☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Colorado
|
20-8980078
|
(State or other jurisdiction of
|
(I.R.S. Employer Identification No.)
|
Incorporation or organization)
|
Large accelerated filer
|
☐
|
Accelerated filer
|
☐
|
Non-accelerated filer
|
☐
|
Smaller reporting company
|
☒
|
Emerging growth company
|
☒
|
|
2019
|
2018
|
||||||
ASSETS
|
||||||||
Current assets
|
||||||||
Cash
|
$
|
2,965
|
$
|
27,925
|
||||
Accounts Receivable, net
|
56,459
|
5,000
|
||||||
Inventory
|
29,786
|
11,888
|
||||||
Prepaid expenses and other assets
|
19,675
|
17,592
|
||||||
Total current assets
|
108,885
|
62,405
|
||||||
Property and equipment, net
|
2,767
|
3,773
|
||||||
Intangible assets, net
|
9,452
|
8,021
|
||||||
Notes receivable, related party
|
452,709
|
94,061
|
||||||
Total assets
|
$
|
573,813
|
$
|
168,260
|
||||
|
||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
|
||||||||
LIABILITIES
|
||||||||
Current liabilities
|
||||||||
Accounts payable
|
$
|
665,791
|
$
|
284,394
|
||||
Accrued expenses
|
437,388
|
82,044
|
||||||
Loans from related parties
|
32,021
|
490,970
|
||||||
Deferred revenue
|
192,500
|
150,000
|
||||||
Notes payable current, net of discount
|
274,282
|
-
|
||||||
Total current liabilities
|
1,601,982
|
1,007,408
|
||||||
Long-term loan from related party
|
48,240
|
-
|
||||||
Long-term notes payable
|
125,000
|
-
|
||||||
Total liabilities
|
1,775,222
|
1,007,408
|
||||||
|
||||||||
STOCKHOLDERS' DEFICIT
|
||||||||
Common stock, no par value, 100,000,000 shares authorized, 33,792,589 and 27,140,550 issued and outstanding,
respectively, at January 31, 2019 and 2018
|
-
|
-
|
||||||
Additional Paid in Capital
|
7,238,699
|
5,325,684
|
||||||
Retained deficit
|
(8,440,108
|
)
|
(6,164,832
|
)
|
||||
Total Stockholders' deficit
|
(1,201,409
|
)
|
(839,148
|
)
|
||||
Total liabilities and stockholders' deficit
|
$
|
573,813
|
$
|
168,260
|
|
2019
|
2018
|
||||||
|
||||||||
Consulting Services
|
$
|
136,537
|
$
|
263,500
|
||||
Cost of consulting services
|
(110,761
|
)
|
(233,529
|
)
|
||||
Gross profit
|
25,776
|
29,971
|
||||||
|
||||||||
Operating costs and expenses
|
||||||||
Rents and other occupancy
|
59,450
|
67,927
|
||||||
Compensation
|
744,128
|
523,805
|
||||||
Professional, legal and consulting
|
597,099
|
193,950
|
||||||
General and administrative
|
355,814
|
307,023
|
||||||
Depreciation and amortization
|
1,826
|
2,308
|
||||||
Total operating costs and expenses
|
1,758,317
|
1,095,013
|
||||||
|
||||||||
Other income (expense)
|
||||||||
Interest expense
|
(104,783
|
)
|
(1,016
|
)
|
||||
Other expenses
|
6,666
|
-
|
||||||
Loss on impairment of investment
|
(345,394
|
)
|
-
|
|||||
Loss on debt conversion
|
(80,502
|
)
|
-
|
|||||
Loss on investment in affiliate
|
(18,722
|
)
|
(24,159
|
)
|
||||
Total other income (expense)
|
(542,735
|
)
|
(25,175
|
)
|
||||
|
||||||||
Loss from continuing operations, before provision for taxes on income
|
(2,275,276
|
)
|
(1,090,217
|
)
|
||||
