As filed with the Securities and Exchange
Commission on October 6, 2014
Registration No.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________________
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
_______________________________
CannaVEST Corp.
(Exact name
of Registrant as specified in its charter)
_______________________________
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Delaware
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2688 South Rainbow Blvd, Suite B
Las Vegas, Nevada 89146
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80-0944970
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(State or other jurisdiction of
incorporation or organization)
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(Address of principal executive offices and zip code)
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(I.R.S. Employer
Identification Number)
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_______________________________
CANNAVEST CORP. AMENDED AND RESTATED
2013 EQUITY INCENTIVE PLAN
(Full title of the plan)
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Michael Mona, Jr.
Chief Executive Officer
CannaVEST Corp.
2688 South Rainbow Blvd.
Suite B
Las Vegas, Nevada 89146
(860) 290-2157
(Name, address, and telephone number, including
area code, of agent for service)
Copy to:
John P. Cleary, Esq.
Procopio Cory Hargreaves & Savitch LLP
12544 High Bluff Drive, Suite 300
San Diego, California 92130
(619) 515-3221
_______________________________
Indicate by check mark whether the registrant
is a large accelerated filed, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions
of “large accelerated filer,” “accelerated filer” and “smaller reporting company in Rule 12b-2 of
the Exchange Act.
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Large Accelerated filer
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Accelerated filer
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Non-accelerated filer
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(Do not check if a smaller reporting company)
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Smaller reporting company
x
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CALCULATION OF REGISTRATION FEE
Title of securities to be
registered
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Amount to be
registered
(1)
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Proposed
maximum offering
price per share
(2)
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Proposed
maximum
aggregate offering
price
(2)
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Amount of
registration
fee
(3)
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Common stock, par value
$0.0001 per share (Reserved for issuance under the CannaVEST Corp. Amended and Restated 2013 Equity Incentive Plan)
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10,000,000
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$2.97
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$29,700,000
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$3,451.14
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(1) Represents
the maximum number of shares of common stock issuable pursuant to awards under the annaVEST Corp. Ameed and Rested 2013 Equity
Incentive Plan (the “Plan”). Pursuant to Rule 416(a) under the Securities Act of 1933, as amended (the “Securities
Act”), this Registration Statement shall also cover any additional shares of common stock that become issuable by reason
of any stock dividend, stock split, recapitalization or other similar transaction of or by the Registrant that results in an increase
in the number of the registrant’s outstanding shares of common stock or shares issuable pursuant to awards granted under
the Plan.
(2) Estimated
solely for purposes of calculating the registration fee pursuant to Rule 457(c) and 457(h) of the Securities Act of 1933, as amended.
The above calculation is based on the average of the bid and ask price of the common stock reported on the Over the County Bulletin
Board on October 1, 2014.
(3) Represents
the Proposed Maximum Aggregate Offering Price multiplied by $.00013640.
CANNAVEST CORP.
REGISTRATION STATEMENT ON FORM S-8
INTRODUCTION
This Registration Statement on Form S-8
(the “Registration Statement”) is being filed by CannaVEST Corp. (the “Company” or “Registrant”)
in accordance with the requirements of Form S-8 under the Securities Act of 1933, as amended (the “Securities Act”),
in order to register 10,000,000 shares of Common Stock, $0.0001 par value per share, issuable on a registered basis pursuant to
stock options and other equity-based compensation awards that may have been or may be granted under the Company’s Amended
and Restated 2013 Equity Incentive Plan.
This Registration Statement contains the
form of reoffer prospectus in accordance with Part I of Form S-3 relating to 1,600,000 shares of the Company’s Common Stock,
which are reofferings and resales of up to an aggregate of 1,600,000 shares of our common stock, issuable as stock awards or upon
exercise of options under our Amended and Restated 2013 Equity Incentive Plan. The reoffer prospectus may be used for reoffer and
resales of restricted securities (as such term is defined in General Instruction C to Form S-8) acquired pursuant to each of the
plans.
PART I
INFORMATION REQUIRED IN THE SECTION 10(a)
PROSPECTUS
The information specified
in Item 1 and Item 2 of Part I of Form S-8 is omitted from this Registration Statement on Form S-8 (the “Registration Statement”)
in accordance with the provisions of Rule 428 under the Securities Act of 1933, as amended (the “Securities Act”),
and the introductory note to Part I of Form S-8. The documents containing the information specified in Part I of Form S-8 will
be delivered to the participants in the equity benefit plans covered by this Registration Statement as specified by Rule 428(b)(1)
under the Securities Act.
REOFFER PROSPECUTS
The date of this prospectus is October 2,
2014
CANNAVEST CORP.
2688 South Rainbow Blvd., Suite B
Las Vegas, Nevada 89146
1,600,000 Shares of Common Stock
This reoffer prospectus relates to 1,600,000
shares of our common stock, par value $0.0001 per share, that may be offered and resold from time to time by the selling stockholders
identified in this prospectus (the “Selling Stockholders”) for their own account. The shares included in this prospectus
include shares issued or to be issued to the Selling Stockholders pursuant to our Amended and Restated 2013 Equity Incentive Plan,
as amended (the “Plan”). It is anticipated that the Selling Stockholders will offer common shares for sale at prevailing
prices on the Over-the-Counter Bulletin Board on the date of sale. We will receive no part of the proceeds from sales made under
this reoffer prospectus. The Selling Stockholders will bear all sales commissions and similar expenses. Any other expenses incurred
by us in connection with the registration and offering and not borne by the Selling Stockholders will be borne by us.
The Plan authorizes the issuance of up
to 10,000,000 shares of our common stock to officers, directors, employees and consultants of the Company. This reoffer prospectus
has been prepared for the purposes of registering the common shares under the Securities Act to allow for future sales by the Selling
Stockholders on a continuous or delayed basis to the public without restriction.
The Selling Stockholders and any brokers
executing selling orders on their behalf may be deemed to be “underwriters” within the meaning of the Securities Act,
in which event commissions received by such brokers may be deemed to be underwriting commissions under the Securities Act.
Our common stock is traded on the Over-the-Counter
Bulletin Board under the symbol “CANV”. On October 1, 2014, the closing price of our common stock on such market was
$2.97 per share.
Investing in our common stock involves
risks. See “Risk Factors” on page 4 of this reoffer prospectus. These are speculative securities.
NEITHER THE SECURITIES AND EXCHANGE
COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
October 2, 2014
TABLE OF CONTENTS
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Page
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Prospectus Summary
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5
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Risk Factors
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8
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Cautionary Note Regarding Forward-Looking Statements
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12
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Use of Proceeds
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12
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Selling Stockholders
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12
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Plan of Distribution
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13
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Legal Matters
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16
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Interest of Named Experts and Counsel
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16
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Disclosure of Commission Position on Indemnification for Securities Act Liabilities
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16
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Additional Information Available to You
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16
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, IN CONNECTION WITH THE OFFERING MADE
HEREBY, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY
OR ANY OTHER PERSON. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF. THIS PROSPECTUS DOES NOT CONSTITUTE
AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OFFERED HEREBY BY ANYONE IN ANY JURISDICTION IN WHICH SUCH
OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON.
PROSPECTUS SUMMARY
Our Company
As used in this prospectus, unless otherwise
stated, all references to the “Registrant”, “Company”, “we,” “our” and “us”
refer to CannaVEST Corp. We were incorporated under the name Foreclosure Solutions, Inc. in the State of Texas on December 9, 2010
to provide information on pre-foreclosure and foreclosed residential properties to homebuyers and real estate professionals on
its website. The Company generated no revenues nor was able to secure financing for its business plan. As a result, on November
16, 2012, the shareholders owning 6,979,900 outstanding shares of the Company’s stock sold their shares in private transactions
to Mai Dun Limited, LLC, Mercia Holdings, LLC, General Hemp, LLC and Bamburgh Holdings, LLC. Upon consummation of these transactions,
the buyers collectively acquired 99.7% of the total issued and outstanding shares. The Company reincorporated in Delaware on July
25, 2013.
On December 15, 2012, the Company entered
into an Agreement for Purchase and Sale of Assets (the “PhytoSPHERE Agreement”) with PhytoSPHERE Systems, LLC (“PhytoSPHERE”)
whereby upon the closing of the transaction the Company acquired certain assets of PhytoSPHERE in exchange for common stock and
cash of the Company. The transaction closed on January 29, 2013. During 2013, we paid $950,000 in cash and issued 5,825,000 shares
of common stock in full payment for those assets.
We are in the business of developing, producing,
marketing and selling end consumer products to the nutraceutical industry containing the hemp plant extract, Cannabidiol (“CBD”),
and reselling to third parties raw product acquired by us pursuant to our supply relationships in Europe. We seek to take advantage
of an emerging worldwide trend to re-energize the production of industrial hemp and to foster its many uses for consumers.
Our business focus is divided into the
following categories:
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Product development, manufacturing and distribution of hemp-derived products focused on the nutraceutical
and beauty, cosmetic and personal care market sectors; and
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Supplier of bulk hemp oil.
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Historically cultivated for industrial
and practical purposes, hemp is used today for textiles, paper, auto parts, biofuel, cosmetics, animal feed, supplements and much
more. The global hemp market in 2014 is estimated to offer over 25,000 products—an impressive scope for such a misunderstood
and restricted commodity. The market for hemp-derived products is expected to increase exponentially over the next five years,
and we believe we are well-positioned to be a dominant player in the hemp industry.
Current Operations
We currently manufacture, market, and sell
products containing CBD. CBD is one of at least 65 cannabinoids found in hemp, and is non-psychoactive. It has been shown in certain
clinical settings to not only promote overall wellness, but also to potentially treat a wide array of diseases. Dr. Sanjay Gupta’s
CNN
documentary,
WEED
, was just the latest in an explosion of mainstream media attention to the therapeutic potential
of CBD. The Company is capitalizing on this exposure by offering CBD from industrial hemp oil in a variety of consumer products.
