AGTK Quarterly Highlights. Goodluck Folks.
On March 2, 2015, the Company, the Company’s CEO at the time and the Company’s CFO were named in a civil complaint filed by Erick Rodriguez in the District Court in Clark County, Nevada. The complaint alleges that Mr. Rodriguez never received 250,000 shares of Series B preferred stock that were initially approved by the Board of Directors in 2012. Mr. Rodriguez resigned in June 2013, and the Company cancelled the issuance of the shares to Mr. Rodriguez on the Company’s books and records.
On March 20, 2015, Montblanc-Simplo GmbH (“Montblanc”) filed a Combined Notice of Opposition and Petition for Cancellation with the United States Patent and Trademark Office. Montblanc believes that it will be damaged by the registration of the mark MONT BLUNT filed on April 26, 2014 in Application Serial No. 86/263,737 (the “Application”) and by the previously issued U.S. Registration NO. 4,608,789 (the “Registration”). The Company believes that the logos and product of Mont Blunt pursuant to the Registration and Application significantly differ from Montblanc and accordingly does not believe it subjects Montblanc to any damages.
For the year ended December 31, 2014, net cash used in operating activities was $749,764 compared to $453,355 for the year ended December 31, 2013. The net loss for the year ended December 31, 2014 of $2,012,102 was impacted by stock compensation expense of $379,000 comprised of $133,000 to advisories to the board of directors and $246,000 for the issuance of 2,035,895 shares of common stock for services provided. Non cash interest expense included $363,991 for excess value of common stock issued for convertible notes payable, the amortization of discounts on convertible notes of $248,782 and the amortization of deferred financing fees of $35,379 related to the convertible promissory notes. Additional non-cash expenses for the year ended December 31, 2014 was a write-off to licensing costs of $15,000 and bad debt expense of $16,654, offset by the change in fair value of the derivative liability of $30,347. Changes in operating assets and liabilities included an increase in accounts payable and accrued expenses of $62,063, an increase in deferred compensation of $149,224 and the receipt of tenant deposits of $90,000. These amounts were offset by increases in prepaid expenses of $73,540 and a decrease in inventory of $6,423.
Healing Farms was the partner for Pueblo County, Colorado. I do not see it mention. But, that deal fell thru also. This is mentioned: In March 2015, the Company returned $90,000 of tenant deposits in the aggregate that the Company had received during 2014, for the sublease of certain property within the Company’s 40 acre lease in Pueblo County
On January 7, 2015, My Life notified the Company that it was terminating the lease with the Company, claiming the Company had defaulted on certain provisions of the lease.
Chill Drink Products to medical dispensaries. The agreement expired during the year ended December 31, 2014.
The Company has three full-time employees.
Wages ect.
We incurred a net loss of $2,012,102 and $4,421,662 for the years ending December 31, 2014 and 2013, respectively. Because of our continued operating losses, negative cash flows from operations and working capital deficit, in their report on our financial statements for the year ended December 31, 2014, our independent auditors included an explanatory paragraph regarding their substantial doubt about our ability to continue as a going concern. We will continue to experience net operating losses in the foreseeable future. Our ability to continue as a going concern is subject to our ability to generate a profit and/or obtain necessary funding from outside sources, including obtaining additional funding from the sale of our securities, increasing sales or obtaining loan from various financial institutions where possible. Our continued net operating losses increase the difficulty in meeting such goals and there can be no assurances that such methods will prove successful.
We have raised capital through the use of convertible debt instruments that causes substantial dilution to our stockholders.
Because of the size of our Company and its status as a “penny stock” as well as the current economy and difficulties in companies our size finding adequate sources of funding, we have been forced to raise capital through the issuance of convertible notes and other debt instruments. These debt instruments carry favorable conversion terms to their holders of up to 50% discounts to the market price of our common stock on conversion and in some cases provide for the immediate sale of our securities into the open market. Accordingly, this has caused dilution to our stockholders in 2014 and may for the foreseeable future. As of December 31, 2014, we had approximately $938,721 in convertible debt and potential convertible debt outstanding. This convertible debt balance as well as additional convertible debt we incur in the future will cause substantial dilution to our stockholders.
