UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 7, 2014
GROGENESIS, INC.
(Exact name of registrant as specified in its charter)
Nevada 333-168337 42-1771870
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
Highway 79 North, Springville, TN 38256
(Address of principal executive offices) (Zip Code)
|
Registrant's telephone number, including area code: 855-691-4764
H16/B Adsulim, Benaulim, Goa, K7 403716
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
ITEM 2.01. COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS
On September 9, 2013, we entered into an asset purchase agreements with Joseph Fewer of Aylmer, Ontario and Stephen Moseley of Paris, Tennessee, whereby we agreed to acquire all rights, title, and interest in and to the assets relating to a natural blend of plant extracts that is used as a liquid plant growth enhancer, known as the Agraburst crop surfactant formula SURF0107 ("Agraburst"),. A plant surfactant is a compound that lowers the surface tension between a liquid and a solid in order to allow for more efficient nutrient uptake in the plant.
In consideration of Joseph Fewer selling the intellectual property comprising Agraburst to us, including the technology described in the United States provisional patent application number 61/897,584- "Composition and Method for Enhancing Plant Growth", as well as all related assets necessary for operating a plant growth enhancement product manufacture and sales business as a going concern, we issued to Mr. Fewer 12,500,000 post forward-split common shares in our capital. The agreement also required that we complete a forward split of our common stock such that 25 new shares of common stock are exchanged for each currently issued share of common stock outstanding, and that 74,000,000 shares of post-forward-split common stock held by our former president be returned to treasury. We completed this forward-split on November 1, 2013. We have also executed a consulting agreement with Mr. Fewer whereby he will provide his full-time management services to us in consideration of payments of $7,000 per month. The consulting agreement will become effective on the date that we raise a minimum of $500,000 for operations.
Closing of the asset purchase agreement with Mr. Fewer was also subject to us changing our name to a name acceptable to Mr. Fewer. We changed our name from "Lisboa Leisure, Inc." to "GroGenesis, Inc." on December 10, 2013.
We also entered into an agreement with Mr. Moseley on September 9, 2013 whereby we agreed to acquire certain equipment used in conjunction with the production, sales, and marketing of Agraburst. In consideration of Mr. Moseley transferring title of these assets to us, we have issued 5,000,000 post-split shares of our common stock to him. We have also executed a consulting agreement with Mr. Moseley whereby he will receive $5,000 per month in consideration of him providing his full-time services to us. As with Mr. Fewer's consulting agreement, Mr. Moseley's agreement will become effective on the date that we raise a minimum of $500,000 for operations. The agreement recognizes that Mr. Moseley has been involved in the sale of surfactants prior to the date of the agreement and that he shall maintain the right to sell Agraburst to 53 existing clients and profit exclusively from sales to them.
We have also entered into an easement agreement with Joseph Fewer and Denise Fewer whereby they have agreed to grant to us the right to use a portion of their farm located in Alymer, Ontario for the purposes of using it as a demonstration farm in order to evaluate and exhibit the effects of Agraburst. In consideration of the easement, we have issued to the Fewers an aggregate of 2,500,000 post-split shares of our common stock. The initial term of the easement is three years.
We completed the purchase of the assets necessary for the operation of the Agraburst plant growth surfactant manufacture and sales business on February 7, 2014.
DESCRIPTION OF BUSINESS
PRIOR OPERATIONS
We were incorporated pursuant to the laws of Nevada on May 19, 2010. Our intended plan of operation was to operate beach front eating establishments on the beaches on Goa, India. However, due to difficulties in raising additional funds to cover our planned operations and obtaining the necessary permits to operate beach shacks, management decided to discontinue operations in the sector.
AGRABURST FORMULA
We intend to proceed with business operations in the agricultural and environmental sectors. On February 7, 2014, we completed the acquisition of the assets relating to the Agraburst naturally-derived plant stimulant, including all intellectual property rights relating to its unique formulation. Agraburst
consists of a blend of predominantly natural plant extracts, or phytochemicals, that are naturally-derived, non-toxic, carcinogen-free, and biodegradable. It is a foliar-feed liquid growth enhancer that aids efficient nutrient and water uptake in plants. Foliar feeding involves applying AgraBurst directly to plant foliage, which then absorbs it. Agraburst can be used alone or tank-mixed with most liquid fertilizers, herbicides, pesticides, and fungicides in order to increase their effectiveness. It can also be utilized as a wash for fruits and vegetables, and as a cleaner for garden and lawn sprayers, field-sized sprayers, and agricultural tanks.
Agraburst is designed to work as a cation exchange stimulant that penetrates plant foliage and roots in order to enhance photosynthesis and higher brix levels. The brix level is the percentage of solids, particularly sugar and minerals, present in the plant. A high brix level is an indication that the plant has been grown with sufficient nutrients and water. Minute particles in Agraburst increase the speed of nutrient transport within a plant and can carry other blended products into plant leaves.
The small particles within Agraburst have very close to a neutral electrical charge, which allows them to form light bonds with the hydrogen atoms in water, which results in a reduction in water's natural surface tension. As a result, Agraburst acts akin to a lubricant that keeps water flowing and transporting nutrients within a plant with little resistance. This promotes higher efficiency of water and nutrient uptake in a plant. The resulting higher brix level in the plant better enables it to resist disease, insects, drought, and cold weather. It is also linked to better tasting food crops.
To date, Agraburst and predecessor product formulations have been sold to a small group of farming clients and tested in a variety of case studies that has resulted, amongst other benefits, in increased yield for corn, soybean, tobacco, canola, alfalfa, wheat, cabbage, cotton, corn silage, hay, tomatoes, and beans.
PRODUCT SAFETY
Because Agraburst ingredients are comprised of refined extracts that originate from tree oils and plants, it is considered to be environmentally friendly. It complies with the United States Occupational Safety and Health Administration's OSHA CFR - 1910.1200 Section (i) in that Agraburst contains no hazardous or toxic components.
In addition, Agraburst is comprised solely of ingredients that are contained on the Food and Drug Administration's EAFUS list and are thus considered safe for use with food products. Additional tests performed at the Genetic ID testing facility in Fairfield, Iowa also confirmed that Agraburst is free of genetically modified organisms.
MARKET FOR THE PRODUCT
As consumers become increasingly concerned over the use of synthetic pesticides and fertilizers on food crops, the infiltration of harmful crop additives in soil and water supplies, and the availability of food products as reasonable prices, there is growing pressure on global farmers to provide safe food products for consumption without causing undue environmental harm. Because Agraburst is formulated to increase agricultural output without adverse health and environmental impacts, the potential market for the product is large. Our business plan is based on the premise that there will be increasing pressure on farmers to provide more agricultural products without increasing the amount of land cleared for farm use or creating environmental or health risks for society.
We intend to initially manufacture and distribute Agraburst in the United States and Canada with a view to expanding our market focus depending on our initial success.
Our Agraburst manufacturing facility is located in Paris, Tennessee, and has the capacity to produce approximately 100,000 gallons of Agraburst per month with existing equipment. Currently, it takes approximately six hours to produce a 3,000 gallon batch of Agraburst. It currently involves an exothermic process that involves ingredient mixing in large stainless steel tanks and then allowing the product to cool. Currently, Agraburst is sold to a small group of farmers and local cooperatives located primarily in Tennessee and Kentucky.
Our ability to market Agraburst in North America will be adversely impacted by the fragmented and competitive nature of the agriculture fertilizer and fertilizer enhancement industry. The sector includes large entities that produce fertilizers in massive quantities, as well as small, boutique manufacturers that produce fertilizers and growth enhancement products in small batches.
While the principal competitive factors in the sale of fertilizer enhancement products are crop output and product safety, pricing and availability of the product and geographic coverage are also critical. Most of our competitors have an established market for their products and greater financial resources and may be able to withstand sales or price decreases better than we will. We also expect to continue to face competition from new market entrants. We may be unable to compete effectively with these existing or new competitors, which could have a material adverse effect on our financial condition and results of operations.
EXISTING COMPETITIVE PRODUCTS
While various companies offer commercial agricultural fertilizer products and fertilizer enhancements to farms and consumers, we are not aware of any direct competitors that offer a product that substantially increases yields that is also naturally-derived.
SALES AND MARKETING STRATEGY
Our proposed marketing strategy is to demonstrate to our potential end-use customers, principally commercial farmers, that Agraburst will increase their agricultural output. We intend to accomplish this through a combination of independent product testing through scientific trials and by allowing farmers to use Agraburst on a trial basis. We expect that our marketing strategy will be most successful if farmers are able to realize improvements in crop quality and yield on their own fields when they use Agraburst.
We intend to sell Agraburst through distribution arrangements with agricultural input distributors and agricultural supply stores. We are subject to the risk that large, high-profile, distributors could exert substantial pressure on us due to their size and the small contribution that our products would likely have to their financial success. Because of this difference in market influence, such distributors would have leverage over the pricing and promotion of Agraburst.
We hope to enter into agreements with both national and international distributors, though there is no guarantee that we will be successful in reaching such arrangements. While we attempt to establish these relationships, we will also directly market our product to farmers through a direct sales force, as well as offer Agraburst through a corporate website. If we decide to
directly control product distribution, we will incur costs related to taking and processing product orders from retailers; shipping and warehousing costs; credit, collections, and in-house accounting fees.
EMERGING GROWTH COMPANY STATUS
Because we generated less than $1 billion in total annual gross revenues during our most recently completed fiscal year, we qualify as an "emerging growth company" under the Jumpstart Our Business Startups ("JOBS") Act.
We will lose our emerging growth company status on the earliest occurrence of any of the following events:
1. on the last day of any fiscal year in which we earn at least $1 billion in total annual gross revenues, which amount is adjusted for inflation every five years;
2. on the last day of the fiscal year of the issuer following the fifth anniversary of the date of our first sale of common equity securities pursuant to an effective registration statement;
3. on the date on which we have, during the previous 3-year period, issued more than $1 billion in non-convertible debt; or
4. the date on which such issuer is deemed to be a `large accelerated filer', as defined in section 240.12b-2 of title 17, Code of Federal Regulations, or any successor thereto."
A "large accelerated filer" is an issuer that, at the end of its fiscal year, meets the following conditions:
1. it has an aggregate worldwide market value of the voting and non-voting common equity held by its non-affiliates of $700 million or more as of the last business day of the issuer's most recently completed second fiscal quarter;
2. It has been subject to the requirements of section 13(a) or 15(d) of the Act for a period of at least twelve calendar months; and
3. It has filed at least one annual report pursuant to section 13(a) or 15(d) of the Act.
As an emerging growth company, exemptions from the following provisions are available to us:
1. Section 404(b) of the Sarbanes-Oxley Act of 2002, which requires auditor attestation of internal controls;
2. Section 14A(a) and (b) of the Securities Exchange Act of 1934, which require companies to hold shareholder advisory votes on executive compensation and golden parachute compensation;
3. Section 14(i) of the Exchange Act (which has not yet been implemented), which requires companies to disclose the relationship between executive compensation actually paid and the financial performance of the company;
4. Section 953(b)(1) of the Dodd-Frank Act (which has not yet been implemented), which requires companies to disclose the ratio between
the annual total compensation of the CEO and the median of the annual total compensation of all employees of the companies; and
5. The requirement to provide certain other executive compensation disclosure under Item 402 of Regulation S-K. Instead, an emerging growth company must only comply with the more limited provisions of Item 402 applicable to smaller reporting companies, regardless of the issuer's size.
Pursuant to Section 107 of the JOBS Act, an emerging growth company may choose to forgo such exemption and instead comply with the requirements that apply to an issuer that is not an emerging growth company. We have elected under this section of the JOBS Act to maintain our status as an emerging growth company and take advantage of the JOBS Act provisions relating to complying with new or revised accounting standards under Section 102(b)(1) of the JOBS Act.
GOVERNMENT REGULATION
While agricultural fertilizers, soil amendments, and related products are highly regulated at the state level in the United States, these regulations do not apply to Agraburst because it is a crop surfactant that is comprised of less than 3% active ingredients, which typically include potassium, nitrogen, and phosphorus. In Canada, where we intend to extend our marketing efforts, such active ingredients must constitute less than 5% of the surfactant product ingredient mix.
We anticipate that we will incur periodic testing costs in order to ensure that Agraburst qualifies as a crop surfactant and is not deemed to be a fertilizer or similarly regulated product that is subject to regulatory requirements. However, we do not anticipate that such testing costs will be material to our operations.
SUBSIDIARIES
We do not have any subsidiaries.
PATENTS AND TRADEMARKS
The composition of our crop surfactant, Agraburst, is covered by provisional patent application number 61/897,584 - "Composition and Method for Enhancing Plant Growth" that was filed with the United States patent office on October 30, 2013.
Our product brand name, Agraburst, is covered by a U.S. Trademark Application Serial Number 86/092618, which was filed with the United States Trademark and Patent Office on October 16, 2013.
Otherwise, we do not own, either legally or beneficially, any patents or trademarks.
RESEARCH AND DEVELOPMENT ACTIVITIES AND COSTS
We have not spent any funds on research and development activities to date.
COMPLIANCE WITH ENVIRONMENTAL LAWS
Our current operations are not subject to any environmental laws.
FACILITIES
Our Agraburst manufacturing facility is located in Paris, Tennessee, and has the capacity to produce approximately 100,000 gallons of Agraburst per month with existing equipment. The facility is currently leased under a 1-year rental agreement with Bradley Moseley at the rate of $800 per month, which lease term expires on May 22, 2014 and then continues on a month-to-month basis thereafter until terminated by either party on written notice. Management believes that this facility's current production capacity is sufficient to satisfy customer demand for the foreseeable future. We will consider re-locating and/or expanding internationally to new manufacturing facilities in future based on sales fulfilment logistics concerns, alongside sales side requirements and economics.
Pursuant to our asset purchase agreement with Joseph Fewer, we also have an easement for a period of three years in a 10 acre portion of a hobby farm located in Aylmer, Ontario. The easement allows us to operate an agricultural surfactant testing and development facility on the land.
EMPLOYEES
We have commenced only limited operations, and therefore currently have no employees.
RISK FACTORS
Please consider the following risk factors before deciding to invest in our common stock. Any investment in our common stock involves a high degree of risk. You should carefully consider the risks described below and all of the information contained in this current report before deciding whether to purchase our common stock. If any of the following risks actually occur, our business, financial condition and results of operations could be harmed. The trading price of our common stock could decline, and you may lose all or part of your investment in our common stock.
THERE IS SUBSTANTIAL UNCERTAINLY AS TO WHETHER WE WILL CONTINUE AS A GOING CONCERN. IF WE DISCONTINUE OPERATIONS, YOU WILL LOSE YOUR INVESTMENT.
We have incurred losses since our inception resulting in an accumulated deficit of $76,709 at November 30, 2013. Further losses are anticipated in the development of our business. As a result, there is substantial doubt about our ability to continue as a going concern. In fact, our auditors have issued a going concern opinion in connection with their audit of our financial statements for our most recent fiscal year ended May 31, 2013. This means that our auditors believe there is substantial doubt that we can continue as an on-going business for the next twelve months. While we have acquired the assets relating to the manufacturing and sales of Agraburst subsequent to our most recently completed fiscal year, there is still no assurance that our intended operations will be profitable.