Our current product portfolio includes:
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PlusCBD™
– CBD-rich industrial hemp oil with
the highest concentrations available. Designed for health and wellness;
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Cibdex
™ – Both 25 mg CBD capsules and flavored
tinctures packaged in bottles with concentrations of 100mg or 500 mg of CBD; and
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Cibaderm
™ – Beauty products containing CBD-rich
hemp oil including lotion, body wash, salve, shampoo, conditioner and hand cream.
We have filed a trademark application for
HempFit™, in connection with our line of products in development geared towards hemp seed oil, hemp protein powder, hemp
seed and hemp seed meal/flour. We are expanding our product offerings and will continue to scale up our manufacturing processes
to accommodate the new products in the pipeline.
Hemp Oil – Cannabidiol
We currently have over 1,000 metric tons
of inventory on-hand or that is being processed. In addition, we have commitments from suppliers overseas for a significant amount
of future inventory. Experts expect, and we agree that the demand for hemp-derived products will increase exponentially over the
next five years. We have invested significant capital to develop and maintain relationships with growers on a global scale to ensure
access to a significant percentage of the worldwide hemp crop. Despite this already large footprint, we continue to explore and
develop other relationships to ensure that we can meet the expected demand for bulk hemp products well into the future.
We continue to perfect the processing of
our hemp-based CBD. To that end, we established a research laboratory and pilot processing facility to increase our ability to
purify and process cannabidiol. In the short time since its establishment, our lab has already purified natural (non-synthetic),
hemp-based cannabidiol in excess of 97%, which resulted in our winning the prestigious
High Times Medical Cannabis Cup
in
Seattle, Washington in September, 2013. To give perspective on this achievement, the second CBD place entry was only 54% pure (approximately).
Since then, we have won similar competitions in Amsterdam, Detroit, and Los Angeles.
Fortune 500 companies like Ford, Patagonia
and L’Oreal already manufacture and sell consumer products made of hemp. We believe the establishment of state-of-the-art
facilities, processes, and procedures will allow us to be well positioned to get a jumpstart on the ever increasing demand for
bulk hemp oil and fiber.
Our laboratory is uniquely equipped with
qualified industry leaders and state of the art equipment for testing of constituents in hemp and removing CBD from the plant base
material. Our lab is equipped with the very best tools and validated procedures to analyze hemp-based products. Each product is
tested multiple times for cannabinoid content, pesticide residues, aromatic terpenoid compounds, and biological pathogens that
could be harmful to the consumer. These protocols ensure that our products are consistent and the highest quality on the market.
Development Programs
The Company recently completed a partnering
arrangement with Kentucky's Murray State University to assist in providing seeds, and also to provide agronomy, processing
and quality testing consulting of the University’s hemp research pilot program under the Agricultural Act of 2014. We are
working closely with Murray State to optimize hemp cultivars, yields and planting schematics. Additionally, we are pursuing opportunities
within Kentucky to evaluate investment in processing equipment and mills.
Background
In a short time, the Company has established
itself as a leader in the industrial hemp industry, with the mission of developing, producing and marketing products derived from
hemp to consumers and manufacturers. The Company was established in Q4 2012, and our corporate history can be reviewed in our reports
filed with the Securities and Exchange Commission, at www.sec.gov. The Company’s trading symbol is “CANV”, and
it trades on the Over-the-Counter Bulletin Board (OTCBB).
A summary of our accomplishments
to date:
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Purchased the assets of PhytoSPHERE Systems LLC, an internationally-recognized hemp biotechnology
company. This acquisition provided the Company access to substantial inventory, an international network of growers, a seed bank
of different hemp varieties suited to multiple purposes, and a license to the PhytoSPHERE name and trademark.
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Enhanced our network of hemp farmers to insure increased supply to meet the anticipated needs of
a growing market for CBD and related products.
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Established a state-of-the-art lab facility in San Diego to allow pilot-scale purification, production
and analysis of our products, along with the infrastructure to research additional products.
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Developed an expanding network of customers creating greater awareness of the Company’s products
and to established a foundation to increase our revenue base.
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5.
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Our 2014
Los Angeles High Times Medical Cannabis Cup
win is the latest in many awards for
CBD Simple™, which also won the 2013
High Times Cannabis Cup
competition in Amsterdam and the 2013
Seattle High
Times Cannabis Cup
for Highest (hemp) CBD Concentrate. In addition, CBD Simple™ took top honors at the 2013 Michigan
Medical Marijuana Conference “
Green Cup
” contest for Highest CBD Concentrate.
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Strategic Plan – The next 3
years
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1.
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Continued expansion of our worldwide network of hemp farmers.
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2.
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Expand infrastructure investment in operating areas including sales, marketing, product development,
finance and IT.
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3.
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Expansion of our product offerings containing natural, hemp-based CBD.
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Characterization of additional cannabinoids to drive continued product development.
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Scale our manufacturing process to repeatedly purify industrial hemp oil with predetermined quantities
of CBD and other cannabinoids, and further characterize additional cannabinoids.
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Continue to monitor the industry and evaluate strategic acquisitions that will provide additional
capabilities to achieve our strategic objective of being a dominant player in growing, harvesting, and processing hemp and hemp-derived
products.
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Market, Customers and Distribution
Methods
Our market, customers and distribution
methods are large and diverse. These markets range from hemp-based bio-plastics to textiles. This is an ever-evolving distribution
system that today only has a few outlets in mainstream commercial and retail stores. However, we believe that as awareness grows
for the “green,” environmentally-friendly products derived from hemp\cannabis, the industry will adapt its current
product lines to integrate them with hemp-based additives or replace harmful components in their existing products with the components
of hemp\cannabis.
To understand the market and consumers
as well as distribution methods, we have studied all the uses of hemp\cannabis and its legal structure in the U.S. and abroad,
including in the European Union, Africa and Latin America. There are more than 50,000 known uses for hemp\cannabis based products,
most of which were used in the past and were replaced by cotton, petroleum\oil, concrete, corn and soybeans. We believe the market
potentially represents trillions of dollars in worldwide product sales. We will focus on the products that management believes
will have the greatest positive environmental impact, profitability and ease to market. These tend to be new, innovative products
as well as the replacement of raw base materials for products that exist today, such as plastics, fuel, textiles, foods and beauty,
cosmetic and personal care products.
Our target customers are first and foremost
end consumers via Internet sales, direct-to-consumer health and wellness stores, collectives, cooperatives, affiliate sales and
master distributors. Secondarily, we are targeting manufactures of products that can readily replace their raw base materials for
our base materials, making the products more environmentally friendly and sustainable. Next, we will target retail stores with
major distribution companies who have preexisting relationships with major retail chain stores. As we continue to develop our business,
these markets may change, be re-prioritized or eliminated as management responds to consumer and regulatory developments.
Competition
There are many developers of hemp-based
consumer products, many of which are under-capitalized which we consider to be viable acquisition targets. There are also large,
well-funded companies that currently do not offer hemp-based products but may do so in the future. Some of these companies may
have a competitive advantage over us because they are better capitalized and established in the relevant markets (
see
, “RISK
FACTORS”, below).
Intellectual Property and Trademarks
We have filed trademark protection on our
brands, logos and marks including CannaVest, Cibaderm, Cibdex, Plus CBD and CBD Simple. We review our trademark portfolio on a
routine basis and will continue to broaden our portfolio in a fiscally prudent manner. We intend to file for patent protection
on certain products and methods important to our business, as those processes are developed and patentable. In connection with
our purchase of assets from PhytoSPHERE, we acquired all URLs and domain names of PhytoSPHERE and an exclusive license to use the
names “PhytoSPHERE” and “PhytoSPHERE Systems” in the development and commercialization of hemp-based products
including CBD. Although we currently do not utilize that license, we may do so in the future.
Research and Development
We opened a laboratory facility in San
Diego, California in September, 2013. Our lab focuses on process development, product testing and pilot production. We did not
incur any research and development expenses during the period from December 9, 2010, (inception) through December 31, 2012. We
incurred research and development expenses of $524,476 during the year ended December 31, 2013 and anticipate that we will spend
approximately $700,000 dollars on research and development during fiscal 2014.
Government Regulation
For the first time since 1937, industrial
hemp has been decriminalized at the federal level and can be grown legally in the United States, but on a limited basis. A landmark
provision in the recently passed Agricultural Act of 2014 recognizes hemp as distinct from its genetic cousin, marijuana. Federal
law now exempts industrial hemp from U.S. drug laws in order to allow for crop research by universities, colleges and state agriculture
departments. The new federal law, written by U.S. Rep. Jared Polis (D-Colo) and U.S. Sen. Mitch McConnell (R-Ken), allows for agricultural
pilot programs for industrial hemp “in states that permit the growth or cultivation of hemp.”
Employees
As
of October 1, 2014, we have 17 employees. Michael Mona, Jr., our Chief Executive Officer and Chairman of our board of directors,
spends about 50 hours per week on our operations. We are currently in discussions with qualified individuals to engage them for
our research, development, business plan implementation and potential acquisitions of currently operating businesses
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Executive Offices
Our executive offices are located at 2688
South Rainbow Blvd., Suite B, Las Vegas, NV 89146. Our telephone number is (866) 290-2157. We maintain a laboratory and secondary
office facilities in San Diego, California.
RISK FACTORS
Before you invest in our securities,
you should be aware that there are various risks. You should consider carefully these risk factors, together with all of the other
information included in this prospectus before you decide to purchase securities. If any of the following risks and uncertainties
develops into actual events, our business, financial condition or results of operations could be materially adversely affected
and you could lose your entire investment in our company.
In addition to the risk factors below,
Investors should read and are directed to the Company’s Risk Factors contained in its Form 8-K filed with the Commission
on February 13, 2013. Such Risk Factors are deemed incorporated herein by this reference, and can be found by following the link
below:
(http://www.sec.gov/Archives/edgar/data/1510964/000101968713000439/0001019687-13-000439-index.htm).
We have
only a limited operating history, and the nature of our business.