14
On January 13, 2014, the Company issued 545,454 shares of common stock to Venture Equity upon the conversion of $60,000 of accrued management fees. The shares were issued at $0.11 per share, the market price of the common stock on December 31, 2013.
On January 14, 2014, the Company issued 2,460,968 shares of common stock upon the conversion of 100,000 shares of Class B Preferred Stock.
On January 30, 2014, February 3, 2014 and February 5, 2014, the Company issued in the aggregate 369,420 shares of common stock to Asher upon the conversion of $65,000 of the 2013 Notes and accrued and unpaid interest of $2,600. The shares were issued at approximately $0.18299.
In March 2014, the Company issued in the aggregate 843,654 shares of common stock to Typenex upon the conversion of $116,611 of the Company note and accrued and unpaid interest. The shares were issued at approximately $0.1382 per share.
On March 17, 2014, the Company issued 4,312,420 shares of common stock upon the conversion of 150,000 shares of Class B Preferred Stock.
On March 31, 2014, the Company issued 56,948 shares of common stock to Jayme Canton upon the conversion of $25,000 of accrued stock compensation.
On April 17, 2014, the Company issued 188,088 shares of common stock in satisfaction of $36,000 of the October 2013 Asher Note. The shares were issued at approximately $0.19 per share.
On April 20, 2014, the Company issued 202,867 shares of common stock in satisfaction of $34,000 of the October 2013 Asher convertible note and accrued and unpaid interest of $2,800. The shares were issued at approximately $0.18 per share.
On July 22, 2014, the Company issued 150,000 shares of Company common stock to Mr. Bartoletta as an advisor to the Board of the Directors of the Company.
On August 6, 2014, the Company issued 625,978 shares of common stock upon the conversion of $19,933 of principal of the 2014 Company Note and $80,067 of accrued and unpaid interest. The shares were issued at approximately $0.16 per share.
On September 5, 2014, the Company issued 871,460 shares of common stock upon the conversion of $88,804 of principal of the 2014 Company Note and $11,196 of accrued and unpaid interest. The shares were issued at approximately $0.115 per share.
On September 18, 2014, the Company issued 208,333 shares of common stock to Jayme Canton upon the conversion of $25,000 of accrued stock compensation.
On September 18, 2014, the Company issued 1,300,000 shares of common stock to Philip Johnston pursuant to a consulting agreement for services including but not limited to business modeling and strategies, strategic alliances, introduction to investment bankers, identify property acquisitions for agricultural use in Canada and to identify retail chains/outlets for wellness products throughout Canada.
On September 18, 2014, the Company issued in the aggregate 1,500,000 shares of common stock pursuant to the APA for the acquisition of Dry Vapes Holdings, Inc. The shares were valued at $0.12 per share.
On October 13, 2014, the Company issued 562,272 shares of common stock upon the conversion of $38,745 of principal of the 2014 Company Note and $11,255 of accrued and unpaid interest. The shares were issued at approximately $0.089 per share.
On October 21, 2014, the Company issued 2,011,142 shares of common stock upon the conversion of $89,369 of principal of the 2014 Company Note and $10,631 of accrued and unpaid interest. The shares were issued at approximately $0.05 per share.
On October 21, 2014 the Company issued 735,895 shares of common stock to a consultant for investor relation services.
15
On October 24, 2014, the Company received a payment of $100,000 on notes receivable issued in exchange for convertible promissory note.
On November 11, 2014, the Company issued 1,541,163 shares of common stock upon the conversion of $76,483 of principal of the 2014 Company Note and $147 of accrued and unpaid interest. The shares were issued at approximately $0.05 per share.
On December 5, 2014, the Company issued 1,712,241 shares of common stock upon the conversion of $90,007 of principal of the 2014 Company Note and $9,993 of accrued and unpaid interest. The shares were issued at approximately $0.058 per share.
On December 31, 2014, the Company issued 17,226,778 shares of restricted common stock to Mr. Friedman upon the conversion of 450,000 shares of Class B Preferred Stock.
On December 31, 2014, the Company issued 1,230,484 shares of restricted common stock to Venture Equity upon the conversion of 50,000 shares of Class B Preferred Stock. The Company also issued Venture Equity 444,444 shares of restricted common stock for accrued and unpaid management fees of $40,000 owed to Venture Equity.
