LOS ANGELES and DESERT HOT SPRINGS, Calif., July 06, 2022 (GLOBE NEWSWIRE) — via InvestorWire — Grapefruit USA, Inc. (OTCQB: GPFT) (“Grapefruit” or the “Company”), an innovative California-based cannabiotech company, announces today the execution of a binding letter of intent (“LOI”), entered into on June 30, 2022, by the Company and Diagnostic Lab Corporation of Englewood Cliffs, New Jersey, (“DLC”) a diversified food and agriculture safety company, pursuant to which the Company and DLC will jointly recapitalize Grapefruit and raise $12.5 million of debt financing (including $5.5 million already committed from a qualified construction lender) to:
1. Complete construction of the Company’s “Mothership” cultivation, manufacturing and distribution facility in the Coachillin’ Industrial Cultivation and Ancillary Canna-Business Park, located 14 miles north of downtown Palm Springs, California.
2. Acquire all of DLC’s assets for a to-be-determined amount of cash and Grapefruit common shares.
3. Fund the Company’s application for an FDA 510K approval for its patented Hourglass™ time release Z-POD THC/CBD/cannabinoid infused delivery cream.
4. Fund the Company’s clinical study to measure the effects of the Hourglass™ delivery cream on the pain and other symptoms of patients who suffer from the debilitating effects of osteoarthritis.
DLC will additionally arrange Grapefruit’s acquisition of cash-flowing testing labs and provide sufficient working capital and interest payment reserves for Grapefruit to reach positive cash flow (the “Transaction”).
Implementation of the Transaction is subject to Grapefruit’s completion of due diligence with respect to the various components of the Transaction and drafting and execution of a definitive agreement between the Company and DLC.
The parties plan to withdraw the $12.5 million of new debt through a public equity capital raise and concurrent uplist to a US or Canadian exchange, as applicable securities regulations permit.
Bradley J. Yourist, Grapefruit’s CEO and co-founder, commented, “Execution of this letter of intent between DLC and GPFT is the next step in Grapefruit’s evolution from a ‘me too’ cannabis company to a medical science-based, canna-focused biotech company that will develop and obtain regulatory approval for an ever-expanding line of proprietary cannabis products based on the Company’s patented Hourglass technology. Construction of the Coachillin’ ‘Mothership’ facility at the Coachillin’ Park will secure our balance sheet and provide a reliable source of reasonably priced pharma-quality cannabis flowers for raw material for THC Hourglass products and for distribution in both the US and Canada, as appropriate under any given market circumstances. The 510K approval for the Hourglass technology will facilitate its rapid market acceptance throughout the United States as an approved medical device. Finally, our lab acquisition program will provide rapid revenue growth and expand the Company’s cannabis industry footprint. The parties expect to finalize and execute the definitive agreement before the end of August 2022 and close the Transaction shortly thereafter
Alan Hirsch, Diagnostic Lab Corporation’s CEO and co-founder, commented, “We look forward to the anticipated business combination, synergistic sector verticals and working with the Grapefruit team to build a successful company.”
To purchase Grapefruit’s groundbreaking patented CBD delivery topical cream outside of Canada, please visit: https://hourglassonlinestore.com/
To learn more about Grapefruit’s new sustained-release patented Hourglass™ THC + Cannabinoid topical cream, please watch this promotional video: https://www.youtube.com/watch?v=6cU9MJMgH1w&feature=youtu.be
and visit our website at: https://grapefruitblvd.com/hourglass/
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Grapefruit’s corporate headquarters is in Westwood, Los Angeles, California. Grapefruit holds California permits and licenses to both manufacture and distribute cannabis products in the Golden State. Grapefruit’s extraction laboratory and manufacturing and distribution facilities are located in the industry-recognized Coachillin’ Industrial Cultivation and Ancillary Canna-Business Park in Desert Hot Springs, located on the extension of North Canyon Road, approximately 14 miles north of downtown Palm Springs. To obtain further information on Grapefruit and its operations, please visit the Company’s website at https://grapefruitblvd.com/.
Safe Harbor Statement
Grapefruit cautions 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 Grapefruit’s business, including, without limitation: the Company may not ever obtain additional funds necessary to support its business development and growth. plans; and the Company may not ever achieve the market success to reach or sustain a profitable business. In addition, there are risks and uncertainties related to economic recession or terrorist actions, competition from much larger cannabis companies, unexpected costs and delays, potential product liability claims and many other factors. More detailed information about Grapefruit 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, its Quarterly Report on Form 10 -Q for the period ended Sept. 30, 2021, and its Registration Statement on Form S-1/A. Such documents may be read free of charge on the SEC’s website at www.sec.gov. Readers 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 Grapefruit 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.
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