U.S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

Form 8-K

 

Current Report Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported):

May 5, 2017

 

MEDICINE MAN TECHNOLOGIES, INC.

(Exact name of small business issuer as specified in its charter)

 

Nevada 000-55450 46-5289499
(State or other jurisdiction of incorporation) (Commission File Number) (IRS Employer ID No.)

 

4880 Havana Street

Suite 200

Denver, Colorado 80239

(Address of principal executive offices)

 

(303) 371-0387

(Issuer’s Telephone Number)

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). 

 

Emerging growth company     [X]

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [  ]

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

[  ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[  ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[  ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[  ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

     
 

 

Item 7.01 Regulation FD Disclosure

 

Our Press Release relating to the execution of the Denver Consulting Group Term Sheet described above is attached as Exhibit 99.4 and is hereby incorporated.

 

Item 8.01 Other Events

 

On May 5, 2017, we executed a Term Sheet whereby we have reached an agreement to acquire Denver Consulting Group LLC, (“DCG”), a Colorado limited liability company that is engaged in cannabis consulting throughout the United States. The consideration for this acquisition will be the issuance of 2,258,065 shares of our Common Stock valued at $3.5 million based upon the closing price of our Common Stock on the date the Term Sheet was executed.

 

The agreement is subject to our due diligence as well as execution of definitive agreements, which shall contain customary representations. Due diligence is expected to be completed within 60 days from the date of the Term Sheet. It is also anticipated that we will retain the services of several of the principals of DCG, as well as its current employees.

 

As previously disclosed in our filings, we are also engaged in discussions with other third parties to acquire them. While no assurances can be provided it is anticipated that we will engage in additional acquisitions in the near future. Each of these proposed acquisitions will be synergistic to our existing business and is intended to continue our efforts to become a national, full service cannabis company.

 

Item 9.01 Financial Statements and Exhibits

 

(b) Exhibits. The following exhibits are included in this report:

 

No.

Description

   
10.5 Term Sheet with Denver Consulting Group, LLC
   
99.4 Press Release Announcing Execution of Term Sheet
   

 

 

 

 

 

 

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  MEDICINE MAN TECHNOLOGIES, INC.
  (Registrant)
   
Dated: May 8, 2017 By: /s/ Andrew Williams
    Andrew Williams,
Chief Executive Officer

 

 

 

 

 

 

 

 

 

 

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Exhibit 10.5

 

Term Sheet (Binding)


ACQUISITION of


Denver Consulting Group, LLC.

 

 

The terms set forth below except as noted herein are binding and as such are subject to, among other things, execution and delivery of definitive documentation and approval of each respective company’s shareholders. This document is intended to precede the creation of a Definitive Agreement that fully defines the various working parts of the acquisition process from both the Seller as well as Buyer perspectives that may become a binding term sheet so as to lock in a particular share price date for valuation purposes.

 

Parties

Medicine Man Technologies, Inc., a Nevada Corporation (“Buyer”)


and

Denver Consulting Group, LLC., a Colorado limited liability company (hereinafter the “Seller”)

Transaction Summary The parties hereto shall engage in a share exchange, whereby Buyer shall acquire all of the issued and outstanding securities of the Seller in exchange for issuance of an aggregate of shares of MDCL common stock (under Rule 144 requisites), representing $3,500,000.00 of Buyer’s issued and outstanding securities upon closing the proposed transaction (the “Transactions” or “Share Exchange”), price based upon the date of execution of this Term Sheet and MDCL’s closing price.
Contemplated Closing Date On or before 60 days from the date hereof unless extended by mutual agreement of the parties.
Due Diligence

Seller shall afford to the legal counsel, employees, agents, and authorized representatives of the Buyer reasonable access at reasonable times, upon reasonable prior notice, to its properties, offices, files, agreements, books and records as may be necessary in order that the Buyer may have a full opportunity to conduct such investigations and due diligence reviews as it shall deem necessary in connection with the Transactions contemplated hereby.


This process shall allow the Buyer to complete an audit of the Seller’s financial statements in a manner that is consistent with the Buyers public company requisites so that the Buyer may create PCAOB audited financial statements that will serve as the basis for acquisition by the Buyer.

 

 

 

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Purchase Price An aggregate of shares of Buyer’s Common Stock, to be issued to Seller at the point of closing as defined within the definitive agreement(s) associated with this process and under Rule 144 requisites and as described in the Transaction Summary Section of this document.
Representations and Warranties

The definitive agreement(s) shall include customary representations, which may include, without limitation, organization and corporate power, authorization, no breach, valid and binding agreement, capitalization, subsidiaries, financial statements, no undisclosed liabilities, absence of certain developments, title to property, tax matters, contracts, intellectual property, litigation, brokerage, governmental consents, employee benefit plans, insurance, compliance with laws, environmental compliance, employee and labor relations, accounts, effect of transaction, transactions with affiliates, customers, software, customer accounts receivable, salaries of officers and directors.