On December 31, 2014, the Company issued 277,778 shares of common stock to Jayme Canton upon the conversion of $25,000 of accrued stock compensation.
On March 19, 2013, the Company issued 25,000 shares of restricted common stock, to Empire Relations Holdings, LLC, as consideration under a consulting agreement dated March 7, 2013 for public and financial relations services.
On March 31, 2013, the Company agreed to issue 369,928 shares of common stock upon the conversion of the remaining balance of $32,000 of a convertible note and accrued and unpaid interest of $6,060.
Previously the Company appointed Mr. James Canton to be an advisor to the Company’s Board of Directors. In April 2013, the Company agreed to issue to Mr. Canton 200,000 shares of common stock, a warrant to purchase 300,000 shares of common stock at an exercise price of $0.50 per share with an expiration date on the third year anniversary of the grant, and $25,000 to be paid in shares of common stock to be issued at the end of each calendar quarter beginning on June 30, 2013 and ending on the earlier of March 31, 2015 (the term of Canton’s advisor role) or the date Canton is no longer serving as an advisor to the board of directors. The Company valued the warrant at $124,200 based on the Black Scholes formula.
On April 23, 2013 the Company issued a Convertible Note to an unaffiliated third party in exchange and for the cancellation of a litigation contingency of $46,449, which was acquired by the third party. Also on April 23, 2013, the Company issued 175,000 shares of common stock in satisfaction of the April 23, 2013 Convertible Note.
On June 4, 2013 and June 11, 2013, the Company issued in the aggregate 121,027 shares of common stock in satisfaction of the November 28, 2012 note of $23,500 and accrued and unpaid interest of $940. The shares were issued at $0.20 per share.
On June 26, 2013, B. Michael Friedman, the Company’s CEO exchanged 3,033,500 shares of common stock for 450,000 shares of Class B Preferred Stock.
On July 8, 2013, the Company issued 185,714 shares of common stock in satisfaction of the January 2, 2013 Asher convertible note of $37,500 and accrued and unpaid interest of $1,500. The shares were issued at $0.21 per share.
On August 22, 2013 and August 27, 2013, the Company issued in the aggregate 131,480 shares of common stock in satisfaction of the February 11, 2013 note of $27,500 and accrued and unpaid interest of $1,100. The shares were issued at $0.21 per share.
On October 21, 2013, the Company issued 172,289 shares of common stock in satisfaction of the April 18, 2013 Asher convertible note of $27,500 and accrued and unpaid interest of $1,100. The shares were issued at approximately $0.16 per share.
16
On November 22, 2013, the Company issued 145,191 shares of common stock to Typenex upon the conversion of $20,000 of their Note. The shares were issued at approximately $0.1377 per share.
On December 11, 2013, the Company issued 424,899 shares of common stock to Typenex upon the conversion of $50,000 of their Note. The shares were issued at approximately $0.1177 per share.
Revenues for the years ended December 31, 2014 and 2013 were $47,261 and $143,792, respectively, and were comprised of the following:
Note a good portion of revenues came from the Chillo drinks, which AGTK does not distribute anymore.
The increase in the 2014 period is primarily due to costs associated with the Company’s land acquisition and property management fees.
Commission and licensing fees of $8,722 were incurred for year ended December 31, 2014 compared to commissions of $27,671 for the year ended December 31, 2013. Also included in 2013 were fees of $31,200 pursuant to the ACS Agreement. The decrease in the 2014 period is primarily due to the Company and ACS terminating their agreement in April 2013.
Advertising and promotional expenses increased to $72,091 for the year ended December 31, 2014 compared to $15,077 for the year ended December 31, 2013. The increase of $57,014 was primarily due to the design, launch and marketing of the Company’s Mont Blunt brand.
Rent and occupancy costs were $76,235 for the year ended December 31, 2014 compared to $37,195 for the year ended December 31, 2013. The increase was due primarily to the Company entering into sublease agreement for the use of up to 7,500 square feet of office space that will be utilized to market, sell and distribute products to Colorado dispensaries.
