Company acquires valuable domain, trademark, and operating business of THC Industries; Company intends to audit records and become a fully reporting issuer
LOS ANGELES, Feb. 16, 2016 (GLOBE NEWSWIRE) -- PINEAPPLE EXPRESS, INC. (OTCPink:PNPL) (the “Company”), a publicly traded company that offers cannabis industry consulting, technology, investments, turn-key property rentals, and branding concepts to businesses in the legal cannabis industry, announced today that it has finalized an acquisition of the business and assets of THC Industries, Inc. (“THC”), the web domain www.thc.com, and the trademark THC®. 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.
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.
The acquisition includes the THC.com URL address, the THC branded clothing line, use of a clothing distribution facility, and the rights to sell clothing, namely T-shirts, hats, beanies, pants, shorts, baseball jerseys, jackets, sweatshirts, polo shirts, and sweat pants displaying the THC trademarked name and logo. The agreement contains customary representations and warranties for transactions of this nature.
“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”, stated Matthew Feinstein, CEO and Chairman of Pineapple Express. “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.”
THC founder and CEO of the newly formed THC Industries, LLC stated, “I have long been an industry participant and consider THC.com and the THC trademark to be my prized possessions. While I fielded multiple offers for my company over the years, I always felt that a proper home for these valuable assets would one day be known to me and I wouldn’t have any pause or hesitation. In Pineapple Express I see a remarkable opportunity to shape a burgeoning industry during its formative years and I look forward to making THC.com one of the most well-known e-commerce sites in the cannabis industry. While our focus has never been on marketing the plant itself, we see a day where marketing cannabis products on a website may be a reality. Until then, we will be focused on providing other popular items besides the plant that cater to the cannabis industry.”
About Pineapple Express
Headquartered in Los Angeles, CA, Pineapple Express is a publicly traded company that invests in, expands, and brands existing and newly established canna-businesses through expert consulting and cutting-edge technology. We provide capital to our canna-business clientele, lease real properties to canna-businesses, and provide consulting and technology to operators within the cannabis industry. We intend to create a nationally branded chain of company-owned cannabis retail stores under the "Pineapple Express" name, as soon as federal laws allow. As long as cannabis remains federally illegal, our operations will be limited to consulting, product licensing, leasing to and investing in existing and new canna-businesses, selling industry specific technology and branding/retail concept support services. Home to some of the most experienced and well-connected minds in the business, Pineapple Express is at the forefront of the legal cannabis industry.
Forward-Looking Statements:
This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended. Statements that are not a description of historical facts constitute forward-looking statements and may often, but not always, be identified by the use of such words as "expects", "anticipates", "intends", "estimates", "plans", "potential", "possible", "probable", "believes", "seeks", "may", "will", "should", "could" or the negative of such terms or other similar expressions. Actual results may differ materially from those set forth in this release due to the risks and uncertainties inherent in the Company's business, including that we have a limited operating history, are dependent upon key personnel whose loss may adversely impact our business, and some of our business activities and the business activities of some of our customers and counterparties, while believed to be compliant with applicable state law, may be illegal under federal law because they violate the Federal Controlled Substances Act. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. More detailed information about the Company is available at www.otcmarkets.com/stock/PNPL/quote. All forward-looking statements are qualified in their entirety by this cautionary statement and the Company undertakes no obligation to revise or update this release to reflect events or circumstances after the date hereof.