Our operations
have never been profitable, and it is expected that we will continue to incur operating losses in the future. During fiscal 2013,
we generated revenue of $2,154,063, resulting in an operating loss of $1,617,333 and a net loss of $2,300,196. The cash balance
at December 31, 2013 was $2,243,670 and the accumulated deficit was $2,444,412. During fiscal 2012 we did not generate any revenue,
our operating loss was $43,018 and our net loss was $45,611. We did not generate any revenue in 2011 or 2010. There is no assurance
that we will be able to fully implement our business model, generate any meaningful revenues or operate profitably in the future.
Our failure to generate substantial revenues and achieve profitable operations in future periods will adversely affect our ability
to continue as a going concern. If we should be unable to continue as a going concern, you could lose all of your investment in
our company.
We will
need additional financing which we may not be able to obtain on acceptable terms. If we cannot raise additional capital as needed,
our ability to execute our business plan and grow our company will be in jeopardy.
Capital is needed
not only to fund our ongoing operations and to pay our existing obligations, but capital is also necessary for the effective implementation
of our business plan. Our future capital requirements, however, depend on a number of factors, including our ability to internally
grow our revenues, manage our business and control our expenses. On June 30, 2014, we had cash on hand of $9.2 million. We will
need to raise significant additional capital to fund the future growth of our company, including advertising and marketing, continued
investment in growing our customer base, product development and working capital investment including funding of future inventory
commitments. We do not have any firm commitments to provide capital. Accordingly, we cannot assure you that additional working
capital will be available to us upon terms acceptable to us. If we do not raise funds as needed, our ability to continue to implement
our business model is in jeopardy. In that event, our ability to continue as a going concern is in jeopardy and you could lose
all of your investment in our company.
We have a limited customer base,
and have severed our relationship with the customer that has historically provided the substantial majority of our revenues.
Historically, all of our agreements in
place to sell our raw hemp oil were to a limited number of companies, each of which is affiliated with Medical Marijuana, Inc.
(“MJNA”). Until August 11, 2014, approximately 90% of our sales were to HempMeds PX, LLC, which is a wholly-owned subsidiary
of MJNA. On August 11, 2014, we terminated the Non-Exclusive License and Distribution Agreement with HempMeds PX, LLC (the “HempMeds
Agreement”). As a result, we expect sales to HempMeds, PX, LLC to decline and perhaps discontinue entirely. Although we have
been successful in securing additional customers and receiving revenue from other customers since the termination of the HempMeds
Agreement, if those customers were to fail, and if we are not able to further expand our customer base, our prospects and operations
would materially and negatively be affected. In addition, if our supply relationships end or if they become unable to pay for product
delivered, our prospects and operations would materially and negatively be affected.
We are involved
in litigation matters.
We are involved
in multiple litigation matters that require the expenditure of cash and commitment of time to prosecute and defend. If determined
adversely to the Company, these matters would have a material adverse effect on our business and prospects.
On March 8, 2008, Far West Industries (“Far
West”) sued Michael J. Mona, Jr., President and Chief Executive Officer of the Company and others for damages arising out
of a land transaction in California (the “California Action”). On February 23, 2012, a judgment was entered in the
California Action in favor of Far West against Mr. Mona and others in the amount of $17,777,562. On October 18, 2012, the judgment
in the California Action was domesticated in Nevada and enforcement proceedings commenced including, but not limited to an examination
of Mr. Mona as a judgment debtor, and garnishments of various accounts belonging to Mr. Mona. During the period, Mr. Mona loaned
$3,000,000 to Roen Ventures, which was subsequently loaned to the Company. The suit alleges that the loan transactions were intended
to prejudice creditors like Far West by concealing and wasting assets that would otherwise be available to satisfy the judgment
that Far West has against Mr. Mona. Pursuant to a Second Amendment Complaint filed by Far West Industries on February 20, 2014,
the Company was added as a defendant to the suit. On March 17, 2014, the Company was served with a complaint from Far West Industries.
In summary, Far West alleges that the Company is in possession of funds as a result of an allegedly fraudulent transfer between
Mr. Mona, Roen Ventures, LLC, and the Company. On May 13, 2014, a motion to dismiss filed by the Company was granted and thus,
the Company is no longer be a defendant in the lawsuit.
On April 23, 2014, Tanya Sallustro filed
a purported class action complaint (the “Complaint”) in the Southern District of New York (the “Court”)
alleging securities fraud and related claims against the Company and certain of its officers and directors and seeking compensatory
damages including litigation costs. Ms. Sallustro alleges that between March 18-31, 2014, she purchased 325 shares of the Company’s
common stock for a total investment of $15,791. The Complaint refers to Current Reports on Form 8-K and Current Reports on Form
8-K/A filings made by the Company on April 3, 2014 and April 14, 2014, in which the Company amended previously disclosed sales
(sales originally stated at $1,275,000 were restated to $1,082,375 - reduction of $192,625) and restated goodwill as $1,855,512
(previously reported at net zero). Additionally, the Complaint states after the filing of the Company’s Current Report on
Form 8-K on April 3, 2014 and the following press release, the Company’s stock price “fell $7.30 per share, or more
than 20%, to close at $25.30 per share.” Subsequent to the filing of the Complaint, six different individuals have filed
a motion asking to be designated the lead plaintiff in the litigation. The Court held a hearing on August 14, 2014 to consider
the motions for designation as lead plaintiff. The other individuals seeking lead plaintiff designation are: Wayne Chesner; Anamaria
Schelling; Mark Williams; Otilda LaMont; Jane Ish and Steve Schuck. At this time the Court has not yet issued a ruling appointing
a lead plaintiff. The Company has not yet answered the Complaint and management intends to vigorously defend the allegations. Since
the action was recently filed and no discovery has been conducted, an estimate of the possible loss cannot be made at this time.
On August 11,
2014, we terminated the Non-Exclusive License and Distribution Agreement with HempMeds PX, LLC (the “HempMeds Agreement”).
On August 22, 2014, HempMeds filed a complaint in the Eighth Judicial District, Clark County, Nevada (the “Nevada Complaint”)
against us for breach of the HempMeds Agreement. At the same time, HempMeds filed a Motion for Preliminary Injunction, asking the
court to reinstate the HempMeds Agreement. We are vigorously opposing that motion, which was initially heard on September 10, 2014,
and will be heard again on October 2, 2014. The Company has not yet answered the Nevada Complaint and management intends to vigorously
defend the allegations. Since the action was recently filed and no discovery has been conducted, an estimate of the possible loss
or recovery cannot be made at this time.
On September 11,
2014, we filed a complaint for trademark infringement against Kannaway, LLC, General Hemp, LLC and HDDC Holdings, LLC in the United
States District Court, Southern District of California, Case No. 14-cv-2160-CAB-BLM, asserting that the defendants have infringed
our CANNABIS BEAUTY DEFINED™ trademarks. Defendants have not responded. Management intends to vigorously prosecute this complaint.
Since the action was recently filed and no discovery has been conducted, an estimate of the possible recovery cannot be made at
this time.
Our common
stock is currently quoted on the OTC Markets, but trading in the securities is limited, and trading in these securities is, or
could be, subject to the penny stock rules
.
Currently, our
common stock is quoted on the OTC Markets. The market for these securities is extremely limited and there are no assurances an
active market for either security will ever develop. Additionally, securities which trade at less than $5.00 per share, such as
our securities, are considered a “penny stock,” and subject to the requirements of Rule 15g-9 under the Securities
Exchange Act of 1934. Under this rule, broker/dealers who recommend low-priced securities to persons other than established customers
and accredited investors must satisfy special sales practice requirements. SEC regulations also require additional disclosure in
connection with any trades involving a “penny stock,” including the delivery, prior to any penny stock transaction,
of a disclosure schedule explaining the penny stock market and its associated risks. These requirements would severely limit the
liquidity of our securities in the secondary market because few broker or dealers are likely to undertake these compliance activities.
Provisions
of our Certificate of Incorporation and Bylaws may delay or prevent a take-over which may not be in the best interests of our shareholders.
Provisions of
our Certificate of Incorporation and Bylaws may be deemed to have anti-takeover effects, which include when and by whom special
meetings of our shareholders may be called, and may delay, defer or prevent a takeover attempt. In addition, certain provisions
of the Delaware General Corporation Law also may be deemed to have certain anti-takeover effects which include that control of
shares acquired in excess of certain specified thresholds will not possess any voting rights unless these voting rights are approved
by a majority of a corporation's disinterested shareholders.
Conflicts of Interest
.
One of our board members, Bart Mackay,
owns 100% of Roen Ventures, LLC (“Roen Ventures”), which owns 10,000,000 shares of our common stock, or 30.2% of our
issued and outstanding shares. Mr. Mackay also owns 100% of Mai Dun, LLC, Mercia Holdings, LLC, and Mackay Ventures which together
own 7,823,518 shares of our common stock. As a result, Mr. Mackay beneficially owns 17,823,518 shares, representing 53.8% of our
issued and outstanding shares. In addition, our Vice President of Operations, Michael Mona III, is the son of our Chief Executive
Officer and also beneficially owns 2,025,000 shares of our common stock. He owns 750,000 shares directly, 750,000 shares through
the MikNik Trust and 525,000 shares through Shire Ltd, LLC. These holdings constitute 6.1% of our issued and outstanding shares.
Dilution.
As of August 31, 2014, the Company has
issued and outstanding 33,116,666 shares of its capital stock. The Company plans to compensate management, employees, members of
the Board of Directors and other service providers through the issuance of shares of our common stock and options to purchase our
common stock. These issuances will have the effect of diluting our investors and stockholders.
We cannot assure profitability based
on our developmental nature.
The Company’s business is speculative
and dependent upon the timely implementation of its business model to gain customers for the purchase of the raw hemp oil we secure
and to develop and commercialize current and future products. The Company is unsure that its efforts will be successful or result
in continued revenues or profit. There can be no assurance that the Company will ever earn significant revenues or that investors
will not lose their entire investment.
We may not be able to effectively
manage growth
.