Our ability to continue as a going concern is dependent upon our ability to generate profitable operations in the future and to obtain the necessary financing to expand our business operations; to market our current products and services; and to develop new products and services.
Our ability to achieve and maintain profitability and positive cash flow is dependent upon:
* our ability to raise necessary financing in order to develop and
expand our operations;
* our ability to successfully manufacture, distribute, market and sell
Agraburst;
* our success in expanding operations by hiring experienced employees
and independent contractors in the agricultural sector; and
* our ability to develop additional products; and
Based upon current plans, we expect to incur operating losses in future periods because we will be incurring expenses related to developing a commercial-sized manufacturing facility for Agraburst and the marketing of our product. We cannot guarantee that we will be successful in generating substantial revenues in the future. Failure to generate revenues will cause us to go out of business.
IF WE DO NOT OBTAIN ADDITIONAL FINANCING, OUR BUSINESS WILL FAIL.
In order to successfully manufacture, distribute, market, and sell Agraburst, we will need to obtain additional financing in order to establish a manufacturing facility, retain and train staff, market our product, generate sales, and pursue additional business development. In order to expand and develop our operations as we envision, we anticipate that our expenses over the next 12 months will be approximately $1.5 million.
We will require additional financing to sustain our business operations if we are not successful in earning significant revenues from operations. We do not currently have any arrangements for financing and we can provide no assurance to investors that we will be able to find such financing if required. Obtaining additional financing would be subject to a number of factors, including our ability to generate revenue, investor acceptance of our business plan and general economic and market conditions. These factors may make the timing, amount, terms or conditions of additional financing unavailable to us.
The most likely source of future funds presently available to us is through the sale of equity capital. Any sale of share capital will result in dilution to existing shareholders. We do not have any arrangement in place for the sale of shares of our common stock.
BECAUSE WE HAVE NOT COMMENCED COMMERCIAL SCALE BUSINESS OPERATIONS, WE FACE A HIGH RISK OF BUSINESS FAILURE.
We have not yet commenced manufacturing and selling Agraburst in commercial quantities. Accordingly, we have no way to evaluate the likelihood that our business will be successful. We have not earned any revenues as of the date of this report and do not anticipate earning significant revenue during the next 12 month period. Potential investors should be aware of the difficulties normally encountered by development stage companies and the high rate of failure of such enterprises. The likelihood of success must be considered in light of the problems, expenses, difficulties, complications and delays encountered in manufacturing, marketing, and the sale of new products.
There is no history upon which to base any assumption as to the likelihood that we will prove successful, and it is doubtful that we will generate any operating revenues or ever achieve profitable operations. If we are unsuccessful in addressing these risks, our business will most likely fail.
BECAUSE WE WILL RELY UPON THIRD PARTY CONSULTANTS FOR IMPORTANT ASPECTS OF OUR BUSINESS PLAN, WE ARE SUBJECT TO THE RISK THAT THEY WILL NOT PERFORM THEIR TASKS EFFECTIVELY AND THAT WE WILL BE UNSUCCESSFUL IN OPERATING OUR BUSINESS AS A RESULT.
We intend to rely on third parties, such as a marketing consultants and distributors for the marketing and sale of Agraburst. We may also outsource aspects of the manufacturing process as well. Because some of these consultants will have expertise in areas that our management does not, we may not be able to effectively evaluate their work. We also cannot ensure that third party consultants will be able to complete their work for us in a timely or effective manner. Accordingly, our reliance on third parties exposes us to the risk that our business will be unsuccessful if they do not market and distribute our product as envisioned.
BECAUSE WE HAVE NOT YET PATENT PROTECTED AGRABURST, A COMPETITOR COULD COPY OUR PROPOSED DESIGN, WHICH COULD CAUSE OUR BUSINESS TO FAIL.
Our potential competitive advantage lies in the potential unique formulation of Agraburst. While we have a provisional patent application for protection of our intellectual property in the United States, there is no guarantee that a patent will be issued for Agraburst or that competitors may not try to use our formula to develop similar products that do not violate any patent that we do obtain. Accordingly, our business is subject to the risk that competitors could either copy or reverse engineer our surfactant and could thereby produce and sell a competing product with similar features. If this occurs, our ability to sell our product could be jeopardized, which could cause our business to fail.
THE AGRICULTURAL SURFACTANT INDUSTRY IS EXTREMELY FRAGMENTED AND COMPETITIVE AND WE MAY NOT BE ABLE TO COMPETE SUCCESSFULLY WITH EXISTING COMPETITORS OR NEW ENTRANTS IN THIS MARKET.
The agricultural fertilizer and surfactant industry is extremely fragmented and competitive. The sector includes large entities, such as Bunge Limited, Cargill, Incorporated, and Archer-Daniels-Midland Company, which mass produce a variety of fertilizer products, as well as many boutique manufacturers that produce fertilizer enhancements and crop surfactants in small batches.
While the principal competitive factors in crop surfactants are their effects on agricultural output and environmental impact, pricing and availability of the product and geographic coverage are also key. Most of our competitors have greater financial resources and may be able to withstand sales or price decreases better than we will. We also expect to continue to face competition from new market entrants. We may be unable to compete effectively with these existing or new competitors, which could have a material adverse effect on our financial condition and results of operations.
WE ARE AN "EMERGING GROWTH COMPANY" AND WE INTEND TO TAKE ADVANTAGE OF REDUCED DISCLOSURE AND GOVERNANCE REQUIREMENTS APPLICABLE TO EMERGING GROWTH COMPANIES, WHICH COULD RESULT IN OUR COMMON STOCK BEING LESS ATTRACTIVE TO INVESTORS.
We are an "emerging growth company," as defined in the Jumpstart Our Business Startups Act of 2012 and we intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive
compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. As well, our election allows us to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until they apply to private companies. Therefore, as a result of our election, our financial statements may not be comparable to companies that comply with public company effective dates.
We cannot predict if investors will find our common stock less attractive because we will rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile. We may take advantage of these reporting exemptions until we are no longer an emerging growth company, which in certain circumstances could be for up to five years.
BECAUSE MANAGEMENT HAS LIMITED EXPERIENCE IN MANUFACTURING AND MANAGEMENT, OUR BUSINESS HAS A HIGHER RISK OF FAILURE.
Joseph Fewer and Alan Hughes, our sole members of management, have limited business experience in the manufacture, marketing, and sale of agricultural products, particularly on a large-scale, commercial basis. Consequently, management's decisions and choices may not be well thought out and our operations, earnings and ultimate financial success may suffer irreparable harm as a result.
BECAUSE WE RELY ON OUR KEY CONSULTANTS, JOSEPH FEWER AND STEVE MOSELEY, TO CONDUCT OUR OPERATIONS, OUR BUSINESS WILL LIKELY FAIL IF WE LOSE THEIR SERVICES.
We depend on the services of our senior management for the future success of our business. Our sole contracted consultants, Joseph Fewer and Stephen Moseley, are the only people who know and understand the Agraburst formulation and have been involved in its small trial scale production. Our success depends on their continued efforts. While we have executed formal consulting agreements with Mr. Fewer and Mr. Moseley, each consultant is able to terminate his respective agreement on 90 days' notice. The loss of their services could have an adverse effect on our business, financial condition, and results of operations.
WE WILL LIKELY ISSUE ADDITIONAL SHARES OF COMMON STOCK THAT WILL RESULT IN DILUTION TO EXISTING SHAREHOLDERS AND ADVERSELY IMPACT THE VALUE OF OUR SHARES.
We must raise additional capital in order for our business plan to succeed. Our most likely source of additional capital will be through the sale of additional shares of common stock. We are currently authorized to issue up to 200,000,000 shares of common stock. Our directors have the authority to cause us to issue additional shares of common, and to determine the rights, preferences and privilege of such shares, without consent of any of our stockholders. We may issue shares in connection with financing arrangements or otherwise. Any such issuances will result in immediate dilution to our existing shareholders' interests, which will negatively affect the value of their shares.
A PURCHASER IS PURCHASING PENNY STOCK WHICH LIMITS HIS OR HER ABILITY TO SELL OUR STOCK.
The shares offered by this prospectus constitute penny stock under the Exchange Act. The shares will remain penny stock for the foreseeable future. "Penny stock" rules impose additional sales practice requirements on broker-dealers who
sell such securities to persons other than established customers and accredited investors, that is, generally those with assets in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 together with a spouse. For transactions covered by these rules, the broker-dealer must make a special suitability determination for the purchase of such securities and have received the purchaser's written consent to the transaction prior to the purchase.
Additionally, for any transaction involving a penny stock, unless exempt, the rules require the delivery, prior to the transaction, of a disclosure schedule prescribed by the Commission relating to the penny stock market. The broker-dealer also must disclose the commissions payable to both the broker-dealer and the registered representative and current quotations for the securities. Finally, monthly statements must be sent disclosing recent price information on the limited market in penny stocks. Consequently, the "penny stock" rules may restrict the ability of broker-dealers to sell our shares of common stock. The market price of our shares would likely suffer as a result.
FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements that involve risks and uncertainties. We use words such as anticipate, believe, plan, expect, future, intend and similar expressions to identify such forward-looking statements. You should not place too much reliance on these forward-looking statements. Our actual results may differ materially from those anticipated in these forward-looking statements for many reasons, including the risks faced by us described in the "Risk Factors" section and elsewhere in this report.
REPORTS TO SECURITY HOLDERS
We are required to file annual, quarterly and current reports, and other information with the Securities & Exchange Commission. The public may read and copy any materials that we file with the Commission at the Commission's Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the Commission at 1-800-SEC-0330. The Commission maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the Commission. The address of that site is http://www.sec.gov.
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
We are a development stage corporation with no revenues from our business operations. Our auditors have issued a going concern opinion. This means that our auditors believe there is substantial doubt that we can continue as an ongoing business for the next twelve months. While we have acquired ownership of the formulation of Agraburst, including all related intellectual property rights, subsequent to our most recently completed fiscal year, there is still no assurance that our intended operations will be profitable.
To meet our financing requirements, we anticipate raising funds through the sale of our equity. At the present time, we have not made any arrangements to raise additional cash. If we need additional cash and cannot raise it, we will either have to delay or suspend operations until we do raise the cash, or cease operations entirely.
PLAN OF OPERATION
We were incorporated pursuant to the laws of Nevada on May 19, 2010 and intended to be involved in the development of beach front restaurants in Goa, India until
we entered into an asset purchase agreement with Joseph Fewer Farms Inc. on September 9, 2013.
Our plan of operation for the twelve month period following the date of this report is to establish facilities for the commercial manufacture of Agraburst, enter into distribution arrangements for the sale of Agraburst, and retain a sales force necessary for the direct marketing of Agraburst to commercial farmers in the United States and Canada.
We expect to incur the following costs in the next 12 months in connection with our goals:
Manufacturing facilities and equipment costs: $ 500,000
Sales and Marketing: $ 350,000
Product manufacturing costs: $ 250,000
Consulting and distribution costs: $ 200,000
Wages for sales force: $ 150,000
General and administrative costs: $ 50,000
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Total: $1,500,000
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Total expenditures over the next 12 months are therefore expected to be approximately $1,500,000. Our ability to meet these objectives will be dependent on our ability to generate revenue from operations and to raise sufficient additional capital to expand operations. If we are unable to generate sufficient revenue or raise financing as required, we will delay our establishment and expansion of operations as necessary.
SOURCES AND USES OF CASH
At November 30, 2013, our current assets consisted of $31 in cash. Subsequent to that date, we have raised $150,500 from the sale of our common stock. Accordingly, we will have to raise additional funds in the next twelve months in order to cover our anticipated administrative costs and costs of expanding our operations as outlined above. We currently do not have a specific plan of how we will obtain such funding; however, we anticipate that additional funding will be in the form of equity financing from the sale of our common stock. Any private placement of our common stock could result in substantial dilution to existing shareholders.
EVENTS, TRENDS AND UNCERTAINTIES
The development of our business will depend upon our success in selling Agraburst to commercial farmers. Our ability to generate revenue may be affected by events and trends such as general economic conditions, changes to farm subsidies, and competing products from existing and new companies in the same business.
RESULTS OF OPERATIONS
PERIOD ENDED NOVEMBER 30, 2013
We did not earn any revenues from operations in the six-month period ended November 30, 2013. We incurred operating expenses in the amount of $8,982 during the period consisting of general and administrative costs of $2,982 and professional fees of $6,000.
FISCAL YEAR ENDED MAY 31, 2013
We did not earn any revenues from operations in the fiscal year ended May 31, 2013. We incurred operating expenses in the amount of $42,891 during the fiscal year. These operating expenses were comprised of general and administrative costs of $34,877 and professional fees of $8,014.
FISCAL YEAR ENDED MAY 31, 2012
We did not earn any revenues from operations in the fiscal year ended May 31, 2012. We incurred operating expenses in the amount of $18,575 during the fiscal year. These operating expenses were comprised of general and administrative costs of $3,575 and professional fees of $15,000.
We have not attained profitable operations and are dependent upon obtaining financing to pursue exploration activities. For these reasons, there is substantial doubt that we will be able to continue as a going concern.
PROPERTIES
Our Agraburst manufacturing facility is located in Paris, Tennessee, and has the capacity to produce approximately 100,000 gallons of Agraburst per month with existing equipment. The facility is currently leased under a one-year rental agreement with Bradley Moseley at the rate of $800 per month, which lease term expires on May 22, 2014 and then continues on a month-to-month basis thereafter until terminated by either party on written notice.
Pursuant to our asset purchase agreement with Joseph Fewer, we also have an easement for a period of three years in a 10 acre portion of a hobby farm located in Aylmer, Ontario. The easement allows us to operate an agricultural surfactant testing and development facility on the land.
Otherwise, we do not hold any interest in real property.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table provides the names and addresses of each person known to us to own more than 5% of our outstanding common stock as of the date of this current report, and by the officers and directors, individually and as a group. Except as otherwise indicated, all shares are owned directly.
Amount of
Title of Name and address beneficial Percent
Class of beneficial owner ownership of class
----- ------------------- --------- --------
Common Joseph Fewer 24,000,000 (1) 30.7%
Stock President and C.E.O.
7123 Hacienda Road
Aylmer, Ontario
Common Maria Fernandes 11,000,000 13.5%
Stock Former President
H16/B Adsulim
Benaulim, Goa, India
Common Stephen Moseley 5,000,000 6.1%
Stock Former President
737 Salem Circle
Paris, TN
13
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Common Alan Hughes 250,000 0.3%
Stock Chief Operating Officer
2221 Southwood Drive,
The Villages, Florida 32162
Common All Officers and Directors 24,250,000 29.8%
Stock as a group that consists of shares
two people
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1. includes 2,500,000 registered in the name of Joseph Fewer and his wife, Denise Fewer
The percent of class is based on 81,430,000 shares of common stock issued and outstanding as of the date of this current report.
There are no arrangements that may result in our change in control of the company.
DIRECTORS AND EXECUTIVE OFFICERS
Our executive officers and directors and their respective ages as of the date of this current report are as follows:
DIRECTORS:
Name of Director Age ---------------- --- Joseph Fewer 59 Alan Hughes 62 EXECUTIVE OFFICERS: Name of Officer Age Office --------------- --- ------ Joseph Fewer 59 President, C.E.O., Secretary and Treasurer Alan Hughes 62 Chief Operating Officer |
BIOGRAPHICAL INFORMATION
Set forth below is a brief description of the background and business experience of each of our executive officers and directors for the past five years.
