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You should read the 8k again, they cancelled the MS Agreement with Turetsky’s Trava. They were the ones growing on the farm. How can this news be “massive,” when it’s so similar to the agreement they had with Trava? Now they owe Trava at least $250,000, and they owe Aeon $1 million, plus at least 500 million shares to be dumped. After Aeon gets their money back, they still get royalties from the crop. That’s the new debt, not including the old debt from Redwood, Magic Farms, Chicago Venture Partners, and Southwest farms, and the $3 million balloon payment. If Siegel really does work for Aeon, this is looking just like the days of Vinnie and Goh, more insider enrichment.
Some background:
”On May 31, 2017, we, and two of our subsidiaries, EWSD I, LLC (“EWSD”) and Pueblo Agriculture Supply and Equipment LLC, and Trava LLC, a Florida limited liability company that has lent various sums to us (“Trava”), entered into a Management Services Agreement (the “MS Agreement”) in respect of our hemp grow-and-extraction operations located in Pueblo, Colorado (the “Pueblo Farm”). The MS Agreement has a 36-month term with two consecutive 12-month unilateral options exercisable in the sole discretion of Trava. Pursuant to the provisions of the MS Agreement, Trava shall collect all revenue generated by the Pueblo Farm operations. Further, Trava is to satisfy all of our Pueblo Farm-related past due expenses and, subject to certain limitations, to pay all current and future operational expenses of the Pueblo Farm operations. Finally, commencing October 2017, Trava is obligated to make the monthly mortgage payments on the Pueblo Farm, although we remain responsible for any and all “balloon payments” due under the mortgage. On a cumulative calendar monthly cash-on-cash basis, Trava is obligated to tender to us or, at our option, to either or both of our subsidiaries, an amount equivalent to 51% of the net cash for each such calendar month. Such monthly payments are on the 10th calendar day following the end of a calendar month for which such tender is required.”
So who is Trava llc? Trava is a Florida LLC that was created on 10/26/2016, three names show up, Daniel Sands, an attorney; Steven Turetsky, and Green V LLC. I don’t know who “Green V” is, but the address they list is for a penthouse condo in Sunny Isles Beach, FL that is worth $5.7 million according to Zillow. This condo is literally across the street from the UPS store that Redwood Management and Magic Farms use as their address. In the 8/23/2017 8K Trava and Redwood are listed collectively as “the lenders” in the settlement agreement, so there is likely some connection. I posted about Turetsky last week, he has several other mj ventures he invests in, but this seems to be the biggest, another being a CBD company that sells to retails stores.
So what?
“I love the deal, as it will encourage Turtestky to work hard.”
You hate it then? Turetsky is the CEO of Trava, kind of an important detail, since their MS Agreement has been terminated since Jan 29, 2018. Notis was only 3 and a half months late in filing the 8k.
Since Notis hasn’t been forthcoming with their financing terms, now or in the past, we still don’t know who owns what or how much is owed. August is right around the corner.
Nice find. I’m wondering what happened with Trava too. In a previous 8k we knew the farm was being pledged to one of the lenders, but they weren’t named. I’m a little surprised to hear it was Trava that had the option on the farm though, I’m ssuming that option is gone now, but who knows. Everything looks good on Shi Farms Facebook and Instagram, they just got another pivot working, so I’m not sure what’s going on, maybe they can share the space. The last line makes me think Trava has a lot of shares left to sell if Notis is worried about them going above the 4.9% ownership limit.
Aeon will do well with their “royalties/investment,” until they get back their $1 million, they receive 50% of the gross sales of the farm. After they’re paid back, up to $10,000,000, they receive 20% of gross sales of the 2018-2019 crop, after that it drops to 10% of the 2018-2019 crop. Everything is based on the 2018-2019 crop for whatever reason. Aeon has until 5/31 to advance the other $500,000.
Aeon will also receive $100,000 worth of stock, at $.0001-.0002, that’s 1 BILLION to 500 million shares. As soon as the filing drops, watch out for these shares.
Still well shy of the $3 million Notis needs to cover the balloon payment in August, so there may be more news soon. Would be nice if Notis was up to date on its filings so people know what’s going on here, even this 8K is over a month late.