The Company expects its growth to place
a substantial strain or its managerial, operation and financial resources. The Company cannot assure that it will be able to effectively
manage the expansion of its operations, or that its facilities, systems, procedures or controls will be adequate to support its
operations. The Company’s inability to manage future growth effectively would have a material adverse effect on its business,
financial condition and results of operations.
Our management may not be able to
control costs in an effective or timely manner
.
The Company’s management has used
reasonable efforts to assess, predict and control costs and expenses. However, the Company only has a brief operating history upon
which to base those efforts. Although the Company’s current management has extensive business background that experience
is in industries unrelated to our business. Implementing our business plan may require more employees, capital equipment, supplies
or other expenditure items than management has predicted. Likewise, the cost of compensating employees and consultants or other
operating costs may be higher than management’s estimates, which could lead to sustained losses.
The failure to attract and retain
key employees could hurt our business
.
Our success also depends upon our ability
to attract and retain numerous highly qualified employees. Our failure to attract and retain skilled management and employees may
prevent or delay us from pursuing certain opportunities. If we fail to successfully hire many management roles, fail to fully integrate
new members of our management team, lose the services of key personnel, or fail to attract additional qualified personnel, it will
be significantly more difficult for us to achieve our growth strategies and success.
The commercial success of our products
is dependent, in part, on factors outside our control
.
The commercial success of our products
in development is dependent upon unpredictable and volatile factors beyond our control, such as the success of our competitors’
products. Many of our potential competitors are better capitalized that we are, and have more brand recognition and experience
in the nutraceutical consumer product business. Our failure to attract market acceptance and a sustainable competitive advantage
over our competitors would materially harm our business.
Limitation on Liability; Indemnification
.
The Company’s Bylaws contain limitations
on the liability of, and indemnification in favor of, the Company’s management and board of directors (collectively, “Indemnified
Persons”) for any action taken, or any failure to act, on behalf of the Company unless such act or omission has been determined
in a final judicial proceeding: (a) to constitute fraud, gross negligence or willful misconduct and (b) with respect to any criminal
action or proceeding, to have been taken or suffered with reasonable cause to believe that such Indemnified Person’s conduct
was unlawful.
Cautionary Note Regarding
Forward-Looking StatementS
We and our representatives may from time
to time make written or oral statements that are “forward-looking,” including statements contained in this prospectus
and other filings with the Securities and Exchange Commission, reports to our stockholders and news releases. All statements that
express expectations, estimates, forecasts or projections are forward-looking statements. In addition, other written or oral statements
which constitute forward-looking statements may be made by us or on our behalf. Words such as “expects,” “anticipates,”
“intends,” “plans,” “believes,” “seeks,” “estimates,” “projects,”
“forecasts,” “may,” “should,” variations of such words and similar expressions are intended
to identify forward-looking statements. These statements are not guarantees of future performance and involve risks, uncertainties,
and assumptions which are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed
or forecasted in or suggested by such forward-looking statements. Among the important factors on which such statements are based
are assumptions concerning our ability to obtain additional funding, our ability to compete against our competitors, our ability
to integrate our acquisitions and our ability to attract and retain key employees.
Use of Proceeds
We will not receive any proceeds from the
sale of common shares by the Selling Stockholders pursuant to this prospectus. The Selling Stockholders will receive all proceeds
from the sales of these common shares, and they will pay any and all expenses incurred by them for brokerage, accounting or tax
services (or any other expenses incurred by them in disposing of their common shares).
Selling Stockholders
The selling shareholders named in this
prospectus (the “Selling Shareholders”) are offering all of the 1,600,000 shares offered through this prospectus, all
of which are issued or to be issued under our Amended and Restated 2013 Equity Incentive Plan, as amended (the “Plan”).
If, subsequent to the date of this reoffer
prospectus, we grant any further awards under the Plan to any eligible participants who are affiliates of our company (as defined
in Rule 405 under the Securities Act), Instruction C of Form S-8 requires that we supplement this reoffer prospectus with the names
of such affiliates and the amounts of securities to be reoffered by them as selling stockholders.
Beneficial ownership is determined according
to the rules of the Securities and Exchange Commission, and generally means that a person has beneficial ownership of a security
if he, she or it possesses sole or shared voting or investment power of that security. The percentages for each Selling Stockholder
are calculated based on 33,116,666 shares issued and outstanding as of August 31, 2014, plus any additional shares that the Selling
Stockholder is deemed to beneficially own as set forth in the table. The shares offered by this prospectus shall be deemed to include
shares offered by any pledgee, donee, transferee or other successor in interest of any of the Selling Stockholders below, provided
that this prospectus is amended or supplemented if required by applicable law.
|
Name
|
Shares Beneficially Owned Prior to this
Offering (1)
|
Number of Shares Being Offered
|
Shares Beneficially Owned Upon Completion of the Offering (1)
|
|
|
Number
|
Percent (2)
|
Number
|
Percent (3)
|
|
Michael Mona III (6)
|
2,250,000
|
6.794%
|
1,000,000 (4)
|
3,250,000
|
9.361%
|
|
Joseph Dowling (7)
|
0
|
*
|
600,000 (5)
|
600,000
|
1.728%
|
|
|
(1)
|
The number and percentage of shares beneficially owned is determined in accordance with Rule 13d-3
of the Securities Exchange Act of 1934, as amended, and the information is not necessarily indicative of beneficial ownership for
any other purpose. Under such rule, beneficial ownership includes any shares as to which the Selling Stockholder has sole or shared
voting power or investment power and also any shares, which the Selling Stockholder has the right to acquire within 60 days.
|
|
|
(2)
|
Based upon 33,116,666 shares of common stock issued and outstanding as of the date of this prospectus.
|
|
|
(3)
|
Based upon 34,716,666 shares of common stock issued and outstanding, including the issuance of
an aggregate of 1,600,000 to the individuals listed in the table above.
|
|
|
(4)
|
Comprised of (i) 250,000 shares, fully vested, (ii) 250,000 shares, vested and issuable on January
1, 2015, and (iii) options to purchase 500,000 shares, vesting in installments.
|
|
|
(5)
|
Comprised of options to purchase 600,000 shares, vesting in installments over 4 years.
|
|
|
(6)
|
Mr. Mona III is the Company’s Vice President, Operations.
|
|
|
(7)
|
Mr. Dowling is the Company’s Chief Financial Officer.
|
|
|
*
|
Less than one percent (1%).
|
PLAN OF DISTRIBUTION
Timing of Sales
Under our Amended and Restated 2013 Equity
Incentive Plan, as amended, we are authorized to issue up to 10,000,000 shares of our common stock.
Subject to the foregoing, the Selling Stockholders
may offer and sell the shares covered by this prospectus at various times. The Selling Stockholders will act independently of our
company in making decisions with respect to the timing, manner and size of each sale.
No Known Agreements to Resell the Shares
To our knowledge, no Selling Stockholder
has any agreement or understanding, directly or indirectly, with any person to resell the common shares covered by this prospectus.
Offering Price
The sales price offered by the Selling Stockholders to the public
may be:
|
|
1.
|
the market price prevailing at the time of sale;
|
|
|
2.
|
a price related to such prevailing market price; or
|
|
|
3.
|
such other price as the Selling Stockholders determine from time to time.
|
Manner Of Sale
The common shares may be sold by means of one or more of the
following methods:
|
|
1.
|
a block trade in which the broker-dealer so engaged will attempt to sell the common shares as agent, but may position and resell a portion of the block as principal to facilitate the transaction;
|
|
|
2.
|
purchases by a broker-dealer as principal and resale by that broker-dealer for its account pursuant to this prospectus;
|
|
|
3.
|
ordinary brokerage transactions in which the broker solicits purchasers;
|
|
|
4.
|
through options, swaps or derivatives;
|
|
|
5.
|
in transactions to cover short sales;
|
|
|
6.
|
privately negotiated transactions; or
|
|
|
7.
|
in a combination of any of the above methods.
|
The Selling Stockholders may sell their
common shares directly to purchasers or may use brokers, dealers, underwriters or agents to sell their common shares. Brokers
or dealers engaged by the Selling Stockholders may arrange for other brokers or dealers to participate. Brokers or dealers may
receive commissions, discounts or concessions from the Selling Stockholders, or, if any such broker-dealer acts as agent for the
purchaser of common shares, from the purchaser in amounts to be negotiated immediately prior to the sale. The compensation received
by brokers or dealers may, but is not expected to, exceed that which is customary for the types of transactions involved. Broker-dealers
may agree with a Selling Stockholder to sell a specified number of common shares at a stipulated price per common share, and,
to the extent the broker-dealer is unable to do so acting as agent for a Selling Stockholder, to purchase as principal any unsold
common shares at the price required to fulfill the broker-dealer commitment to the Selling Stockholder.
Broker-dealers who acquire common shares
as principal may thereafter resell the common shares from time to time in transactions, which may involve block transactions and
sales to and through other broker-dealers, including transactions of the nature described above, in the over-the-counter market
or otherwise at prices and on terms then prevailing at the time of sale, at prices then related to the then-current market price
or in negotiated transactions. In connection with resales of the common shares, broker-dealers may pay to or receive from the purchasers
of shares commissions as described above.
If our Selling Stockholders enter into
arrangements with brokers or dealers, as described above, we are obligated to file a post-effective amendment to this registration
statement disclosing such arrangements, including the names of any broker-dealers acting as underwriters.
The Selling Stockholders and any broker-dealers
or agents that participate with the Selling Stockholders in the sale of the common shares may be deemed to be “underwriters”
within the meaning of the Securities Act. In that event, any commissions received by broker-dealers or agents and any profit on
the resale of the common shares purchased by them may be deemed to be underwriting commissions or discounts under the Securities
Act.
Sales Pursuant to Rule 144
Any common shares covered by this prospectus
which qualify for sale pursuant to Rule 144 under the Securities Act may be sold under Rule 144 rather than pursuant to this prospectus.
