Freedom Leaf (FRLF) announced today that it had signed a definitive agreement to acquire the Irie CBD Product Line, which includes all assets, formulating equipment, trademarks, formulas, products, and a full manufacturing and processing facility located in Oakland, California
Irie CBD is a California-based manufacturer of cannabidiol tinctures, concentrates, edibles, and topicals. In 2017, Irie CBD reported approximately $1.5 million in revenue.
As part of the agreement, Freedom Leaf will pay approximately $400,000 in cash and 1.8 million in shares of common stock, valued at $0.23 a share, with an anticipated closing date of April 15, 2018.
Given the company’s troubled financial status, the transaction has raised a few eyebrows. In the company’s 10Q for the fiscal quarter ending on Dec. 31, 2017, it was reported that the company had a $6.3 million deficit, no cash, and did not “sufficient resources to effectuate” the business; leaving some to wonder how the deal was paid for.
The deal also includes assesses and trademarks in addition to the Irie CBD line, including the following: Earth Born Inc. California, Earth Born Inc. Delaware, Irie Living, and Genesis Media Works LLC; which has also operated under the names Terra’s Way,” “Irie Hemp Company,” and “Earth Born Botanicals”.
“Completing the Irie CBD acquisition is directly in line with Freedom Leaf’s goal of creating a more financially stable corporation in the cannabis/hemp space,” said Freedom Leaf CFO, Richard Groberg, in a statement. Freedom Leaf expects to see a direct growth in sales for the target’s existing product lines as well as providing various cost-saving and revenue-enhancing aspects to Freedom Leaf’s existing businesses.”
Recently, the company also announced that it had signed a national distribution agreement with Quality Products Distribution Inc. to distribute its Hempology product line. The agreement is expected to help the Hempology line generate approximately $2 million in revenue in 2018.
Despite the recent announcements, the company’s stock continues to slide downwards. Trading at $0.19 cents per share, the company’s stock is down 55% from its all time of $0.43 cents per share, which it reached in January, and down 38% from the previous month’s high of $0.31 cents per share.