Will Aeon take over the farm?????
So who owns NGBL and EWSD? Looks like lenders.....
“In connection with the Pre-acquisition Loans and the PCH-Related Note, the makers and co-obligors thereof entered into an Amended and Restated Security and Pledge Agreement in favor of the Lender, pursuant to which such parties, jointly and severally, granted to the Lender a security interest in all, or substantially all, of their respective property”
https://www.sec.gov/Archives/edgar/data/1547996/000161577417001245/s105672_8k.htm
New 10Q out.
During the three months ended March 31, 2018, we mined 91.5 Bitcoin for total revenue of $956,000.
Net loss for the quarter was $4.549 million.
MGT’s revenue is nearly $1 million per quarter, but they spend $5.2 million to make that million!
As of May 8, 2018 cash and cash equivalents is $522,000
Crypto-currency mining machines as of 3/31/18 $10,198,000
As of 12/31/17 $3,685,00
Huge amount of shares where dumped in the quarter: “During the three months ended March 31, 2018, the ownership limitations were satisfied and the Company issued 3,381,816 shares of its common stock to this former noteholder.”
Shares were sold for just $.40 each: “On March 15, 2018, the Company issued 200,000 shares of common stock to an investor for $80,000 in gross proceeds.”
11,034,642 shares are still exercisable as of 3/31/18
On April 16, 2018, the Company issued 1,000,000 shares of its common stock in exchange for the cashless exercise of warrants.
On April 30, 2018, the Company received $313,000 in proceeds from the exercise of a warrant to purchase 625,000 shares of the Company’s common stock.
On May 2, 2018, the Company received $313,000 in proceeds from the exercise of a warrant to purchase 625,000 shares of the Company’s common stock.
During the three months ended March 31, 2018, an anti-dilution protection feature in certain of the Company’s warrants was triggered, causing a decrease in the exercise price of those warrants from $4.50 to $0.40. In accordance with ASC 260-10-25, the Company has recorded a deemed dividend equal to the change in fair value of the warrants due to the decrease in exercise price in the amount of $2,514,000
G&A Expenses has nearly doubled to $4.2 million this quarter, as compared to the same time last year. Cost of revenue has quadrupled to $881,000.
Net loss for the quarter was $4.549 million.
Between the toxic debt, warrants, stock for services, and stock based compensation over 7 million shares were added to the o/s this quarter.
“Our revenues for the three months ended March 31, 2018 increased by $644,000, or 206%, to $956,000 as compared to $312 for the three months ended March 31, 2017. Our revenue is derived from cryptocurrency mining, which commenced in September 2016. The significant increase in revenues is a result of our increased mining capacity through the acquisition of additional machines during the year ended December 31, 2017 and during the first quarter of 2018. “
“Operating expenses for the three months ended March 31, 2018 increased by $1,935,000, or 59%, to $5,192,000 as compared to $3,257,000 for the three months ended March 31, 2017. The increase in operating expenses was primarily due to a $680,000 increase in cost of revenues from the increase in cryptocurrency mining operations, of which $286,000 is depreciation expense, a $928,000 increase in stock-based compensation and an increase of $530,000 in payroll and related expenses.”
“Due to the lack of availability of adequate electric power in Washington to support the Company’s growth, the Company decided to move its principal operations to northern Sweden at the end of 2017. During the first quarter of 2018, the Company took delivery of additional Bitcoin mining machines in Sweden and moved or sold most of its Bitcoin mining machines from Washington. The Company plans to continue growing its mining capacity in Sweden during 2018.”
“As of March 31, 2018, MGT owned and operated approximately 500 miners located in a leased facility in Quincy, Washington and 4,200 miners located in a leased facility in Sweden. In addition, the Company operates about 2,100 miners in the Sweden location pursuant to management agreements. All miners owned or managed by MGT are S9 Antminers sold by Bitmain Technologies LTD. At full deployment expected in May 2018, our total Bitcoin mining capacity, as measured by computational hashing rate, will be approximately 90 petahash per second (“PH/s”). In addition to the S9 Antminers, the Company owns 50 custom designed GPU-based Ethereum mining rigs.
