Got to vote that down.....doesn't appear they own much of the common..hmmm I wonder why? They are good at raising money and paying themselves but the return to shareholders is a bit light imo. They have to prove to me that the cash generated by the rental of the greenhouses will actually go back to shareholders rather than to themselves.
Even more concerning were the details of the related party transactions. Always knew that McKowen had pull at TURV but this is a bit over the top.
RELATED-PARTY TRANSACTIONS
The following discussion relates to certain transactions that involve both our company and one of our executive officers, directors or five-percent shareholders, each of whom we refer to as a “related party.” For purposes of this discussion, a “related-party transaction” is a transaction, arrangement or relationship in which we participate and in which a related party has a direct or indirect material interest.
Since January 1, 2016 there have been the following related-party transactions, except for the compensation arrangements described under “Executive Compensation” and “Director Compensation”:
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Wayne Harding CEO
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Short-term loan to the Company of $5,000.
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Short-term loan to the Company of $25,000.
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Board Members
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Samuel Morris $5,000 short-term loan to the Company.
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Michael Harnish invested $35,000 in the GrowCo $6M Exchange Note prior to becoming a board member.
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Thomas Prasil greater than five percent shareholder had the following transactions with the Company:
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Invested $400,000 in the GrowCo $6M Exchange Note.
The following is a list of all related party transactions with John McKowen, former CEO of Two Rivers, during the year ended December 31, 2016:
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Johnny Cannaseed, LLC
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Advance of $33,599 for expenses incurred for greenhouse supplies. Recorded as a related party receivable on balance sheet.
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In August 2016 TR Capital Partners, LLC’s subsidiary GCP1 signed a lease agreement for greenhouse 1 with Johnny Cannaseed, a company formed and operated by John McKowen.
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In August 2016, the Company’s subsidiary GCP2 signed a lease agreement for greenhouse 2 with Johnny Cannaseed.
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Revenue recorded of $178,609 for greenhouse lease. Recorded as a related party receivable on balance sheet.
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McGrow, LLC
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In July 2016 the Company’s subsidiary GrowCo signed a series of agreements with McGrow, LLC, a Colorado limited liability company that is headed and partially owned by John McKowen. The agreements included a Master Agreement, and Advisory Services agreement, a Construction Services agreement, a Financing Services agreement, a Non-Compete and Exclusivity agreement, and a Stock Purchase Agreement. Collectively these are known as the “McGrow Agreements”. As a result of these agreements GrowCo paid McGrow for services provided primarily for the construction of greenhouses and fees associated with the raising of capital.
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Advance of $8,295 for services rendered.
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Advance of $5,000 for services rendered.
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Expense payment of $374,526 for services rendered.
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Fees paid of $107,250 for financing services.
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Advance of $12,548 for services rendered.
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The Company entered into a subleasing agreement whereby McGrow will pay $47,000 per year for office space leased by the Company.
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John McKowen
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Interest expense of $85,630 on investment into GCP Super Units.
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Payment of office space of $29,458 while CEO of Two Rivers.
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Equity investment of $496,000 in GCP Super Units.
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Equity compensation in the form of GrowCo common shares valued at $10,000 for services provided.
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Fees of $71,864 for GrowCo capital raised.
The following is a list of all related party transactions during the quarter ended March 31, 2017
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Wayne Harding, Company CEO provided a short term loan to the Company of $25,000. The loan is secured by land assets of the Company and carries an interest rate of 12%.
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Advances totaling $34,400 resulting in a cumulative total of $72,999 for greenhouse expenses to Johnny Cannaseed, LLC which is majority owned by former Company CEO John McKowen.
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Accounts Receivable to Johnny Cannaseed for the quarter ending 3/31/17 was $536K, with total outstanding AR $839K.
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Advances totaling $26,957 resulting in a cumulative total of $39,505 for greenhouse expense to McGrow, LLC which is majority owned by former Company CEO John McKowen.
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Payments totaling $178,733 to MCG Services, LLC which is majority owned by former Company CEO John McKowen for costs associated with a services agreement with GrowCo.
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Advances to MCG Services, LLC total $8,294
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Advance of $5,000 to McGrow, LLC for services rendered.
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Payments totaling $11,210 to John McKowen for interest expense on a loan held by Mr. McKowen to GrowCo.
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Existing investors, including the Thomas Prasil Trust who is a greater than 5% investor, have invested approximately $9.5 M in GrowCo securities.
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The Chief Executive Officer of Two Rivers serve as the only members of the Sunset Metropolitan District (Sunset). Sunset is a quasi-governmental agency operating under Title 32 of the State of Colorado Constitution. As of March 31, 2017, the Company had advanced $80,000 to Sunset.
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