Leased property available for sub-lease and property maintenance costs were $108,163 and $67.925, respectively, for the year ended December 31, 2014. These costs were comprised of $85,246 for leased real estate that the Company plans to lease or sub-lease to licensed marijuana operators, $22,917 for water rights, $15,500 for land surveys and $2,425 on land maintenance. Additionally, the Company expensed $50,000 it had advanced to MYLO Construction for the management and construction of a proposed building in the Apex Industrial Park Complex, otherwise known as Nevada’s “Green Zone”.
General and other administrative costs for the year ended December 31, 2014, were $93,665 compared to $137,881 for the year ended December 31, 2013. Expenses for the year ended December 31, 2014, include a settlement expense of $15,000 related to licensing fees, public company filing and transfer agent fees of $12,236, telephone, internet and web based service costs of $17,225, office and employee moving costs of $9,518, payroll taxes and fees of $6,304, office supply purchases of $11,736 and $21,646 of other general and administrative costs. Expenses for the 2013 period include public company filing and transfer agent fees of $30,770, travel and entertainment costs of $43,071, internet and web based service costs of $26,585, office supplies of $8,661 and $28,794 of other general and administrative costs.
Other Income (Expense), Net
Other expense for the year ended December 31, 2014 was $675,083 compared to $578,321 for the year ended December 31, 2013. Included in other expenses for the 2014 period was income from the decrease on the fair value of derivatives of $30,347 and interest income of $80,206, offset by interest expense of $785,636 related to the 2013 and 2014 Company Notes.
The 2013 expenses were comprised of $299,856 of interest expense and expense from the decrease on the fair value of derivatives of $353,761. Also included in other expenses was a gain on distribution of equity method investee of $67,186 and $8,110 of interest income related to interest collected on notes receivables.
Interest expense was $785,636 for the year ended December 31, 2014 compared to $299,856 for the year ended December 31, 2013. The increase was due to the issuance of various debt instruments from May 2013 through January 2014. A summary of interest expense for each of the periods is as follows:
Negative cash flows from operations for 2013 was due to the net loss of $4,421,662 and was impacted by stock and warrant compensation expense of $3,255,947 comprised of $2,821,275 of preferred stock compensation, the amortization of deferred stock compensation of $192,472 from the previous issuance of Series B preferred stock, $124,200 warrant based compensation for issuance of warrants to purchase 300,000 shares of common stock to our advisor to the board of directors, $80,000 for the one time issuance of 200,000 shares of common stock to the same advisor, 75,000 shares of common stock (with an additional 25,000 shares to be issued each quarter the advisor continues his relationship with the Company) valued at $22,500 and $15,500 for the issuance of 25,000 shares for the services provided to the Company. Additional non-cash expenses for the year ended December 31, 2013 were the amortization of the initial discounts of $185,612 on the convertible notes, the initial derivative liability expense and the change in fair market value of the derivatives of $353,761, amortization of deferred financing fees of $38,808 also related to the convertible promissory notes, loss related to the conversion of the contingent liability to common stock of $29,561 and a gain on discontinuance of equity method of $67,186.
During the year ended December 31, 2014, net cash used in investing activities was $532,573 compared to $19,060 for the year ended December 31, 2013. The 2014 period was the result of land acquisition costs of $268,531, investments of $50,000 in non-marketable securities, advances to a related party of $169,573, security deposits paid of $14,700 and the purchase of office furniture of $9,769 and the cash payment portion of $20,000 for the acquisition of Dry Vapes, Holdings, Inc. The net cash used in investing activity for the year ended December 31, 2013 was the result of the acquisition of licensing rights and the purchase of office furniture.
Net cash provided by financing activities was $1,292,000 and $579,500 for the years ended December 31, 2014 and 2013, respectively. The 2014 activity was comprised of proceeds received related to the Typenex notes receivable of $200,000, the issuance of convertible promissory notes of $1,100,000 and the payment of deferred financing fees of $8,000. The 2013 amount was comprised of issuance of convertible promissory notes of $227,500, proceeds of $400,000 related to the Typenex convertible note (see Note 6 to the consolidated financial statements contained herein) and the payment of deferred financing fees of $48,000.
For the year ended December 31, 2014, cash and cash equivalents increased by $9,663 compared to $106,874 for the year ended December 31, 2013. Ending cash and cash equivalents at December 31, 2014 was $118,429 compared to $108,766 at December 31, 2013.