McAfee’s wife Janice Dyson had a consulting contract with MGT, on January 26, 2018, the Company terminated its agreement with FTS. During the three months ended March 31, 2018 and 2017, the Company recorded consulting fees of $137,000 and $200,000, respectively, to FTS for such services.
Looks like the shareholder lawsuits are all being settled or dismissed.
Most of Barry Honig’s lawsuit against MGT has been dismissed, except for one important part, the unjust enrichment claim.
https://www.sec.gov/Archives/edgar/data/1001601/000149315218006508/form10-q.htm
Thanks, I guess I had 80 on my mind, meant $.40. I pulled out my calc to double check and I still wrote it wrong lol.
Looks like the toxic lenders only needed 2 days to dump their shares, volume has gone back to just about nothing.
Barry Honig news. He needs no introduction, but I’m sure many here have read about him and his antics with $RIOT lately, which is very similar to what he was trying to do to $MGTI. Robert Ladd and John McAfee found a way to screw Honig before Honig could make about $43 million off of MGT shareholders. It was a risky maneuver, but MGT seemed to have found a loophole in their contract with Honig. Instead of buying D-Vassive and Demonsaw outright, MGT bought the 33% of Demonsaw that McAfee’s former prostitute wife owned, giving her millions of dollars, and leaving Honig out about $750,000. Honig settled his case against blogger Teri Buehl and MGT back in January, but his case against MGT for unjust enrichment is proceeding.
On March 3, 2017 and April 4, 2017 respectively, two additional actions were filed against the Company by a former shareholder Barry Honig (“Honig”). The first action was filed in federal court in North Carolina (the “North Carolina Action”) against the Company and its president and alleges claims for libel, slander, conspiracy, interference with prospective economic advantage, and unfair trade practices. The North Carolina Action substantively alleges that the defendants defamed Honig by causing or allowing certain statements to be published about Honig in news blogs and articles authored by a journalist, who is also a defendant in the case. On June 5, 2017, the Company filed a motion to dismiss the lawsuit, and on July 17, 2017 the plaintiff filed on opposition brief to the motion to dismiss. The Company filed its reply on August 18, 2017. On August 24, 2017, the court in North Carolina Action issued an order granting in part and denying in part the motion to dismiss. On January 3, 2018, the parties signed a settlement stipulation in which the North Carolina Action was withdrawn with prejudice. The court in the North Carolina Action thereafter dismissed the case on January 18, 2018.
The second action was brought by Honig and others in the Court (the “Breach of Contract Action”) against the Company and certain of its officers and directors. The Breach of Contract Action alleges claims for breach of contract, tortious interference with contractual relations, and unjust enrichment related to the Company’s unsuccessful attempt to acquire D–Vasive, Inc. (“D-Vasive”) and Demonsaw LLC (“Demonsaw”) in 2016 and the alleged resulting harm to certain D–Vasive and Demonsaw noteholders. The defendants filed a motion to dismiss on June 5, 2017, but after the plaintiffs filed an amended complaint on June 26, 2017, the defendants filed a motion to dismiss that complaint on July 24, 2017. On March 19, 2018, the Court issued a Memorandum Opinion & Order dismissing the breach of contract and tortious interference claims, but permitting the unjust enrichment claim to proceed. On April 2, 2018, the defendants filed a motion asking the Court to reconsider its decision to permit the unjust enrichment claim to proceed. On April 16, 2018, the plaintiffs filed their opposition to that motion, and on April 23, the defendants filed their reply. Additionally, on April 30, the Court issued a civil case management plan and scheduling order setting deadlines for discovery in the action. Should the reconsideration motion be denied, the Company and its officers and directors believe that they have meritorious defenses against the remaining claim and intend to defend that claim vigorously.
https://www.sec.gov/Archives/edgar/data/1001601/000149315218006508/form10-q.htm
As of 12/31/2017 MGT held $48,000 in digital currencies!
After the run to $8+, lenders dumped over 2 million shares in just 38 days, pushing the pps below $1.50.
$22 million in general and administrative expenses, and just $3 million in mining assets according to the 10k.
Wonder what Ladd has planned next? Now that McAfee is gone, all they have is a money losing bitcoin mining venture.