The Seller shall also provide with the execution of this agreement a corporate resolution wherein at least 51% of the existing ownership have agreed to the basic terms and conditions of this document and will, at closing provide a final corporate resolution with a vote of the entire ownership group, yea or nay. In the interim, these owners may also provide a confirmation of such vote via email to Mr. Brett Roper at licensing@medicinemandenver.com and within 10 business days of such notice provide a corporate resolution of conditional approval including all owners and their vote, yea or nay.

Conditions Buyer shall have completed due diligence and be satisfied with the results thereof no later than 30 days from the date hereof, with the definitive agreement(s) executed no later than 60 days from the date hereof unless extended by both parties for a period of up to 45 days based upon material outstanding elements beyond its control;

 

 

 

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The Share Exchange shall be approved in accordance with the existing provisions of each, the Buyer and Seller’s shareholders, members and/or Directors and managers as such authority exists;


The parties shall have performed, in all material respects, all of their obligations under the definitive agreements. All of the statements, representations and warranties contained in the definitive agreements shall be complete and true in all material respects. No material adverse changes shall have occurred in the business, properties and assets of Seller other than changes set forth in the definitive agreement or occurring in the ordinary course of business.

The Seller shall provide an audited or reviewed status financial statement of its books and records by a duly qualified independent accountant in accordance with Generally Accepted Accounting Practices (“GAAP”) in a form acceptable to the US Securities and Exchange Commission. The costs of the Audit shall be borne by the Buyer however, the Seller agrees to reimburse all such costs to the Buyer should this agreement be nullified by the Seller for any reason. If this occurs, the Buyer agrees that all such related documentation shall become the sole property of the Seller upon reimbursement of audited financial statement generation costs.


The Buyer is authorized to disclose elements related to this acquisition as required by law including relevant 8K filings and press releases as customary with a material event with the Seller’s right to review and comment on any such release of information. The Buyer also agrees that quotes related to any such press release(s) as provided by the Seller will be included within any such release based upon legal review and relevance, if required.


Buyer shall agree to various employment agreements with the Seller upon closing mutually agreeable between Buyer and Seller, including allocation of an appointment of one (1) member of the Advisory Board to the Board of Directors, such Advisory Board shall be invited to attend all Board of Director Meetings on a voluntary basis.

 

 

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Buyer agrees that any future business referred to it by the existing officers and directors of the Seller that are not included in the hiring outlook for the Buyer’s team shall be entitled to a commission payment that will be negotiated and included in the final definitive agreement.


The Buyer agrees to provide all possible consideration for the hiring of the existing Seller’s employee group but agrees that any such hire shall be made on a temp to hire basis of ninety (90) days duration similar to the Buyer’s current hiring procedure.


The Buyer agrees to provide all possible consideration to other Seller related contract service providers based upon non-duplication of tasking and value to the Buyer’s business.
Termination Terminable (i) by mutual consent of the parties or (ii) by either party if the conditions to such party’s obligations are incapable of fulfillment or Transactions shall not have closed within 60 days or by mutual extension of this agreement from the date hereof.
Binding Provisions Seller shall not, either directly or indirectly, for a minimum of 60 days from the date hereof (herein called the “Exclusive Period” or unless extended in accordance with the Buyer’s provision as noted in the conditions section), enter into, or continue, any negotiations or discussions with any party in respect of the sale of Seller or any assets owned by Seller or any part thereof in any manner whatsoever to any person, in any manner which would be inconsistent or in competition with the matters and transactions contemplated by this Term Sheet.  In the event Seller breaches this provision, Seller shall be responsible for all costs incurred by Buyer herein, including but not limited to Buyer’s attorneys’ fees.
Amendment Only by written consent of all of the parties hereto.
Governing Law/Venue Nevada

 

 

SIGNATURE PAGE TO FOLLOW

 

 

 

 

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AGREED TO AND ACCEPTED this    4    day of May 2017.

 

MEDICINE MAN TECHNOLOGIES, INC.      
         
By: /s/ Brett Roper      
         
Brett Roper, Chairperson of the Board of Directors      
         
         
DENVER CONSULTING GROUP, LLC.      
         
By: /s/ Greg Gamet   By: /s/ Ryan Lewis
         
Name: Greg Gamet   Name: Ryan Lewis
         
Position: Member   Position: Member
         
         
By: /s/ Justin Jones   By: /s/ Frank Falconer
         
Name: Justin Jones   Name: Frank Falconer
         
Position: Member   Position: Member
         
         
By: /s/ Bryan Sullivan   By: /s/ Jay Griffin
         
Name: Bryan Sullivan   Name: Jay Griffin
         
Position: Member   Position: Member
         
         
By: /s/ Dan Glenn      
         
Name: Dan Glenn    
         
Position: Member    
         
         
Witnessed      
         
By: /s/ Lauren Edgerton      
         
Name: Lauren Edgerton      

 

 

 

 

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Exhibit 99.4

 

For Immediate Release

May 9, 2017

 