JOSEPH FEWER acts as our President, C.E.O., Secretary, Treasurer and as a director, and has been responsible for much of the formulation and testing of Agraburst to date. Mr. Fewer has acted as the President of Joseph Fewer Acres Inc., a 25 acre hobby farm and supplier of agricultural products in North America since November 2009. From May 2012 to January 2013, he also acted as Chief Operating Officer of Premier Equipment Services Inc., a ten store John Deere dealership business located in Ontario, Canada. From 2005 to 2012, Mr. Fewer also acted as President and C.E.O. of AgraTurf Equipment Services Inc., a
five store John Deere dealership in southwestern Ontario that subsequently merged with Elmira Farm Services Inc. to create Premier Equipment Services Inc.
ALAN HUGHES acts as our Chief Operating Officer and as a director. Mr. Hughes has spent over 36 years with John Deere managing sales territories, as well as being involved in product training, wholesale finance, and dealer development improvement processes. Since 2009, he has acted as the principal of Clear Processes, LLC, a consulting company that provides advice on business consolidations, operational performance, and strategic business planning in the agribusiness sector. Mr. Hughes graduated from Southern Illinois University with a dual degree in agricultural economics and finance.
TERM OF OFFICE
Our directors are appointed for a one-year term to hold office until the next annual general meeting of our shareholders or until removed from office in accordance with our bylaws. Our officers are appointed by the board of directors and will hold office until removed by the board.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The table below summarizes all compensation awarded to, earned by, or paid to our executive officers by any person for all services rendered in all capacities to us for the fiscal years ended May 31, 2013 and 2012, as well as the six-month fiscal period ended November 30, 2013:
SUMMARY COMPENSATION TABLE
Change in
Pension
Value and
Non-Equity Nonqualified
Name and Incentive Deferred
Principal Stock Option Plan Compensation All Other
Position Year Salary($) Bonus($) Awards($) Awards($) Compensation($) Earnings($) Compensation($) Totals($)
-------- ---- --------- -------- --------- --------- --------------- ----------- --------------- ---------
Joseph Fewer 2014 None None None None None None None None
President
Alan Hughes 2014 None None None None None None None None
C.O.O.
Maria Fernandes 2013 None None None None None None None None
Former President 2012 None None None None None None None None
2011 None None None None None None None None
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STOCK OPTION GRANTS
We have not granted any stock options to the executive officer since our inception.
CONSULTING AGREEMENTS
We do not have any employment or consulting agreement with our current officers, other that Joseph Fewer. We have executed a consulting agreement with Mr. Fewer whereby he will provide his full-time management services to us in consideration
of payments of $7,000 per month. The consulting agreement will become effective on the date that we raise a minimum of $500,000 for operations.
We do not pay Mr. Fewer or Mr. Hughes any amount for acting as directors.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On September 9, 2013, we entered into an asset purchase agreements with Joseph Fewer, our president and a director, whereby we acquired from him the intellectual property comprising Agraburst to us, including the technology described in in the United States provisional patent application number 61/897,584 - "Composition and Method for Enhancing Plant Growth", as well as all related assets necessary for operating a plant growth enhancement product manufacture and sales business as a going concern. In connection with the acquisition, we issued to Mr. Fewer 12,500,000 post forward-split common shares in our capital.
We have also executed a consulting agreement with Mr. Fewer whereby he will provide his full-time management services to us in consideration of payments of $7,000 per month. The consulting agreement will become effective on the date that we raise a minimum of $500,000 for operations.
We have also entered into an easement agreement with Joseph Fewer and Denise Fewer, Mr. Fewer's wife, whereby they have agreed to grant to us the right to use a portion of their farm located in Alymer, Ontario for the purposes of using it as a demonstration farm in order to evaluate and exhibit the effects of Agraburst. In consideration of the easement, we have issued to the Fewers an aggregate of 2,500,000 post-split shares of our common stock. The initial term of the easement is three years.
Otherwise, none of the following parties has, since our date of incorporation, had any material interest, direct or indirect, in any transaction with us or in any presently proposed transaction that has or will materially affect us:
* Any of our directors or officers;
* Any person proposed as a nominee for election as a director;
* Any person who beneficially owns, directly or indirectly, shares
carrying more than 10% of the voting rights attached to our
outstanding shares of common stock;
* Any of our promoters; or
* Any relative or spouse of any of the foregoing persons who has the
same house as such person.
LEGAL PROCEEDS
There are no legal proceedings pending or threatened against us. Our address for service of process in Nevada is 1802 N Carson Street, Suite 212, Carson City, Nevada, 89701.
MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS.
MARKET INFORMATION
Our shares of common stock are quoted for trading on the OTC Bulletin Board under the symbol GROG. However, no trades of our shares of common stock occurred through the facilities of the OTC Bulletin Board during the fiscal year ended May 31, 2013.
DIVIDENDS
There are no restrictions in our articles of incorporation or bylaws that prevent us from declaring dividends. The Nevada Revised Statutes, however, do prohibit us from declaring dividends where, after giving effect to the distribution of the dividend:
1. we would not be able to pay our debts as they become due in the usual course of business; or
2. our total assets would be less than the sum of our total liabilities plus the amount that would be needed to satisfy the rights of shareholders who have preferential rights superior to those receiving the distribution.
We have not declared any dividends, and we do not plan to declare any dividends in the foreseeable future.
RECENT SALES OF UNREGISTERED SECURITIES
In the past three years, we have sold the following securities that were not registered under the Securities Act, including new securities resulting from the modification of outstanding securities:
On February 7, 2014, we issued 12,500,000 shares of our common stock to Joseph Fewer (as to 11,500,000), and certain assignees, namely Helen Keenan (500,000 shares), Alan Hughes (250,000 shares), Ronald Evinou (250,000 shares), in connection with our purchase of the technology described in in the United States provisional patent application number 61/897,584 - "Composition and Method for Enhancing Plant Growth", as well as all related assets necessary for operating the Agraburst plant growth surfactant manufacture and sales business as a going concern.
On February 7, 2014, we issued 2,500,000 shares of our common stock to Joseph Fewer and Denise Fewer in connection with an easement agreement whereby we acquire the right to use a portion of their farm located in Alymer, Ontario for the purposes of using it as a demonstration farm in order to evaluate and exhibit the effects of Agraburst.
On February 7, 2014, we issued 5,000,000 shares of our common stock to Stephen Moseley in connection with our acquisition of certain equipment used in conjunction with the production and marketing of Agraburst.
On January 6, 2014, we issued 300,000 shares of our common stock to Peter Born pursuant to a private placement subscription agreement. Mr. Born paid $0.35 per share.
On February 3, 2014, we issued 100,000 shares of our common stock to Richard Williams and 30,000 shares to Judith Weiss pursuant to private placement subscription agreements. They each paid $0.35 per share.
We issued the shares to Joseph Fewer, Denise Fewer, and Stephen Moseley pursuant to Section 4(2) of the Securities Act of 1933. We were able to rely upon this exemption since this issuance does not constitute a public offering of our shares.
In connection with these issuances, the shareholders were provided with access to all material aspects of the company, including the business, management, offering details, risk factors and financial statements. They also represented to us that they were acquiring the shares as principal for their own accounts with investment intent. They also represented that they was sophisticated, having prior investment experience and having adequate and reasonable opportunity and access to any corporate information necessary to make an informed decision. This issuance of securities was not accompanied by general
advertisement or general solicitation. The shares were issued with a Rule 144 restrictive legend.
In connection with the completion of the aforementioned agreements, we completed a forward split our common stock such that every share of pre-split stock was exchange for 25 post-split shares of common stock. All of the above-noted share issuances were on a post forward split basis.
We issued the shares to Peter Born, Richard Williams, and Judith Weiss pursuant to Regulation S of the Securities Act of 1933. These investors were not U.S. persons (as that term is defined in Regulation S of the Securities Act of 1933, as amended) and they purchased our shares in transactions outside of the United States. The certificates representing the common shares each bear a restrictive legend in accordance with Regulation S. In addition, we and the purchaser have complied or will comply with the following requirements of Regulation S:
1. the offer or sale was made in an offshore transaction;
2. we did not make any directed selling efforts in the United States;
3. no offer or sale was made to a U.S. person or for the account or benefit of a U.S. person;
4. the purchasers of the securities certified that they were not U.S. persons and were not acquiring the securities for the account or benefit of any U.S. person;
5. the purchasers of the securities agreed to resell such securities only in accordance with the provisions of Regulation S, pursuant to registration under the Act, or pursuant to an available exemption from registration and agreed not to engage in hedging transactions with regard to such securities unless in compliance with the Act; and
6. we are required to refuse to register any transfer of the securities not made in accordance with the provisions of Regulation S pursuant to registration under the Act, or pursuant to an available exemption from registration.
DESCRIPTION OF SECURITIES
COMMON STOCK
Our authorized common stock consists of 200,000,000 shares, $0.001 par value, of which 81,430,000 shares of common stock are currently issued and outstanding.
Holders of our common stock have no preemptive rights to purchase additional shares of common stock or other subscription rights. The common stock carries no conversion rights and is not subject to redemption or to any sinking fund provisions. All shares of common stock are entitled to share equally in dividends from sources legally available. Therefore, when, as and if declared by the Board of Directors, and upon our liquidation or dissolution, whether voluntary or involuntary, to share equally in our assets that are available for distribution to stockholders.
The Board of Directors is authorized to issue additional shares of common stock not to exceed the amount authorized by our Articles of Incorporation, on such
terms and conditions and for such consideration as the Board may deem appropriate without further stockholder action.
VOTING RIGHTS
Each holder of common stock is entitled to one vote per share on all matters on which such stockholders are entitled to vote. Since the shares of common stock do not have cumulative voting rights, the holders of more than fifty percent of the shares voting for the election of directors can elect all the directors if they choose to do so and, in such event, the holders of the remaining shares will not be able to elect any person to the Board of Directors.
DIVIDEND POLICY
Holders of our common stock are entitled to dividends if declared by the Board of Directors out of funds legally available therefore. We do not anticipate the declaration or payment of any dividends in the foreseeable future. We intend to retain earnings, if any, to finance the development and expansion of our business. Future dividend policy will be subject to the discretion of the Board of Directors and will be contingent upon future earnings, if any, our financial condition, capital requirements, general business conditions and other factors. Therefore, there can be no assurance that any dividends of any kind will ever be paid.
SHARE PURCHASE WARRANTS
We have not issued and do not have outstanding any warrants to purchase shares of our common stock.
OPTIONS
We have not issued and do not have outstanding any options to purchase shares of our common stock.
CONVERTIBLE SECURITIES
We have not issued and do not have outstanding any securities convertible into shares of our common stock or any rights convertible or exchangeable into shares of our common stock.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Our officers and directors are indemnified as provided by the Nevada Revised Statutes (the "NRS") and our bylaws.
Under the NRS, director immunity from liability to a company or its shareholders for monetary liabilities applies automatically unless it is specifically limited by a company's articles of incorporation that is not the case with our articles of incorporation. Excepted from that immunity are:
(1) a willful failure to deal fairly with the company or its shareholders in connection with a matter in which the director has a material conflict of interest;
(2) a violation of criminal law (unless the director had reasonable cause to believe that his or her conduct was lawful or no reasonable cause to believe that his or her conduct was unlawful);
(3) a transaction from which the director derived an improper personal profit; and
(4) willful misconduct.
Our bylaws provide that we will indemnify our directors and officers to the fullest extent not prohibited by Nevada law; provided, however, that we may modify the extent of such indemnification by individual contracts with our directors and officers; and, provided, further, that we shall not be required to indemnify any director or officer in connection with any proceeding (or part thereof) initiated by such person unless:
(1) such indemnification is expressly required to be made by law;
(2) the proceeding was authorized by our Board of Directors;
(3) such indemnification is provided by us, in our sole discretion, pursuant to the powers vested us under Nevada law; or
(4) such indemnification is required to be made pursuant to the bylaws.
Our bylaws provide that we will advance all expenses incurred to any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he is or was our director or officer, or is or was serving at our request as a director or executive officer of another company, partnership, joint venture, trust or other enterprise, prior to the final disposition of the proceeding, promptly following request. This advanced of expenses is to be made upon receipt of an undertaking by or on behalf of such person to repay said amounts should it be ultimately determined that the person was not entitled to be indemnified under our bylaws or otherwise.
Our bylaws also provide that no advance shall be made by us to any officer in any action, suit or proceeding, whether civil, criminal, administrative or investigative, if a determination is reasonably and promptly made: (a) by the board of directors by a majority vote of a quorum consisting of directors who were not parties to the proceeding; or (b) if such quorum is not obtainable, or, even if obtainable, a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, that the facts known to the decision- making party at the time such determination is made demonstrate clearly and convincingly that such person acted in bad faith or in a manner that such person did not believe to be in or not opposed to our best interests.
FINANCIAL STATEMENTS
Our pro forma financial statements for the period ended November 30, 2013 showing what our financial position would have been if our acquisition of Agraburst described in the "Description of Business" section had occurred at November 30, 2013 are filed as an exhibit to this current report. Readers are advised to review these pro forma financial statements in conjunction with our interim report on Form 10-Q for the period ended November 30, 2013, as well as our annual report on Form 10-K for the fiscal year ended May 31, 2013.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
We have had no changes in or disagreements with our accountants.
ITEM 3.02. UNREGISTERED SALES OF EQUITY SECURITIES
On February 7, 2014, we issued 12,500,000 shares of our common stock to Joseph Fewer (as to 11,500,000), and certain assignees, namely Helen Keenan (500,000 shares), Alan Hughes (250,000 shares), Ronald Evinou (250,000 shares),in connection with our purchase of the technology described in in the United States provisional patent application number 61/897,584 - "Composition and Method for Enhancing Plant Growth", as well as all related assets necessary for operating the Agraburst plant growth surfactant manufacture and sales business as a going concern.
On February 7, 2014, we issued 2,500,000 shares of our common stock to Joseph Fewer and Denise Fewer in connection with an easement agreement whereby we acquire the right to use a portion of their farm located in Alymer, Ontario for the purposes of using it as a demonstration farm in order to evaluate and exhibit the effects of Agraburst.
On February 7, 2014, we issued 5,000,000 shares of our common stock to Stephen Moseley in connection with our acquisition of certain equipment used in conjunction with the production, marketing of Agraburst.
On January 6, 2014, we issued 300,000 shares of our common stock to Peter Born pursuant to a private placement subscription agreement. Mr. Born paid $0.35 per share.
On February 3, 2014, we issued 100,000 shares of our common stock to Richard Williams and 30,000 shares to Judith Weiss pursuant to private placement subscription agreements. They each paid $0.35 per share.
We issued the shares to Joseph Fewer, Denise Fewer, and Stephen Moseley pursuant to Section 4(2) of the Securities Act of 1933. We were able to rely upon this exemption since this issuance does not constitute a public offering of our shares.