Regulation M
The Selling Stockholders must comply with
the requirements of the Securities Act and the Exchange Act in the offer and sale of the common stock. In particular, we will advise
the Selling Stockholders that the anti-manipulation rules of Regulation M under the Exchange Act may apply to sales of common shares
in the market and to the activities of the Selling Stockholders and their affiliates. Regulation M under the Exchange Act prohibits,
with certain exceptions, participants in a distribution from bidding for, or purchasing for an account in which the participant
has a beneficial interest, any of the securities that are the subject of the distribution.
Accordingly, during such times as a Selling
Stockholder may be deemed to be engaged in a distribution of the common stock, and therefore be considered to be an underwriter,
the Selling Stockholder must comply with applicable law and, among other things:
|
|
1.
|
may not engage in any stabilization activities in connection with our common stock;
|
|
|
2.
|
may not cover short sales by purchasing shares while the distribution is taking place; and
|
|
|
3.
|
may not bid for or purchase any of our securities or attempt to induce any person to purchase any of our securities other than as permitted under the Exchange Act.
|
In addition, we will make copies of this
prospectus available to the Selling Stockholders for the purpose of satisfying the prospectus delivery requirements of the Securities
Act.
Penny Stock Rules
The SEC has adopted regulations which generally
define “penny stock” to be any equity security that has a market price (as defined) of less than $5.00 per share or
an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules,
which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and
“institutional accredited investors.” The term “institutional accredited investor” refers generally to
those accredited investors who are not natural persons and fall into one of the categories of accredited investor specified in
subparagraphs (1), (2), (3), (7) or (8) of Rule 501 of Regulation D promulgated under the Securities Act, including institutions
with assets in excess of $5,000,000.
The penny stock rules require a broker-dealer,
prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document
in a form required by the Securities and Exchange Commission, obtain from the customer a signed and dated acknowledgement of receipt
of the disclosure document and to wait two business days before effecting the transaction. The risk disclosure document provides
information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide
the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson
in the transaction and monthly account statements showing the market value of each penny stock held in the customer's account.
The bid and offer quotations, and the broker-dealer
and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction
and must be given to the customer in writing before or with the customer's confirmation. In addition, the penny stock rules require
that prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written
determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to
the transaction.
These disclosure requirements may have
the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock
rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that
the penny stock rules discourage investor interest in and limit the marketability of our common stock.
State Securities Laws
Under the securities laws of some states,
the common shares may be sold in such states only through registered or licensed brokers or dealers. In addition, in some states
the common shares may not be sold unless the shares have been registered or qualified for sale in the state or an exemption from
registration or qualification is available and is complied with.
Expenses of Registration
We are bearing all costs relating to the
registration of the common stock. These expenses are estimated to be $5,000, including, but not limited to, legal, accounting,
printing and mailing fees. The Selling Stockholders, however, will pay any commissions or other fees payable to brokers or dealers
in connection with any sale of the common stock.
LEGAL MATTERS
The validity of the common stock has been
passed upon by Procopio, Cory, Hargreaves & Savitch, LLP, San Diego, California.
INTERESTS OF NAMED EXPERTS AND COUNSEL
No expert or counsel named in this prospectus
as having prepared or certified any part of this prospectus or having given an opinion upon the validity of the securities being
registered or upon other legal matters in connection with the registration or offering of the common stock was employed on a contingency
basis or had, or is to receive, in connection with the offering, a substantial interest, directly or indirectly, in the registrant
or any of its parents or subsidiaries.
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR
SECURITIES ACT LIABILITIES
Our directors and officers are indemnified
pursuant to our bylaws against amounts actually and necessarily incurred by them in connection with the defense of any action,
suit or proceeding in which they are a party by reason of being or having been directors or officers of the Company. Our certificate
of incorporation provides that none of our directors or officers shall be personally liable for damages for breach of any fiduciary
duty as a director or officer involving any act or omission of any such director or officer. Insofar as indemnification for liabilities
arising under the Securities Act of 1933, as amended, may be permitted to such directors, officers and controlling persons pursuant
to the foregoing provisions, or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.
In the event that a claim for indemnification
against such liabilities, other than the payment by us of expenses incurred or paid by such director, officer or controlling person
in the successful defense of any action, suit or proceeding, is asserted by such director, officer or controlling person in connection
with the securities being registered, we will, unless in the opinion of counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed
in the Securities Act and will be governed by the final adjudication of such issue.
ADDITIONAL INFORMATION AVAILABLE TO YOU
This prospectus is part of a Registration
Statement on Form S-8 that we filed with the SEC. Certain information in the Registration Statement has been omitted from this
prospectus in accordance with the rules of the SEC. We file annual, quarterly and special reports, proxy statements and other information
with the SEC. You can inspect and copy the Registration Statement as well as reports, proxy statements and other information we
have filed with the SEC at the public reference room maintained by the SEC at 100 F Street N.E. Washington, D.C. 20549, You can
obtain copies from the public reference room of the SEC at 100 F Street N.E. Washington, D.C. 20549, upon payment of certain fees.
You can call the SEC at 1-800-732-0330 for further information about the public reference room. We are also required to file electronic
versions of these documents with the SEC, which may be accessed through the SEC's World Wide Web site at http://www.sec.gov. No
dealer, salesperson or other person is authorized to give any information or to make any representations other than those contained
in this prospectus, and, if given or made, such information or representations must not be relied upon as having been authorized
by us. This prospectus does not constitute an offer to buy any security other than the securities offered by this prospectus, or
an offer to sell or a solicitation of an offer to buy any securities by any person in any jurisdiction where such offer or solicitation
is not authorized or is unlawful. Neither delivery of this prospectus nor any sale hereunder shall, under any circumstances, create
any implication that there has been no change in the affairs of our company since the date hereof.
PART II
INFORMATION REQUIRED IN REGISTRATION
STATEMENT
Item 3.
Incorporation of Documents
by Reference
.
CannaVEST Corp. (the
“Registrant”) hereby incorporates by reference into this Registration Statement the following documents previously
filed with the Securities and Exchange Commission (the “Commission”):
(1) The Registrant’s
Annual Report on Form 10-K for the fiscal year ended December 31, 2013, filed with the SEC on March 28, 2014;
(2) The Registrant’s
Quarterly Report on Form 10-Q for the quarter ended March 31, 2014 and filed with the SEC on May 15, 2014, and the Registrant’s
Quarterly Report on Form 10-Q for the quarter ended June 30, 2014 and filed with the SEC on August 14, 2014;
(3) The Registrant’s
Quarterly Report Amendments on Form 10-Q/A, filed with the SEC on April 24, 2014 and May 21, 2014;
(4) The Registrant’s
Current Reports on Form 8-K, filed with the SEC on January 16, 2014, January 28, 2014, March 26, 2014, May 12, 2014, June 19, 2014,
July 29, 2014, and August 14, 2014;
(5) The Registrant’s Current Report
Amendments on Form 8-K/A, filed with the SEC on April 14, 2014 and April 30, 2014;
(6) The Registrant’s Definitive Proxy
Statement on Schedule 14A, filed with the SEC on July 2, 2014;
(7) All other filings
made by the Registrant with the SEC pursuant to Section 13(a) or 15(d) of the Exchange Act since December 31, 2013; and
(8) The description
of the Registrant’s common stock contained in the Registrant’s Registration Statements filed under the Exchange Act,
including any amendments or reports filed for the purposes of updating such descriptions.
All documents filed
by the Registrant pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act on or after the date of this Registration
Statement and prior to the filing of a post-effective amendment which indicates that all securities offered have been sold or which
deregisters all securities then remaining unsold shall be deemed to be incorporated by reference in this Registration Statement
and to be part hereof from the date of filing of such documents.
Item 4.
Description of Securities
.
Not applicable.
Item 5.
Interests of Named Experts
and Counsel
.
Not applicable.
Item 6.
Indemnification of Directors
and Officers
.
Section 145 of the
Delaware General Corporation Law authorizes a corporation’s board of directors to grant, and authorizes a court to award,
indemnity to officers, directors and other corporate agents.
As permitted by Section
102(b)(7) of the Delaware General Corporation Law, the Registrant’s amended and restated certificate of incorporation contains
provisions that limit the liability of its directors for monetary damages to the fullest extent permitted by Delaware law. Consequently,
the Registrant’s directors will not be personally liable to the Registrant or its stockholders for monetary damages for any
breach of fiduciary duties as directors, except liability for the following:
• any breach
of their duty of loyalty to the Registrant or its stockholders;
• any act
or omission not in good faith or that involves intentional misconduct or a knowing violation of law;
• unlawful
payments of dividends or unlawful stock repurchases or redemptions as provided in Section 174 of the Delaware General Corporation
Law; or
• any transaction
from which they derived an improper personal benefit.
Any amendment to, or
repeal of, these provisions will not eliminate or reduce the effect of these provisions in respect of any act, omission or claim
that occurred or arose prior to that amendment or repeal. If the Delaware General Corporation Law is amended to provide for further
limitations on the personal liability of directors of corporations, then the personal liability of the Registrant’s directors
will be further limited to the greatest extent permitted by the Delaware General Corporation Law.
In addition, the Registrant’s
bylaws provide that the Registrant will indemnify, to the fullest extent permitted by law, any person who is or was a party or
is threatened to be made a party to any action, suit or proceeding by reason of the fact that he or she is or was one of the Registrant’s
directors or officers or is or was serving at the Registrant’s request as a director or officer of another corporation, partnership,
joint venture, trust or other enterprise. The Registrant’s bylaws provide that the Registrant may indemnify to the fullest
extent permitted by law any person who is or was a party or is threatened to be made a party to any action, suit or proceeding
by reason of the fact that he or she is or was one of the Registrant’s employees or agents or is or was serving at the Registrant’s
request as an employee or agent of another corporation, partnership, joint venture, trust or other enterprise. The Registrant’s
bylaws also provide that the Registrant must advance expenses incurred by or on behalf of a director or officer in advance of the
final disposition of any action or proceeding, subject to limited exceptions.