Provision for taxes on income
|
-
|
-
|
||||||
Loss from continuing operations, net of tax
|
(2,275,276
|
)
|
(1,090,217
|
)
|
||||
Income from discontinued operations
|
-
|
1,479,497
|
||||||
Net income (loss)
|
$
|
(2,275,276
|
)
|
$
|
389,280
|
|||
|
||||||||
Basic earnings and fully diluted income (loss) per common share
|
||||||||
Continuing operations
|
$
|
(0.08
|
)
|
$
|
(0.04
|
)
|
||
Discontinued operations
|
$
|
-
|
$
|
0.05
|
||||
|
||||||||
Basic and fully diluted weighted average number of shares outstanding
|
29,222,516
|
27,140,550
|
|
2019
|
2018
|
||||||
Cash flows from operating activities:
|
||||||||
Net Loss
|
$
|
(2,275,276
|
)
|
$
|
389,280
|
|||
Depreciation and Amortization
|
1,826
|
2,308
|
||||||
Accretion of debt discount
|
68,182
|
-
|
||||||
Loss on debt conversion
|
80,502
|
-
|
||||||
Loss on impairment of investment
|
345,394
|
-
|
||||||
Loss on investment in affiliates
|
18,722
|
24,159
|
||||||
Stock compensation
|
197,720
|
-
|
||||||
Shares and warrants issued for services
|
272,438
|
-
|
||||||
Changes in assets and liabilities:
|
||||||||
Accounts receivable
|
(51,459
|
)
|
(5,000
|
)
|
||||
Inventory
|
(17,898
|
)
|
(11,888
|
)
|
||||
Investments in affiliates
|
(364,116
|
)
|
15,000
|
|||||
Notes receivable, related party
|
(358,648
|
)
|
(94,061
|
)
|
||||
Deposits, prepaids and other
|
(2,083
|
)
|
(17,592
|
)
|
||||
Accounts payable
|
386,397
|
36,324
|
||||||
Accrued expenses
|
295,042
|
139,156
|
||||||
Deferred revenue
|
42,500
|
150,000
|
||||||
Net cash (used in) operating activities from continuing operations
|
(1,360,757
|
)
|
627,686
|
|||||
Net cash (used in) operating activities from discontinued operations
|
-
|
(1,047,215
|
)
|
|||||
|
||||||||
Cash flows from investing activities:
|
||||||||
Purchase of fixed assets
|
-
|
(4,024
|
)
|
|||||
Investment in Intangible assets
|
(2,250
|
)
|
-
|
|||||
Net cash provided (used) by investing from continuing operations
|
(2,250
|
)
|
(4,024
|
)
|
||||
Net cash provided (used) by investing from discontinued operations
|
-
|
2,137,026
|
||||||
|
||||||||
Cash flow from financing:
|
||||||||
Proceeds from stock issuance
|
765,700
|
-
|
||||||
Proceeds from warrant exchange
|
49,650
|
-
|
||||||
Proceeds from debt
|
551,100
|
-
|
||||||
Proceeds from related party loans
|
171,597
|
181,263
|
||||||
Payment to related party loans
|
(200,000
|
)
|
-
|
|||||
Net cash from (used) by financing from continuing operations
|
1,338,047
|
181,263
|
||||||
Net cash from (used) by financing from discontinued operations
|
-
|
(2,000,000
|
)
|
|||||
Net cash flows
|
(24,960
|
)
|
(105,264
|
)
|
||||
Cash, beginning of period
|
27,925
|
133,189
|
||||||
Cash, end of period
|
$
|
2,965
|
$
|
27,925
|
||||
|
||||||||
Supplemental cash flow
|
||||||||
Cash paid for interest
|
$
|
20,079
|
$
|
171,736
|
||||
Non-cash transactions
|
||||||||
Shares issued in exchange for debt
|
402,508
|
-
|
||||||
Shares and warrants issued for services
|
272,438
|
-
|
||||||