In connection with these issuances, the shareholders were provided with access to all material aspects of the company, including the business, management, offering details, risk factors and financial statements. They also represented to us that they were acquiring the shares as principal for their own accounts with investment intent. They also represented that they was sophisticated, having prior investment experience and having adequate and reasonable opportunity and access to any corporate information necessary to make an informed decision. This issuance of securities was not accompanied by general advertisement or general solicitation. The shares were issued with a Rule 144 restrictive legend.
We issued the shares to Peter Born, Richard Williams, and Judith Weiss pursuant to Regulation S of the Securities Act of 1933. These investors were not U.S. persons (as that term is defined in Regulation S of the Securities Act of 1933, as amended) and they purchased our shares in transactions outside of the United States. The certificates representing the common shares each bear a restrictive legend in accordance with Regulation S. In addition, we and the purchaser have complied or will comply with the following requirements of Regulation S:
1. the offer or sale was made in an offshore transaction;
2. we did not make any directed selling efforts in the United States;
3. no offer or sale was made to a U.S. person or for the account or benefit of a U.S. person;
4. the purchasers of the securities certified that they were not U.S. persons and were not acquiring the securities for the account or benefit of any U.S. person;
5. the purchasers of the securities agreed to resell such securities only in accordance with the provisions of Regulation S, pursuant to registration under the Act, or pursuant to an available exemption from registration and agreed not to engage in hedging transactions with regard to such securities unless in compliance with the Act; and
6. we are required to refuse to register any transfer of the securities not made in accordance with the provisions of Regulation S pursuant to registration under the Act, or pursuant to an available exemption from registration.
ITEM 5.01. CHANGES IN CONTROL OF REGISTRANT
On February 7, 2014 we completed asset purchase agreements whereby we issued 12,500,000 restricted shares of our common stock to Joseph Fewer, and 5,000,000 restricted shares of our common stock to Stephen Moseley. In addition, we issued 2,500,000 restricted shares of common stock to Joseph Fewer and Denise Fewer pursuant to an easement agreement.
Concurrently, Maria Fernandes, our former director, agreed to sell 10,000,000 shares of restricted common stock to Joseph Fewer for $10,000. She also agreed to return to treasury a total of 74,000,000 restricted shares in our common stock, thereby relinquishing control. As a result of these transactions, Joseph Fewer is the beneficial owner of 31% of our issued common stock and Joseph Fewer and Alan Hughes now control our Board of Directors.
ITEM 5.02. DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS
On February 7, 2014, we appointed Joseph Fewer and Alan Hughes as our directors in place of Maria Fernandes, who tendered her resignation as of that date.
Our officers now consist of Joseph Fewer (President, C.E.O., Secretary, and Treasurer) and Alan Hughes (Chief Operating Officer).
ITEM 5.06. CHANGE IN SHELL COMPANY STATUS
As a result of the closing of between us and Joseph Fewer, management believes that we have ceased to be a shell company as defined in Rule 12b-2 of the Securities Exchange Act. Details of the material terms of the asset purchase agreement that led to our change in shell company status are contained in Item 2.01 in this current report.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS
Exhibit No. Description
----------- -----------
10.1 Asset Purchase Agreement
10.2 Asset Purchase Agreement
10.3 Easement Agreement
99.1 Pro Forma Financial Statements
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
GroGenesis, Inc.
Date: February 7, 2014 By: /s/ Joseph Fewer
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Joseph Fewer, President
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Exhibit 10.1
ASSET PURCHASE AGREEMENT
THIS AGREEMENT is made effective this 9th day of September, 2013.
BETWEEN:
JOSEPH FEWER, DOING BUSINESS AS HACIENDA ACRES, of 7123 Hacienda Road,
RR #6, Aylmer, Ontario, N5H 2R5;
("Fewer")
OF THE FIRST PART
AND:
LISBOA LEISURE, INC., a company incorporated pursuant to the laws of Nevada with an office located at H 16/B, Adsulim, Benaulim, Goa, India, 403716;
("Lisboa")
OF THE SECOND PART
WHEREAS:
A. Fewer is the owner of a 100% interest in the intellectual property described Schedule "A" hereto, as well as all related assets necessary for operating a plant growth enhancement product manufacture and sales business as a going concern (collectively, "the Assets");
B. Fewer has agreed to sell and transfer the Assets to Lisboa and Lisboa has agreed to purchase the Assets from Fewer upon the following terms and conditions; and
C. Upon execution of this Agreement, Lisboa will forthwith incorporate a new corporation (the "Subsidiary") that will act as a subsidiary for the operation of the plant growth enhancement product manufacture and sales business contemplated by this Agreement and will own the Assets.
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the premises and mutual agreements and covenants herein contained, the parties hereby covenant and agree as follows:
1. FEWER'S REPRESENTATIONS
Fewer represents and warrants to Lisboa now and at the Closing Date that:
(a) Fewer has good and sufficient right and authority to enter into this Agreement on the terms and conditions herein set forth and to transfer the legal title and beneficial ownership of the Assets to the Subsidiary;
(b) the performance of this Agreement will not be in violation of any Agreement to which Fewer is a party, whether written or verbal, and will not give any person or company any right to terminate or cancel any agreement or any right enjoyed by Fewer and will not result in the creation or imposition of any lien, encumbrance or restriction of any nature whatsoever in favour of a third party upon or against the Assets;
(c) Fewer has good and marketable title to the Assets, all of which are free and clear of all liens, charges and encumbrances, and are in the possession of or under the control of Fewer;
(d) there has been no act of God, damage, destruction, loss, labour disruption or trouble, or other event (whether or not covered by insurance) materially and adversely affecting any of the Assets or the organization, operations, affairs, business, properties, prospects or financial condition or position of Fewer's business operations;
(e) Fewer holds, and shall transfer to the Subsidiary at the Closing Date, all permits, licences, registrations and authorizations necessary to own and operate the Assets and carry on its business;
(f) Fewer has not, directly or indirectly, engaged or entered into any transaction or incurred any liability or obligation which might materially and adversely affect any of the Assets;
(g) there is no known indebtedness of Fewer to any person which might, by operation of law or otherwise, now or hereafter constitute or be capable of forming an encumbrance upon any of the Assets and there is no known indebtedness of any kind whatsoever relating to the business in respect of which the Subsidiary may become liable on or after the Closing Date;
(h) no known action, suit, judgment, investigation, inquiry, assessment, reassessment, litigation, determination or administrative or other proceeding or arbitration before or of any court, arbitrator or governmental authority is in process, or pending or threatened, against or relating to Fewer's Assets and no known state of facts exists which could constitute the basis therefor;
(i) all tangible rights, assets and properties comprising the Assets are free from material defect, are in good condition and repair and (where applicable) are in proper working order, having regard to the use and age thereof;
(j) there is no known written, oral or implied agreement, option, understanding or commitment or any right or privilege capable of becoming any of the same, for the purchase from Fewer of his Assets, other than purchase orders accepted by Fewer in the usual and ordinary course of the operation of his business; and
(k) none of the Assets is in any respect infringing the right of any person under or in respect of any patent, design, trade mark, trade name, copyright or other industrial or intellectual property.
2. LISBOA'S REPRESENTATIONS
Lisboa represents and warrants to Fewer now and at the Closing Date that:
(a) Lisboa is a corporation duly incorporated, validly existing and in good standing under the laws of Nevada and is a United States reporting company; and
(b) Lisboa is in good standing with the U.S. Securities & Exchange Commission (the "Commission"). All of Lisboa's filings submitted to the Commission are true and accurate as at the date of such filing; and
(c) Lisboa has good and sufficient right and authority to enter into this Agreement on the terms and conditions herein set forth.
3. EFFECT OF REPRESENTATIONS
3.1 The representations and warranties of Fewer and Lisboa (the "Parties") set out above form a part of this Agreement and are conditions upon which the Parties have relied in entering into this Agreement and shall survive the acquisition of the Assets by Lisboa.
4. PURCHASE AND SALE OF ASSETS
For the mutual valuable consideration set forth in this paragraph, the Parties hereby agree as follows:
4.1 Forthwith upon execution of this Agreement, Lisboa shall take steps to incorporate the Subsidiary.
4.2 Fewer hereby agrees to sell and transfer to the Subsidiary a 100% right, interest, and title to the Assets in consideration of Lisboa issuing to Fewer, or any other parties designated by Fewer, an aggregate of 12,500,000 post-split shares of restricted common stock in the capital of Lisboa.
4.3 The Parties hereby agree that they will cause the Subsidiary to execute a consulting agreement with Fewer in the form attached hereto as Schedule "B" (the "Consulting Agreement") on the Closing Date.
5. CLOSING
The sale and purchase of the Assets shall be closed at the office of Hacienda Acres (Ontario time) on October 15, 2013 or on such other date or at such other place as may be agreed upon by the parties (the "Closing Date" or "Closing").
6. ACTIONS BY THE PARTIES PENDING CLOSING
From and after the date hereof and until the Closing Date, the Parties covenant and agree that:
(a) Lisboa, and its authorized representatives, shall have full access during normal business hours to all documents of Fewer relating to the Assets and shall have full access to inspect the Assets, and Fewer shall furnish to Lisboa or its authorized representatives all information with respect to the Assets as Lisboa may reasonably request;
(b) Fewer, and his authorized representatives, shall have full access during normal business hours to all documents relating to Lisboa's affairs that Fewer may reasonably request; and
(c) Fewer shall not enter into any contract or commitment to purchase or sell any interest in the Assets without the prior written consent of Lisboa.
7. CONDITIONS PRECEDENT TO FEWER'S OBLIGATIONS
Each and every obligation of Fewer to be performed on the Closing Date shall be subject to the satisfaction by the Closing Date of the following conditions, unless waived in writing by Fewer:
(a) The representations and warranties made by Lisboa in this Agreement shall be true and correct on and as of the Closing Date with the same effect as though such representations and warranties had been made or given by the Closing Date;
(b) Lisboa shall have completed a forward split of its common stock such that every share of pre-split common stock shall be exchanged for 25 post-split shares of common stock;
(c) Lisboa shall have changed its name to "GroGenesis, Inc.", or such other name acceptable to Fewer;
(d) Lisboa shall deliver to Fewer:
(i) a copy of resolutions of Lisboa's Board of Directors authorizing the execution of this Agreement and the acquisition of the Assets;
(ii) copies of the incorporation documents for the Subsidiary;
(iii) a share certificate representing 12,500,000 post-split shares of common stock in the capital of Lisboa issued in the name of Fewer, or any other nominees that Fewer designates; and
(iv) a copy of a current report on Form 8-K that includes pro forma financial statements showing Lisboa's financial position upon completion of its acquisition of the Assets; and
(v) an executed copy of the Consulting Agreement.
8. CONDITIONS PRECEDENT TO LISBOA'S OBLIGATIONS
Each and every obligation of Lisboa to be performed on the Closing Date shall be subject to the satisfaction by the Closing Date of the following conditions, unless waived in writing by Lisboa:
(a) The representations and warranties made by Fewer in this Agreement shall be true and correct on and as of the Closing Date with the same effect as though such representations and warranties had been made or given by the Closing Date; and
(b) Fewer shall deliver to Lisboa
(i) a bill of sale evidencing the sale and transfer of title to the Assets to the Subsidiary; and
(ii) an executed copy of the Consulting Agreement.
9. SUBSIDIARY DIRECTORS AND MANAGEMENT
The Parties hereto shall cause the initial director of the board of the Subsidiary to be Steven Moseley who will also act as the President, Chief Executive Officer, and Secretary of the Subsidiary.
10. FURTHER ASSURANCES
The parties hereto covenant and agree to do such further acts and execute and deliver all such further deeds and documents as shall be reasonably required in order to fully perform and carry out the terms and intent of this Agreement.
11. ENTIRE AGREEMENT
This Agreement constitutes the entire agreement to date between the parties hereto and supersedes every previous agreement, communication, expectation, negotiation, representation or understanding, whether oral or written, express or implied, statutory or otherwise, between the parties with respect to the subject of this Agreement.
12. TIME OF ESSENCE
Time shall be of the essence of this Agreement.
13. TITLES AND RECITALS
The titles to the respective sections hereof shall not be deemed a part of this Agreement but shall be regarded as having been used for convenience only. The Parties intend the recitals to this Agreement to be binding and effective terms of this Agreement.
14. SEVERABILITY
If any one or more of the provisions contained herein should be invalid, illegal or unenforceable in any respect in any jurisdictions, the validity, legality and enforceability of such provisions shall not in any way be affected or impaired thereby in any other jurisdiction and the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby.
15. APPLICABLE LAW
The situs of the Agreement is Aylmer, Ontario, and for all purposes this Agreement will be governed exclusively by and construed and enforced in accordance with laws prevailing in the Province of Ontario. The parties agree to attorn to the jurisdiction of the Courts of the Province of Ontario.
17. ENUREMENT
This Agreement shall enure to the benefit of and be binding upon the parties hereto and their respective successors and permitted assigns.
IN WITNESS WHEREOF this Agreement has been executed as of the day and year first above written.
LISBOA LEISURE INC.
/s/ Joseph Fewer per: /s/ Maria Fernandes ------------------------------- --------------------------------- JOSEPH FEWER in his personal Authorized Signatory capacity and doing business as Hacienda Acres |
SCHEDULE "A"
TO THAT CERTAIN AGREEMENT MADE AS OF SEPTEMBER 9TH, 2013
BETWEEN JOSEPH FEWER DOING BUSINESS AS HACIENDA ACRES
AND LISBOA LEISURE INC.
The intellectual property described in Recital "A" to this Agreement and forming part of the Assets is more particularly described by the following patent application filed with the United States Patent and Trademark Office:
United States provisional patent application number 61/897,584 - "Composition and Method for Enhancing Plant Growth"
SCHEDULE "B"
TO THAT CERTAIN AGREEMENT MADE AS OF SEPTEMBER 9TH, 2013
BETWEEN JOSEPH FEWER DOING BUSINESS AS HACIENDA ACRES
AND LISBOA LEISURE INC.
1. CONSULTING AGREEMENT
THIS AGREEMENT dated as of the o, 2013.
BETWEEN:
GROGENESIS INC., a company incorporated pursuant to the laws of USA, an office located at 8810 Hwy 79 North, Springville, Tennessee, 38256;
(the "Company")
AND:
JOSEPH FEWER, having an address at 7123 Hacienda Road, RR #6, Aylmer, Ontario, N5H 2R5;
(the "Consultant")
WHEREAS:
A. The Company wishes to obtain the services of the Consultant who will be involved in the production, marketing, and sales of the Company's products; and
B. The Consultant is qualified to undertake the duties outlined in this Agreement;
THEREFORE in consideration of the foregoing recitals and of the mutual promises, covenants and agreements hereinafter set forth, the parties promise, covenant and agree that:
2. CONSULTANCY
(a) Position
(i) The Company hereby retains the Consultant to supervise and manage operations on a full-time basis.
(b) Term
(i) The term of this Agreement shall commence on the date that GroGenesis, Inc. ("GroGenesis"), the parent corporation of the Company, raises a minimum sum of US$500,000 for the Company's operations and shall continue until it is terminated in accordance with this Agreement.
(c) Duties
(i) The Consultant shall perform such duties and render such services as and when prescribed by the Board of Directors of the Company or GroGenesis (the "Boards") and in accordance with such instructions and directions of the Board as are lawfully assigned or communicated to him and as are consistent with the position of President and of manager of operations. The Consultant shall perform such duties on behalf of Company and, as directed by the Board.