How does any of that help Notis?
Since it wasn’t in their filings, no, they haven’t owned any land in Ca. You can trace where every dollar went, in the filings. Still no link to the lawsuit.
Ummm.... that address in LA is their office in a high rise, they certainly don’t own the land. If they’re “laying low” and not disclosing this litigation, then they’re committing a crime. Still waiting on the link to the lawsuit.
What are you talking about? It’s not 2,000 plant’s.
You must have the wrong stock. Any links?
Big balloon note in August and lots of NDP’s show up just in time.
Took 2 years for that response? There are links to lawsuits against you, are they true or not?
I would just leave your order open at the bid until it’s filled. The bid is $.24, not $.30. If it wasn’t for that 20k share trade, your trade for 4K shares was more than the entire year’s volume. It’s going to take a while, be patient. Good luck.
The math is simple but their answer is still wrong. Odd how they answer that question and ignore the other questions like; when did the greenhouse grow to be nearly 3 acres, or when did the state revoke your distributor license?
“show me your reference where it’s says they can only grow 15,000 sq ft ANNUALLY
It’s in the ibox towards the bottom, I added all the license info in January. They have two licenses, one medical and one recreational, one is 10,000 sq ft, the other is 5,000 sq ft.
The state cultivation licenses of course.
Well since you asked, I took a look.
200x600=120,000 sq feet
I don't remember hearing anything close to that number in an 8K, and they're only licensed for 15,000 square feet of course. Apparently they've finished the new greenhouse adding 3,500 square feet too.
The entire property consists of 220,000 sq feet of greenhouses. The one that Battle Mountain originally leased was for 12,000 sq feet and 1,000 sq feet of space to share with the other growers for trimming and drying etc. What they've added since then who knows, all the pics look like the same greenhouse from the beginning. Something doesn't add up, maybe 20x600 or 200x60?
That $2.00 tax seems to be for nurseries, which VBF is not. For whatever reason the county website shows the $2.00 tax, but if you click on the link above it, you'll get to see the whole tax code. The tax is actually $15 per square foot of cultivation space, and it is based on the entire licensed amount, not on the amount grown. Since VBF is licensed for 15,000 square feet, they should be paying $56,250 per quarter. If the tax they're paying is really $54,000 per quarter, that would be based on 14,400 square feet. In Monterey the taxes are the same for medical and recreational marijuana.
There is also a 5% sales tax on gross receipts in Monterey too, and that's just the county!
State taxes are:
$9.25 per dry-weight ounce of cannabis flowers,
$2.75 per dry-weight ounce of cannabis leaves, and
$1.29 per ounce of fresh cannabis plant*.
Effective January 1, 2018, a 15 percent cannabis excise tax applies to the average market price of the retail sale. The average market price is determined by the type of transaction (either "arm's length" or "nonarm's length") that occurred when the seller (cultivator, manufacturer or distributor) sold the cannabis or cannabis product to the retailer.
The state has some interesting details they added to make sure cultivators don't sell product for artificially low prices to lower their tax bill. In an arms length transaction the 15% tax is on the wholesale cost of the cannabis or cannabis products, plus a mark-up of 60%
From the county tax code:
"7.100.050 - Tax imposed.
A. There is established and imposed a commercial cannabis business tax at the rates set forth in this Chapter. B. Tax on Commercial Cannabis Cultivation Except Nurseries. 1. Every person who is engaged in commercial cannabis cultivation in the unincorporated area of the County shall pay an annual commercial cannabis business tax. The initial tax rate effective January 1, 2017 through June 30, 2020 for commercial cannabis cultivation, excluding nurseries, shall be set at fifteen dollars ($15.00) per fiscal year, per square foot of canopy authorized by each County permit, or by each State license in the absence of a County permit, not deducting for unutilized square footage. The square footage shall be the maximum square footage of canopy allowed by the County permit for commercial cannabis cultivation, or, in the absence of a County permit, the square footage shall be the maximum square footage of canopy for commercial cannabis cultivation allowed by the State license type. In no case shall canopy square footage which is authorized by the permit or license but not utilized for cultivation be deducted for the purpose of determining the tax for cultivation."
