Quarterly report pursuant to Section 13 or 15(d)

SUBSEQUENT EVENTS

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SUBSEQUENT EVENTS
3 Months Ended
Mar. 31, 2019
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS

In accordance with authoritative guidance, the Company has evaluated any events or transactions occurring after March 31, 2019, the balance sheet date, through the date of filing of this report and note that there have been no such events or transactions that would require recognition or disclosure in the consolidated financial statements as of and for the quarter ended March 31, 2019, except as disclosed below.

 

Subsequent to the reporting period, and up through April 11, 2019, the Company accepted shareholder subscriptions in the total amount of $612,040 in exchange for issuance of 1,282,175 shares of common stock in an offering exempt under Rule 506 of Regulation D.

 

On April 30, 2019, the Company’s former Chief Financial Officer, gave 30-day notice of her resignation from that position and on May 9, 2019, notified the Company that her resignation would be effective immediately. On May 9, 2019, the Company’s Board of Directors appointed our Chief Executive Officer and Chairman of the Board, Philip J. Young to serve as Interim Chief Financial Officer until such time as a replacement CFO can be retained.

 

On May 9, 2019, the Board of Directors adopted and approved the report of Scalar, LLC (“Scalar”) on the valuation of the Company’s subsidiary, Exactus One World, LLC (“EOW”), together with their opinion on the fairness of the terms of the Company’s acquisition of controlling interest in EOW.

 

On May 9, 2019, the Board of Directors approved terms for a proposed Management and Services Agreement (the “Agreement”) with Ceed2Med, LLC (“C2M”). As a condition to the Agreement terms informally agreed with C2M the Company required completion of the Scalar valuation and issuance of a fairness opinion prior to completion and issuance of any consideration to C2M, a related party, under of the Agreement. Per the Agreement, and in consideration for C2M’s assignment of the right to acquire EOW including the option to purchase 20.1% from existing holders of EOW, C2M’s and other assistance to the Company with establishing the EOW subsidiary, and the continuing services to be performed by C2M for EOW in the future, the Board of Directors approved the issuance of 0% convertible preferred stock to C2M having a stated value of $10 million. On May 9, 2019 Scalar issued its fairness opinion to the Board of Directors. The final terms of the Agreement and the preferred stock are subject to negotiation and approval by the Company’s executive officers.

 

On May 9, 2019, the Board of Directors approved an exempt private offering the Company’s common stock in a total amount of $5 million to $25 million. In addition, the Company’s Board of Directors appointed a Private Offering Committee of the Board, which has been vested with delegated authority to determine the specific terms of the private offering, including share price, warrant coverage, and other specific terms. The members of the Private Offering Committee are Jonathan Gilbert, John Price, and Philip Young.