Further, the Registrant
may enter into agreements of indemnification with our directors to provide for indemnification to the fullest extent permitted
under Delaware law.
Item 7.
Exemption from Registration
Claimed
.
Not applicable.
Item 8.
Exhibits
.
|
Exhibit No.
|
|
Description
|
|
|
|
|
4.1
|
|
CannaVEST Corp. Amended and Restated 2013 Equity Incentive Plan, incorporated by reference to Appendix 3 of the Registrant’s Definitive Proxy Statement on Schedule 14A, filed with the SEC on July 2, 2014.
|
|
4.2
|
|
Form of Stock Option Grant Notice for use with Amended and Restated 2013 Equity Incentive Plan*
|
|
4.3
|
|
Form of Stock Award Agreement for use with Amended and Restated 2013 Equity Incentive Plan*
|
|
5.1
|
|
Opinion of Procopio, Cory, Hargreaves & Savitch LLP.*
|
|
23.1
|
|
Consent of PKF, Certified Public Accountants, A Professional Corporation, independent registered public accounting firm.
*
|
|
23.2
|
|
Consent of Procopio, Cory, Hargreaves & Savitch LLP incorporated by reference to Exhibit 5.1 to this Registration Statement on Form S-8.
|
|
24.1
|
|
Power of Attorney, incorporated by reference to the Signature Page of this Registration Statement on Form S-8.
|
___________________________________
* Filed herewith
Item 9.
Undertakings
.
The undersigned Registrant hereby undertakes:
1. (a) to file,
during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement;
(i) to include any
prospectus required by Section 10(a)(3) of the Securities Act;
(ii) to reflect
in the prospectus any facts or events arising after the effective date of this Registration Statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this
Registration Statement;
(iii) to include
any material information with respect to the plan of distribution not previously disclosed in this Registration Statement or any
material change to such information in this Registration Statement;
provided, however, that paragraphs 1(a)(i)
and 1(a)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained
in periodic reports filed with or furnished to the Commission by the Registrant pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in this Registration Statement;
(b) that, for the
purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof;
(c) to remove from
registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination
of the offering.
2. The undersigned
Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the Registrant's
annual report pursuant to Section 13(a) or 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in this Registration Statement
shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
3. Insofar as indemnification
for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant
pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding)
is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant
will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by it is against public policy as expressed in the Securities Act and
will be governed by a final adjudication of such issue.
SIGNATURES
Pursuant to the requirements
of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements
for filing on Form S-8 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Las Vegas, State of Nevada, on this 2nd day of October, 2014.
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CANNAVEST CORP.
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By:
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/s/ Michael Mona Jr.
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Michael Mona Jr., Chairman of the Board of Directors and Chief Executive Officer
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POWER OF ATTORNEY
KNOW ALL PERSONS BY
THESE PRESENTS, that each person whose signature appears below constitutes and appoints Michael Mona, Jr. and Joseph Dowling, jointly
and severally, as his attorneys-in-fact, with full power of substitution in each, for him in any and all capacities to sign any
amendments to this Registration Statement on Form S-8, and to file the same, with all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorneys-in-fact,
or his substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements
of the Securities Act of 1933, this registration statement has been signed below by the following persons in the capacities and
on the dates indicated.
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Signature
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Title
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Date
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/s/ MICHAEL MONA, JR.
Michael Mona, Jr.
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Chairman of the Board of Directors and Chief Executive Officer
(Principal Executive Officer)
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October 2, 2014
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/s/ BART P. MACKAY
Bart P. Mackay
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Director
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October 2, 2014
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/s/ LARRY RASKIN
Larry Raskin
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Director
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October 2, 2014
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/s/ JOSEPH DOWLING
Joseph Dowling
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Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)
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October 2, 2014
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Exhibit 4.2
CannaVEST
Corp.
Stock
Option Grant Notice
Amended and Restated 2013 Equity Incentive Plan
FOR GOOD AND VALUABLE CONSIDERATION
,
CannaVEST Corp. (the “
Company
”), hereby grants to the Optionee named below, a stock option (the “
Option
”)
to purchase any part or all of the specified number of shares of its Common Stock (“
Option Shares
”),
upon the terms and subject to the conditions set forth in this Stock Option Grant Notice (the “
Grant Notice
”),
at the specified purchase price per share without commission or other charge. The Option is granted pursuant to the Company’s
Amended and Restated 2013 Equity Incentive Plan (the “
Plan
”) and the Stock Option Agreement (the “
Option
Agreement
”), promulgated under the Plan and in effect as of the date of this Grant Notice.
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Optionee:
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Date of Grant:
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Vesting Commencement Date:
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Number of Option Shares :
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Exercise Price (Per Share):
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Total Exercise Price:
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Expiration Date:
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Ten years
after Date of Grant
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Type of Grant:
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¨
Incentive
Stock Option
1
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¨
Nonstatutory
Stock Option
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Exercise Schedule
:
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¨
Same
as Vesting Schedule
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¨
Early Exercise Permitted
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Vesting Schedule
: Except as otherwise
provided in the Option Agreement, the number of Option Shares that are vested (disregarding any resulting fractional share) as
of any date shall be determined as follows: (i) no Option Shares will be vested prior to the Vesting Commencement Date; (ii) twenty-five
percent (25%) of the Option Shares will be vested upon the one (1) year anniversary of the Vesting Commencement Date,
provided,
however
, that there has not been a Termination of Service as of such date; and (iii) the balance of the Option Shares will
be vested in a series of thirty-six (36) successive equal monthly installments measured from the first anniversary of the Vesting
Commencement Date,
provided, however
, that there has not been a Termination of Service as of each such date. In no event
will the Option become exercisable for any additional Option Shares after a Termination of Service.
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Payment:
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By one or a combination of the following
items (described in the Plan):
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ý
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By cash or check
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¨
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By
net exercise, if the Company has established procedures for net exercise
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Additional Terms/Acknowledgements:
The undersigned Optionee acknowledges receipt of, and understands and agrees to, this Stock Option Grant Notice, the Option Agreement,
and the Plan.
Further, by their signatures below, the
Company and the Optionee agree that the Option is governed by this Grant Notice and by the provisions of the Plan and Option Agreement,
both of which are attached to and made a part of this Grant Notice. Optionee acknowledges receipt of copies of the Plan and the
Option Agreement, represents that the Optionee has read and is familiar with their provisions, and hereby accepts the Option subject
to all of their terms and conditions. Optionee further acknowledges that, as of the Date of Grant, this Grant Notice, the Option
Agreement and the Plan set forth the entire understanding between Optionee and the Company regarding the acquisition of stock in
the Company and supersede all prior oral and written agreements on that subject, with the exception of options previously granted
under the Plan.
1
If this is an Incentive Stock Option, it (plus other outstanding Incentive Stock Options) cannot be first
exercisable
for more than $100,000 in value (measured by exercise price) in any calendar year. Any excess over $100,000 is a Nonstatutory
Stock Option.
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CannaVEST Corp.
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Optionee: [name]
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By:
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[Name, Title]
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Signature
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Date:
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Date:
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Attachments
: (I) Option
Agreement; (II) Amended and Restated 2013 Equity Incentive Plan; and (III) Notice of Exercise
Attachment I
Option
Agreement
Stock
Option Agreement
(Incentive
Stock Option or Nonstatutory Stock Option)
CANNAVEST
CORP. Amended and Restated 2013 Equity Incentive Plan
Effective as of _____________, 2014
Pursuant to the Stock
Option Grant Notice (“
Grant Notice
”) and this Option Agreement (“
Option Agreement
”), CannaVEST
Corp., a Delaware corporation (the “
Company
”) has granted to Optionee an option under its Amended and Restated
2013 Equity Incentive Plan (the “
Plan
”), to purchase the number of shares of the Company’s Common Stock
indicated in Optionee’s Grant Notice, at the exercise price indicated in such Grant Notice. This Option Agreement is incorporated
by reference into and made a part of the Grant Notice. Whenever capitalized terms are used in this Option Agreement, they shall
have the meaning specified (i) in the Plan, (ii) in the relevant Grant Notice, or (iii) below, unless the context clearly indicates
to the contrary.
The details of the
Option granted to Optionee are as follows:
1.
Term of
Option
.
Subject to the maximum time limitations in Sections 5(b) and 6(a) of the Plan, the term of the Option shall be
the period commencing on the Date of Grant and ending on the Expiration Date (as defined in the Grant Notice), unless terminated
earlier as provided herein or in the Plan.
2.
Exercise
Price
.
The Exercise Price of the Option granted hereby shall be as provided in the Grant Notice.
3.
Exercise
of Option
.
(a) The Grant
Notice sets forth the rate at which the Option Shares shall become subject to purchase (“
vest
”) by Optionee.
(b) In the
event of a Change in Control of the Company, except as otherwise may be provided in the Plan or Grant Notice, the vesting of the
Option
shall not
accelerate, and the Option shall terminate if not exercised (to the extent then vested and exercisable)
at or prior to such Change in Control.
(c) Optionee
shall exercise the Option, to the extent exercisable, in whole or in part, by sending written notice to the Company on a Notice
of Exercise in the form attached to the Grant Notice of his or her intention to purchase Option Shares hereunder, together with
a check in the amount of the full purchase price of the Option Shares to be purchased, or such other form of payment as permitted
by the Grant Notice. Except as otherwise consented to by the Company, Optionee shall not exercise the Option at any one time with
respect to less than five percent (5%) of the total Option Shares set forth in the Grant Notice unless Optionee exercises all of
the Option then vested and exercisable.
(d) If the
Option is an Incentive Stock Option, by Optionee’s exercise of the Option, Optionee agrees that he or she will notify the
Company in writing within fifteen (15) days after the date of any disposition of any of the shares of the Common Stock issued upon
exercise of the Option that occurs within two (2) years after the date of the Date of Grant or within one (1) year after such shares
of Common Stock are transferred upon exercise of the Option.
(e) Optionee
agrees to complete and execute any additional documents which the Company reasonably requests that Optionee complete in order to
comply with applicable federal, state and local securities laws, rules and regulations.
