Bots Inc (BTZI)

[lesgetrich]

Thanks cash. I thought that was the interim agreement between Hawkins and mCig that expired on 9/1/16, since the 10-K was thru 4/30/16, until you had me take another look.

The contract stipulates that...

...at the option of the Company it shall treat $10,000 per month of the base salary as debt owed to the Employee.

...so they're not being paid in stock. The full year salary can be booked immediately by the Company as debt but only $10,000 is earned by the Employee each month (I assume written off as salary owed and debt repayment). I should show up in this quarter's financials. Presumably Paul and Mike are not entitled to it until it's earned.

Furthermore, ...

Upon mutual agreement, or the termination of this Agreement, the Company shall convert the outstanding balance owed into equity of the company at a 15% discount to the then 5 day trailing closing average.

So the Company has to agree to convert the cash debt into shares. They could also simply pay cash if it's available. If the intent was to have the Board meet each month to approve converting that month's Salary into shares, they could have simply paid in shares and avoided the hassle of a loan/debt. The first sentence of that clause also talks about the Board adjusting the salary annually, so presumably any share conversion would be decided at that time. As a condition of the conversion and/or continued employment, the Board could impose further restrictions (i.e. more limited than what the SEC allows) on when and how many shares can be sold and/or converted.

As for the incentive bonus, it's clear that it's calculated as of April 30th of each year and payable by September 30th. Then they can only convert what's over and above twice their annual cash salary of $36,000/year and again only if the Board decides to pay them in stock instead of cash. Again, the Board can also impose further restrictions on when and how many shares can be sold and/or converted.

Keep in mind that mCig also has the option of converting their 8% ownership of VTCQ into cash for salaries if they don't have sufficient revenue/earnings by that time. What you consider lack of transparency by Paul is probably just a desire to keep all options open for moving the company forward.