GoFire invented a cannabis vaporizer and dose-monitoring app. (Courtesy GoFire)
Local inventors of vaping devices once purportedly valued at $330 million say they were bullied and threatened into selling their patents for zero cash and stock in a failing company — an “utterly disastrous result” that “will almost certainly render” their inventions worthless.
GoFire Inc., which once had 26 employees in Wheat Ridge and one dozen American and foreign patents, made devices for recreational and pharmaceutical purposes that allowed users, through a phone app, to control how much cannabis or medicine went into each puff.
“We’re very focused on the medical marketplace,” CEO Peter Calfee told BusinessDen after a capital raise in 2017. “I’m not looking at the 21- to 28-year-old pothead.”
By 2022, Calfee and fellow co-founder John Woodbine were hearing offers to buy GoFire, which said it had raised $13 million from investors since its 2015 founding. That July, independent accountants valued it at $336 million, the company claims.
So, GoFire hired Winchester Capital to broker a sale. Based in Connecticut, Winchester was founded in 1986 by the family of Averell Harriman, who was a U.S. ambassador and U.S. commerce secretary in the 1940s, then governor of New York in the 1950s.
Winchester vowed that its work would “maximize the sale value of GoFire’s intellectual property,” according to a copy of its contract with GoFire. As would later become relevant, Winchester’s contract with GoFire was to expire on March 31, 2023.
Peter Calfee co-founded GoFire Inc.
In GoFire’s recollection, Winchester CEO Ceasar Anquillare claimed that finding a buyer for the company’s patents “would be a cake walk” and likely result in a $120 million sale by spring 2023. With that assurance, GoFire handed over a $75,000 retainer, it said.
But the process did not go well. GoFire was put off by Winchester’s refusal to talk with firms that had previously shown interest and Winchester’s demand that GoFire not do so. And it was surprised that no one from Winchester came to Colorado or saw GoFire’s products.
“When met with any sort of concern by GoFire,” it said in a Sept. 24 lawsuit, “regarding the anticipated transaction, Winchester’s efficacy or the likelihood and timing of closing … Mr. Anquillare would repeatedly tell GoFire, ‘You need to trust me; this is my job.’”
By October 2022, Anquillare was predicting a sale of GoFire for $70 million, well below his prior estimate of $120 million and the company’s $336 valuation, according to GoFire. In the months that followed, there wasn’t a single offer. The March 31 deadline was fast approaching.
And then, in March of 2023, there was a bid.
Kaival Brands, a publicly traded Florida company, had sold vapes until it ran afoul of Food and Drug Administration rules in 2021. According to GoFire, Winchester described Kaival as a “fallen angel” that would soon win over the FDA and see its stock price surge. GoFire said was told that Kaival had just signed agreements to sell vapes in 53,000 stores.
Kaival’s initial purchase offer included $10 million in cash, plus Kaival stock, GoFire said.
“During the course of discussions between Winchester and Kaival, the amount of cash that Winchester represented Kaival was offering slowly dwindled until, ultimately, the final offer that GoFire received included no cash,” only stock, according to its lawsuit last week.
Assuming that Kaival’s stock price would soon soar, Winchester valued the sale at $76.4 million, according to GoFire. The latter company’s board members were concerned, noting that Kaival’s stock price was so low it was nearly delisted, but approved the deal in May 2023.
“Winchester refused to allow the GoFire management to meet with any of the principals of Kaival,” GoFire alleges in its lawsuit. “Winchester also repeatedly threatened GoFire that if it did attempt to directly communicate with Kaival, it could ‘tank’ the deal.”
“Winchester…bullied GoFire into accepting a sale that benefited Winchester,” GoFire said.
GoFire claims that only after selling did it learn that Kaival does not actually have a deal with 53,000 stores, nor would it be receiving FDA approval for its non-GoFire product. Its stock price hasn’t risen to $19, as Winchester allegedly estimated it would, but instead is just over $1, even factoring in a 1-for-21 reverse stock split this past January.
“Even worse, and arguably more definitive in terms of the utterly disastrous results of the deal initiated, negotiated, and closed by Winchester, Kaival has informed GoFire that it does not anticipate it will be able to maintain the GoFire intellectual property portfolio independently valued in excess of $300 million,” GoFire’s lawsuit claims. “Failure to maintain the intellectual property portfolio will almost certainly render it worthless in short order.”
And for that it blames Winchester, which it is suing for negligence, among other claims.
“We are very surprised that they are doing this,” Winchester Capital said in a statement. “We obviously need to review it with our counsel, because the claims are baseless.”
GoFire believes that Winchester rushed the sale to Kaival, failing to do due diligence along the way, in order to collect fees. GoFire said that Winchester was the sale’s only winner.
“GoFire has lost everything it has built over the course of many years,” that company claimed in last week’s complaint, which was filed in Jefferson County District Court, “not to mention its very significant financial and time investment in building its patent portfolio.”
