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Status and what we know - RXNB lawsuit
Let me preface this by saying I was unimpressed with the LEAF Aspen GIFT revenue and profit margins. I was expecting higher. That being said, I think a substantial part of PHOT's future and ability to recoup reporting losses is tied to the CEN Bio and RXNB deals.
The RXNB deal has been subject of much commotion as RXNB filed suit against GrowLife on March 20. Here is a tidbit from page 15 of the annual that explains what that lawsuit is all about :
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ITEM 3. LEGAL PROCEEDINGS .
The Company discloses the following pending legal actions to which we are a party or of which our property is the subject that may have a material adverse affect on our business and operations:
On March 20, 2014, Wise Phoenix, LLC (“WP”) and AJOA Holdings, LLC (“AJOA”), collectively referred to as the “Sellers,” and R.X.N.B., Inc., a Nevada Corporation (“RXNB”) initiated a lawsuit against the Company and OGI, the Company’s Joint Venture, in Clark County, Nevada in its Business Court division in regards to a Sellers Interest Purchase Agreement (“RXNB Agreement”) with the Company and OGI. The Sellers and RXNB claim that the Company must effect registration of Company shares issuable to Seller in connection with the RXNB Agreement since it had complied with the provisions set forth in the RXNB Agreement and delivered documents and instruments to the Company. The Company contends that the Sellers and RXNB have not met the requirements established by the RXNB Agreement and therefore the Company is not obligated to register or issue the shares.
On March 24, 2014, Sellers, RXNB, OGI and the Company agreed to extend the closing date of the RXNB Agreement to April 4, 2014.* Additionally, Sellers and RXNB agreed to withdraw their lawsuit against the Company and OGI without prejudice.
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*Of course , the date was pushed back again to the 30th, as of yesterday.
Takeaway : RXNB wants the shares NOW. They want the shares, and to close the deal so badly that they were willing to sue to get them . That's how bad they want the deal.
PHOT is not satisfied. The deal with RXNB is contingent on books/ financials of RXNB being vetted to OGI's satisfaction, much like the CEN Bio deal is contingent upon Bill getting the license to grow.
Let me preface this by saying I was unimpressed with the LEAF Aspen GIFT revenue and profit margins. I was expecting higher. That being said, I think a substantial part of PHOT's future and ability to recoup reporting losses is tied to the CEN Bio and RXNB deals.
The RXNB deal has been subject of much commotion as RXNB filed suit against GrowLife on March 20. Here is a tidbit from page 15 of the annual that explains what that lawsuit is all about :
----------------------
ITEM 3. LEGAL PROCEEDINGS .
The Company discloses the following pending legal actions to which we are a party or of which our property is the subject that may have a material adverse affect on our business and operations:
On March 20, 2014, Wise Phoenix, LLC (“WP”) and AJOA Holdings, LLC (“AJOA”), collectively referred to as the “Sellers,” and R.X.N.B., Inc., a Nevada Corporation (“RXNB”) initiated a lawsuit against the Company and OGI, the Company’s Joint Venture, in Clark County, Nevada in its Business Court division in regards to a Sellers Interest Purchase Agreement (“RXNB Agreement”) with the Company and OGI. The Sellers and RXNB claim that the Company must effect registration of Company shares issuable to Seller in connection with the RXNB Agreement since it had complied with the provisions set forth in the RXNB Agreement and delivered documents and instruments to the Company. The Company contends that the Sellers and RXNB have not met the requirements established by the RXNB Agreement and therefore the Company is not obligated to register or issue the shares.
On March 24, 2014, Sellers, RXNB, OGI and the Company agreed to extend the closing date of the RXNB Agreement to April 4, 2014.* Additionally, Sellers and RXNB agreed to withdraw their lawsuit against the Company and OGI without prejudice.
---------------------------------
*Of course , the date was pushed back again to the 30th, as of yesterday.
Takeaway : RXNB wants the shares NOW. They want the shares, and to close the deal so badly that they were willing to sue to get them . That's how bad they want the deal.
PHOT is not satisfied. The deal with RXNB is contingent on books/ financials of RXNB being vetted to OGI's satisfaction, much like the CEN Bio deal is contingent upon Bill getting the license to grow.
TM
