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California-based cannabis company to buy Imaging3 in reverse merger


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California-based cannabis company to buy Imaging3 in reverse merger

Medical-device maker Imaging3 Inc. is going to be acquired in a reverse merger by a privately held Los Angeles-based cannabis company to help fund its 3D X-ray imaging technology.

Under a letter of intent, Burbank, Calif.-based Imaging3 will own about 20% of the combined company, while the remaining will be held by the cannabis producer. The cannabis company has generated revenues of about $550,000 since it began operations in mid-2018.

The cannabis company is required to obtain a $10 million equity investment and a minimum $1.3 million bridge loan prior to the closing of the deal.

Imaging3 added that it plans to close a $3 million funding for its Dominion 3D X-ray imaging technology. The company said it has certain obligations, and the proposed acquisition will help it settle the dues so that a large part of the $3 million can be used to develop and commercialize Dominion.

Following the acquisition's close, a new privately held company will own all rights to the Dominion technology. This new private company, which will consist of people from both companies, will report its business plan separately from the cannabis operation.

Also upon closing, officers and directors of Imaging3 will resign, making way for appointees of the cannabis company.

Imaging3 intends to execute a definitive equity exchange agreement that defines the material terms of the deal around March 31.