We have cash and cash equivalents on hand to meet our obligations. We presently maintain our daily operations and capital needs through the sale of our products and financings available to us from our lender.
Total Compensation for Michael Freidman 2014 $ 150,000.00
2013 $2,974,775
Barry Hollander was $ 96,000.00 for both years.
Mr. Friedman resigned as an officer and director of the Company effective March 20, 2015. Includes $80,082 (2014) and $32,347 (2013) expensed (unpaid) to our CEO as deferred compensation authorized by the Board of Directors of the Company.
(2) Relates to the issuance of 450,000 shares of Class B Preferred Stock and includes the accounting value of the excess shares on an as if converted basis, over the 3,033,500 shares of common stock Mr. Friedman returned to the Company.
(3) Mr. Hollander’s 2014 and 2013 salary includes $40,000 and $60,000 of unpaid and accrued expenses to be paid in restricted shares of common stock, based on the market value of the common stock at the end of the period. The Company issued 545,454 shares of common stock in January 2014 for the 2013 accrued expenses of $60,000 and 444,444 shares of common stock on December 31, 2014 for the 2014 accrued expenses of $40,000. The shares were issued at $0.09 and $0.11 per share, respectively, the market price of the common stock when issued.
Effective January 1, 2013, the Company has agreed to annual compensation of $150,000 for the CEO and $96,000 for the CFO. For 2013, the Company and the CFO agreed that $3,000 per month will be paid in cash and $5,000 per month will be paid in restricted shares of common stock. For 2014, the Company and the CFO agreed that up to $5,000 per month can be paid in cash and the balance in restricted shares of common stock. For the years ended December 31, 2014 and 2013, the Company expensed $246,000 and $249,500 included in Administrative and Management Fees in the Consolidated Statements of Operations, included herein. In June 2013, Mr. Friedman and the Company, agreed to exchange 3,033,500 shares of common stock in partial consideration for the issuance of 450,000 shares of Class B Preferred Stock. The Company reduced accrued compensation of Mr. Friedman by $100,022 and recognized stock compensation expense of $2,821,275. As of December 31, 2014, the Company owed the CEO $63,332 and the CFO $1,549 included in deferred compensation on the Company’s consolidated balance sheet.
On January 13, 2014, the Company issued 545,454 shares of common stock to Venture Equity, LLC, (“Venture Equity”) a Florida limited liability Company, controlled by the Company’s CFO, upon the conversion of $60,000 of accrued management fees. The shares were issued at $0.11 per share, the market price of the common stock on December 31, 2013. On December 31, 2014, the Company issued 444,444 shares of restricted common stock to Venture Equity, upon the conversion of $40,000 of accrued and unpaid management fees as of December 31, 2014 the date on which the board of directors approved the issuance. The shares were issued at $0.09 per share, the average market price of the common stock for the period.
Gross profit 21,343
Operating Loss 1,337,019
As of December 31, 2014, $1,256,658 of principal and accrued interest of $122,063 is outstanding on the 2014 Company Note, and the principal amount is carried at $1,233,903, net of a remaining note discount of $22,755.
On November 12, 2013, the Board of Directors of the Company approved by unanimous written consent a 1-for-10 Reverse Stock Split and to decrease the authorized common stock of the Company to 250,000,000. Pursuant to the Reverse Stock Split, each ten (10) shares of the Company’s Common Stock automatically converted into one share of Common Stock.
On November 12, 2013, the Financial Industry Regulatory Authority approved the company’s 1-for-10 reverse stock split (the “Reverse Stock Split”) on the Company’s common stock outstanding with an effective date of December 11, 2013. All the following share issuances are stated to reflect the reverse stock split.
On March 19, 2013, the Company issued 25,000 shares of restricted common stock, to Empire Relations Holdings, LLC, as consideration under a consulting agreement dated March 7, 2013 for public and financial relations services. The fair value was $15,500 based on the closing stock price of $0.62 per share on the measurement date as the shares are non-refundable and no future performance obligation exists.
On March 31, 2013, the Company agreed to issue 369,928 shares of common stock upon the conversion of the remaining balance of $32,000 of a note payable and accrued and unpaid interest of $6,060.