"Tax on All Other Commercial Cannabis Businesses. 1. Every person who is engaged in business as a dispensary, manufacturer, testing laboratory, transporter, distributor, or distribution facility, or engaging in delivery of cannabis in the unincorporated area of the County shall pay an annual commercial cannabis business tax. The initial tax rate effective January 1, 2017 through June 30, 2020 shall be set at five percent of the gross receipts per fiscal year."
"What is meant by nursery cultivation?
For taxation purposes in Monterey County pursuant to Chapter 7.100.040(s), nursery cultivation is defined as “a person that produces only clones, immature plants, seeds, and other agricultural products used specifically for the planting, propagation, and cultivation of cannabis.” The presence of immature plants on a cultivation site may not meet the definition of nursery cultivation. Cultivators requesting taxation as a nursery must intend to apply for a Type 4 Nursery cultivation license from the state for cultivation solely as a nursery."
Link to county cannabis taxes:
https://www.co.monterey.ca.us/taxcollector/Templates/Files/Commercial%20Cannabis%20Tax%20-%20Frequently%20Asked%20Questions.pdf
https://library.municode.com/ca/monterey_county/codes/code_of_ordinances?nodeId=TIT7BUTALIRE_CH7.100COCABUTA
State culticvation tax:
http://www.cdtfa.ca.gov/industry/cannabis.htm
http://www.cdtfa.ca.gov/industry/cannabis.htm#Cultivators
https://www.boe.ca.gov/sptaxprog/tax_rates_stfd.htm
There aren’t 50k shares on the ask, so that’s not possible. Why would they wait for someone to hit the bid to save $1000-$1,500, when they have $150k+ tied up? They wouldn’t. The stock has gone up when there’s “negative” posts, and down when the posts are “positive,” so maybe it doesn’t matter. Is it possible they’re not short, just a buyer? All they did was raise the offer by showing such a large block.
No short would put up a 50k block and leave it sitting there for 2 days. The reason why is obvious, sellers at the ask will raise the offer knowing that there’s not even close to 50k shares for sale. And that’s exactly what happened. The spread was only $.02-.03, they could have hit the ask in smaller blocks and no one would notice. That one block was 50 times the traded volume when it showed up on L2.
You bring up a point that I don’t understand, what is the point REI? REI can’t manufacture anything, they’re not licensed. A few weeks back I was trying to figure out how the state would treat a licensed company, and non licensed from working together. I never found the answer I was looking for, but did find some interesting info about sharing space. In the S-1A from last year, we know that Battle Mountain Genetics has a lease for 1,000 sq feet of space they share with other growers on the property. The state rules are very specific on how shared spaces are used, but only with other licensees! Like I said I never found the answer I was looking for l, but isn’t the whole purpose of a license to prove who can and can’t be in the cannabis business? It would make far more sense for VBF to hire someone competent, than to bring in an unlicensed business. Same goes for the master grower, why is he an employee of REI and not VBF?
Well if they sold the extract without selling it to a distributor they’ve got a problem since neither was licensed to distribute.
I only started looking into the differences between self and 3rd party distribution yesterday, so it’s new to me too. From what I can tell the Monterey rules have stayed the same. Here’s the link I used: http://www.co.monterey.ca.us/home/showdocument?id=59837
Also here’s an attorney website that is easier to read, http://www.winterllp.com/blog/post/winter-llp-update-selfdistribution-of-cannabis-products
specifically this line: “Monterey County, for example, allow cultivation and manufacturing permit holders to “self-distribute” their material or products without the use of a third-party distributor.”
Monterey was creating their rules at the same time the state was, and the state made changes at the last minute before 1/1/2018, and they’ve continued to make changes. So the quote above may be legal for the county, but without a state distribution license, they wouldn’t be able to self-distribute, and 3rd party distribution is either not allowed in the county, or only in certain areas. When I looked at the county zoning regs they imply that there is somewhere in the county that is zoned for 3rd party distribution, I couldn’t find out where that is exactly, but I do know that it’s not where the grow site is.
The 2 types of state distribution you referrenced relate to wholesale distribution (the more expensive license is distribution for other growers) and a retail delivery service. I’m not sure, but it appears to me SIGO got the right license form the state, they just weren’t allowed to because of the county rule on 3rd party distribution.