(f) Subject
to the Company’s compliance with all applicable laws, rules and regulations relating to the issuance of such Option Shares
and Optionee’s compliance with all the terms and conditions of the Grant Notice, this Option Agreement, and the Plan, the
Company shall promptly deliver the Option Shares to Optionee.
(g) Except
as otherwise provided herein or in the Plan, the Option may be exercised during the lifetime of Optionee only by Optionee.
(h) In the
event that Optionee is an Employee eligible for overtime compensation under the Fair Labor Standards Act of 1938, as amended (
i.e.
,
a “
Non-Exempt Employee
”), Optionee may not exercise his or her Option until the later of (i) the date that he
or she shall have completed at least six (6) months of service to the Company measured from the Date of Grant specified in Optionee’s
Grant Notice, or (ii) the date set forth in the Grant Notice for when the Option is first exercisable.
4.
Exercise
Prior to Vesting (“Early Exercise”)
.
If expressly permitted by the Grant Notice and subject to the provisions
of this Option Agreement, Optionee may, at any time that is both (i) prior to a Termination of Service; and (ii) prior to the Expiration
Date, elect to exercise all or part of the Option, including the nonvested portion of the Option;
provided, however
, that:
(a) a partial
exercise of the Option shall be deemed to cover first any vested Option Shares and then the earliest vesting installment(s) of
unvested Option Shares;
(b) any Option
Shares so purchased from installments which have not vested as of the date of exercise shall be subject to a purchase option in
favor of the Company, pursuant to an Early Exercise Stock Purchase Agreement in form satisfactory to the Company;
(c) Optionee
shall enter into the Early Exercise Stock Purchase Agreement with a vesting schedule that will result in the same vesting as if
no early exercise had occurred; and
(d) as provided
in the Plan, if the Option is an Incentive Stock Option, to the extent that the aggregate Fair Market Value (determined at the
time of grant) of Common Stock with respect to which the Option plus all other Incentive Stock Options held by Optionee are exercisable
for the first time during any calendar year (under all plans of the Company and its Affiliates) exceeds One Hundred Thousand Dollars
($100,000), the Options or portions thereof that exceed such limit (according to the order in which they were granted) shall be
treated as Nonstatutory Stock Options.
5.
Option
Not Transferable
.
The Option granted hereunder shall not be transferable in any manner other than as provided in Section
6(d) of the Plan. More particularly (but without limiting the foregoing), the Option may not be assigned, transferred (except as
expressly provided in the Plan), pledged or hypothecated in any way, shall not be assignable by operation of law and shall not
be subject to execution, attachment or similar process. Any attempted assignment, transfer, pledge, hypothecation or other disposition
of the Option contrary to the provisions hereof, or the levy of any execution, attachment or similar process upon the Option, shall
be null and void and without effect.
6.
Termination
of Option
.
(a) To the
extent not previously exercised, the Option shall terminate on the Expiration Date;
provided, however
, that except as otherwise
provided in this Section 6,
the Option may not be exercised more than sixty (60) days after the Termination of Service of Optionee
for any reason (other than for Cause, as defined below, or upon Optionee’s death or Disability)
. Within such sixty (60)
-
day
period, except as may otherwise be specifically provided in this Option Agreement or any other agreement between Optionee and the
Company which has been approved by the Board, Optionee may exercise the Option only to the extent the same was exercisable on the
date of such termination and said right to exercise shall terminate at the end of such period.
(b) In the
event of the Termination of Service of Optionee as a result of Optionee’s Disability, the Option shall be exercisable for
a period of six (6) months from the date of such termination, but in no event later than the Expiration Date and only to the extent
that the Option was exercisable on the date of such termination.
(c) In the
event of the Termination of Service of Optionee as a result of Optionee’s death, the Option shall be exercisable by Optionee’s
estate (or by the person who acquires the right to exercise the Option by will or by the laws of descent and distribution) for
a period of twelve (12) months from the date of such termination, but in no event later than the Expiration Date and only to the
extent that Optionee was entitled to exercise the Option on the date of death.
(d) In the
event of the Termination of Service of Optionee for Cause (as defined below), unless otherwise determined by the Board, (A) the
Option shall expire as of the date of the first occurrence giving rise to such termination or upon the Expiration Date, whichever
is earlier; (B) Optionee shall have no rights with respect to any unexercised portion of the Option; and (C) any Option Shares
issued in respect of the exercise of the Option on or after the date of the first act and/or event constituting Cause shall have
occurred shall be deemed to have been issued in respect of an expired option, and shall thereupon be deemed null and
void ab
initio
, and Optionee shall have no claims to, or rights in, any such Option Shares. “Cause” means with respect
to Optionee, the occurrence of any of the following events, as reasonably determined by the Board in each case: (i) Optionee’s
commission of any felony or any crime involving fraud, dishonesty or moral turpitude under the laws of the United States or any
state thereof; (ii) Optionee’s commission, or attempted commission, of, or participation in, a fraud or act of dishonesty
against the Company or any Affiliate, or any of their respective employees, officers or directors; (iii) Optionee’s intentional,
material violation of any contract or agreement between the Optionee and the Company or any Affiliate or of any statutory duty
owed to the Company or any Affiliate; (iv) Optionee’s unauthorized use or disclosure of the Company’s or an Affiliate’s
material confidential information or trade secrets; (v) Optionee’s gross misconduct in connection with Optionee’s service
to the Company or an Affiliate; or (vi) Optionee’s failure to promptly return all documents and other tangible items belonging
to the Company or its Affiliates in the Participant’s possession or control, including all complete or partial copies, recordings,
abstracts, notes or reproductions of any kind made from or about such documents or information contained therein, upon a Termination
of Service for any reason. “Cause” shall not require that a civil judgment or criminal conviction have been entered
against, or guilty plea shall have been made by, Optionee regarding any of the matters referred to in clauses (i) through (vi).
Accordingly, the Board shall be entitled to determine “Cause” based on the its good faith belief. If the Optionee is
criminally charged with a felony or similar offense, that shall be a sufficient, but not a necessary, basis for such a belief.
Unless otherwise specifically provided in the Grant Notice, the foregoing definition of “Cause” shall apply for all
purposes relating to the Option, notwithstanding any employment or other agreement by and between Optionee and the Company or any
Affiliate thereof that defines a termination on account of “Cause” (or a term having similar meaning).
(e) Notwithstanding
the foregoing, the Option is subject to earlier termination upon a Change in Control, as provided in Section 3(b) above and in
Section 11 of the Plan, or upon the dissolution of the Company. If the Option will terminate in connection with a Change in Control,
the Company shall provide written notice to Optionee of a proposed transaction constituting a Change in Control, not less than
ten (10) days prior to the anticipated effective date of the proposed transaction.
(f) Notwithstanding
anything herein to the contrary, no portion of any Option which is not exercisable by Optionee upon the Termination of Service
of such Optionee shall thereafter become exercisable, regardless of the reason for such termination, except as may otherwise be
specifically provided in this Option Agreement or any other agreement between Optionee and the Company which has been approved
by the Board.
7.
No Right
to Continued Service
.
The Option does not confer upon Optionee any right to continue as an Employee or Director of, or
Consultant to, the Company or an Affiliate, nor does it limit in any way the right of the Company or an Affiliate to terminate
Optionee’s employment or other relationship with the Company or an Affiliate, at any time, with or without Cause.
8.
Notice
of Tax Election
.
If Optionee makes any tax election relating to the treatment of the Option Shares under the Internal Revenue
Code of 1986, as amended, Optionee shall promptly notify the Company of such election.
9.
Acknowledgments
of Optionee
.
Optionee acknowledges and agrees that:
(a) Although
the Company has made a good faith attempt to qualify the Option as an incentive stock option within the meaning of Sections 421,
422 and 424 of the Code (if the Grant Notice provides that the Option is an Incentive Stock Option), the Company does not warrant
that the Option granted herein constitutes an “incentive stock option” within the meaning of such sections, or that
the transfer of Option Shares will be treated for federal income tax purposes as specified in Section 421 of the Code.
(b) Optionee
shall notify the Company in writing within fifteen (15) days of each disposition (including a sale, exchange, gift or a transfer
of legal title) of the Option Shares made within two years after the issuance of such Option Shares.
(c) If the
Grant Notice provides that the Option is an Incentive Stock Option, Optionee understands that if, among other things, he or she
disposes of any Option Shares granted within two years of the granting of the Option to him or her or within one year of the issuance
of such shares to him or her, then such Option Shares will not qualify for the beneficial treatment which Optionee might otherwise
receive under Sections 421 and 422 of the Code.
(d) Optionee
and his or her transferees shall have no rights as a shareholder with respect to any Option Shares until the date of the issuance
of a stock certificate evidencing such Option Shares. No adjustment shall be made for dividends (ordinary or extraordinary, whether
in cash, securities or other property) or distributions or other rights for which the record date is prior to the date such stock
certificate is issued, except as provided in Section 10 of the Plan.
(e) Certificates
representing Option Shares acquired pursuant to the exercise of Incentive Stock Options shall be imprinted with the following legend:
THE SHARES EVIDENCED BY THIS CERTIFICATE
WERE ISSUED BY THE CORPORATION TO THE REGISTERED HOLDER UPON EXERCISE OF AN INCENTIVE STOCK OPTION AS DEFINED IN SECTION 422 OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (“ISO”). IN ORDER TO OBTAIN THE PREFERENTIAL TAX TREATMENT AFFORDED TO
ISOs, THE SHARES SHOULD NOT BE TRANSFERRED PRIOR TO THE LATER OF (A) TWO YEARS AFTER THE DATE OF GRANT OF SUCH ISO, OR (B) ONE
YEAR AFTER THE DATE OF EXERCISE OF SUCH ISO. SHOULD THE REGISTERED HOLDER ELECT TO TRANSFER ANY OF THE SHARES PRIOR TO SUCH DATE
AND FOREGO ISO TAX TREATMENT, THE TRANSFER AGENT FOR THE SHARES SHALL NOTIFY THE CORPORATION IMMEDIATELY. THE REGISTERED HOLDER
SHALL HOLD ALL SHARES PURCHASED UNDER THE INCENTIVE STOCK OPTION IN THE REGISTERED HOLDER'S NAME (AND NOT IN THE NAME OF ANY NOMINEE)
PRIOR TO THIS DATE OR UNTIL TRANSFERRED AS DESCRIBED ABOVE.
