Pineapple Express (OTCPINK:PNPL) announced finalized its acquisition of the business and assets of THC Industries, Inc. THC has been an operating business and was incorporated in California since 1996, making THC one of the first internet based cannabis related businesses in the nation.
According to the press release:
The Company will pay the THC shareholders consideration consisting of (i) a cash payment in the amount of $1,000,000, (ii) $4,000,000 of the Company’s common stock, or 2,275,133 shares based on the closing stock price on December 3, 2015, the date the parties entered into a letter of intent and (iii) a $600,000 note (part of the $1,000,000 cash payment) secured by all of the purchased intellectual property that is payable in two equal installments on the 60 day and 90 day anniversaries of closing. $150,000 of the initial cash payment shall be held in escrow to cover seller’s expected personal litigation costs related to trademark enforcement of the purchased IP. Approximately 95% of the shares shall be issued to the main shareholder of THC Industries, Inc., Ramsey Salem, who along with all other shareholders receiving shares from the Company in this transaction have entered into two-year lockup agreements with the Company restricting any share sales during that period. Mr. Salem executed a five-year employment agreement and will serve as CEO of THC Industries, LLC, the Company’s new wholly owned subsidiary. The THC shareholders shall have the option to require the Company to purchase from them up to 1,478,836 shares at a price of $0.68 per share for the period commencing on the 24 month anniversary of the closing and ending on the 30 month anniversary of the closing; provided however that they may only exercise this option if the Company’s stock price is below $0.88 and trading volume is below 50,000 a day for a 90 day period.
Matthew Feinstein, CEO and Chairman of Pineapple Express commented:
With the current scramble to brand and trademark marijuana industry related products, we believe we’ve hit a home run by acquiring the trademark and URL of one of the most recognized and popular names in the industry. THC.com generates organic website traffic and direct Google searches from all over the world. We are currently exploring different ways to maximize the potential of the website’s features and functions in serving the cannabis community. Besides this overwhelming value of having a branded and industry related trademark and URL, we intend to audit THC’s operating history and include THC’s financial information in our expected filings with the SEC as a fully reporting issuer. This is an important step in our maturation process as a publicly traded company.