Icanic Brands Completes Merger With LEEF Holdings Extraction Company

Icanic Brands Company, Inc. ICNAF ICAN has acquired all of the common stock of LEEF Holdings, Inc., pursuant to the terms of a merger agreement among the company, its wholly-owned subsidiary, Icanic Merger Sub, Inc. and LEEF, dated January 21, 2022.

LEEF’s manufacturing capabilities include a 12,000 square foot extraction and manufacturing facility with significant throughput and distillate extraction capability. Headquartered in Willits, California, LEEF’s core manufacturing competencies include ethanol extraction, hydrocarbon extraction, and solventless extraction. LEEF has also recently received a 186.7 acre cultivation land use permit. The site sits on over 1,900 acres of prime California real estate.

“Today is a historic day for Icanic as we officially welcome Micah Anderson and the rest of the Leef Holdings team to our family. Micah has created a truly amazing business and we couldn’t be more excited for this transformational acquisition that now positions the company extremely well to be a market leader in the state of California and beyond” stated Brandon Kou, CEO of Icanic Brands. “The significance of this transaction cannot be understated as it finalizes the foundation that we have been building and will now allow the combined entity to take advantage of market opportunities that present themselves over the coming years that should result in some very exciting growth. I want to thank everyone on both teams for their dedication and determination during this process in seeing the transaction to a close.”

Terms of the Merger

Pursuant to the terms of the merger agreement, the company acquired all the issued and outstanding LEEF shares in accordance with the Nevada Revised Statutes. In consideration for the acquisition of the LEEF shares, Icanic issued an aggregate of 758.27 million common shares of the company, resulting in former LEEF shareholders being entitled to receive approximately 12.54755 Icanic shares for each Leef share held.

Pursuant to the terms of the merger agreement, former LEEF shareholders will also be entitled to receive the following contingent earn-out payments:

• On July 20, 2023, an amount equal to 10% of the product equal to two times the trailing 12-months revenue calculated for the 12-month period immediately following the date hereof minus $120 million;

• On July 20, 2024, an amount equal to 10% of the product equal to two times the TTM revenue calculated for the 12-month period immediately following the date that is one year from the date hereof minus the $120 million and minus any amounts paid pursuant to the first earn-out payment

• On July 20, 2025, an amount equal to 10% of the product equal to two times the TTM revenue calculated for the 12-month period immediately following the date that is two years from the date hereof minus $120 million, minus any amounts paid pursuant to the first earn-out payment, minus any amounts paid pursuant to the second earn-out payment.

Each of the foregoing earn-out payments will be satisfied in full through the issuance of Icanic shares based on the 30-day volume weighted average trading price of the Icanic shares on the Canadian Securities Exchange for the period ending on the business day prior to the issuance.

Upon closing of the merger, the company entered into an employment agreement with Micah Anderson whereby Anderson has been appointed CEO of LEEF. Upon closing of the merger and pursuant to Anderson’s employment agreement, the company granted Anderson 7.5 million stock options of the company, whereby each option entitles the holder thereof to acquire one Icanic share at $0.185 per Icanic share for a period of five years from the date of issuance, vesting in 36 equal monthly installments over three years.

In connection with the merger, the company has issued 22.75 million Icanic shares at $0.19978 per Icanic share to Mark Smith pursuant to his employment agreement as bonus payment.

Photo: Courtesy of Ryan Lange on Unsplash

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