Grapefruit to Accelerate its Plan to Rapidly Grow its Cannabis and CBD Business
Burbank, CA, June 03, 2019 (GLOBE NEWSWIRE) -- (OTCQB:IGNG) Grapefruit Boulevard Investments, Inc. (‘GBI” or “Grapefruit”) a formerly privately held Los Angeles based cannabis company today announces that by virtue of the approval of the IGNG board of directors on Friday May 31, 2019, it has successfully completed its reverse acquisition (the “Acquisition”) of Imaging3, Inc. (“IGNG”) and simultaneously closed on its $10,000,000.00 debt and equity investment from Boston, MA based Auctus Fund, LLC (“Auctus”) (the “Investment”). Plans for the Acquisition were first announced in a press release made with the joint approval of IGNG and Grapefruit on March 13, 2019. Over the ensuing 81 days management of both companies in full mutual cooperation have, among other achievements, successfully negotiated the terms of the Acquisition and negotiated the terms of the Investment.
John Hollister, Imaging3 CEO stated, “We are thrilled to have successfully completed the process of being acquired by Grapefruit. During the nearly three months of working together, it has become abundantly clear that Grapefruit is poised for a great future. We believe that, as a result of the completion of the Acquisition and Investment, IGNG’s shareholders have a much larger value appreciation opportunity with lower risk than existed prior to IGNG’s association with Grapefruit, given the potential of the expanding cannabis market and Grapefruit’s strong cannabis market potential.”
Under the terms of the Share Exchange Agreement by and between IGNG and Grapefruit documenting the terms of the Acquisition (the “SEA”), IGNG will issue to Grapefruit’s existing shareholders that number of newly issued restricted IGNG common shares such that the former Grapefruit shareholders (now new IGNG shareholders) will own approximately 81% of the post- Acquisition shares and the current IGNG shareholders will retain 19% of the post-Acquisition IGNG shares. At the time of the execution of the SEA, IGNG had approximately eighty-five million (85,000,000) outstanding shares of common stock. Therefore IGNG will shortly, after the closing of the Acquisition, issue to Grapefruit’s shareholders approximately three hundred sixty two million two hundred forty thousand (362,240,000) IGNG common shares to Grapefruit’s current shareholders on a pro rata basis with their current ownership of Grapefruit of which Bradley Yourist and Daniel J Yourist will own a combined 72.26% or approximately 276,244,244 shares. In addition, shortly after the closing, IGNG will issue approximately 23,000,000 new restricted common shares to an advisor to Grapefruit in connection with structuring of the Acquisition and the Investment. As a result, at the conclusion of the Acquisition, IGNG will have a total of approximately 470,418,945 common shares issued and outstanding.
Under the terms of the Securities Purchase Agreement (the “SPA”) and related documents executed by Auctus and IGNG which define the terms of the investment, IGNG will sell $4,000,000 of convertible notes (the “Note(s)”) and issue $6,200,000 of callable warrants (the “Warrants”) to Auctus. Pursuant to the SPA, Auctus will purchase the $4,000,000 of Notes from IGNG in four tranches as follows: $600,000.00 at the closing, June 4 or 5, 2019; the second tranche of $1,400,000.00 will be funded by Auctus on the day IGNG files its required registration statement on Form S-1 registering the IGNG shares underlying tranches 1 and 2 (the ‘Registration Statement”); the third tranche will be funded the day the SEC declares the Registration Statement effective (the “Effective Date”) and the fourth tranche will be funded 90 Days after the Effective date. The Notes have a two year term and will bear interest at 10%. The notes are redeemable at any time between the date of issuance and maturity at 150% of face value. The Notes will be convertible into shares of IGNG common stock at 95% of the mathematical average of the five lowest trading prices for IGNG common stock on the OTCQB for the period from the Closing to the maturity date of the Note being converted less $0.01 for conversions at less than $0.15 and less $ 0.02 for conversions at more than $0.15.
In addition to the Notes, at the closing IGNG will issue to the Investor a warrant to purchase 16,000,000 shares of its common stock at $0.125 per share, a warrant to purchase 15,000,000 shares at $0.15 per share and a warrant to purchase 8,000,000 shares at $0.25 per share (collectively, the “Warrants”). The Warrants are “cash only” and are callable if IGNG stock trades on the OTCQB at 200% or more of a given exercise price for 5 consecutive days. All told, upon payment of all four tranches of the Notes and exercise of all of the Warrants the Company will realize gross proceeds of $10.25 Million.
