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Note 17 - Subsequent Event
12 Months Ended
Dec. 31, 2018
Subsequent Events [Abstract]  
Note 17 - Subsequent Event

NOTE 17 – SUBSEQUENT EVENTS

 

On January 8, 2019, the Company completed the first close on a $7.5 million private offering of securities (the “Offering”), whereby the Company entered into a Note Purchase Agreement (the “Purchase Agreement”) with certain accredited investors, pursuant to which the Company shall issue to those investors $1,073,905 worth of 10% convertible promissory notes, convertible into shares of the Company’s common stock, par value $0.0001 per share at a  conversion price of $1.00 per share upon the terms and subject to the conditions set forth in the Note Purchase Agreement and the Notes (the “Notes”), for a maximum of $7.5 million. The Notes have a maturity date of twelve 12 months if not converted.

 

On January 17, 2019, the Company announced the expansion of its corporate management team with the appointments of Dr. John MacKay as Chief Technology Officer (“CTO”), Patrick P. Tang as Chief Compliance Officer (“CCO”) and Sandra Ribble as Corporate Controller of Newbridge Global Ventures.  

 

Dr. John MacKay’s employment agreement commenced January 2, 2019 and terminates on December 31, 2021, with extensions upon mutual agreement.  His base salary is $10,000 per month and he will be issued 200,000 shares of the Company’s Common Stock par value $0.0001 as a signing bonus and he will be eligible for an annual bonus.

 

Patrick Tang’s employment agreement commences March 1, 2019 and terminating on December 31, 2020, with extensions upon mutual agreement.  His base salary is $10,000 per month for March thru December 2019 and then $15,000 per month for the twelve months ended December 2020.  Patrick will also be granted options to acquire 300,000 shares of the Company’s Common Stock par value $0.0001 and will be eligible for an annual bonus.  Also, on December 18, 2018, the Company signed an interim services agreement with Patrick Tang in which he will receive 32,000 shares of common stock for interim services from December 18, 2018 through March 2019.

 

On January 17, 2019, the Company granted non-statutory stock options of 1,000,000 to Synergistic Technologies Associates, LLC (a company owned by Dr. John MacKay) and 300,000 to Patrick Tang.  The options have an exercise price of $1.00 per share.

 

On January 18, 2019, the Board approved the 2019 Equity Incentive Plan (“2019 Incentive Plan”) in order to attract and retain qualified personnel, directors and consultants and align their interests with those of the Company’s stockholders.  The 2019 Incentive Plan reserves 5,000,000 shares of the Company’s common stock, par value $0.000l for future issuance.  The option exercise price will be set by a committee but will not be less than the fair market value of the common stock at the time of the grant.

 

On January 17, 2019, the Board approved the appointment of Ellen Gee as President of 5Leaf, LLC, replacing Dr. John MacKay.

 

On February 14, 2019, the Company and EcoXtraction LLC, a Louisiana limited liability company (the “Seller”) entered into an Asset Purchase Agreement (the “Purchase Agreement”), pursuant to which the Company issued to the Seller an aggregate of 2,350,000 shares of the Company’s common stock par value $0.0001 per share (the “Shares”) and the Seller sold to the Company certain equipment and other tangible property. In connection with the Purchase Agreement, the Company and the Seller entered into a Lock-Up Agreement, which provides that, among other things, the Seller may not liquidate any of the Shares received in connection with the Purchase Agreement until September 30, 2020 (the “Lock-Up Agreement”). Further, in connection with the Purchase Agreement and the Lock-Up Agreement, the Company and the Seller entered into a Registration Rights Agreement, wherein the Company agreed to provide certain registration rights under the Securities Act of 1933 (the “Securities Act”) including an obligation to, within ninety (90) days following the Seller’s written request, prepare and file with the Securities and Exchange Commission (the “SEC” or the “Commission”) a Registration Statement or Registration Statements on Form S-1, or such other applicable form if Form S-1 is not available.  

 

The Purchase Agreement conveyed only assets; the Company did not receive any ownership interest in or to the Seller or the securities of the Seller and the Company does not consider it to be an acquisition of a business. The Company and the Seller also took steps described herein to create a joint venture (the “Joint Venture”).  

 

In connection with the Purchase Agreement, on February 14, 2019, the Company and the Seller entered into a License Agreement, pursuant to which Seller sub-licensed to the Company certain intellectual property relating to cannabis extraction technology which the Seller licenses from Hydro Dynamics, Inc. (“Hydro”) (the “License Agreement”). Subject to the terms of the License Agreement, the Seller grants to the Company certain licenses, including an exclusive license for an initial term of two (2) years from the effective date of the agreement (the “Exclusive License”). The Company has the option to renew the Exclusive License for two (2) successive additional terms of one (1) year each. The Company shall exercise its renewal option by giving the Seller written notice of the Company’s intent to renew the license; in consideration for each one-year renewal term, the Company shall issue to the Seller 250,000 shares of the Company’s common stock. The Company is under no obligation to renew.  

 

In connection with the Purchase Agreement, on February 14, 2019, the Company, the Seller and CleanWave entered into an Assignment and License Agreement (the “A&L Agreement”), pursuant to which the Seller agreed to assign and/or license certain intellectual property to the Company and CleanWave, and the Company agreed to contribute an aggregate of $2,000,000 of cash contribution to CleanWave (the “Cash Contribution”) such Cash Contribution being made no later than by the second anniversary of the effective date of the A&L Agreement. If the Cash Contribution is not met, then ownership of certain intellectual property described in the A&L Agreement shall revert back to the Seller, and CleanWave would execute all documents necessary to re-assign such intellectual property back to the Seller.

 

In connection with the Purchase Agreement, on February 15, 2019, the Company and the Seller created CleanWave Labs, LLC, a Nevada limited liability company (“CleanWave”) with each of the Company and the Seller as the members of CleanWave (the “Operating Agreement”). The Company shall own 50% of the member equity interests and 50% of the member profit interests of CleanWave. CleanWave was formed primarily for the purpose of (i) exploiting certain proprietary technologies being assigned and licensed to the Company by the Seller designed to extract CBD, THC, as well as additional compounds from cannabis and hemp plants and (ii) manufacture and market equipment derived from that technology for use in extracting CBD, THC and additional compounds.  Pursuant to the terms of the Operating Agreement and in consideration of its membership interests, the Company shall provide certain equipment, as well as $2,000,000 in working capital over a two-year period, with the first $150,000 of the $2,000,000 paid to Hydro upon election to be used to pay Hydro the amount owed by Seller to Hydro.