Debt Discount
|
225,000
|
-
|
||||||
|
$
|
899,946
|
$
|
-
|
|
Common Stock
|
|||||||||||||||||||
|
Shares
|
Amount
|
Additional Capital in excess of par value
|
Accumulated Deficit
|
Total
|
|||||||||||||||
Balance, January 31, 2017
|
27,140,550
|
$
|
-
|
$
|
3,152,658
|
$
|
(5,578,692
|
)
|
$
|
(2,426,034
|
)
|
|||||||||
Gain from related party transaction
|
-
|
-
|
2,173,026
|
(975,420
|
)
|
1,197,606
|
||||||||||||||
Net income
|
-
|
-
|
-
|
389,280
|
389,280
|
|||||||||||||||
Balance, January 31, 2018
|
27,140,550
|
-
|
5,325,684
|
(6,164,832
|
)
|
(839,148
|
)
|
|||||||||||||
Private share offering
|
3,828,500
|
-
|
765,700
|
-
|
765,700
|
|||||||||||||||
Shares issued in exchange for debt
|
2,012,539
|
-
|
402,507
|
-
|
402,507
|
|||||||||||||||
Warrants issued for services
|
-
|
-
|
172,438
|
-
|
172,438
|
|||||||||||||||
Beneficial conversion feature on convertible debt
|
-
|
-
|
225,000
|
-
|
225,000
|
|||||||||||||||
Stock based compensation
|
-
|
-
|
197,720
|
-
|
197,720
|
|||||||||||||||
Shares issued for investment
|
500,000
|
-
|
100,000
|
-
|
100,000
|
|||||||||||||||
Warrants exchange for shares
|
311,000
|
-
|
49,650
|
-
|
49,650
|
|||||||||||||||
Net loss
|
-
|
-
|
-
|
(2,275,276
|
)
|
(2,275,276
|
)
|
|||||||||||||
Balance, January 31, 2019
|
33,792,589
|
$
|
-
|
$
|
7,238,699
|
$
|
(8,440,108
|
)
|
$
|
(1,201,409
|
)
|
January 31,
|
||||||||
2019
|
2018
|
|||||||
Leasehold improvements
|
$
|
2,200
|
$
|
2,200
|
||||
Office equipment, furniture and fixtures
|
26,276
|
26,276
|
||||||
28,476
|
28,476
|
|||||||
Accumulated amortization and depreciation
|
(25,709
|
)
|
(24,703
|
)
|
||||
$
|
2,767
|
$
|
3,773
|
|||||
●
|
$25,000 within twenty-four (24) hours of execution of the BTS,
|
|||
●
|
$25,000 on or before November 1, 2018.
|
|||
●
|
500,000 shares of common stock in STWC
|
|||
●
|
500,000 common share purchase warrants
|
Trademarks
|
2019
|
2018
|
Gross carrying amount
|
$ 13,260
|
$ 11,010
|
Accumulated amortization
|
3,809
|
2,989
|
Net intangible assets
|
$ 9,451
|
$ 8,021
|
Discontinued Operations Income Statement
|
||
|
Year Ended January 31,
|
|
|
|
2018
|
Rental income from the Regulated Entities (Affiliates)
|
$
|
2,342,391
|
Total revenues
|
|
2,342,391
|
Operating costs and expenses
|
|
|
Reserve for amounts due from Regulated Entities (Affiliates)
|
|
657,402
|
Rents and other occupancy
|
|
1,762,858
|
Depreciation and amortization
|
|
146,150
|
Total operating costs and expenses
|
|
2,566,410
|
Loss from continuing operations
|
|
(224,019)
|
Other income and (expenses)
|
|
|
Interest expense
|
|
(171,636)
|
Gain on settlement and cancellation of leases
|
|
1,959,177
|
Gain on sale of assets
|
|
—
|
Income (loss) from discontinued operations
|
$
|
1,563,522
|
|
2019
|
2018
|
|
|
|
Hourly fee contracts
|
$ 3,749
|
$ -
|
Fixed fee contracts
|
96,000
|
263,500
|
Monthly contracts
|
36,788
|
-
|
|
$ 136,537
|
$ 263,500
|
Level 1:
|
Quoted prices in active markets for identical assets or liabilities.
