EVIO EVIO Inc (CE)

ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT

On December 31, 2017, EVIO, Inc. (the “Company”) entered into a Membership Purchase Agreement (the “Purchase Agreement”) with C3 Labs LLC., a Nevada limited liability company (“C3 Labs”); and the Current Members of C3 Labs (“C3 Member”); for the acquisition of 60% of the ownership interest of C3 Labs. (the “Acquisition”). The Acquisition was closed on January 1, 2018, for total consideration of $600,000. Upon consummation of the Acquisition, the Company became the majority member of C3 Labs.

The Company has been granted two options to purchase additional interest of C3 Labs subject to the following terms and conditions.

(a) 30% Option. Effective as of Closing and terminating the date three (3) years from the Closing Date, the C3 Members hereby collectively grant EVIO the right to ratably purchase from the C3 Members an aggregate of 30% of the Interests in C3 LABS following the issuance of 60% of the Interests to EVIO. EVIO may exercise its option by providing C3 LABS and the C3 Members written notice of its intent to exercise the option. The C3 Members shall have three (3) days following the date of such notice to execute assignments of Interests totaling 30% of the then outstanding membership interests in C3 LABS in favor of EVIO California. If EVIO should elect to exercise its option within nine (9) months from the Closing Date, the exercise price for the 30% of Interests shall be $450,000.00, to be paid in cash or EVIO’s common stock, as agreed by the C3 Members. If EVIO does not exercise the option within nine (9) months from the Closing Date, the exercise price shall be set by mutual agreement between the parties or, if no such agreement can be reached, as determined by an independent third-party valuation by an appraiser agreed to by the parties.

(b) 10% Option. Effective as of three (3) years after the Closing Date and terminating the date twenty four (24) months therefrom, the C3 Members hereby collectively grant EVIO the right to ratably purchase from the C3 Members an aggregate of 10% of the then outstanding Interests in C3 LABS (comprising the remaining Interests not owned by EVIO). EVIO may exercise its option by providing C3 LABS and the C3 Members written notice of its intent to exercise the option. The C3 Members shall have three (3) days following the date of such notice to execute assignments of Interests totaling 10% of the then outstanding membership interests in C3 LABS in favor of EVIO. Upon notice of its intent to exercise the option granted hereby, the exercise price shall be set by mutual agreement between the parties or, if no such agreement can be reached, as determined by an independent third-party valuation by an appraiser agreed to by the parties. 

The Company financed the Acquisition pursuant to the finance arrangements described in Item 2.03 below.

The foregoing is a summary of the Transfer Agreement qualified in its entirety by reference to the Transfer Agreement which is filed as Exhibit 2.1 to this Current Report on Form 8-K (this “Current Report”) and is incorporated herein by reference.

The information provided in response to Item 2.03 of this Current Report with respect to the Note, the Security Agreement and the Pledge Agreement (each as defined below), is incorporated by reference into this Item 1.01.

On January 2, 2018, EVIO Inc. (the “Company”) issued a press release announcing the appointment of Acquisition of C3 Labs, LLC. A copy of the press release is attached as Exhibit 99.1 to this Report.