MEDICINE MAN TECHNOLOGIES INC. TO ACQUIRE DENVER CONSULTING GROUP

 

Companies Enter into a Binding Term Sheet

 

Denver, Colorado – May 9, 2017. Medicine Man Technologies, Inc. (OTCQB: MDCL), one of the country’s leading cannabis brand development and consulting companies announced today that it has agreed to terms to acquire the Denver Consulting Group, LLC with offices in Denver, Colorado and Portland, Oregon. The closing of this transaction is subject to completion by Medicine Man Technologies (“MMT”) of its due diligence efforts. The transaction has already been approved by the Board of Directors of MMT and by the Managers and Members of Denver Consulting Group, Inc. The terms of the acquisition provide for MMT to issue an aggregate of 2,258,065 shares of its Common Stock to the Members of Denver Consulting Group.

 

Greg Gamet, Denver Consulting Group’s Co-Founder and Managing Partner stated, “Our companies have known each other for some time and worked together in the past to accommodate clients when we both had capacity challenges. In discussing this opportunity we were immediately comfortable in considering such an alignment based upon our mutual respect for each other that has developed from past experiences. I believe our corporate cultures are very similar and that the combination of their new relationship with Josh Haupt with both company’s respected presence in the cannabis industry will allow the consolidated company to become an even more value based resource to our existing and future clients.”

 

Brett Roper, MMT’s COO and Co-Founder stated, “As we continue to search for acquisition and growth opportunities we firmly believed that other high quality consulting practices would provide greater access to people resources as well as markets here in the US and globally. The Denver Consulting Group’s principals and team have worked tirelessly over these past several years to develop a well-respected and successful business presence within the industry. We are honored that they believe in this opportunity and are looking forward to continuing to provide a value engineered level of excellence in our service offerings. We are very excited about the various growth opportunities this consolidation will provide and are optimistic that these exciting developments will enhance revenues and allow us all to reach our overall goals of the evolution of Medicine Man Technologies and the Denver Consulting Group into a valuable component of our brands warehouse.”

 

 

 

About the Denver Consulting Group

 

Founded in Colorado in 2014, , the Denver Consulting Group has active clients in Colorado, Alaska, Washington, Oregon, California, Michigan, Illinois, Arkansas, Rhode Island, Maryland, Pennsylvania, Massachusetts, New York, and Florida as well as Puerto Rico and Australia. In addition, DCG has successfully support winning applications in Colorado, Alaska, Oregon, California, Illinois, Maryland, and Puerto Rico. In addition, DCG has successfully support winning applications in Colorado, Alaska, Oregon, California, Illinois, Maryland, and Puerto Rico. More recently the company has added new offices in Oregon and intends to add a significant presence in California led by Greg Gamet, in concert with Medicine Man Technologies, Inc. The company’s 1 st quarter of FY 2017 produced just over $450,000 of income and substantial profitability.

 

 

About Medicine Man Technologies

 

Established in March 2014, the Company secured its first client/licensee in April 2014.  With their recent acquisition of Pono Publications and Success Nutrients which included the enhanced cultivation IP of Joshua Haupt, its new Chief Cultivation Officer, they are launching several new service lines including Cultivation MAX, wherein they provide cultivation guidance to underperforming businesses in exchange for compensation related to the improvement factor, as well as cost containment for these clients. To date, they have entered into three Cultivation MAX arrangements that represent a substantial new income opportunity for the Company and are actively providing all new licensees of their other services with access to the Three-A-Light Pro version of their newly improved cultivation methodology. This cultivation metric has a proven capability to generate up to four (4) pounds plus per light per harvest, or in excess of 700 plus grams of dried cured flower per square foot of flowering space on an annualized basis.

 

 

 

 

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Safe Harbor Statement

 

This press release may contain forward looking statements which are based on current expectations, forecasts, and assumptions that involve risks as well as uncertainties that could cause actual outcomes and results to differ materially from those anticipated or expected, including statements related to the amount and timing of expected revenues as well as any payment of dividends on our common and preferred stock, statements related to our financial performance, expected income, distributions, and future growth for upcoming quarterly and annual periods. These risks and uncertainties are further defined in filings and reports by the Company with the U.S. Securities and Exchange Commission (SEC).  Actual results and the timing of certain events could differ materially from those projected in or contemplated by the forward-looking statements due to a number of factors detailed from time to time in our filings with the Securities and Exchange Commission. Among other matters, the Company may not be able to sustain growth or achieve profitability based upon many factors including but not limited to general stock market conditions. Reference is hereby made to cautionary statements set forth in the Company's most recent SEC filings. We have incurred and will continue to incur significant expenses in our expansion of our existing as well as new service lines noting there is no assurance that we will generate enough revenues to offset those costs in both the near and long term.  Additional service offerings may expose us to additional legal and regulatory costs and unknown exposure(s) based upon the various geopolitical locations we will be providing services in, the impact of which cannot be predicted at this time.

 

Contact Information:

Attention Brett Roper via info@medicinemantechnologies.com

Telephone (303) 371-0387