When did the license get revoked? Who knows, we may never know, but in the state’s eyes it would appear that doesn’t matter, the license should have never been issued in the first place, so it was never valid.
Your post makes sense, they can’t do any distribution atm. That doesn’t mean they can’t sell their product though, they just have to sell it to a distributor first.
It’s not my fault you can’t comprehend that I was talking about SIGO not being able to distribute cannabis for 3rd parties in Monterey. SIGO won’t be able to distribute anything manufactured by REI, unless it was produced by SIGO. As it stands now SIGO can’t even distribute its own product or REI’s, they’ll have to sell it to a distributor outside of Monterey county, which is what I said originally.
“Do you really think they will pay that county tax again? as one. ”
Why would REI pay the county tax, they don’t have any licenses?
I didn’t say REI needed a distribution license. But I do wonder why they didn’t apply for their own manufacturing license.
“They just need general business licence to do investing/ packaging/pressing sALES.”
To do sales they would need a distribution license or a store front license, to press they would need a manufacturing license.
Also mmj has been legal since 1996 in CA
I don’t think Monterey issues separate licenses like the state does. At least in the case of a distribution license it seems to be a set of rules everyone has to follow. You’re right about the multiple city, county and state rules, and I think that’s what happened here. SIGO applied for a license they aren’t allowed to have, and the state didn’t double check since all of the other paperwork from Monterey appeared correct. We know for a fact that SIGO intended to distribute for a 3rd party, they even explained the percentages that they would receive from REI, if REI used its own trim. I doubt this was intentional, but it’s against the county rules anyway. An easy way to fix that is to not allow REI to process 3rd party trim, but until they get their own distribution license, they’ll have to sell to a distributor outside of Monterey. Their attorney is actually pretty good, maybe one of the best in the area, so this is a little surprising.
I don’t really see any of that as a big deal, but not telling anyone until a poster finds out is only done for one reason.
The rule is a county rule, not state. SIGO’s attorney should know the rules, so ultimately the blame lies with him. He should have told SIGO the county wouldn’t allow them to sell REI’s extracts if they were sourced from anyone but VBF.
The 3rd party distribution seems to be a county issue, not state. SIGO has a deal with a company called REI Extracts to turn trim into oil, and if REI brought in their own trim from an outside source, SIGO would get a cut. So the rule in Monterey county prevents the license holder ( vbf in this case, but that’s a whole different can of worms) from selling any oils made from cannabis not grown by vbf.
But.....there is a question I’ve had since this deal was first announced, is the REI deal legal in the state’s eyes? Why can’t REI get their own license, the state hands them out to just about anyone. I haven’t read all of the state regulations of course, but the point seems to be to prevent this kind of partnership with non licensed companies.
Some good laughs on the SIGO board though, of course it’s the state’s fault not SIGO’s, I blame their attorney, he works in the county and he should know the rules. The state seems to hand out a license based partly on the city and county rules and regulations being met, so I’m not sure where the miscommunication was. Regardless, hiding this form shareholders since January 28 is disgusting and serves only one purpose.
Someone here did ask them on instagram, so that probably alerted whomever runs that account. I’m pretty sure they check this board often based on their past 8k’s though.
I don’t know if it’s illegal per se, but it definitely warrants an 8k within 4 days. Let’s face it, they could care less about their filing requirements, and the SEC only rarely says something anyway.
From the 8k:
“The County only allows for self-distribution and not general distribution. Which means the company may only distribute its own products and not unrelated 3 rd party products”
So what does this mean for the REI deal, only VBF’s weed can be distributed from Monterey county. Why can’t REI get their own licenses if the state’s handing them out to anyone that qualifies?
When did SIGO find out about this, has anyone checked the status of the manufacturing license recently? The date on the license lookup page says 1/28/2018, but I thought I had checked since then. This is worthy of an 8k, and within an hour of the first post pointing this out, SIGO responsed. Something tells me SIGO has known about this for more than four days though.
A few of those companies took money from Chicago Venture Partners aka Fife, haven’t looked into all of them though. Wade may or may not be complicit, but he knows what he’s getting into with Fife.