Sunniva Inc. acquired Full Scale Distributors, LLC for $5 million on February 10, 2017. Under the transaction, Full Scale Distributors (‘FSD’) shareholders will receive $1.5 million in cash, $3.5 million in a secured convertible promissory note and an additional amount of contingent consideration. Sunniva will pay up to the following amounts as contingent consideration should certain revenue and EBITDA milestones be attained by FSD. If the FSD revenue is greater than or equal to $8 million, less than $12 million and EBITDA margin achieves 30% than FSD will receive $0.15 million in 2017, 2018 and 2019. If the FSD revenue is greater than or equal to $12 million and EBITDA margin achieves 30% than FSD will receive $0.3 million in 2017, 2018 and 2019. The secured convertible promissory note is due December 31, 2017 and bears interest at a rate of 0.74 percent per annum. The note is secured by the membership interests. Sunniva Inc. completed the acquisition of Full Scale Distributors, LLC on February 10, 2017.