Ionic Brands (CSE: IONC) announced this morning that it has completed the acquisition of Washington-based Natural Extractions, which has been doing business as Zoots Premium Cannabis Infused Edibles. The definitive agreement was originally announced on April 23.
The total purchase price equates to roughly US$11 million, in the form of shares and cash. Total cash consideration consists of US$855,000. 9,635,150 shares were issued in connection with the agreement at a price of C$1.30 per share, despite recent weakness that the equity has experienced. Up to 4.8 million share purchase warrants will also be issued in connection with the transaction, dependent on certain events occurring.
Despite the high price per share that the vendors have accepted, they have also agreed to a 70% share lock up agreement which will see gradual unlocks over a nine month period.
John Gorst, CEO and Chairman of Ionic Brands
“Ionic Brands has been working closely with the Zoots leadership team to integrate companies and transition the Zoots line of handcrafted and trusted edible products. Our top-rated Ionic vaporizer pen targets consumers interested in luxury cannabis products that can be discreetly consumed which make Zoots edibles a natural fit for our brand strategy. The Zoots acquisition expands our market segments to the popular edibles space and expands our distribution network throughout the United States. We are also very pleased to have Mr. Dan Devlin continues as the Company’s Chief Operating Officer.”
John Gorst, CEO and Chairman of Ionic Brands
Zoots Premium Cannabis Infused Edibles is a Washington based firm focused on providing a number of edible cannabis products to the recreational consumption landscape. They currently offer products consisting of drops, gummies, energy shots and hard candies across four states, including Washington, Illinois, Massachusetts, and Colorado. The acquisition is expected to add further market share to Ionic Brands position in the premium cannabis niche of the sector, as well as increase the national presence of the firm.
Sponsored · Altamira Gold Corp.
Zoots Edibles is forecasting total revenues of approximately US$3 million for 2019, with an EBITDA cash flow of US$360,000.
Ionic Brands is currently trading at C$0.18, down 5.13% on the day.
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