{"id":3151,"date":"2016-01-13T17:31:41","date_gmt":"2016-01-13T17:31:41","guid":{"rendered":"http:\/\/www.medicalmarijuanainc.com\/?p=5285"},"modified":"2016-01-13T17:31:41","modified_gmt":"2016-01-13T17:31:41","slug":"medical-marijuana-inc-announces-14-million-debt-reduction-and-major-strategic-acquisitions-in-q4-of-2015","status":"publish","type":"post","link":"https:\/\/medicalmarijuanainc.com\/2016\/01\/13\/medical-marijuana-inc-announces-14-million-debt-reduction-and-major-strategic-acquisitions-in-q4-of-2015\/","title":{"rendered":"Medical Marijuana Inc. Announces $14 Million Debt Reduction and Major Strategic Acquisitions in Q4 of 2015"},"content":{"rendered":"

Medical Marijuana, Inc. Announces $14 Million Debt Reduction and Major Strategic Acquisitions in the Fourth Quarter of 2015<\/b><\/span><\/em><\/h3>\n

Medical Marijuana, Inc. Eliminates Approximately $14 Million in Long-Term Debt and Extends Maturities on Remaining Debt Obligations and Acquires and Consolidates Into Its Operations 93.4% of HempMeds<\/i>\u00ae<\/i><\/b> Brasil\u2122, Remaining 20% of <\/i>HempMeds<\/i>\u00ae <\/i><\/b>PX<\/i><\/span> Not Already Owned; 100% Each of HempMeds<\/i>\u00ae<\/i><\/b> Puerto Rico\u2122 and HempMeds<\/i>\u00ae<\/i><\/b> Mexico\u2122<\/i><\/span><\/p>\n

San Diego, California – January 13, 2016 <\/b>–\u00a0Medical Marijuana, Inc.<\/span><\/a> (the \u201cCompany\u201d \u2013 OTC Pink: MJNA) is pleased to announce the Company has significantly reduced its debt obligation from $24 million at the close of the third quarter (ending 9\/30\/2015) to approximately $10 million at the close of the fourth quarter (ending 12\/31\/2015), a reduction of approximately $14 million. The Company also acquired and consolidated several of its partnerships including 93.4% of HempMeds\u00ae<\/b> Brasil\u2122, LLC and the remaining 20% of HempMeds\u00ae <\/b>PX<\/span><\/a> that Medical Marijuana, Inc.<\/span> did not already own from affiliated parties that comprise the largest shareholder of the Company.<\/span><\/p>\n

Prior to the acquisitions, the Company sold its RSHO\u2122 products to HempMeds Brasil\u2122<\/span><\/a> and the other consolidated companies at wholesale, which then in turn sold those products retail to consumers in their respective markets. As a result of the acquisitions, the Company will now realize the full margin between the cost of manufacturing the product and retail pricing on the sales of the product.<\/span><\/p>\n

The acquisition of the remaining 20% of HempMeds\u00ae <\/b>PX<\/span> was completed after HempMeds\u00ae<\/b> PX acquired HempMeds\u00ae<\/b> PR (Puerto Rico) Ventures, LLC and KannaMex\u2122, LLC from the same affiliated shareholder. The combined purchase price for the two acquisitions was $13,875,000. Under the terms of the acquisitions, the purchase price is subject to downward adjustment if the aggregate post-acquisition valuation of both entities (as of the transaction date of December 31, 2015) by a recognized independent valuation firm is less than the purchase price and is not<\/i> subject to upward adjustment unless the aggregate valuation is greater than $100 million (as of December 31, 2015) and such upward valuation is nonetheless subject to a cap of $20 million.<\/span><\/p>\n

The acquisition by HempMeds\u00ae<\/b> PX of HempMeds\u00ae<\/b> Puerto Rico\u2122 and KannaMex\u2122 was completed immediately prior to the Company\u2019s acquisition of Hempmeds\u00ae<\/b> PX for the nominal sum of $100,000. The value of these two entities shall not be included in the aggregate valuations of HempMeds\u00ae<\/b> Brasil\u2122 and HempMeds\u00ae<\/b> PX unless their aggregate valuation is less than the purchase price.<\/span><\/p>\n

In commenting on the transactions, CEO Stuart Titus stated: \u201cThe elimination of $14 million in debt and associated improvement in our balance sheet combined with the acquisitions enhances the Company\u2019s positioning for significant growth. We believe that we\u2019re acquiring 93.4% of HempMeds Brasil\u2122 and the 20% of our flagship U.S.-based operation HempMeds\u00ae<\/b> PX for a fraction of what the independent valuations will show these entities to be worth. In the very unlikely event that we\u2019re wrong, the transaction structure protects the shareholders through a purchase price reduction. I\u2019m most excited by the fact that we\u2019ve completed the acquisitions when Brazil has barely begun to realize what we believe to be the potential for explosive growth. Our products have been approved by the Brazilian government as a prescription by Brazilian doctors to patients suffering from Epilepsy, Parkinson\u2019s and Chronic Pain. These represent enormous markets in Brazil with these conditions estimated to affect approximately 20 million people.\u201d<\/span><\/p>\n

Titus went on to say, \u201cIn addition, HempMeds\u00ae<\/b> Puerto Rico and KannaMex\u2122 were essentially included in the deal for what amounts to mere nominal consideration. Puerto Rico holds great potential, specifically the Company has 12 medical product registrations as well as an agreement for the distribution and marketing of those products by the island\u2019s largest private pharmaceutical sales and distribution company. KannaMex\u2122 made significant inroads in Mexico and we expect to announce some of those accomplishments in the very near future. We believe that Mexico alone has the potential to be as large or even larger than the South American markets we have already been approved in. Our affiliated largest shareholders that entered into these transactions at these prices, and with these protections for the shareholders, have demonstrated an impressive commitment to enhancing shareholder value for itself, and for the other shareholders of the Company. I could not be more optimistic about what this means for our future.\u201d<\/span><\/p>\n

Summary of above:<\/span><\/p>\n

Loan Payable Chicago Ventures:<\/span><\/p>\n