(ii) The Consultant understands that the Consultant is retained on a full-time basis with Company. Throughout the term of this Agreement, the Consultant shall:
I. diligently, honestly and faithfully serve Company and shall use his best efforts to promote and advance the interests and goodwill of Company;
II. conduct himself at all times in a manner which is not prejudicial to Company interests;
III. except as permitted in this Agreement or authorized by the Board in writing, devote all of his business time to the business and affairs of Company;
IV. refrain from engaging in any activity which shall in any manner, directly or indirectly, compete with the trade or business of Company; and
V. without the consent in writing of the Board, not acquire, directly or indirectly, any interest in a firm, partnership, association or corporation, the business and operations of which in any manner, directly or indirectly, compete with the trade or business of Company other than publicly traded stocks representing not more than 10% of any such firm, partnership, association or corporation.
3. REMUNERATION
(a) Salary
(i) During the currency of this Agreement, the Company shall pay to the Consultant a monthly salary of $7,000 (the "Salary") for all hours worked. The Salary shall be payable monthly in advance.
(ii) The Company shall have the right to deduct and withhold from the Consultant's compensation any amounts required to be deducted and remitted under any applicable local, domestic or other laws of general application to the consultancy relationship. The Consultant shall have the right to charge the company any applicable taxes, including Goods & Services Tax or Harmonized Sales Tax.
(b) Reimbursement of Expenses
(i) The Company shall reimburse the Consultant for all reasonable travel, promotional and other business expenses actually and properly incurred by the Consultant in the performance of his duties for the Company.
4. TERMINATION OF CONSULTANCY
(a) Termination by Consultant
(i) The Consultant may terminate this Agreement by giving 90 days written notice of resignation to Company. At the time the Consultant provides the Company with notice of resignation, or at any time thereafter, the Company shall have the right to elect to terminate the this Agreement at any time prior to the end of the effective date of the Consultant's resignation, and upon such election, shall provide to the Consultant a lump sum equal to 30 days of the Salary or to such proportion of the 30 days that remain outstanding at the time of the election and shall continue to provide only those benefits that Company is permitted or able to provide under the applicable rules of the relevant plans for the lesser of 30 days or the period of time that remains outstanding at the time of the Company's election.
(b) Termination by Company Without Cause
(i) The Company may immediately terminate this Agreement without cause at any time by providing the Consultant with a written notice of termination together with a lump sum payment in an amount equal to six month's Salary.
(ii) The Consultant agrees that the Consultant shall not be entitled, to any remuneration, compensation or other benefits other than those expressly provided for in this Agreement.
(c) Termination by Company for Just Cause
(i) Notwithstanding any other provision of this Agreement, the Company may on written notice to the Consultant immediately terminate this Agreement with the Company at any time for "cause", without notice or payment in lieu of notice or any other form of compensation, severance pay or damages.
(ii) For the purposes of this Agreement, "cause" has the meaning commonly ascribed to the phrase "cause" or "just cause for termination" in the courts of the Province of Ontario, and without limiting the foregoing, includes any of the following acts or omissions:
I. the wilful failure of the Consultant to follow the instructions of the Company;
II. the wilful failure of the Consultant to perform the reasonable duties assigned to him by the Company;
III. the Consultant's misconduct, dishonesty, or any material violation of the Company's policies and procedures in effect from time to time;
IV. the material breach or non-observance of any of the provisions of this Agreement by the Consultant;
V. any breach of Sections 5 and 6 of this Agreement; or
VI. any conduct of the Consultant which tends to bring him or the Company into disrepute and which is not corrected within a reasonable time after the Company gives written notice to the Consultant specifying the conduct.
5. CONFIDENTIALITY AND OWNERSHIP OF COMPANY PROPERTY
(a) Confidential and Proprietary Information
(i) The Consultant acknowledges that, by reason of the Consultant's position with the Company, the Consultant will have access to Confidential and Proprietary Information, as hereinafter defined, of the Company, that the Company has or will spend time, effort and money to develop and acquire.
(ii) The term "Confidential and Proprietary Information" as used in this Agreement means all trade secrets, proprietary information and other data or information (and any tangible evidence, record or representation thereof) whether prepared, conceived or developed by an Consultant or agent of the Company (including the Consultant) or received by the Company from an outside source which is maintained in confidence by the Company or any of its customers. Without limiting the generality of the foregoing, Confidential and Proprietary Information includes information of the Company pertaining to:
I. business improvements and processes; marketing and selling plans; business opportunities, plans (whether pursued or not) and budgets; unpublished financial statements; licenses; pricing, pricing strategy and cost data; information regarding the skills and compensation of Consultants; the identities of clients and potential clients, customers and potential customers (collectively, "Customers"); the identities of contact persons at Customers; the preferences and needs of Customers; information regarding sales calls, timing, sales terms, service plans, methods, practices, strategies, forecasts, know-how, and other marketing techniques; the identities of key accounts, potential key accounts; the identities of suppliers and Consultants, and all information about those
supplier and Consultant relationships; research and development plans or projects, data and reports; computer materials such as programs, instructions, source and object code, and printouts; formulas, inventions, developments and discoveries; and product information, including testing information;
II. any information relating to the relationship of the Company with any personnel, suppliers, principals, investors, contacts or prospects of the Company and any information relating to the requirements, specifications, proposals, orders, contracts or transactions of or with any such persons; and
III. financial information, including the Company's costs, financing or debt arrangements, income, profits, salaries or wages.
(iii) The Consultant acknowledges that the Confidential and Proprietary Information is a valuable and unique asset of the Company and that the Confidential and Proprietary Information is and will remain the exclusive property of the Company.
(iv) The Consultant agrees to maintain securely and hold in strict confidence all Confidential and Proprietary Information received, acquired or developed by the Consultant or disclosed to the Consultant as a result of or in connection with the Consultant's position with the Company. The Consultant agrees that, both during his relationship with the Company and after the termination of this Agreement, the Consultant will not, directly or indirectly, divulge, communicate, use, copy or disclose or permit others to use, copy or disclose, any Confidential and Proprietary Information to any person, except as such disclosure or use is required to perform his duties hereunder or as may be consented to by prior written authorization of the Board.
(v) The obligation of confidentiality imposed by this Agreement shall not apply to information that appears in issued patents or printed publications, that otherwise becomes generally known in the industry through no act of the Consultant in breach of this Agreement, or that is required to be disclosed by court order or applicable law.
(vi) The Consultant understands that the Company has from time to time in its possession information belonging to third parties or which is claimed by third parties to be confidential or proprietary and which the Company has agreed to keep confidential. The Consultant agrees that all such information shall be Confidential and Proprietary Information for the purposes of this Agreement.
(vii) The Consultant represents and warrants that the Consultant has not brought and will not bring with the Consultant to the Company, and that the Consultant has not used and will not use, while performing the Consultant's duties for the Company, any materials or documents of a former company which the Consultant is under a duty not to disclose. The Consultant understands that, while retained by the Company, the Consultant shall not breach any obligation or confidence or duty the Consultant may have to a former Company and the Consultant agrees that the Consultant will fulfil all such obligations during the Consultant's relationship with the Company.
(viii) The Consultant represents and warrants that the Consultant will not, to the best of the Consultant's knowledge and belief, use or cause to be incorporated in any of the Consultant's work product any information, designs, techniques or know-how which the Consultant or the Company does not have the right to use.
(b) Ownership and Disclosure of Discoveries, Ideas and Inventions
(i) Any new technology, knowledge or information developed by the Consultant related to the business of the Company during the term of this Agreement shall be the exclusive property of the Company to the extent that such technology, knowledge or information is owned by the Consultant.
(ii) The Consultant acknowledges that all Confidential and Proprietary Information and all other discoveries, know-how, inventions, ideas, concepts, processes, products, protocols, treatments, methods, tests and improvements, computer programs, or parts thereof, conceived, developed, reduced to practice or otherwise made by the Consultant either alone or with others, during the course of the Consultant's relationship with the Company pursuant to this Agreement or any previous agreements or arrangements between the Consultant and the Company, whether or not conceived, developed, reduced to practice or made during the Consultant's regular working hours or on the premises of the Company (collectively "Inventions"), and any and all services and products which embody, emulate or employ any such Inventions will be the sole property of the Company and all copyrights, patents, patent rights, trademarks, service marks and reproduction rights to, and other proprietary rights in, each such Invention, whether or not patentable or copyrightable, will belong exclusively to the Company.
(iii) The Consultant represents and warrants that the Consultant does not claim rights in, or otherwise exclude from this Agreement, any Inventions.
(iv) The Consultant shall disclose promptly to the Company, its successors or assigns, any Inventions.
(v) The Consultant hereby assigns and agrees to assign all his rights, title and interest in the Inventions, to the Company or its nominee.
(vi) Whenever requested to do so by the Company, the Consultant shall execute any and all applications, assignments or other instruments which the Company shall deem necessary to apply for and obtain patents or copyrights of Canada, the United States or any foreign country or to otherwise protect the Company's interest in the Inventions and shall assist the Company in every proper way (entirely at the Company's expense, including reimbursement to the Consultant for all expense and loss of income) to obtain such patents and copyrights and to enforce them, inclusive of but not limited to, US Provisional Patent Application 61//858203 and US Provisional Patent Application 86/092618.
(vii) The Consultant hereby waives for the benefit of the Company and its successors and assigns any and all moral rights in respect of any Inventions.
(c) Delivery of Records
(i) The Consultant agrees that documents, copies, records and other property or materials made or received by the Consultant that pertain to the business and affairs of the Company, including all Confidential and Proprietary Information and Inventions which is in the Consultant's possession or under the Consultant's control are the property of the Company and that the Consultant will return same and any copies of same to the Company immediately upon termination of this Agreement or at any time upon the request of the Company.
6. NON-SOLICITATION
(a) During the term of this Agreement and for a period of 36 months following the termination of this Agreement, howsoever arising, the Consultant shall not (unless acting as an Consultant under this Agreement or with the prior written consent of the Board or its nominee):
I. call on, solicit, or endeavour to entice away, either directly or indirectly, any person or entity who is, or was a client, customer or potential customer of the Company who the Consultant or his subordinates solicited or serviced on behalf of the Company during the twelve month period immediately preceding the termination of this Agreement; and
II. call on, solicit, or endeavour to entice away, either directly or indirectly, any person or entity who is, or was an employee, independent contractor, or consultant of the Company during the twelve month period immediately preceding the termination of this Agreement, to terminate his or her relationship with the Company in order to become an employee, consultant or independent contractor for any person or entity other than the Company.
7. EQUITABLE RELIEF
(a) The Consultant acknowledges that the restrictions contained in Sections 5 and 6 are, in view of the nature of the business of the Company, reasonable and necessary to protect the legitimate interests of the Company, that the Company would not have entered into this Agreement in the absence of such restrictions and that any violation of any provision of those Sections could result in irreparable injury to the Company.
(b) The Consultant agrees that, in the event he violates any of the restrictions referred to in Sections 5 and 6, the Company shall be entitled to such injunctive relief or other remedies at law or in equity which the Court deems fit.
8. RIGHT TO USE THE CONSULTANT'S NAME AND LIKENESS
(a) The Consultant hereby grants to the Company, during the term of the Consultant's term with the Company, the right to use the Consultant's name, likeness and biography in connection with the Consultant's services under this Agreement and in connection with the advertising or exploitation of any project with respect to which the Consultant performs his services for the Company.
9. GENERAL
(a) No Derogation of Obligations at Law
(i) Nothing in this Agreement is intended to limit or otherwise affect the duties and obligations of the Consultant to the Company existing at common law or in equity whether during, or after the termination of, this Agreement.
(b) Waiver
(i) No consent or waiver, express or implied, by any party to this Agreement or any breach or default by any other party in the performance of its obligations under this Agreement or of any of the terms, covenants or conditions of this Agreement shall be deemed or construed to be a consent or waiver of any subsequent or continuing breach or default in such party's performance or in the terms, covenants or conditions of this Agreement. The failure of any party to this Agreement to assert any claim in a timely fashion for any of its rights or remedies under this Agreement shall not be construed as a waiver of any such claim and shall not serve to modify, alter or restrict any such party's right to assert such claim at any time thereafter.
(c) Survival of Provisions
(i) The Company and the Consultant expressly acknowledge and agree that the provisions of this Agreement, which by their express or implied terms extend beyond the termination of the Consultant's
relationship hereunder, or beyond the termination of this Agreement, shall continue in full force and effect notwithstanding the termination of the this Agreement for any reason.
(d) Notices
(i) Any notice relating to this Agreement or required or permitted to be given in accordance with this Agreement shall be in writing and shall, if to the Company, be personally delivered, emailed or mailed by registered mail, postage prepaid, to its address set out on the first page of this Agreement and, if to the Consultant, to the home address of the Consultant on the Company's records. Any notice shall be deemed to have been received if delivered or sent by email, when delivered or emailed, and if mailed, on the third day (excluding Saturdays, Sundays and holidays) after the mailing thereof. If normal mail service is interrupted the sender shall deliver such notice in order to ensure prompt receipt thereof.
(ii) Each party to this Agreement may change its address for the purpose of Section (i) by giving written notice of such change in the manner provided for in Section (i).
(e) Applicable Law
(i) This Agreement shall be governed by and construed in accordance with the laws of Ontario including the laws of Canada applicable therein, which shall be deemed to be the proper law hereof. The parties hereto hereby attorn and agree to submit to the jurisdiction of the courts of Ontario, Canada.
(f) Currency
8.6.1 Unless otherwise indicated, all funds referred to under the terms of this Agreement shall be funds designated in the lawful currency of Canada.
(g) Severability
(i) If any provision of this Agreement for any reason is declared invalid, such declaration shall not affect the validity of any remaining portion of the Agreement, which remaining portion shall remain in full force and effect as if this Agreement had been executed with the invalid portion thereof eliminated and it is hereby declared the intention of the parties that they would have executed the remaining portions of this Agreement without including therein any such part, parts or portion which may, for any reason, be hereafter declared invalid.
(h) Entire Agreement
(i) This Agreement constitutes the entire Agreement between the parties hereto in relation to the subject matter hereof and there are no representations or warranties, express or implied, statutory or otherwise other than those set forth in this Agreement. This Agreement supersedes any prior agreements,
written or oral in respect of the Consultant's relationship with the Company, and any such prior agreements are hereby terminated and cancelled.
(i) Amendment
(i) This Agreement cannot be amended or supplemented except by a written Agreement executed by all parties hereto.
(j) Counterpart
(i) This Agreement may be executed in counterpart and such counterparts together shall constitute one and the same instrument and notwithstanding the date of execution shall be deemed to bear the date as set out on the first page of this Agreement.
(k) Enurement
(i) This Agreement shall enure to the benefit of and be binding upon the parties and their respective heirs, executors, administrators, successors, personal representatives and permitted assigns.
IN WITNESS WHEREOF the parties have duly executed this Agreement as of the date set out on the first page of this Agreement
Exhibit 10.2
ASSET PURCHASE AGREEMENT
THIS AGREEMENT is made effective this 9th day of September, 2013.