GoFire invented a cannabis vaporizer and dose-monitoring app. (Courtesy GoFire)
Local inventors of vaping devices once purportedly valued at $330 million say they were bullied and threatened into selling their patents for zero cash and stock in a failing company — an “utterly disastrous result” that “will almost certainly render” their inventions worthless.
GoFire Inc., which once had 26 employees in Wheat Ridge and one dozen American and foreign patents, made devices for recreational and pharmaceutical purposes that allowed users, through a phone app, to control how much cannabis or medicine went into each puff.
“We’re very focused on the medical marketplace,” CEO Peter Calfee told BusinessDen after a capital raise in 2017. “I’m not looking at the 21- to 28-year-old pothead.”
By 2022, Calfee and fellow co-founder John Woodbine were hearing offers to buy GoFire, which said it had raised $13 million from investors since its 2015 founding. That July, independent accountants valued it at $336 million, the company claims.
So, GoFire hired Winchester Capital to broker a sale. Based in Connecticut, Winchester was founded in 1986 by the family of Averell Harriman, who was a U.S. ambassador and U.S. commerce secretary in the 1940s, then governor of New York in the 1950s.
Winchester vowed that its work would “maximize the sale value of GoFire’s intellectual property,” according to a copy of its contract with GoFire. As would later become relevant, Winchester’s contract with GoFire was to expire on March 31, 2023.
Peter Calfee co-founded GoFire Inc.
In GoFire’s recollection, Winchester CEO Ceasar Anquillare claimed that finding a buyer for the company’s patents “would be a cake walk” and likely result in a $120 million sale by spring 2023. With that assurance, GoFire handed over a $75,000 retainer, it said.
But the process did not go well. GoFire was put off by Winchester’s refusal to talk with firms that had previously shown interest and Winchester’s demand that GoFire not do so. And it was surprised that no one from Winchester came to Colorado or saw GoFire’s products.
“When met with any sort of concern by GoFire,” it said in a Sept. 24 lawsuit, “regarding the anticipated transaction, Winchester’s efficacy or the likelihood and timing of closing … Mr. Anquillare would repeatedly tell GoFire, ‘You need to trust me; this is my job.’”
By October 2022, Anquillare was predicting a sale of GoFire for $70 million, well below his prior estimate of $120 million and the company’s $336 valuation, according to GoFire. In the months that followed, there wasn’t a single offer. The March 31 deadline was fast approaching.
And then, in March of 2023, there was a bid.
Kaival Brands, a publicly traded Florida company, had sold vapes until it ran afoul of Food and Drug Administration rules in 2021. According to GoFire, Winchester described Kaival as a “fallen angel” that would soon win over the FDA and see its stock price surge. GoFire said was told that Kaival had just signed agreements to sell vapes in 53,000 stores.
Kaival’s initial purchase offer included $10 million in cash, plus Kaival stock, GoFire said.
“During the course of discussions between Winchester and Kaival, the amount of cash that Winchester represented Kaival was offering slowly dwindled until, ultimately, the final offer that GoFire received included no cash,” only stock, according to its lawsuit last week.
Assuming that Kaival’s stock price would soon soar, Winchester valued the sale at $76.4 million, according to GoFire. The latter company’s board members were concerned, noting that Kaival’s stock price was so low it was nearly delisted, but approved the deal in May 2023.
“Winchester refused to allow the GoFire management to meet with any of the principals of Kaival,” GoFire alleges in its lawsuit. “Winchester also repeatedly threatened GoFire that if it did attempt to directly communicate with Kaival, it could ‘tank’ the deal.”
“Winchester…bullied GoFire into accepting a sale that benefited Winchester,” GoFire said.
GoFire claims that only after selling did it learn that Kaival does not actually have a deal with 53,000 stores, nor would it be receiving FDA approval for its non-GoFire product. Its stock price hasn’t risen to $19, as Winchester allegedly estimated it would, but instead is just over $1, even factoring in a 1-for-21 reverse stock split this past January.
“Even worse, and arguably more definitive in terms of the utterly disastrous results of the deal initiated, negotiated, and closed by Winchester, Kaival has informed GoFire that it does not anticipate it will be able to maintain the GoFire intellectual property portfolio independently valued in excess of $300 million,” GoFire’s lawsuit claims. “Failure to maintain the intellectual property portfolio will almost certainly render it worthless in short order.”
And for that it blames Winchester, which it is suing for negligence, among other claims.
“We are very surprised that they are doing this,” Winchester Capital said in a statement. “We obviously need to review it with our counsel, because the claims are baseless.”
GoFire believes that Winchester rushed the sale to Kaival, failing to do due diligence along the way, in order to collect fees. GoFire said that Winchester was the sale’s only winner.
“GoFire has lost everything it has built over the course of many years,” that company claimed in last week’s complaint, which was filed in Jefferson County District Court, “not to mention its very significant financial and time investment in building its patent portfolio.”