|
For the Fiscal Year Ending January 31,
|
|
|||
2020
|
|
|
55,250
|
|
2021
|
|
|
56,250
|
|
2022
|
42,750
|
|||
Thereafter
|
|
|
—
|
|
Total minimum lease payments
|
|
$
|
154,250
|
|
Year Ended January 31
|
|||
2019
|
2018
|
||
Income tax expense (benefit):
|
|||
Current:
|
|||
Federal
|
$ (346,143)
|
$ 138,483
|
|
State
|
(76,361)
|
18,024
|
|
Deferred income tax expense (benefit):
|
(422,504)
|
156,507
|
|
Valuation allowance
|
422,504
|
(156,507)
|
|
Provision
|
$ -
|
$ -
|
2019
|
$ 431,100
|
2020
|
125,000
|
|
556,100
|
Less Debt discount
|
(156,818)
|
|
$ 399,282
|
|
|
Warrants
|
||||||
|
|
|
|
|
|
|
|
|
|
|
Number of Warrants
|
|
Exercise Price
|
|
Wtgd Avg Calculation
|
|
Wtgd Avg Remining Life
|
Balance at 1/31/2017
|
|
2,224,700
|
|
$ 5.00
|
|
$ 11,123,500
|
|
2.00
|
|
|
|
|
|
|
|
|
|
Granted
|
|
-
|
|
-
|
|
$ -
|
|
|
Exercised
|
|
-
|
|
-
|
|
$ -
|
|
|
Cancelled
|
|
-
|
|
-
|
|
$ -
|
|
|
|
|
|
|
|
|
|
|
|
Balance at 1/31/2018
|
|
2,224,700
|
|
$ 5.00
|
|
$ 11,123,500
|
|
1.00
|
|
|
|
|
|
|
|
|
|
Granted
|
|
2,000,000
|
|
0.16
|
|
$ 322,000
|
|
|
Exercised
|
|
(311,000)
|
|
0.16
|
|
$ (49,650)
|
|
|
Cancelled
|
|
(2,013,700)
|
|
$ 5.00
|
|
$ (11,091,850)
|
|
|
|
|
|
|
|
|
|
|
|
Balance at 1/31/19
|
|
1,900,000
|
|
$ 0.16
|
|
$ 304,000
|
|
1.71
|
Expected term (years)
|
5
|
Risk-free interest rate
|
2.73%
|
Volatility
|
218%
|
Expected dividend yield
|
0.00%
|
Name |
|
Age |
|
Position |
Director Since |
Erin Phillips |
|
43 |
|
President, Chief Financial and Accounting Officer and a Director |
2014 |
Matthew D. Willer |
|
42 |
|
President |
|
Financial Statements Index:
|
Page
|
|
|
||
Report of Independent Registered Public Accounting firm
|
3 |
|
Consolidated Balance Sheets, January 31, 2019 and 2018
|
4 |
|
Statements of Operations, for the years ended January 31, 2019 and
2018
|
5 |
|
Statements of Cash Flows, for the years ended January 31, 2019 and
2018
|
6 |
|
Statement of Changes in Stockholders’ Equity (Deficit), for the
years ended January 31, 2019 and 2018
|
7 |
|
Notes to Financial Statements, January 31, 2019 and 2018
|
8 |
Incorporated by Reference
|
|||||||||||||
Exhibit Number
|
Exhibit Description
|
Form
|
File No.
|
Exhibit
|
Filing Date
|
Filed Herewith
|
|||||||
3.1
|
Articles of Incorporation
|
X
|
|||||||||||
10.1
|
Convertible Promissory Note dated March 22, 2019 with Power Up
Lending Group
|
8-K
|
000-52825
|
99.1
|
4/12/19
|
||||||||
10.2
|
Stock Purchase Agreement dated March 22, 2019 with Power Up Lending
Group
|
8.K
|
000-52825
|
99.2
|
4/12/19
|
||||||||
10.3
|
Convertible Promissory Note dated February 13, 2019 with Power Up
Lending Group
|
8-K
|
000-52825
|
99.1
|
2/19/19
|
||||||||
10.4
|
Stock Purchase Agreement dated February 13, 2019 with Power Up
Lending Group
|
8.K
|
000-52825
|
99.2
|
2/19/19
|
||||||||
10.5
|
LLC Operating Agreement of Meridian A, LLC dated 1/7/19
|
8-K
|
000-52825
|
99.2
|
2/5/19
|
||||||||
10.6
|
15% Promissory Note dated December 7, 2018 to Richland Fund, LLC
|
8-K
|
000-52825
|
99.1
|
3/5/19
|
||||||||
10.7
|
Settlement Agreement dated November 15, 2018 with Headgate II, LLC
|
8-K
|
000-52825
|
99.1
|
12/12/18
|
||||||||
10.8
|
Investor Relations Consulting Agreement dated October 26, 2018 with
Hayden IR, LLC
|
8-K
|
000-52825
|
99.1
|
11/1/18
|
||||||||
10.9
|
Consulting Agreement dated November 1, 2018 with J Paul Consulting
Corp.