BETWEEN:
STEPHEN MOSELEY, of 737 Salem Circle, Paris, Tennessee 38242,
("Moseley")
OF THE FIRST PART
AND:
LISBOA LEISURE, INC., a company incorporated pursuant to the laws of Nevada with an office located at H 16/B, Adsulim, Benaulim, Goa, India, 403716;
("Lisboa")
OF THE SECOND PART
WHEREAS:
A. Moseley is the owner of certain assets more particularly described in Schedule "A" hereto (collective the "Assets") that are used in conjunction with the production, marketing, and sale of the crop surfactant currently known as "GroGenesis" and previously referred to as "Agriboost" (collectively, "the Assets");
B. Moseley has agreed to sell and transfer the Assets to Lisboa and Lisboa has agreed to purchase the Assets from Moseley upon the following terms and conditions; and
C. Upon execution of this Agreement, Lisboa will forthwith incorporate a new company (the "Subsidiary") that will act as a subsidiary for the operation of the plant growth enhancement product manufacture and sales business contemplated by this Agreement and will own the Assets.
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the premises and mutual agreements and covenants herein contained, the parties hereby covenant and agree as follows:
1. MOSELEY'S REPRESENTATIONS
Moseley represents and warrants to Lisboa now and at the Closing Date that:
(a) Moseley has good and sufficient right and authority to enter into this Agreement on the terms and conditions herein set forth and to transfer the legal title and beneficial ownership of the Assets to the Subsidiary;
(b) the performance of this Agreement will not be in violation of any Agreement to which Moseley is a party, whether written or verbal, and will not give any person or company any right to terminate or cancel any agreement or any right enjoyed by Moseley and will not result in the creation or imposition of any lien, encumbrance or restriction of any nature whatsoever in favour of a third party upon or against the Assets;
(c) Moseley has good and marketable title to the Assets, all of which are free and clear of all liens, charges and encumbrances, and are in the possession of or under the control of Moseley;
(d) there has been no act of God, damage, destruction, loss, labour disruption or trouble, or other event (whether or not covered by insurance) materially and adversely affecting any of the Assets or the organization, operations, affairs, business, properties, prospects or financial condition or position of Moseley's business operations;
(e) Moseley holds, and shall transfer to the Subsidiary at the Closing Date, all permits, licences, registrations, and authorizations necessary to own and operate the Assets and carry on its business;
(f) Moseley has not, directly or indirectly, engaged or entered into any transaction or incurred any liability or obligation which might materially and adversely affect any of the Assets;
(g) there is no indebtedness of Moseley to any person which might, by operation of law or otherwise, now or hereafter constitute or be capable of forming an encumbrance upon any of the Assets and there is no indebtedness of any kind whatsoever relating to the business in respect of which the Subsidiary may become liable on or after the Closing Date;
(h) no action, suit, judgment, investigation, inquiry, assessment, reassessment, litigation, determination or administrative or other proceeding or arbitration before or of any court, arbitrator or governmental authority is in process, or pending or threatened, against or relating to Moseley's Assets and no state of facts exists which could constitute the basis therefor;
(i) all tangible rights, assets and properties comprising the Assets are free from material defect, are in good condition and repair and (where applicable) are in proper working order, having regard to the use and age thereof;
(j) there is no written, oral or implied agreement, option, understanding or commitment or any right or privilege capable of becoming any of the same, for the purchase from Moseley of his Assets, other than purchase orders accepted by Moseley in the usual and ordinary course of the operation of his business; and
(k) none of the Assets is in any respect infringing the right of any person under or in respect of any patent, design, trade mark, trade name, copyright or other industrial or intellectual property.
2. LISBOA'S REPRESENTATIONS
Lisboa represents and warrants to Moseley now and at the Closing Date that:
(a) Lisboa is a corporation duly incorporated, validly existing and in good standing under the laws of Nevada and is a United States reporting company; and
(b) Lisboa is in good standing with the U.S. Securities & Exchange Commission (the "Commission"). All of Lisboa's filings submitted to the Commission are true and accurate as at the date of such filing; and
(c) Lisboa has good and sufficient right and authority to enter into this Agreement on the terms and conditions herein set forth.
3. EFFECT OF REPRESENTATIONS
3.1 The representations and warranties of Moseley and Lisboa (the "Parties") set out above form a part of this Agreement and are conditions upon which the Parties have relied in entering into this Agreement and shall survive the acquisition of the Assets by Lisboa.
4. PURCHASE AND SALE OF ASSETS
For the mutual valuable consideration set forth in this paragraph, the Parties hereby agree as follows:
4.1 Forthwith upon execution of this Agreement, Lisboa shall take steps to incorporate the Subsidiary.
4.2 Moseley hereby agrees to sell and transfer to the Subsidiary a 100% right, interest, and title to the Assets in consideration of Lisboa issuing to Moseley, or any other parties designated by Moseley, an aggregate of 5,000,000 post-split shares of restricted common stock in the capital of Lisboa;
4.3 The Parties hereby agree that they will cause the Subsidiary to execute a consulting agreement with Moseley in the form attached hereto as Schedule "B" (the "Consulting Agreement") on the Closing Date.
5. CLOSING
The sale and purchase of the Assets shall be closed at Paris, Tennessee on October 15, 2013 or on such other date or at such other place as may be agreed upon by the parties (the "Closing Date" or "Closing").
6. ACTIONS BY THE PARTIES PENDING CLOSING
From and after the date hereof and until the Closing Date, the Parties covenant and agree that:
(a) Lisboa, and its authorized representatives, shall have full access during normal business hours to all documents of Moseley relating to the Assets and shall have full access to inspect the Assets, and Moseley shall furnish to Lisboa or its authorized representatives all information with respect to the Assets as Lisboa may reasonably request;
(b) Moseley, and his authorized representatives, shall have full access during normal business hours to all documents relating to Lisboa's affairs that Moseley may reasonably request; and
(c) Moseley shall not enter into any contract or commitment to purchase or sell any interest in the Assets without the prior written consent of Lisboa.
7. CONDITIONS PRECEDENT TO MOSELEY'S OBLIGATIONS
Each and every obligation of Moseley to be performed on the Closing Date shall be subject to the satisfaction by the Closing Date of the following conditions, unless waived in writing by Moseley:
(a) The representations and warranties made by Lisboa in this Agreement shall be true and correct on and as of the Closing Date with the same effect as though such representations and warranties had been made or given by the Closing Date;
(b) Lisboa shall have completed a forward split of its common stock such that every share of pre-split common stock shall be exchanged for 25 post-split shares of common stock;
(c) Lisboa shall have changed its name to "GroGenesis, Inc.", or such other name acceptable to Moseley;
(d) Lisboa shall deliver to Moseley:
(i) a copy of resolutions of Lisboa's Board of Directors authorizing the execution of this Agreement, the acquisition of the Assets, and the appointment of Moseley as a director of Lisboa in place of Maria Fernandes;
(ii) copies of the incorporation documents for the Subsidiary, along with executed minutes or resolutions appointing Moseley as the initial director of the Subsidiary;
(iii) a share certificate representing 5,000,000 post-split shares of common stock in the capital of Lisboa issued in the name of Moseley, or any other nominees that Moseley designates; and
(iv) a copy of a current report on Form 8-K that includes pro forma financial statements showing Lisboa's financial position upon completion of its acquisition of the Assets; and
(v) an executed copy of the Consulting Agreement.
8. CONDITIONS PRECEDENT TO LISBOA'S OBLIGATIONS
Each and every obligation of Lisboa to be performed on the Closing Date shall be subject to the satisfaction by the Closing Date of the following conditions, unless waived in writing by Lisboa:
(a) The representations and warranties made by Moseley in this Agreement shall be true and correct on and as of the Closing Date with the same effect as though such representations and warranties had been made or given by the Closing Date; and
(b) Moseley shall deliver to Lisboa
(i) a bill of sale evidencing the sale and transfer of title to the Assets to the Subsidiary; and
(ii) a signed consent to act as a director of Lisboa Leisure Inc.; and
(iii) an executed copy of the Consulting Agreement.
9. FURTHER ASSURANCES
The parties hereto covenant and agree to do such further acts and execute and deliver all such further deeds and documents as shall be reasonably required in order to fully perform and carry out the terms and intent of this Agreement.
10. ENTIRE AGREEMENT
This Agreement constitutes the entire agreement to date between the parties hereto and supersedes every previous agreement, communication, expectation, negotiation, representation or understanding, whether oral or written, express or implied, statutory or otherwise, between the parties with respect to the subject of this Agreement.
11. TIME OF ESSENCE
Time shall be of the essence of this Agreement.
12. TITLES AND RECITALS
The titles to the respective sections hereof shall not be deemed a part of this Agreement but shall be regarded as having been used for convenience only. The Parties intend the recitals to this Agreement to be binding and effective terms of this Agreement.
13. SEVERABILITY
If any one or more of the provisions contained herein should be invalid, illegal or unenforceable in any respect in any jurisdictions, the validity, legality and enforceability of such provisions shall not in any way be affected or impaired thereby in any other jurisdiction and the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby.
14. APPLICABLE LAW
The situs of the Agreement is Paris, Tennessee, and for all purposes this Agreement will be governed exclusively by and construed and enforced in accordance with laws prevailing in the State of Tennessee. The parties agree to attorn to the jurisdiction of the Courts of the State of Tennessee.
15. ENUREMENT
This Agreement shall enure to the benefit of and be binding upon the parties hereto and their respective successors and permitted assigns.
IN WITNESS WHEREOF this Agreement has been executed as of the day and year first above written.
LISBOA LEISURE INC.
/s/ Stephen Moseley per: /s/ Maria Fernandes ------------------------------- --------------------------------- STEPHEN MOSELEY Authorized Signatory |
SCHEDULE "A"
TO THAT CERTAIN AGREEMENT MADE AS OF SEPTEMBER 9, 2013
BETWEEN STEPHEN MOSELEY AND LISBOA LEISURE INC.
List of Assets:
1. 2 x 1400 gallon stainless steel tanks
2. 1 x 800 gallon aluninum tank
3. Tank agitators.
4. Pumps
5. Hydraulic lines and fittings
6. Shipping containers
SCHEDULE "B"
TO THAT CERTAIN AGREEMENT MADE AS OF SEPTEMBER 9, 2013
BETWEEN STEPHEN MOSELEY AND LISBOA LEISURE INC.
CONSULTING AGREEMENT
THIS AGREEMENT dated as of the o, 2014.
BETWEEN:
GROGENESIS INC., a company incorporated pursuant to the laws of USA, an office located at 8810 Hwy 79 North, Springville, Tennessee, 38256;
(the "Company")
AND:
STEPHEN MOSELEY, having an address at 737 Salem Circle, Paris, Tennessee 38242;
(the "Consultant")
WHEREAS:
A. THE COMPANY WISHES TO OBTAIN THE SERVICES OF THE CONSULTANT AS MANAGER - SALES AND MANUFACTURING, WHO WILL BE INVOLVED IN THE PRODUCTION, MARKETING, AND SALES OF THE COMPANY'S PRODUCTS; AND
B. THE CONSULTANT IS QUALIFIED TO UNDERTAKE THE DUTIES OUTLINED IN THIS AGREEMENT.
THEREFORE in consideration of the foregoing recitals and of the mutual promises, covenants and agreements hereinafter set forth, the parties promise, covenant and agree that:
1.0 CONSULTANCY
1.1 Position
1.1.1 The Company hereby retains the Consultant as Manager - Sales and Manufacturing, to provide services in relation to the production, marketing, and sales of the Company's products.
1.2 Term
1.2.1 The term of this Agreement shall commence on the date that GroGenesis Inc. ("GroGenesis"), the parent corporation of the Company, raises a minimum sum of US$500,000 for the Company's operations and shall continue until it is terminated in accordance with this Agreement.
1.3 Duties
1.3.1 The Consultant shall perform such duties and render such services as and when prescribed by the Board of Directors of the Company or GroGenesis (the "Boards") and in accordance with such instructions and directions of the Board as are lawfully assigned or communicated to him and as are consistent with the position of President and of manager of operations. The Consultant shall perform such duties on behalf of Company and, as directed by the Board.
1.3.2 The Consultant understands that the Consultant is retained on a full-time basis with Company. Throughout the term of this Agreement, the Consultant shall:
(a) diligently, honestly and faithfully serve Company and shall use his best efforts to promote and advance the interests and goodwill of Company;
(b) conduct himself at all times in a manner which is not prejudicial to Company interests;
(c) except as permitted in this Agreement or authorized by the Board in writing, devote all of his business time to the business and affairs of Company;
(d) refrain from engaging in any activity which shall in any manner, directly or indirectly, compete with the trade or business of Company; and
(e) without the consent in writing of the Board, not acquire, directly or indirectly, any interest in a firm, partnership, association or corporation, the business and operations of which in any manner, directly or indirectly, compete with the trade or business of Company other than publicly traded stocks representing not more than 10% of any such firm, partnership, association or corporation.
1.3.3 The Company hereby acknowledges that the Consultant has been involved in the sale of surfactants prior to the date of this Agreement and that the Consultant shall maintain the right to sell such products to these existing clients, as listed on SCHEDULE "A" to this Agreement, and shall have the sole right to the profit from such sales in the future, based on the product pricing structure to be sold to Consultant per Pricing Matrix table attached as SCHEDULE "B" to this Agreement.
2.0 REMUNERATION
2.1 Salary
2.1.1 During the currency of this Agreement, the Company shall pay to the Consultant a monthly salary of $5,000 (the "Salary") for all hours worked. The Salary shall be payable monthly in advance.
2.1.2 The Company shall have the right to deduct and withhold from the Consultant's compensation any amounts required to be deducted and
remitted under any applicable local, domestic or other laws of general application to the consultancy relationship. The Consultant shall have the right to charge the company any applicable taxes.
2.2 Reimbursement of Expenses
2.2.1 The Company shall reimburse the Consultant for all reasonable travel, promotional and other business expenses actually and properly incurred by the Consultant in the performance of his duties for the Company.
3.0 TERMINATION OF CONSULTANCY
3.1 Termination by Consultant
3.1.1 The Consultant may terminate this Agreement by giving 90 days written notice of resignation to Company. At the time the Consultant provides the Company with notice of resignation, or at any time thereafter, the Company shall have the right to elect to terminate the this Agreement at any time prior to the end of the effective date of the Consultant's resignation, and upon such election, shall provide to the Consultant a lump sum equal to 30 days of the Salary or to such proportion of the 30 days that remain outstanding at the time of the election and shall continue to provide only those benefits that Company is permitted or able to provide under the applicable rules of the relevant plans for the lesser of 30 days or the period of time that remains outstanding at the time of the Company's election.
3.2 Termination by Company Without Cause
3.2.1 The Company may immediately terminate this Agreement without cause at any time by providing the Consultant with a written notice of termination together with a lump sum payment in an amount equal to six month's Salary.
3.2.2 The Consultant agrees that the Consultant shall not be entitled, to any remuneration, compensation or other benefits other than those expressly provided for in this Agreement.
3.3 Termination by Company for Just Cause
3.3.1 Notwithstanding any other provision of this Agreement, the Company may on written notice to the Consultant immediately terminate this Agreement with the Company at any time for "cause", without notice or payment in lieu of notice or any other form of compensation, severance pay or damages.
