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marathon man

09/29/16 5:44 PM

#77797 RE: CashBowski #77795

So are you saying these guys are shorting then buying back at a 15% discount?

lesgetrich

09/29/16 6:48 PM

#77800 RE: CashBowski #77795

You need to read that contract more closely...

Upon mutual agreement, or termination of this agreement, the Company shall convert the outstanding balance owed into equity of the Company at a 15% discount...



The $10,000/month debt can only be converted if the Company agrees to do so or if Hawkins leaves. The Company can choose to pay him in cash if they are profitable.

also...

The annual incentive bonus will be calculated based on the Corporation's financial results as of April 30th of each year with the bonus payable by September 30th of the same calendar year. It is understood that should the company be unable to cash flow the business, any bonus payment in excess of $3,000 per month may be issued in stock of the Company at a 25% discount to the then current market price. Such conversion must be approved by the board of Directors of the Corporation.



The bonus only gets paid in stock if the company can't "cash flow the business" and only for the amount in excess of $3,000/month and only if approved by the Board of Directors. Then, it doesn't get paid until September of that year.

As with all share compensation, it is probably also paid in restricted shares and subject to the other share compensation restrictions published earlier which state that no employee can sell more than 3% of their holdings on any given day.

I am not in the least concerned about the payments to Paul and Mike Hawkins. I do think, however, that they should be more transparent about the arrangement they have with Ron Sassano, particularly about his agreement concerning Zoha and Scalable Solutions. Did he make salary concessions in return for his ownership percent? In any event, his compensation consist of $15,000/month in stock. Even if he is allowed to cash all of it immediately, at $.03/share it amounts to about 500,000 shares each month. This is easily absorbed in the daily transaction volume. As of April 30, 2016 Sassano owned 1,252,809 common shares, so he's obviously not selling every share he makes.

Also, according to the 10-K...

Other than the Chief Financial Officer and the CEO of Scalable Solutions, LLC, there are no other agreements with our officers, although we may enter into such agreements following our receipt of additional capital.

lesgetrich

09/30/16 10:14 AM

#77813 RE: CashBowski #77795

Could you please provide a link to the source of that contract. A summary was published in the 10-Q but I can't find the actual contract in any of mCig's published materials.

Also, please provide a link to your later reference to the SEC and debt securities.