UPEXI, INC. current report, 05 August 2021

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UPEXI, Inc. (formerly Grove, Inc.) — Form 8-K Summary

Business Context and Reporting Period

Grove, Inc., a Nevada corporation and emerging growth company, filed this Current Report on August 5, 2021, with the report signed August 6, 2021. The filing reports the closing of an acquisition of substantially all assets of VitaMedica Corporation, an online seller of supplements for surgery, recovery, skin, beauty, health, and wellness.

Transaction and Key Financial Terms

  • The Asset Purchase Agreement was entered into effective August 1, 2021, and the transaction closed on August 5, 2021.
  • The stated purchase consideration consisted of $2.0 million in cash, $500,000 of Grove common stock, a $500,000 non-negotiable promissory note, and a $500,000 convertible promissory note.
  • The convertible note may be converted at the seller’s option at $5.00 per share, representing 100,000 shares of Grove common stock.
  • The purchase price is subject to a potential reduction if the acquired business generates less than $2.5 million in revenue during the first year after closing.
  • The purchase price is also subject to a positive or negative adjustment based on closing working capital compared with benchmark working capital of $573,000.

Material Changes Versus the Prior Comparable Period

The filing does not provide prior-period financial statements or comparable operating metrics. The material change disclosed is the acquisition of VitaMedica’s substantially all assets and the related cash, debt, and potential equity obligations.

Guidance, Outlook, Risks, and Unusual Items

  • No formal revenue, earnings, margin, cash flow, or other operating guidance is provided.
  • The first-year revenue threshold creates a potential purchase-price reduction, while the working-capital adjustment could increase or decrease the final consideration.
  • The transaction increases the company’s funding obligations through $1.0 million of promissory notes and includes potential dilution from the convertible note and stock consideration.
  • The filing does not provide clear values for revenue, profit, cash flow, margins, debt balances, liquidity, or post-transaction financial results.
  • Audited financial statements for the acquired business and pro forma financial information were not included in the filing and were expected to be filed by amendment within 71 calendar days.
  • The filing states that no material relationships existed among the transaction parties and Grove or its affiliates, directors, or officers, other than in connection with the Agreement.

Investor Verification Points

  • Verify the audited VitaMedica financial statements and subsequent pro forma financial information when filed.
  • Confirm the final cash, stock, note, convertible-note, and working-capital adjustments to the purchase price.
  • Assess VitaMedica’s actual revenue performance against the $2.5 million first-year threshold.
  • Review the terms, maturity, interest, security, and conversion mechanics of both promissory notes.
  • Evaluate the transaction’s effect on liquidity, leverage, share count, and future dilution.