3.3.2 For the purposes of this Agreement, "cause" has the meaning commonly ascribed to the phrase "cause" or "just cause for termination" in the courts of the State of Tennessee , and without limiting the foregoing, includes any of the following acts or omissions:
(a) the wilful failure of the Consultant to follow the instructions of the Company;
(b) the wilful failure of the Consultant to perform the reasonable duties assigned to him by the Company;
(c) the Consultant's misconduct, dishonesty, or any material violation of the Company's policies and procedures in effect from time to time;
(d) the material breach or non-observance of any of the provisions of this Agreement by the Consultant;
(e) any breach of Sections 4.0 and 5.0 of this Agreement; or
(f) any conduct of the Consultant which tends to bring him or the Company into disrepute and which is not corrected within a reasonable time after the Company gives written notice to the Consultant specifying the conduct.
4.0 CONFIDENTIALITY AND OWNERSHIP OF COMPANY PROPERTY
4.1 Confidential and Proprietary Information
4.1.1 The Consultant acknowledges that, by reason of the Consultant's position with the Company, the Consultant will have access to Confidential and Proprietary Information, as hereinafter defined, of the Company, that the Company has or will spend time, effort and money to develop and acquire.
4.1.2 The term "Confidential and Proprietary Information" as used in this Agreement means all trade secrets, proprietary information and other data or information (and any tangible evidence, record or representation thereof) whether prepared, conceived or developed by an Consultant or agent of the Company (including the Consultant) or received by the Company from an outside source which is maintained in confidence by the Company or any of its customers. Without limiting the generality of the foregoing, Confidential and Proprietary Information includes information of the Company pertaining to:
(a) business improvements and processes; marketing and selling plans; business opportunities, plans (whether pursued or not) and budgets; unpublished financial statements; licenses; pricing, pricing strategy and cost data; information regarding the skills and compensation of Consultants; the identities of clients and potential clients, customers and potential customers (collectively, "Customers"); the identities of contact persons at Customers; the preferences and needs of Customers; information regarding sales calls, timing, sales terms, service plans, methods, practices, strategies, forecasts, know-how, and other marketing techniques; the identities of key accounts, potential key accounts; the identities of suppliers and Consultants, and all information about those supplier and Consultant relationships; research and development plans or projects, data and reports; computer materials such as programs, instructions,
source and object code, and printouts; formulas, inventions, developments and discoveries; and product information, including testing information;
(b) any information relating to the relationship of the Company with any personnel, suppliers, principals, investors, contacts or prospects of the Company and any information relating to the requirements, specifications, proposals, orders, contracts or transactions of or with any such persons; and
(c) financial information, including the Company's costs, financing or debt arrangements, income, profits, salaries or wages.
4.1.3 The Consultant acknowledges that the Confidential and Proprietary Information is a valuable and unique asset of the Company and that the Confidential and Proprietary Information is and will remain the exclusive property of the Company.
4.1.4 The Consultant agrees to maintain securely and hold in strict confidence all Confidential and Proprietary Information received, acquired or developed by the Consultant or disclosed to the Consultant as a result of or in connection with the Consultant's position with the Company. The Consultant agrees that, both during his relationship with the Company and after the termination of this Agreement, the Consultant will not, directly or indirectly, divulge, communicate, use, copy or disclose or permit others to use, copy or disclose, any Confidential and Proprietary Information to any person, except as such disclosure or use is required to perform his duties hereunder or as may be consented to by prior written authorization of the Board. 4.1.5 The obligation of confidentiality imposed by this Agreement shall not apply to information that appears in issued patents or printed publications, that otherwise becomes generally known in the industry through no act of the Consultant in breach of this Agreement, or that is required to be disclosed by court order or applicable law.
4.1.6 The Consultant understands that the Company has from time to time in its possession information belonging to third parties or which is claimed by third parties to be confidential or proprietary and which the Company has agreed to keep confidential. The Consultant agrees that all such information shall be Confidential and Proprietary Information for the purposes of this Agreement.
4.1.7 The Consultant represents and warrants that the Consultant has not brought and will not bring with the Consultant to the Company, and that the Consultant has not used and will not use, while performing the Consultant's duties for the Company, any materials or documents of a former company which the Consultant is under a duty not to disclose. The Consultant understands that, while retained by the Company, the Consultant shall not breach any obligation or confidence or duty the Consultant may have to a former Company and the Consultant agrees that the Consultant will fulfil all such obligations during the Consultant's relationship with the Company.
4.1.8 The Consultant represents and warrants that the Consultant will not, to the best of the Consultant's knowledge and belief, use or cause to be incorporated in any of the Consultant's work product any information, designs, techniques or know-how which the Consultant or the Company does not have the right to use.
4.2 Ownership and Disclosure of Discoveries, Ideas and Inventions
4.2.1 Any new technology, knowledge or information developed by the Consultant related to the business of the Company during the term of this Agreement shall be the exclusive property of the Company to the extent that such technology, knowledge or information is owned by the Consultant.
4.2.2 The Consultant acknowledges that all Confidential and Proprietary Information and all other discoveries, know-how, inventions, ideas, concepts, processes, products, protocols, treatments, methods, tests and improvements, computer programs, or parts thereof, conceived, developed, reduced to practice or otherwise made by the Consultant either alone or with others, during the course of the Consultant's relationship with the Company pursuant to this Agreement or any previous agreements or arrangements between the Consultant and the Company, whether or not conceived, developed, reduced to practice or made during the Consultant's regular working hours or on the premises of the Company (collectively "Inventions"), and any and all services and products which embody, emulate or employ any such Inventions will be the sole property of the Company and all copyrights, patents, patent rights, trademarks, service marks and reproduction rights to, and other proprietary rights in, each such Invention, whether or not patentable or copyrightable, will belong exclusively to the Company.
4.2.3 The Consultant represents and warrants that the Consultant does not claim rights in, or otherwise exclude from this Agreement, any Inventions.
4.2.4 The Consultant shall disclose promptly to the Company, its successors or assigns, any Inventions.
4.2.5 The Consultant hereby assigns and agrees to assign all his rights, title and interest in the Inventions, to the Company or its nominee.
4.2.6 Whenever requested to do so by the Company, the Consultant shall execute any and all applications, assignments or other instruments which the Company shall deem necessary to apply for and obtain patents or copyrights of Canada, the United States or any foreign country or to otherwise protect the Company's interest in the Inventions and shall assist the Company in every proper way (entirely at the Company's expense, including reimbursement to the Consultant for all expense and loss of income) to obtain such patents and copyrights and to enforce them.
4.2.7 The Consultant hereby waives for the benefit of the Company and its successors and assigns any and all moral rights in respect of any Inventions.
4.3 Delivery of Records
4.3.1 The Consultant agrees that documents, copies, records and other property or materials made or received by the Consultant that pertain to the business and affairs of the Company, including all Confidential and Proprietary Information and Inventions which is in the Consultant's possession or under the Consultant's control are the property of the Company and that the Consultant will return same and any copies of same to the Company immediately upon termination of this Agreement or at any time upon the request of the Company.
5.0 NON-SOLICITATION
5.1 During the term of this Agreement and for a period of 36 months following the termination of this Agreement, howsoever arising, the Consultant shall not (unless acting as an Consultant under this Agreement or with the prior written consent of the Board or its nominee):
(a) call on, solicit, or endeavour to entice away, either directly or indirectly, any person or entity who is, or was a client, customer or potential customer of the Company who the Consultant or his subordinates solicited or serviced on behalf of the Company during the twelve month period immediately preceding the termination of this Agreement; and
(b) call on, solicit, or endeavour to entice away, either directly or indirectly, any person or entity who is, or was an employee, independent contractor, or consultant of the Company during the twelve month period immediately preceding the termination of this Agreement, to terminate his or her relationship with the Company in order to become an employee, consultant or independent contractor for any person or entity other than the Company.
6.0 EQUITABLE RELIEF
6.1 The Consultant acknowledges that the restrictions contained in Sections 4.0 and 5.0 are, in view of the nature of the business of the Company, reasonable and necessary to protect the legitimate interests of the Company, that the Company would not have entered into this Agreement in the absence of such restrictions and that any violation of any provision of those Sections could result in irreparable injury to the Company.
6.2 The Consultant agrees that, in the event he violates any of the restrictions referred to in Sections 4.0 and 5.0, the Company shall be entitled to such injunctive relief or other remedies at law or in equity which the Court deems fit.
7.0 RIGHT TO USE THE CONSULTANT'S NAME AND LIKENESS
7.1 The Consultant hereby grants to the Company, during the term of the Consultant's term with the Company, the right to use the Consultant's name, likeness and biography in connection with the Consultant's services under this Agreement and in connection with the advertising or exploitation of any project with respect to which the Consultant performs his services for the Company.
8.0 GENERAL
8.1 No Derogation of Obligations at Law
8.1.1 Nothing in this Agreement is intended to limit or otherwise affect the duties and obligations of the Consultant to the Company existing at common law or in equity whether during, or after the termination of, this Agreement.
8.2 Waiver
8.2.1 No consent or waiver, express or implied, by any party to this Agreement or any breach or default by any other party in the performance of its obligations under this Agreement or of any of the terms, covenants or conditions of this Agreement shall be deemed or construed to be a consent or waiver of any subsequent or continuing breach or default in such party's performance or in the terms, covenants or conditions of this Agreement. The failure of any party to this Agreement to assert any claim in a timely fashion for any of its rights or remedies under this Agreement shall not be construed as a waiver of any such claim and shall not serve to modify, alter or restrict any such party's right to assert such claim at any time thereafter.
8.3 Survival of Provisions
8.3.1 The Company and the Consultant expressly acknowledge and agree that the provisions of this Agreement, which by their express or implied terms extend beyond the termination of the Consultant's relationship hereunder, or beyond the termination of this Agreement, shall continue in full force and effect notwithstanding the termination of the this Agreement for any reason.
8.4 Notices
8.4.1 Any notice relating to this Agreement or required or permitted to be given in accordance with this Agreement shall be in writing and shall, if to the Company, be personally delivered, emailed or mailed by registered mail, postage prepaid, to its address set out on the first page of this Agreement and, if to the Consultant, to the home address of the Consultant on the Company's records. Any notice shall be deemed to have been received if delivered or sent by email, when delivered or emailed, and if mailed, on the third day (excluding Saturdays, Sundays and holidays) after the mailing thereof. If normal mail service is
interrupted the sender shall deliver such notice in order to ensure prompt receipt thereof.
8.4.2 Each party to this Agreement may change its address for the purpose of Section 8.4.1 by giving written notice of such change in the manner provided for in Section 8.4.1.
8.5 Applicable Law
8.5.1 This Agreement shall be governed by and construed in accordance with the laws of Ontario including the laws of Canada applicable therein, which shall be deemed to be the proper law hereof. The parties hereto hereby attorn and agree to submit to the jurisdiction of the courts of Ontario, Canada.
8.6 Currency
8.6.1 Unless otherwise indicated, all funds referred to under the terms of this Agreement shall be funds designated in the lawful currency of Canada.
8.7 Severability
8.7.1 If any provision of this Agreement for any reason is declared invalid, such declaration shall not affect the validity of any remaining portion of the Agreement, which remaining portion shall remain in full force and effect as if this Agreement had been executed with the invalid portion thereof eliminated and it is hereby declared the intention of the parties that they would have executed the remaining portions of this Agreement without including therein any such part, parts or portion which may, for any reason, be hereafter declared invalid.
8.8 Entire Agreement
8.8.1 This Agreement constitutes the entire Agreement between the parties hereto in relation to the subject matter hereof and there are no representations or warranties, express or implied, statutory or otherwise other than those set forth in this Agreement. This Agreement supersedes any prior agreements, written or oral in respect of the Consultant's relationship with the Company, and any such prior agreements are hereby terminated and cancelled.
8.9 Amendment
8.9.1 This Agreement cannot be amended or supplemented except by a written Agreement executed by all parties hereto.
8.10 Counterpart
8.10.1 This Agreement may be executed in counterpart and such counterparts together shall constitute one and the same instrument and notwithstanding the date of execution shall be deemed to bear the date as set out on the first page of this Agreement.
8.11 Enurement
8.11.1 This Agreement shall enure to the benefit of and be binding upon the parties and their respective heirs, executors, administrators, successors, personal representatives and permitted assigns.
IN WITNESS WHEREOF the parties have duly executed this Agreement as of the date set out on the first page of this Agreement.
SCHEDULE "A"
TO THAT CERTAIN AGREEMENT MADE AS OF O, 2014
BETWEEN STEPHEN MOSELEY, AND O
The following is a list of existing clients of Stephen Moseley that are referred to in the Agreement:
STEVE MOSELEY'S CUSTOMER LIST
1 AJ Teal 28 Larry Williams 2 Andy Wengred 29 Latham Farms 3 Arzo Farms 30 Mark Shrewsberry 4 Barry Newsome 31 Maxwell View Farms 5 Billy Cobb 32 Mike Poole 6 Brandon Taul 33 Neil Stivers 7 Charles Neal 34 Nelson Hoover 8 Clayton Bloodworth 35 Ralph Smith 9 Craig Carraway 36 Randy Baldwin 10 Dennis Holubec 37 Randy Louiso 11 Derrick Woods 38 Ray Murdock 12 Durham Farms 39 Rob Prewitt 13 Fridy Farms 40 Rueben Swarey 14 Gordon Enterprises 41 Silsby Farms 15 Hal Rodgers 42 Springwood LLC 16 Haney Farms 43 Steve Carraway 17 Iron Horse Farm 44 Steve Paschall 18 John Livesay 45 Terry Mabus 19 John Smith 46 Terry Warkenton 20 John Wolheter 47 Tim Bishop 21 K & J Farms 48 Todd Harton 22 Keith Davis 49 Tony Moran 23 Kemp Farms 50 Troy Duncan 24 Kevin Wagler 51 Vernon Dell 25 Kim Nardelli 52 William Sulcer 26 L & S Farms Partnership 53 Wilson Farms 27 Lannis McConnell |
SCHEDULE "B"
DISTRIBUTOR PRICING MATRIX TABLE AS OF O, JANUARY 1 - 2014
ORDER QUANTITIES PRICE PER US GALLON ---------------- ------------------- 0 - 250 gallons $95.00 - USD 251 - 500 gallons $90.00 - USD 501 - 1000 gallons $85.00 - USD 1001 - And Up $75.00 - USD |
Note: These prices apply to distributors only. Pricing for direct sales to end users is $135.000 USD per gallon.
Exhibit 10.3
EASEMENT AGREEMENT
THIS AGREEMENT is made effective this 9th day of September, 2013.
