2019, which equated to $3.07 per share. The Purchase Price is payable by the Company to each of the Targets and is estimated to be $4,950,000 for Canyon and $180,000 for the It Brand assets.
A portion of the equity consideration will be subject to certain trading restrictions in the first year after issuance, to be defined in the Long-Form Agreement (as defined below). In addition, claw-back language for fifteen percent (15%) of the equity consideration will also be included in the Long-Form Agreement (as defined below). The Purchase Price is predicated on projected 2019 annual gross revenues of the Targets and is subject to certain adjustments outlined in the Term Sheet, including adjustments in the event of a variance in excess of 10% in the Targets’ revenue.
The Term Sheet provides for a closing on or before September 9, 2020, unless the parties agree to an extension.
The obligations of the Company and the Targets under the Term Sheet are conditioned upon the satisfaction or mutual waiver of certain closing conditions (the “Conditions”) on or before September 9, 2020 or unless the parties agree to a mutual extension, including the following:
The Term Sheet also contemplates the entry into employment agreements with Morgan Iwersen, Andrew Iwersen, and Timothy M. McMurray, owners of the Targets.
In addition, in the event the Targets obtain licensing rights or partners in Oregon, California, or Puerto Rico, as outlined in the Term Sheet, the Term Sheet contemplates certain profit sharing, licensing, or royalty arrangements between the Company and Targets, as well as rights of first refusal for the Company in lieu of such arrangements.
Under the terms of the Term Sheet, the Company and the Targets agreed to mutual indemnification upon the terms and conditions outlined therein. The term sheet also provides that the members of Canyon will not commence or invest in a business that competes with the Company directly or through its affiliates during the eighteen months following the closing.
The Term Sheet contemplates the parties entering into a long-form agreement and other ancillary documents to memorialize the Acquisition (the “Long-Form Agreement”) upon the conclusion of all standard legal and business due diligence. In the event the Long-Form Agreement is not agreed to on or before September 9, 2020, and all of the Conditions are either satisfied or waived, the Acquisition shall be consummated and governed by the terms of the Term Sheet.
On September 12, 2019, the Company issued a press release with respect to the foregoing, a copy of which is attached hereto as Exhibit 99.1.
Item 9.01. Financial Statements and Exhibits.
Medicine Man Technologies, Inc. Exhibit EX-99.1 2 medman_ex9901.htm PRESS RELEASE Exhibit 99.1 Medicine Man Technologies to Increase Its Manufacturing Efficiencies and Branded Product Offerings with Binding Term Sheet for Canyon LLC ·Another industry pioneer that is considered one of Colorado’s leading manufacturers of all-natural,… To view the full exhibit click here
About Medicine Man Technologies, Inc. (OTCMKTS:MDCL)
Medicine Man Technologies, Inc. is a cannabis consulting company. The Company provides consulting services for cannabis growing technologies and methodologies, as well as retail operations of cannabis products. The Company focuses on providing assistance to its clients in various businesses related to the cannabis industry, including cultivation; the dispensary business model, including combinations and other variables related to the retail model configuration of both a medical, as well as adult use (recreational) operation, and other areas, including but not limited to business plan generation, financial pro forma generation, application generation support, recommendations for other service providers, employee training and facility design services. It offers a separate cultivation or dispensary license and other related consultative services. It offers both pre-license consulting, as well as licensure services that generally tie to the size of the proposed business venture.