10.
Withholding
Obligations
.
Whenever Option Shares are to be issued under the Option Agreement, the Company shall have the right to require
Optionee to remit to the Company an amount sufficient to satisfy federal, state and local withholding tax requirements prior to
issuance and/or delivery of any certificate or certificates for such Option Shares.
11.
No Obligation
to Notify
. The Company shall have no duty or obligation to Optionee to advise Optionee as to the time or manner of exercising
the Option. Furthermore, except as specifically set forth herein or in the Plan, the Company shall have no duty or obligation to
warn or otherwise advise Optionee of a pending termination or expiration of the Option or a possible period in which the Option
may not be exercised. The Company has no duty or obligation to minimize the tax consequences of the Option granted to Optionee.
12.
Miscellaneous
.
(a) This
Option Agreement shall bind and inure to the benefit of the parties’ heirs, legal representatives, successors and permitted
assigns.
(b) This
Option Agreement, the Grant Notice and the Plan, constitute the entire agreement between the parties pertaining to the subject
matter contained herein and they supersede all prior and contemporaneous agreements, representations and understandings of the
parties. No supplement, modification or amendment of this Option Agreement shall be binding unless executed in writing by all of
the parties. No waiver of any of the provisions of this Option Agreement shall be deemed or shall constitute a waiver of any other
provisions, whether or not similar, nor shall any waiver constitute a continuing waiver. No waiver shall be binding unless executed
in writing by the party making the waiver. In the event there exists any conflict or discrepancy between any of the terms in the
Plan and this Option Agreement, the terms of the Plan shall be controlling. A copy of the Plan has been delivered to Optionee and
also may be inspected by Optionee at the principal office of the Company.
(c) Should
any portion of the Plan, the Grant Notice or this Option Agreement be declared invalid and unenforceable, then such portion shall
be deemed to be severable from this Option Agreement and shall not affect the remainder hereof.
(d) All notices
required or permitted hereunder shall be in writing and shall be deemed effectively given: (i) upon personal delivery to the party
to be notified; (ii) three (3) days after having been sent by registered or certified mail, return receipt requested, postage prepaid;
or (iii) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification
of receipt. All communications shall be sent to the Company at its principal executive office, and to Optionee at the address set
forth in the Company’s records, or at such other address as the Company or Optionee may designate by ten (10) days advance
written notice to the other party hereto.
(e) This
Option Agreement shall be construed according to the laws of the State of Delaware.
Attachment II
Amended
and Restated 2013 Equity Incentive Plan
Attachment III
Notice
Of Exercise
CannaVEST Corp.
2688 South Rainbow Blvd.
Suite B
Las Vegas, Nevada 89146
Date of Exercise: _______________
Ladies and Gentlemen:
This constitutes notice
under my stock option that I elect to purchase the number of shares for the price set forth below.
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Type of option (check one):
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Incentive
¨
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Nonstatutory
¨
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Stock option dated:
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_______________
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_______________
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Number of shares as to which option is
exercised:
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_______________
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_______________
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Certificates to be issued in name of:
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_______________
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_______________
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Total exercise price:
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$______________
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$______________
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Cash or check payment delivered
herewith:
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$______________
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$______________
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By this exercise, I
agree (i) to provide such additional documents as you may require pursuant to the terms of the Amended and Restated 2013 Equity
Incentive Plan, (ii) to provide for the payment by me to you (in the manner designated by you) of your withholding obligation,
if any, relating to the exercise of this option, and (iii) if this exercise relates to an incentive stock option, to notify
you in writing within fifteen (15) days after the date of any disposition of any of the shares of Common Stock (the “Shares”)
issued upon exercise of this option that occurs within two (2) years after the date of grant of this option or within one (1) year
after such shares of Common Stock are issued upon exercise of this option.
I acknowledge that
all certificates representing any of the Shares subject to the provisions of the Option shall have endorsed thereon appropriate
legends reflecting restrictions pursuant to the Option Agreement, the Company’s Certificate of Incorporation, Bylaws and/or
applicable securities laws.
Very truly yours,
___________________________________________
Exhibit 4.3
CANNAVEST
CORP.
Stock
Award Agreement
Under
Amended and Restated 2013 Equity Incentive Plan
THIS STOCK AWARD AGREEMENT
(the “
Agreement
”) is entered into as of _________________, 20__ by and between _________________________ (hereinafter
referred to as “
Grantee
”) and CannaVEST Corp., a Delaware corporation (hereinafter referred to as the “
Company
”),
pursuant to the Company’s Amended and Restated 2013 Equity Incentive Plan (the “
Plan
”). Any capitalized
term not defined herein shall have the same meaning ascribed to it in the Plan.
R E C I T A L S:
A. Grantee is an
employee, director or consultant of the Company, and in connection therewith has rendered services for and on behalf of the Company
or an Affiliate.
B. The Company desires
to issue shares of the Company’s Common Stock to Grantee for the consideration set forth herein to compensate Grantee for
past services to the Company and/or to provide an incentive for Grantee to remain a service provider of the Company and to exert
added effort towards its growth and success.
NOW, THEREFORE, in
consideration of the mutual covenants hereinafter set forth, and for other good and valuable consideration, the parties agree as
follows:
1.
Issuance
of Shares
. The Company hereby offers to issue to Grantee an aggregate of ___________) shares of Common Stock of the Company
(the “
Shares
”) on the terms and conditions herein set forth. Unless this offer is earlier revoked in writing
by the Company, Grantee shall have ten (10) days from the date of the delivery of this Agreement to Grantee to accept the offer
of the Company by executing and delivering to the Company two copies of this Agreement, without condition or reservation of any
kind whatsoever, together with the consideration to be delivered by Grantee pursuant to Section 2 below, if applicable. If the
Grantee does not accept the offer represented by this Agreement as set forth above within ten (10) days, such offer shall be null
and void.
2.
Consideration
.
The consideration for the grant of the Shares shall be the services already rendered to the Company by the Grantee. The total value
of the services provided shall be reported to tax authorities as being $___________, which is equal to the aggregate Fair Market
Value of the Shares granted.
3.
Vesting
of Shares
. The Shares shall be fully vested as of the date of this Agreement.
4.
No Right
to Continued Service
.
The issuance of the Shares does not confer upon Grantee any right to continue as an Employee or Director
of, or Consultant to, the Company or an Affiliate, nor does it limit in any way the right of the Company or an Affiliate to terminate
Grantee’s employment or other relationship with the Company or an Affiliate, at any time, with or without cause.
5.
Tax Consequences
.
Grantee understands that Grantee (and not the Company) shall be responsible for the Grantee’s own tax liability that may
arise as a result of the grant of the Shares. Grantee represents that Grantee has consulted any tax consultants Grantee deems advisable
in connection with the receipt of the Shares and that Grantee is not relying on the Company or the Company’s counsel for
any tax advice. The Company intends to report the value of the Shares granted, at the value describe in Section 2, to appropriate
tax authorities. The Company has the authority to require Grantee to remit to the Company an amount sufficient to satisfy all federal,
state, and local taxes required by law to be withheld with respect to any taxable event arising as a result of the receipt of the
Shares.
6.
Miscellaneous
.
(a) This Agreement
shall bind and inure to the benefit of the parties’ heirs, legal representatives, successors and permitted assigns.
(b) This Agreement
and the Plan constitute the entire agreement between the parties pertaining to the subject matter contained herein and they supersede
all prior and contemporaneous agreements, representations and understandings of the parties. A copy of the Plan has been delivered
to Grantee and also may be inspected by Grantee at the principal office of the Company, and Grantee hereby consents to receive
any updates to the Plan or Plan prospectus electronically. The parties agree that the entire text of the Plan is incorporated by
reference as if copied herein. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing
by all of the parties. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any
other provisions, whether or not similar, nor shall any waiver constitute a continuing waiver. No waiver shall be binding unless
executed in writing by the party making the waiver. In the event there exists any conflict or discrepancy between any of the terms
in the Plan and this Agreement, the terms of the Plan shall be controlling. A copy of the Plan has been delivered to Grantee and
also may be inspected by Grantee at the principal office of the Company.
(c) By execution of
this Agreement, Grantee consents to the delivery of any notice to the stockholders given by the Company in the form of an electronic
transmission, pursuant to, and as described in, Section 232 of the Delaware General Corporation Law.
(d) Should any portion
of the Plan or this Agreement be declared invalid and unenforceable, then such portion shall be deemed to be severable from this
Agreement and shall not affect the remainder hereof.
(e) All notices required
or permitted hereunder shall be in writing and shall be deemed effectively given: (i) upon personal delivery to the party to be
notified; (ii) three (3) days after having been sent by registered or certified mail, return receipt requested, postage prepaid;
or (iii) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification
of receipt. All communications shall be sent to the Company at its principal executive office, and to Grantee at the address set
forth on the signature page to this Agreement, or at such other address as the Company or Grantee may designate by ten (10) days
advance written notice to the other party hereto.
(f) By executing the
Agreement, the Company and Grantee waive their respective rights hereunder to have any such disputes or claims tried by a judge
or jury.
(g) This Agreement
may be executed in any number of counterparts, each of which when so executed and delivered will be deemed an original, and all
such counterparts together will constitute one and the same instrument.
(h) This Agreement
shall be construed according to the laws of the State of Delaware.
[Signature Page Follows]
IN WITNESS WHEREOF,
the parties hereto have executed this Agreement as of the date first above written.
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THE COMPANY:
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GRANTEE
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CannaVEST Corp.
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By:
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Name:
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(Print Name)
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Title
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Address:
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