Previously the Company appointed Mr. James Canton to be an advisor to the Company’s Board of Directors. In April 2013, the Company agreed to issue to Mr. Canton 200,000 shares of common stock, a warrant to purchase 300,000 shares of common stock at an exercise price of $0.50 per share with an expiration date on the third year anniversary of the grant, and $25,000 to be paid in shares of common stock to be issued at the end of each calendar quarter beginning on June 30, 2013 and ending on the earlier of March 31, 2015 (the term of Canton’s advisor role) or the date Canton is no longer serving as an advisor to the board of directors. During the year ended December 31, 2014, the Company issued 543,059 shares of common stock, valued at $ 75,000 based on the market price of the common stock when issued. The Company included $100,000 in stock based compensation expense for the year ended December 31, 2014. As of December 31, 2014, the Company owed Mr. Canton $25,000, which is included in accounts payable and accrued expenses on the condensed consolidated balance sheet herein.
In January 2014 the Company issued in the aggregate 8,467,388 shares of common stock to Typenex upon the conversion of $523,564 of the Company Note and accrued and unpaid interest of $3,716. The shares were issued at approximately $0.06227 per share.
On January 13, 2014, the Company issued 545,454 shares of common stock to Venture Equity upon the conversion of $60,000 of accrued management fees. The shares were issued at $0.11 per share, the market price of the common stock on December 31, 2013.
On January 14, 2014, the Company issued 2,460,968 shares of common stock upon the conversion of 100,000 shares of Class B Preferred Stock.
On January 30, 2014, February 3, 2014 and February 5, 2014, the Company issued in the aggregate 369,420 shares of common stock to Asher upon the conversion of $65,000 of the 2013 Notes and accrued and unpaid interest of $2,600. The shares were issued at approximately $0.18299.
In March 2014, the Company issued in the aggregate 843,654 shares of common stock to Typenex upon the conversion of $116,611 of the Company note and accrued and unpaid interest. The shares were issued at approximately $0.1382 per share.
On March 17, 2014, the Company issued 4,312,420 shares of common stock upon the conversion of 150,000 shares of Class B Preferred Stock.
On March 31, 2014, the Company issued 56,948 shares of common stock to James Canton upon the conversion of $25,000 of accrued stock compensation.
F- 16
On April 17, 2014, the Company issued 188,088 shares of common stock in satisfaction of $36,000 of the October 2013 Asher Note. The shares were issued at approximately $0.19 per share.
On April 20, 2014, the Company issued 202,867 shares of common stock in satisfaction of $34,000 of the October 2013 Asher convertible note and accrued and unpaid interest of $2,800. The shares were issued at approximately $0.18 per share.
On July 22, 2014, the Company issued 150,000 shares of Company common stock to Mr. Bartoletta as an advisor to the Board of the Directors of the Company. The Company recorded an expense of $33,000 (based on the market price of the Company’s common stock of $0.22 per share) and is included in professional and consulting fees in the consolidated statements of operations for the year ended December 31, 2014, respectively.
On August 6, 2014, the Company issued 625,978 shares of common stock upon the conversion of $19,933 of principal of the 2014 Company Note and $80,067 of accrued and unpaid interest. The shares were issued at approximately $0.16 per share.
On September 5, 2014, the Company issued 871,460 shares of common stock upon the conversion of $88,804 of principal of the 2014 Company Note and $11,196 of accrued and unpaid interest. The shares were issued at approximately $0.115 per share.
On September 18, 2014, the Company issued 208,333 shares of common stock to James Canton upon the conversion of $25,000 of accrued stock compensation.
On September 18, 2014, the Company issued 1,300,000 shares of common stock to Philip Johnston pursuant to a consulting agreement for services including but not limited to business modeling and strategies, strategic alliances, introduction to investment bankers, identify property acquisitions for agricultural use in Canada and to identify retail chains/outlets for wellness products throughout Canada. The Company recorded an expense of $156,000 (based on the market price of the Company’s common stock of $0.12 per share) and is included in professional and consulting fees in the consolidated statements of operations for the year ended December 31, 2014, respectively.
On September 18, 2014, the Company issued in the aggregate 1,500,000 shares of common stock pursuant to the APA for the acquisition of Dry Vapes Holdings, Inc. The shares were valued at $0.12 per share.