BETWEEN:
JOSEPH FEWER, of 7123 Hacienda Road, RR #6, Aylmer, Ontario, N5H 2R5;
OF THE FIRST PART
AND:
DENISE FEWER, of 7123 Hacienda Road, RR #6, Aylmer, Ontario, N5H 2R5;
OF THE SECOND PART
AND:
LISBOA LEISURE, INC., a company incorporated pursuant to the laws of Nevada with an office located at H 16/B, Adsulim, Benaulim, Goa, India, 403716;
("Lisboa")
OF THE THIRD PART
WHEREAS:
A. Denise Fewer is the registered owner and Joseph Fewer and Denise Fewer (collectively, the "Grantors") are joint beneficial owners of the real property that is operated as a farm and is located in Aylmer, Ontario, Canada with the following legal description: Con 4, Lot 15, RP, 11R5630, Part 1 - 7123 Hacienda Road, Aylmer, Ontario N5H 2R5 (the "Property");
B. Lisboa desires the use of a portion of the Property as defined in this Agreement for the purposes of using it as a demonstration farm in order to evaluate and exhibit the effects of using the surfactant known as GroGenesis;
C. In consideration of the share issuance described herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Grantors are willing to enter into this Agreement to provide Lisboa with an easement in respect of the Property, subject to the terms and conditions set forth herein;
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the premises and mutual agreements and covenants herein contained, the parties hereby covenant and agree as follows:
1. GRANTORS' REPRESENTATIONS
The Grantors jointly and severally represent and warrant to Lisboa now and at the Closing Date that:
(a) the Grantors have good and sufficient right and authority to enter into this Agreement on the terms and conditions herein set forth and to grant the easement described herein to Lisboa;
(b) the performance of this Agreement will not be in violation of any Agreement to which the Grantors are a party, whether written or verbal, and will not give any person or company any right to terminate or cancel any agreement or any right enjoyed by the Grantors and will not result in the creation or imposition of any lien, encumbrance or restriction of any nature whatsoever in favor of a third party upon or against the Property; and
(c) the Grantors, and in particular, Denise Fewer, the registered owner of the Property, have good and marketable title to the Property, which is free and clear of all liens, charges and encumbrances.
2. LISBOA'S REPRESENTATIONS
Lisboa represents and warrants to the Grantor now and at the Closing Date that:
(a) Lisboa is a corporation duly incorporated, validly existing and in good standing under the laws of Nevada and is a United States reporting company; and
(b) Lisboa is in good standing with the U.S. Securities & Exchange Commission (the "Commission"). All of Lisboa's filings submitted to the Commission are true and accurate as at the date of such filing; and
(c) Lisboa has good and sufficient right and authority to enter into this Agreement on the terms and conditions herein set forth.
3. EFFECT OF REPRESENTATIONS
3.1 The representations and warranties of the Grantors and Lisboa (the "Parties") set out above form a part of this Agreement and are conditions upon which the Parties have relied in entering into this Agreement and shall survive the acquisition of the Assets by Lisboa.
3.2 The Parties will indemnify and save each other harmless from all loss, damage, costs, actions and suits arising out of or in connection with any breach of any representation, warranty, covenant, agreement or condition made by it and contained in this Agreement, including, without limitation, any legal fees or related costs that a Party incurs in defending any legal action that alleges a breach of any of these representations brought by a third party.
4. GRANT OF EASEMENT
For the mutual valuable consideration set forth in this paragraph, the Parties hereby agree as follows:
4.1 The Grantors hereby grants to Lisboa the exclusive right to 10 acres located on the west side of the Property to operate as a demonstration farm in order to evaluate and exhibit the effects of using the surfactant known as GroGenesis, and any subsequent crop enhancers and similar products of any nature in which Lisboa may subsequently acquire an interest (the "Easement");
4.2 Lisboa agrees to defend, indemnify, and hold harmless the Grantors, and their assigns, that may arise by reason of injury to any person or damage to any property attributable to the deliberate acts or negligence of Lisboa, as well as its officers, agents, and employees in connection with the use of the Easement;
4.3 The Easement shall remain in effect for a period of three years from the date of this Agreement and shall automatically cease immediately upon the occurrence of any of the following:
(a) Lisboa's abandonment, which shall be defined as non-use for any 12 consecutive months, whereupon all interests granted herein shall revert to the Grantors;
(b) the death of either Grantor; or
(c) upon the sale of the Property to an arm's length third party.
4.4 In consideration of the Easement, Lisboa shall issue to the Grantors, or any other parties designated by the Grantors, an aggregate of 2,500,000 post-split shares of restricted common stock in the capital of Lisboa;
5. CLOSING
The sale and purchase of the Assets shall be closed at the office of Hacienda Acres (Ontario time) on October 15, 2013 or on such other date or at such other place as may be agreed upon by the parties (the "Closing Date" or "Closing").
6. FURTHER ASSURANCES
The parties hereto covenant and agree to do such further acts and execute and deliver all such further deeds and documents as shall be reasonably required in order to fully perform and carry out the terms and intent of this Agreement.
7. ENTIRE AGREEMENT
This Agreement constitutes the entire agreement to date between the parties hereto and supersedes every previous agreement, communication, expectation, negotiation, representation or understanding, whether oral or written, express or implied, statutory or otherwise, between the parties with respect to the subject of this Agreement.
8. TIME OF ESSENCE
Time shall be of the essence of this Agreement.
9. SEVERABILITY
If any one or more of the provisions contained herein should be invalid, illegal or unenforceable in any respect in any jurisdictions, the validity, legality and enforceability of such provisions shall not in any way be affected or impaired thereby in any other jurisdiction and the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby.
10. APPLICABLE LAW
The situs of the Agreement is Aylmer, Ontario, and for all purposes this Agreement will be governed exclusively by and construed and enforced in accordance with laws prevailing in the Province of Ontario. The parties agree to attorn to the jurisdiction of the Courts of the Province of Ontario.
11. ENUREMENT
This Agreement shall enure to the benefit of and be binding upon the parties hereto and their respective successors and permitted assigns.
IN WITNESS WHEREOF this Agreement has been executed as of the day and year first above written.
LISBOA LEISURE INC.
/s/ Joseph Fewer per: /s/ Maria Fernandes --------------------------------- --------------------------------- JOSEPH FEWER Authorized Signatory /s/ Denise Fewer --------------------------------- |
DENISE FEWER
Exhibit 99.1
GroGenesis, Inc.
(Formerly Lisboa Leisure, Inc.)
Pro Forma Financial Statements
(A Development Stage Company)
(Unaudited)
Pro Forma Balance Sheet as at November 30, 2013........................... PF-2 Pro Forma Statement of Operations for the Six Months Ended November 30, 2013................................................... PF-3 Notes to the Pro Forma Financial Statements............................... PF-4 |
PF-1
GroGenesis, Inc.
(Formerly Lisboa Leisure, Inc.)
Pro Forma Balance Sheet
As at November 30, 2013
(A Development Stage Company)
(Unaudited)
GroGenesis
As at Pro Forma
November 30, Adjustments
2013 Note 3 Pro Forma
---------- ---------- ----------
$ $ $
ASSETS
Current assets
Cash 31 -- 31
Prepaid expense -- (c) 8,400 8,400
---------- ---------- ----------
Total current assets 31 8,400 8,431
Non-current assets
Prepaid expense - Long term portion -- (c) 16,800 12,600
(e) (4,200)
Property, plant and equipment -- (b) 124,529 124,529
Intangible assets -- (a) 1,342,101 1,342,101
---------- ---------- ----------
Total assets 31 1,487,630 1,487,661
========== ========== ==========
LIABILITIES AND SHAREHOLDERS' DEFICIT
Current liabilities
Accounts payable and accrued liabilities 3,990 -- 3,990
Advance 21,750 -- 21,750
---------- ---------- ----------
Total liabilities 25,740 -- 25,740
---------- ---------- ----------
Stockholders' deficit
Common stock: $0.001 par value, 200,000,000
authorized, 155,000,000 issued and outstanding
as of November 30, 2013 135,000 (a) 12,500 155,000
(b) 5,000
(c) 2,500
Additional paid-in capital (84,000) (a) 1,329,601 1,387,830
(b) 119,529
(c) 22,700
Deficit accumulated during the development stage (76,709) (e) (4,200) (80,909)
---------- ---------- ----------
Total stockholders' deficit (25,709) 1,487,630 1,461,921
---------- ---------- ----------
Total liabilities and stockholders' deficit 31 1,487,630 1,487,661
========== ========== ==========
|
The accompanying notes are an integral part of the unaudited pro forma financial statements.
PF-2
GroGenesis, Inc.
(Formerly Lisboa Leisure, Inc.)
Pro Forma Statement of Operations
For the Three Months Ended November 30, 2013
(A Development Stage Company)
(Unaudited)
GroGenesis
As at Pro Forma
November 30, Adjustments
2013 Note 3 Pro Forma
---------- ---------- ----------
$ $ $
Expenses:
General and administrative 2,014 (d) 2,100 4,114
Professional fees 2,000 -- 2,000
---------- ---------- ----------
4,014 2,100 6,114
---------- ---------- ----------
Net loss (4,014) 2,100 (6,114)
========== ========== ==========
Pro forma net loss per share - basic
and diluted (Note 4) --
Pro forma weighted average shares outstanding -
basic and diluted 155,000,000
|
The accompanying notes are an integral part of the unaudited pro forma financial statements.
PF-3
GroGenesis, Inc.
(Formerly Lisboa Leisure, Inc.)
Pro Forma Statement of Operations
For the Six Months Ended November 30, 2013
(A Development Stage Company)
(Unaudited)
GroGenesis
Six Months
Ended Pro Forma
November 30, Adjustments
2013 Note 3 Pro Forma
---------- ---------- ----------
$ $ $
Expenses:
General and administrative 2,982 (e) 4,200 7,182
Professional fees 6,000 -- 6,000
---------- ---------- ----------
8,982 4,200 13,182
---------- ---------- ----------
Net loss (8,982) 4,200 (13,182)
========== ========== ==========
Pro forma net loss per share - basic and
diluted (Note 4) --
Pro forma weighted average shares outstanding -
basic and diluted 155,000,000
|
The accompanying notes are an integral part of the unaudited pro forma financial statements.
PF-4
GroGenesis, Inc.
(Formerly Lisboa Leisure, Inc.)
Notes to Pro Forma Financial Statements
(A Development Stage Company)
(Unaudited)
1. Basis of Presentation
These unaudited pro forma financial statements ("pro forma financial statements") have been prepared in accordance with accounting principles generally accepted in the United States ("US GAAP) and are expressed in US dollars. These pro forma financial statements do not contain all of the information required for annual financial statements. Accordingly, they should be read in conjunction with the most recent annual financial statements of the Company.
These pro forma financial statements have been compiled from and include:
(a) an unaudited pro forma balance sheet of GroGenesis, Inc. (the "Company") as at November 30, 2013, giving effect to the transactions as if they occurred on June 1, 2013.
(b) an unaudited pro forma statement of operations of the Company for the three months ended November 30, 2013, giving effect to the transactions as if they occurred on June 1, 2013.
(c) an unaudited pro forma statement of operations of the Company for the six months ended November 30, 2013, giving effect to the transactions as if they occurred on June 1, 2013.
The unaudited pro forma financial statements have been compiled using the significant accounting policies as set out in the audited financial statements of the Company for the year ended May 31, 2013.
It is management's opinion that these pro forma financial statements include all adjustments necessary for the fair presentation, in all material respects, of the proposed transaction described above in accordance with US GAAP applied on a basis consistent with the Company's accounting policies.
The unaudited pro forma financial statements are not intended to reflect the results of operations or the financial position of the Company which would have actually resulted had the proposed transaction been effected on the dates indicated. Further, the unaudited pro forma financial information is not necessarily indicative of the results of operations that may be obtained in the future. The pro forma adjustments are based in part on provisional estimates of the fair value of the shares issued. The actual pro forma adjustments will depend on a number of factors, and could result in a change to the unaudited pro forma financial statements.
2. Proposed Transactions
Pursuant to an Asset Purchase Agreement dated September 30, 2013, with Joseph Fewer, doing business as Hacienda Acres ("Hacienda Agreement"), the Company agreed to acquire intellectual property as well as all related assets necessary for operating a plant growth enhancement product ("Plant Surfactant") manufacture and sale business. In consideration, the Company agreed to issue 12,500,000 shares of restricted common stock. In addition, the Company also agreed to incorporate a wholly-owned subsidiary that will hold these assets and conduct operations, and execute a consulting agreement with Joseph Fewer whereby he will receive $5,000 per month. The consulting agreement will become effective on the date that the Company raises a minimum of $500,000 to fund operations.
Pursuant to an Asset Purchase Agreement dated September 30, 2013, with Stephen Moseley ("Moseley Agreement"), the Company agreed to acquire certain equipment used in conjunction with the production, marketing and sale of the Plant Surfactant. In consideration, the Company agreed to issue 5,000,000 shares of restricted common stock. In addition, the Company also agreed to execute a consulting agreement with Stephen Moseley whereby he will receive $5,000 per month. The consulting agreement will become effective on the date that the Company raises a minimum of $500,000 to fund operations.
Pursuant to an Easement Agreement dated September 30, 2013, with Joseph Fewer and Denise Fewer ("Easement Agreement"), the Company agreed to acquire the
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exclusive right to 10 acres of farm property located in Aylmer, Ontario, Canada, to operate as a demonstration farm in order to evaluate and exhibit the effects of using the Plant Surfactant for an initial term of 3 years. In consideration, the Company agreed to issue 2,500,000 shares of restricted common stock.
3. Pro Forma Assumptions and Adjustments
The unaudited pro forma financial statements incorporate the following pro forma assumptions and adjustments:
(a) Upon execution of the Hacienda Agreement, the Company agreed to issue 12,500,000 shares of restricted common stock in exchange for intellectual property and related assets necessary for operating a Plant Surfactant manufacture and sale business. The fair value of the 12,500,000 shares of common stock of $1,342,101 has been recorded as intangible assets.
(b) Upon execution of the Moseley Agreement, the Company agreed to issue 5,000,000 shares of restricted common stock in exchange for certain equipment used in conjunction with the production, marketing and sale of the Plant Surfactant. The fair value of the 5,000,000 shares of common stock of $124,529 has been recorded as property, plant and equipment.
(c) Upon execution of the Easement Agreement, the Company agreed to issue 2,500,000 shares of restricted common stock in exchange for the exclusive right to 10 acres of farm property for an initial term of 3 years. The fair value of the 2,500,000 shares of common stock of $25,200 has been recorded as a prepaid expense, of which $14,700 is recognized as a long-term asset.
(d) During the three months ended November 30, 2013, the Company recognized $2,100 of rent expense related to the amortization of the easement prepayment.
(e) During the six months ended November 30, 2013, the Company recognized $4,200 of rent expense related to the amortization of the easement prepayment.
4. Pro Forma Net Loss Per Share
Pro forma basic and diluted net loss per share for the three and six months ended November 30, 2013, have been calculated based on the weighted average number of common stock issued during the period plus all common stock issuances relating to the proposed transactions. The common stock issued pursuant to the proposed transactions have been treated as issued on June 1, 2013.
Three Months Six Months
Ended Ended
November 30, November 30,
2013 2013
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Basic pro forma net loss per share computation
Numerator:
Pro forma net loss available to shareholders $ (6,114) $ (13,182)
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Denominator:
Weighted average shares of common stock outstanding 135,000,000 135,000,000
Shares issued pursuant to Hacienda Agreement 12,500,000 12,500,000
Shares issued pursuant to Moseley Agreement 5,000,000 5,000,000
Shares issued pursuant to Easement Agreement 2,500,000 2,500,000
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Pro forma weighted average shares outstanding - basic and diluted 155,000,000 155,000,000
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Pro forma net loss per share - basic and diluted -- --
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