Burbank, CA, May 13, 2019 (GLOBE NEWSWIRE) -- Imaging3, Inc. (OTCQB:IGNG), (“IGNG”) or (the “Company”), a development stage company focused on the introduction of disruptive technologies in the medical imaging industry, is further updating its prior announcements regarding its reverse acquisition (the “Acquisition”) by Grapefruit Boulevard Investments, Inc. (‘GBI”) a privately held Los Angeles based cannabis company and simultaneous vending of its imaging business into a privately held corporation which will be partially owned by post - Acquisition IGNG .
After carefully considering various proposals, on Sunday May 12, 2019, Imaging3 signed a term sheet issued to it by a private asset management firm (the “Investor”). The term sheet, which is subject to execution of a definitive Securities Purchase Agreement and associated agreements (the “SPA”) which IGNG expects to be finalized this week, calls for the Investor to purchase $4,000,000.00 of convertible notes (the “Notes”) in four Tranches commencing upon execution of the SPA and simultaneous closing of the Acquisition (the “Closing”). Tranche 1 will be for $600,000.00 and will be paid at the Closing. Tranche 2 will be for $1,400,000 and will be paid the day IGNG files a registration statement registering the shares underlying the convertible notes which the Company believes will be on or before June 7, 2019. Tranche 3 of $1,000,000 will be paid upon effectiveness of the S-1 registration statement, which the Company believes will occur on or before August 15, 2019. The final Tranche of $1,000,000.00 will be paid subsequent to effectiveness of the registration statement. The Notes will mature 24 months from date of issuance and will be redeemable until maturity at 150% of the remaining balance on a given redeemed Note. The Notes will be convertible into shares of IGNG common stock at 95% of the mathematical average of the five lowest trading prices for IGNG common stock on the OTCQB for the period from the Closing to the maturity date of the Note being converted less $0.01 for conversions at less than $0.15 and less $ 0.02 for conversions at more than $0.15. In addition to the Notes, at the closing IGNG will issue to the Investor a warrant to purchase 16,000,000 shares of its common stock at $0.125 per share, a warrant to purchase 15,000,000 shares at $0.15 per share and a warrant to purchase 8,000,000 shares at $0.25 per share. (collectively, the “Warrants”) The Warrants are “cash only” and are callable if IGNG stock trades on the OTCQB at 200% or more of a given exercise price for 5 consecutive days. All told, upon payment of all four tranches of the Notes and exercise of all of the Warrants the Company will realize gross proceeds of $10.25 Million.
John Hollister, Imaging3 CEO stated, “Obtaining this financing commitment, which, by its terms, is a marked departure from the “toxic” debt which is normally offered to issuers in the OTC space, is the last significant piece of the puzzle to ensure that GBI will have the requisite financing necessary to fuel its aggressive expansion plans. The structure of the financing assures that IGNG/GBI will quickly secure the financial resources necessary to ramp up its revenue growth to the benefit of IGNG’s shareholders.”
Brad Yourist, GBI CEO added “Another goal achieved. This mainstream financial commitment not only provides us with a rapid infusion of approximately $4,000,000 so we don’t miss a beat as we build our business, but also provides us with a mechanism to raise up to an additional $6,000,000.00 as the market reacts to our successful execution of our action plan. The simultaneous closing of the Acquisition and this financing affords us the opportunity move ahead decisively, while at the same time leaving us the opportunity to explore all other financing alternatives which may become available to us in the future. GBI’s management is truly gratified by the IGNG/GBI team’s efforts in securing this requisite level of financing which will allow us to proceed in a steady, pragmatic fashion the results of which will inure to the benefit of our shareholders, strategic partners and financial stakeholders. GBI looks forward to closing the Acquisition on or before May 22, 2019 and thereafter ramping up our efforts to rapidly grow our revenues”.
Potential investors in IGNG’s common shares are cautioned that there can be no assurances that the reverse acquisition of IGNG by GBI will ever be closed and that even if it is, there can be no assurance that the Company will thereafter be able to obtain the financing necessary to achieve its articulated goals and further that even if such financing is obtained that it will be sufficient for the Company to achieve its ultimate goals or to even remain in business.
About Imaging3, Inc.
Imaging3, Inc., founded in 1993, has developed a patented medical imaging technology, called the Dominion SmartScan™, that produces 3D X-ray images, effectively in real time. The SmartScan technology has the potential to allow healthcare professionals to perform diagnostic and therapeutic procedures more quickly and accurately, which may result in higher throughput for the clinicians and fewer safety risks for patients. Imaging3’s technology exposes patients to less harmful radiation than current equivalent imaging technologies such as CT scans. The company believes this will allow scans to be used in many settings where scanning is currently limited by concerns about radiation exposure. The technology also notably allows for reasonably convenient portability, easier installation and use-readiness, and a significantly reduced cost burden suitable for novel settings and for healthcare systems across varied global settings. Imaging3 plans to submit a 510(k) application to FDA during 2019 and or 2020 to gain marketing authorization for initial applications for the SmartScan technology. Visit the company’s website at http://www.imaging3.com for detailed information about the company’s technology.
About GBI
GBI is based in Westwood, Los Angeles, California. GBI holds California licenses to both manufacture and distribute cannabis products and is fully compliant with all applicable laws and regulations to operate such business. GBI has its extraction facility located in the Coachillin Industrial Cultivation and Ancillary Canna-Business Park in Desert Hot Springs, located on the extension of North Canyon Rd., approximately 10 miles north of the center of Palm Springs. GBI obtained its California licenses in January of 2018 and commenced distribution of cannabis products in June of 2018. GBI’s goal is to become a seed to sale vertically integrated fully compliant cannabis and CBD product Company. Grapefruit Boulevard Investments, Inc. is a cannabis product company which holds California licenses to manufacture and distribute cannabis products. To obtain further information on GBI’s California cannabis licenses and its business plan and operations, please visit GBI’s website at http://grapefruitblvd.com/packaging/.
Safe Harbor Statement
Imaging3 cautions you that any statement included in this press release that is not a description of historical facts is a forward-looking statement. Many of these forward-looking statements contain the words "anticipate," "believe," "estimate," "may" "intend," "expect" and similar expressions. Actual results, performance or achievements could differ materially from those contemplated, expressed or implied by the forward-looking statements contained herein. These forward-looking statements are based largely on the expectations of the company and are subject to a number of risks and uncertainties inherent in the Imaging3’s business, including, without limitation: the company may not ever obtain FDA approval for any of its devices; the company may not be able to secure the funds necessary to support its product development plans; and the company may not ever achieve the market success to sustain a profitable business. In addition, there are risks and uncertainties related to economic recession or terrorist actions, competition from much larger imaging companies, technological obsolescence, unexpected costs and delays, potential product liability claims, and many other factors. More detailed information about Imaging3 and the risk factors that may affect the realization of forward-looking statements is set forth in the company’s filings with the Securities and Exchange Commission, including the company’s Annual Report on Form 10-K and its Quarterly Report on Form 10-Q. Such documents may be read free of charge on the SEC’s website at www.sec.gov. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. All forward-looking statements are qualified in their entirety by this cautionary statement, and Imaging3 undertakes no obligation to revise or update this press release to reflect events or circumstances after the date hereof. This caution is made under the safe harbor provisions of Section 21E of the Private Securities Litigation Reform Act of 1995.
Investor Relations Contact:
John Hollister
Chief Executive Officer
info@imaging3.com
4919 Noeline Ave., CA 91436
(805) 908-5719