On October 13, 2014, the Company issued 562,272 shares of common stock upon the conversion of $38,745 of principal of the 2014 Company Note and $11,255 of accrued and unpaid interest. The shares were issued at approximately $0.089 per share.
On October 21, 2014, the Company issued 2,011,142 shares of common stock upon the conversion of $89,369 of principal of the 2014 Company Note and $10,631 of accrued and unpaid interest. The shares were issued at approximately $0.05 per share.
On October 21, 2014 the Company issued 735,895 shares of common stock to a consultant for investor relation services. The Company recorded an expense of $90,000 (based on the market price of the Company’s common stock of approximately $0.12 per share) and is included in professional and consulting fees in the consolidated statements of operations for the year ended December 31, 2014, respectively.
On October 24, 2014, the Company received a payment of $100,000 on notes receivable issued in exchange for convertible promissory note.
On November 11, 2014, the Company issued 1,541,163 shares of common stock upon the conversion of $76,483 of principal of the 2014 Company Note and $147 of accrued and unpaid interest. The shares were issued at approximately $0.05 per share.
On December 5, 2014, the Company issued 1,712,241 shares of common stock upon the conversion of $90,007 of principal of the 2014 Company Note and $9,993 of accrued and unpaid interest. The shares were issued at approximately $0.058 per share.
On December 31, 2014, the Company issued 17,226,778 shares of restricted common stock to Mr. Friedman upon the conversion of 450,000 shares of Class B Preferred Stock.
F- 17
On December 31, 2014, the Company issued 1,230,484 shares of restricted common stock to Venture Equity upon the conversion of 50,000 shares of Class B Preferred Stock. The Company also issued Venture Equity 444,444 shares of restricted common stock for accrued and unpaid management fees of $40,000 owed to Venture Equity.
On December 31, 2014, the Company issued 277,778 shares of common stock to James Canton upon the conversion of $25,000 of accrued stock compensation.
P referred Stock
On June 20, 2012 the Company cancelled and returned to authorized but unissued one million shares of Preferred A Stock, and authorized 1,000,000 shares of Class B Convertible Preferred Stock (the “Class B Preferred Stock”), par value $0.01. The rights, preferences and restrictions of the Class B Preferred Stock as amended, state; i) each share of the Class B Convertible Preferred Stock shall automatically convert (the “Conversion”) into shares of the Corporation’s common stock at the moment there are sufficient authorized and unissued shares of common stock to allow for the Conversion. The Class B Convertible Preferred Stock will convert in their entirety, simultaneously to equal one half (1/2) the amount of shares of common stock outstanding on a fully diluted basis immediately prior to the Conversion. The Conversion shares will be issued pro rata so that each holder of the Class B Convertible Preferred Stock will receive the appropriate number of shares of common stock equal to their percentage ownership of their Class B Convertible Preferred Stock and ii) all of the outstanding shares of the Class B Preferred Stock in their entirety will have voting rights equal to the amount of shares of common stock outstanding on a fully diluted basis immediately prior to any vote. The shares eligible to vote will be calculated pro rata so that each holder of the Class B Convertible Preferred Stock will be able to vote the appropriate number of shares of common stock equal to their percentage ownership of their Class B Convertible Preferred Stock. The Class B Convertible Preferred Stock shall have a right to vote on all matters presented or submitted to the Corporation’s stockholders for approval in pari passu with holders of the Corporation’s common stock, and not as a separate class.
As of December 31, 2014 there were no shares of Class B Preferred Stock outstanding. As of December 31, 2013, the Company had 1,000,000 shares of Class B Preferred Stock outstanding.
On April 26, 2013 and in connection with the appointment of Mr. Jayme Canton to the Company’s advisory board, the Company issued a warrant to Mr. Canton to purchase 300,000 shares of common stock. The warrant has an exercise price of $0.50 per share, remains outstanding and expires April 26, 2016.
On January 13, 2015, the Company received $50,000 on notes receivable issued in exchange for a convertible promissory note.
On February 10, 2015, the Company executed a Revenue Participation Agreement with Genie Gateway, for the resale and use of a customized virtual wallet and ecommerce platform to provide cashless merchant and payment services to the healthcare, wellness and unbanked merchants nationally.