Bradley J. Yourist, CEO stated, “As a result of Grapefruit’s completion of the reverse takeover of IGNG and obtaining the Investment, we will expand our current extraction laboratory operations to increase our efficiencies and output as well as continue to expand our distribution services throughout the State of California. Our expansion plans include the acquisition of additional cannabis licenses for permitted cannabis manufacturing and cultivation. In this quarter alone, Grapefruit will be launching its new line of unique infused cannabis edible and CBD products. Our team is also excited about our new line of unique vaporization cartridges, a total of 4 new SKUs, which employ high quality CCELL vaporization elements which more effectively and efficiently deliver our formulated cannabis oils for our customers. We have also identified, screened and interviewed key personnel who are ready, willing and able to join Grapefruit to implement our strategic expansion plans. Grapefruit is also exploring the acquisition of several retail dispensaries, first in California and then all across the nation, to achieve full vertical integration of our cannabis product offerings. With the implementation of the Investment, Grapefruit will have the capacity to position itself to become one of the premier cannabis and CBD brands both domestically and internationally.”
About Imaging3, Inc.
Imaging3, Inc., founded in 1993, has developed a patented medical imaging technology, called the Dominion SmartScan™, that produces 3D X-ray images, effectively in real time. The SmartScan technology has the potential to allow healthcare professionals to perform diagnostic and therapeutic procedures more quickly and accurately, which may result in higher throughput for the clinicians and fewer safety risks for patients. Imaging3’s technology exposes patients to less harmful radiation than current equivalent imaging technologies such as CT scans. The company believes this will allow scans to be used in many settings where scanning is currently limited by concerns about radiation exposure. The technology also notably allows for reasonably convenient portability, easier installation and use-readiness, and a significantly reduced cost burden suitable for novel settings and for healthcare systems across varied global settings. Imaging3 plans to submit a 510(k) application to FDA during 2019 and or 2020 to gain marketing authorization for initial applications for the SmartScan technology. Visit the company’s website at http://www.imaging3.com for detailed information about the company’s technology.
About Grapefruit
Grapefruit is based in Westwood, Los Angeles, California. Grapefruit holds California licenses to both manufacture and distribute cannabis products and is fully compliant with all applicable laws and regulations to operate such business. Grapefruit has its cannabinoid extraction facility located in the Coachillin’ Industrial Cultivation and Ancillary Canna-Business Park in Desert Hot Springs, California located on the extension of North Canyon Rd., approximately 10 miles north of the center of Palm Springs. Grapefruit obtained its California cannabis licenses in January of 2018 and commenced distribution of cannabis products in 2018. Grapefruit’s goal is to become a seed to sale vertically integrated fully compliant cannabis and CBD product Company. To obtain further information on Grapefruit’s California cannabis licenses and its business plan and operations, please visit its website at https://grapefruitblvd.com/
Safe Harbor Statement
Imaging3 cautions you that any statement included in this press release that is not a description of historical facts is a forward-looking statement. Many of these forward-looking statements contain the words “anticipate,” “believe,” “estimate,” “may” “intend,” “expect” and similar expressions. Actual results, performance or achievements could differ materially from those contemplated, expressed or implied by the forward-looking statements contained herein. These forward-looking statements are based largely on the expectations of the company and are subject to a number of risks and uncertainties inherent in the Imaging3’s business, including, without limitation: the company may not ever obtain FDA approval for any of its devices; the company may not be able to secure the funds necessary to support its product development plans; and the company may not ever achieve the market success to sustain a profitable business. In addition, there are risks and uncertainties related to economic recession or terrorist actions, competition from much larger imaging companies, technological obsolescence, unexpected costs and delays, potential product liability claims, and many other factors. More detailed information about Imaging3 and the risk factors that may affect the realization of forward-looking statements is set forth in the company’s filings with the Securities and Exchange Commission, including the company’s Annual Report on Form 10-K and its Quarterly Report on Form 10-Q. Such documents may be read free of charge on the SEC’s website at www.sec.gov. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. All forward-looking statements are qualified in their entirety by this cautionary statement, and Imaging3 undertakes no obligation to revise or update this press release to reflect events or circumstances after the date hereof. This caution is made under the safe harbor provisions of Section 21E of the Private Securities Litigation Reform Act of 1995.
Investor Relations Contact:
John Hollister
Chief Executive Officer
info@imaging3.com