|
8-K
|
000-52825
|
99.2
|
11/1/18
|
||||||||
10.10
|
Master Services Agreement, Trademark Agreement, Management Agreement,
and Consulting Services Agreement, each dated June 16, 2017 with STWC Sorrento Valley, LLC
|
8-K
|
000-52825
|
99.1
|
10/24/18
|
||||||||
10.11
|
Master Services Agreement, Development Agreement, Trademark
Agreement, Management Agreement, and Consulting Services Agreement, each dated October 11, 2018 with 2600 Meridian, LLC
|
8-K
|
000-52825
|
99.2
|
10/24/18
|
||||||||
10.12
|
Master Services Agreement, Trademark Agreement, Management Agreement,
and Consulting Services Agreement, each dated October 11, 2018 with HWH Farms, LLC
|
8-K
|
000-52825
|
99.3
|
10/24/18
|
||||||||
10.13
|
Employment Agreement dated October 15, 2018 with Erin Phillips*
|
8-K
|
000-52825
|
99.1
|
10/22/18
|
||||||||
10.14
|
Employment Agreement dated October 15, 2018 with Jay Kotzker
|
8-K
|
000-52825
|
99.2
|
10/22/18
|
||||||||
10.15
|
Employment Agreement dated October 18, 2018 with Shawn Phillips
|
8-K
|
000-52825
|
99.3
|
10/22/18
|
||||||||
10.16
|
Exchange Agreement dated October 15, 2018 with Shawn Phillips
|
8-K
|
000-52825
|
99.4
|
10.22/18
|
||||||||
10.17
|
Note Purchase and Security Agreement dated August 29, 2018 with
Richland Fund, LLC
|
8-K
|
000-52825
|
99.5
|
10/22/18
|
||||||||
10.18
|
Binding Term Sheet dated September 5, 2018 with HiLife Creative
|
8-K
|
000-52825
|
99.6
|
10/22/18
|
||||||||
10.19
|
Warrant to Purchase Common Stock dated _____ to Elizabeth Illa
|
8-K
|
000-52825
|
99.7
|
10/22/18
|
||||||||
10.20
|
Warrant to Purchase Common Stock dated _____ to Jason Kotzker
|
8-K
|
000-52825
|
99.8
|
10/22/18
|
||||||||
10.21
|
Warrant to Purchase Common Stock dated _____ to Jennifer Yunker
|
8-K
|
000-52825
|
99.9
|
10/22/18
|
||||||||
10.22
|
Lease Assignment dated January 31, 2018 with Kalyx Colorado 695 Bryant LLC
|
8-K
|
000-52825
|
99.1
|
6/19/18
|
||||||||
10.26
|
Assignment and Assumption Agreement dated April 6, 2018 with Green Acres Partners A, LLC, et al.
|
8-K
|
000-52825
|
99.2
|
6/19/18
|
||||||||
10.27
|
Loan Agreement with Green Acres Partners A, LLC dated April 6, 2018 with Green Acres Partners A, LLC
|
8-K
|
000-52825
|
99.3
|
6/19/18
|
||||||||
10.28
|
Commercial Real Estate Lease dated October 1, 2017 with Timothy Riopelle
|
8-K
|
000-52825
|
99.4
|
6/19/18
|
||||||||
10.29
|
Master Services Agreement, Trademark Agreement, Management Agreement, and Consulting Services Agreement, each dated January 1, 2018 with COPR Enterprises,
LLC
|
8-K
|
000-52825
|
99.5
|
6/19/18
|
||||||||
10.30
|
Form of Master Services Agreement
|
8-K
|
000-52825
|
99.6
|
6/19/18
|
||||||||
10.31
|
Advisor Agreement dated July 1, 2018, with Matthew Willer
|
X
|
|||||||||||
21
|
Subsidiaries
|
X
|
|||||||||||
31.1
|
|
Rule 13a-14(d) Certification by Principal Executive Officer
|
X
|
||||||||||
31.2
|
|
Rule 13a-14(d) Certification by Principal Financial Officer
|
X
|
||||||||||
32.1
|
|
Section 1350 Certification of Principal Executive and Financial Officer
|
|
|
|
X | |||||||
101.INS
|
|
XBRL Instance Document
|
10-K
|
000-52825
|
101.INS
|
4/30/19
|
|||||||
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
10-K
|
000-52825
|
101.SCH
|
4/30/19
|
|||||||
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
10-K
|
000-52825
|
101.CAL
|
4/30/19
|
|||||||
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
10-K
|
000-52825
|
101.DEF
|
4/30/19
|
|||||||
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
10-K
|
000-52825
|
101.LAB
|
4/30/19
|
|||||||
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
10-K
|
000-52825
|
101.PRE
|
4/30/19
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and
procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period
in which this report is being prepared;
|
b)
|
designed such internal control over financial reporting, or cause such internal control over
financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles;
|
c)
|
evaluated the effectiveness of the registrant's disclosure controls and procedures and
presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
disclosed in this report any change in the registrant's internal control over financial
reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting; and
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal
control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
any fraud, whether or not material, that involves management or other employees who have
significant role in the registrant's internal control over financial reporting.
