NOTE 4 - ACQUISITION OF THE CONSORTIUM

9 Months Ended

Sep. 30, 2018

Notes

NOTE 4 - ACQUISITION OF THE CONSORTIUM

NOTE 4 – ACQUISITION OF THE CONSORTIUM

On July 14, 2018, NewBridge closed on Share Exchange and Purchase Agreements (“Closing”) with the various members and shareholders of 11th Street, Mad Creek, Timothy, Genus (formerly GLML), Roots Nursery, Inc. (“Roots”), and 5Leaf (together the “Consortium”), whereby NewBridge purchased the shares or membership interests (as the case may be) of the entities making up the Consortium for a total of 31,000,000 shares of the Company’s common stock, par value $0.0001 per share. The Consortium consists of a farm, nursery, management and real estate companies with plans to operate in the cannabis industry.  

The 31,000,000 shares issued to the Consortium represented 76% of the 40,904,589 shares of the Company’s common stock issued and outstanding immediately following the July Acquisitions. In addition, three of the four board members were replaced by the sellers at the Close. Due to the relative size of the Consortium compared to the Company prior to the Closing and the change in control of the Company, the July Acquisitions were considered a reverse acquisition and the Consortium is the acquirer for accounting purposes.

On September 12, 2018, NewBridge provided Roots notice of termination of the Roots Agreement pursuant to Section 10.01 of the Roots Nursery, Inc. Share Exchange and Purchase Agreement (the “Termination Agreement”), effective immediately.  Pursuant to the Termination Agreement, the Company cancelled a total of 9,850,000 shares of Common Stock issued in connection with the July 14 Closing.  On the same day, the Company issued a total of 9,850,000 shares to acquire East 10th Street LLC, a California limited liability real estate company, for 2,925,000 shares of the Company’s common stock and the rights to certain trademarks, logos, business operating procedures, marketing material and future plans for a tissue culture lab and cloning operations for 6,925,000 shares of the Company’s common stock.  These assets were acquired from Sam Mac and Eric Tran, respectively, both directors and principal shareholders in the Company.  

Fair Value of Assets Acquired (Liabilities Assumed):
Assets
Cash	$8,886
Prepaids	207,704
Total assets	216,590
Liabilities
Accounts payable and accrued liabilities	(246,150)
Convertible notes payable, net of discount	(34,723)
Derivative liability	(743,269)
Related party payable	(19,500)
Total liabilities	(1,043,642)
Net liabilities assumed	$(827,052)
Total consideration	$8,418,901
Plus net liabilities assumed	827,052
Goodwill	$9,245,953
Shares issued for the Consortium	31,000,000	75.8%
NewBridge shares prior to acquisition	9,904,589	24.2%
Total shares outstanding following the acquisition	40,904,589	100.0%
Closing price of common stock on July 14, 2018	$0.85
Total Value of the Company following the acquisition	34,768,901
Total Consideration (share price x 24.2%)	$8,418,901
The consideration is 24.2% of the value of the total shares outstanding following the July 14 acquisition.

The following presents the pro-forma combined results of operations of the Company with the Consortium as if the acquisition occurred on January 1, 2018.

	For the nine months ended September 30, 2018
Total revenue	$36,200
Net loss allocable to common stockholders	$(4,402,727)
Net loss per common share	$(0.10)
Weighted-average number of shares outstanding	42,746,557

From the July 14, 2018 acquisition date through September 30, 2018, the acquiree had no revenue and a net loss of $1,515,854.  The pro-forma results of operations are presented for information purposes only.  The pro-forma results of operations are not intended to present actual results that would have been attained had the acquisitions been completed as of January 1, 2018 or to project potential operating results as of any future date or for any future periods.