On March 2, 2015, the Company and the Company’s CEO, at the time, and the Company’s CFO were named in a civil complaint filed by Erick Rodriguez in the District Court in Clark County, Nevada. The complaint alleges that Mr. Rodriguez never received 250,000 shares of Series B preferred stock that were initially approved by the Board of Directors in 2012. Mr. Rodriguez resigned in June 2013, and the Company cancelled the issuance of the shares to Mr. Rodriguez on the Company’s books and records.
On March 2, 2015, the Company issued a Convertible Promissory Note for $79,000 to Vis Vires Group (“Vis Vires”). The Company received net proceeds of $75,000 after debt issuance costs of $4,000 paid for lender legal fees. The Note matures November 25, 2015 and converts at a 42% discount to the market price as defined in the Note.
On March 17, 2015, the Company announced Mr. Justin Braune will be joining Agritek Holdings on March 20, 2015 as Chief Executive Officer (“CEO”) and President. Mr. Braune will also be joining the Agritek Holdings Board of Directors. B. Michael Friedman resigned his role as CEO and also from the Board of Directors, and was named to the Advisory Board to the Company’s Board of Directors.
On March 19, 2015, the Company received a payment of $50,000 on notes receivable issued in exchange for a convertible promissory note.
On March 23, 2015, the Company signed an operational and licensing agreement with Green Leaf Farms Holdings Inc. (“Green Leaf”) an 80% owned subsidiary of Player's Network (PNTV) a fully reporting diversified company with holdings in two primary areas, Media and Medical Marijuana. The five year agreement provides for the Company to be the exclusive consultant regarding the build out on behalf of Green Leaf for the 22,000 sq. ft. facility presently under contract for purchase by Green Leaf. Green Leaf presently holds two provisional or "MME" licenses in North Las Vegas for both medicinal cannabis cultivation and production. Under the terms of the agreement, the Company will provide consulting services and specialists related to grow and production, operational build out, equipment lease financing, and an infrastructure funding commitment of up to one million dollars ($1,000,000). Under the agreement, both Companies expect to complete an approximate 12,000 sq. foot cultivation operation as well as a commercial extraction facility on behalf of Green Leaf. The Company will provide direct to manufacturer relationships with lighting, extraction equipment, chillers and hydroponic equipment, edibles production as well as cultivation specialists. In addition to monthly consulting fees once the facility is operational, the Company will receive licensing fees as the provider of vaporizers, cartridges and infused edibles.
On March 27, 2015, the Company issued a Convertible Promissory Note for $27,000 to GW Holding Group, LLC. On March 31, 2015, the Company received net proceeds of $25,000 after debt issuance costs of $2,000 paid for lender legal fees. The Note matures March 27, 2016 and converts at a 42% discount to the market price as defined in the Note.
March 27, 2015, the Company issued a Convertible Promissory Note for $78,750 to LG Capital Funding, LLC. On March 30, 2015, the Company received net proceeds of $75,000 after debt issuance costs of $3,750 paid for lender legal fees. The Note matures March 27, 2016 and converts at a 42% discount to the market price as defined in the Note.
In March 2015, the Company returned $90,000 of tenant deposits in the aggregate that the Company had received during 2014, for the sublease of certain property within the Company’s 40 acre lease in Pueblo County. In conjunction with the returned deposits, the Company terminated the services of the individual who was previously engaged to manage the property.
On March 30, 2015, the Company issued a Convertible Promissory Note for $27,000 to Service Trading Company, LLC. On April 6, 2015, the Company received net proceeds of $25,000 after debt issuance costs of $2,000 paid for lender legal fees. The Note matures March 30, 2016 and converts at a 42% discount to the market price as defined in the Note.
On March 20, 2015, Montblanc-Simplo GmbH (“Montblanc”) filed a Combined Notice of Opposition and Petition for Cancellation with the United States Patent and Trademark Office. Montblanc believes that it will be damaged by the registration of the mark MONT BLUNT filed on April 26, 2014 in Application Serial No. 86/263,737 (the “Application”) and by the previously issued U.S. Registration NO. 4,608,789 (the “Registration”). The Company believes that the logos and product of Mont Blunt pursuant to the Registration and Application significantly differ from Montblanc and accordingly does not believe it subjects Montblanc to any damages