|
e)
|
designed such disclosure controls and procedures, or caused such disclosure controls and
procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period
in which this report is being prepared;
|
f)
|
designed such internal control over financial reporting, or cause such internal control over
financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles;
|
g)
|
evaluated the effectiveness of the registrant's disclosure controls and procedures and
presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
h)
|
disclosed in this report any change in the registrant's internal control over financial
reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting; and
|
c)
|
all significant deficiencies and material weaknesses in the design or operation of internal
control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
d)
|
any fraud, whether or not material, that involves management or other employees who have
significant role in the registrant's internal control over financial reporting.
|
5.
|
The classes of shares and number of shares of each class that the corporation is authorized to issue are as
follows.
|
7.
|
(Caution: Leave blank if the document does not have a delayed effective date.
Stating a delayed effective date has significant legal consequences. Read instructions before entering a date.)
|
1.
|
All shares of common stock shall share equally in dividends. Subject to the applicable
provisions of the laws of this State, the Board of Directors of the Corporation may, from time to time, declare and the Corporation may pay dividends in cash, property, or its own shares, except when the Corporation is insolvent or when the
payment thereof would render the Corporation insolvent or when the declaration or payment thereof would be contrary to any restrictions contained in this Certificate of Incorporation. When any dividend is paid or any other distribution is
made, in whole or in part, from sources other than unreserved and unrestricted earned surplus, such dividend or distribution shall be identified as such, and the source and amount per share paid from each source shall be disclosed to the
stockholder receiving the same concurrently with the distribution thereof and to all other stockholders not later than six months after the end of the Corporation's fiscal year during which such distribution was made.
|
2.
|
All shares of common stock shall share equally in distributions in partial liquidation.
Subject to the applicable provisions of the laws of this State, the Board of Directors of the Corporation may distribute, from time to time, to its stockholders in partial liquidation, out of stated capital or capital surplus of the
Corporation, a portion of its assets in cash or property, except when the Corporation is insolvent or when such distribution would render the Corporation insolvent. Each such distribution, when made, shall be identified as a distribution in
partial liquidation, out of stated capital or capital surplus, and the source and amount per share paid from each source shall be disclosed to all stockholders of the Corporation concurrently with the distribution thereof. Any such
distribution may be made by the Board of Directors from stated capital without the affirmative vote of any stockholders of the Corporation.
|
b. The designations, powers, rights, preferences, qualifications, restrictions and limitations of the preferred stock shall be established
from time to time by the Corporation's Board of
Directors, in accordance with Colorado law.
|
c. i) Cumulative voting shall not be allowed in elections of directors or for any purpose.
|
ii)
|
No holders of shares of capital stock of the Corporation shall be entitled, as such, to any preemptive or
preferential right to subscribe to any unissued stock or any other securities which the Corporation may now or hereafter be authorized to issue. The Board of Directors of the Corporation, however, in its discretion by resolution, may
determine that any unissued securities of the Corporation shall be offered for subscription solely to the holders of common stock of the Corporation, or solely to the holders of any class or classes of such stock, which the Corporation may
now or hereafter be authorized to issue, in such proportions based on stock ownership as said board in its discretion may determine.
|
iii)
|
The Board of Directors may restrict the transfer of any of the Corporation's stock issued by giving the
Corporation or any stockholder "first right of refusal to purchase" the stock, by making the stock redeemable, or by restricting the transfer of the stock under such terms and in such manner as the directors may deem necessary and as are
not inconsistent with the laws of this State. Any stock so restricted must carry a conspicuous legend noting the restriction and the place where such restriction may be found in the records of the Corporation.
|
iv)
|
The judgment of the Board of Directors as to the adequacy of any consideration received or to be received for
any shares, options, or any other securities which the Corporation at any time may be authorized to issue or sell or otherwise dispose of shall be conclusive in the absence of fraud, subject to the provisions of these Articles of
Incorporation and any applicable law.
|
d. Any action required or permited by the Colorado Business Corporation Act to be taken at a shareholders’ meeting may be taken without a
meeting if the shareholders holding
shares having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting, at
which all of the shares entitled to vote thereon
were present and voted, consent to such action in writing. |
a.
|
Annual budget for operations
|
b.
|
Joint venture relationships and general business development, including acquisition review and joint venture
relationships
|
c.
|
Acquisition and development strategy for national footprint
|