þ
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Nevada
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88-0335710
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|
(State or Other Jurisdiction of Incorporation or Organization)
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(I.R.S. Employer Identification Number)
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112 North Curry Street, Carson City, NV
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89703
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|
(Address of Principal Executive Offices)
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(Zip Code)
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Large accelerated filer
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o
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Accelerated filer
|
o
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Non-accelerated filer
|
o
(Do not check if a smaller reporting company)
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Smaller reporting company
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þ
|
March 31,
2014
(Unaudited)
|
December 31,
2013
(Audited)
|
|||||||
ASSETS
|
||||||||
Current assets
|
||||||||
Cash and cash equivalents
|
$ | 42,481 | $ | 355,860 | ||||
Funds held in trust (note 11)
|
- | 20,000 | ||||||
Accounts receivable
|
112,382 | 100 | ||||||
Inventory (note 7)
|
118,680 | 90,914 | ||||||
Prepaid expenses and vendor deposits
|
155,233
|
15,199 | ||||||
Loan receivable
(note 6)
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73,084 | - | ||||||
Total current assets
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501,860
|
482,073 | ||||||
Property and equipment (note 8)
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6,983 | 3,882 | ||||||
Website development
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62,789 | 42,789 | ||||||
Goodwill (note 5)
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167,422 | - | ||||||
Total long term assets
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237,194
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46,671 | ||||||
Total assets
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$ | 739,054 | $ | 528,744 | ||||
LIABILITIES AND SHAREHOLDERS’ DEFICIENCY
|
||||||||
Current liabilities
|
||||||||
Accounts payable
|
387,380 | $ | 125,163 | |||||
Accrued liabilities
|
26,212 | 56,838 | ||||||
Accrued interest- related parties (note 15)
|
4,388 | 78,838 | ||||||
Loans from shareholders (note 9)
|
458,755 | 20,615 | ||||||
Due to related parties (note 15)
|
863,027 | 767,426 | ||||||
Note payable, related party (note 10)
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- | 225,000 | ||||||
Total current liabilities
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1,739,762 | 1,273,880 | ||||||
Long term liabilities
|
||||||||
Convertible debentures to be issued (note 11)
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- | 45,000 | ||||||
Convertible debentures (note 11)
|
443,361 | 434,514 | ||||||
Total long term liabilities
|
443,361 | 479,514 | ||||||
Total liabilities
|
2,183,123 | 1,753,394 | ||||||
Going concern (note 3)
|
||||||||
Commitments and contingencies (note 16)
|
||||||||
Related party transactions (note 15)
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||||||||
SHAREHOLDERS’ DEFICIENCY
|
||||||||
Common stock (note 12)
|
||||||||
$0.0002 par value, 300,000,000 shares authorized; 68,318,007 and 67,066,977 shares issued and outstanding as of March 31, 2014 and December 31, 2013, respectively
|
13,663 | 13,413 | ||||||
Additional paid-in capital
|
1,593,887 | 1,285,637 | ||||||
Shares to be issued (note 14)
|
139,500 | 37,500 | ||||||
Deficit accumulated during the development stage
|
(3,270,444 | ) | (2,605,961 | ) | ||||
Accumulated other comprehensive income
|
79,325 | 44,761 | ||||||
Total shareholders’ deficiency
|
(1,444,069 | ) | (1,224,650 | ) | ||||
Total liabilities and shareholders’ deficiency
|
$ | 739,054 | $ | 528,744 |
For the Three Months Ended March 31,
2014
|
For the Three Months Ended March 31,
2013
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For the Period from November 29, 2011
(Date of Inception) to March 31, 2014
|
||||||||||
Revenue
|
$ | 19,261 | - | $ | 96,238 | |||||||
Cost of goods sold
|
32,022 | - | 93,643 | |||||||||
Gross profit (loss)
|
(12,761 | ) | - | 2,595 | ||||||||
Operating expenses
|
||||||||||||
Administrative
|
400,599 | 128,861 | 1,447,183 | |||||||||
Consulting fees-related parties (note 15)
|
161,828 | 129,675 | 1,083,484 | |||||||||
Depreciation
|
700 | 341 | 2,895 | |||||||||
Total operating expenses
|
563,127 | 258,877 | 2,533,562 | |||||||||
Loss from operations
|
(575,888 | ) | (258,877 | ) | (2,530,967 | ) | ||||||
Other income (expenses):
|
||||||||||||
Foreign exchange
|
(20,978 | ) | (1,759 | ) | (27,738 | ) | ||||||
Gain (Loss) on loan receivable written off (note 6)
|
19,867 | - | (1,538 | ) | ||||||||
Loss on acquisition of Snoke Distribution Canada Ltd.
|
- | - | (292,226 | ) | ||||||||
Loss on deposit written off
|
- | - | (162,371 | ) | ||||||||
Loss on settlement of debt
|
(27,563 | ) | (27,563 | ) | ||||||||
Amortization of debt discount
|
(8,847 | ) | - | (18,361 | ) | |||||||
Interest expense, net
|
(51,074 | ) | (17,691 | ) | (204,778 | ) | ||||||
Total other expenses
|
(88,595 | ) | (19,450 | ) | (734,575 | ) | ||||||
Net loss before income taxes
|
(664,483 | ) | (278,327 | ) | (3,265,542 | ) | ||||||
Income taxes
|
- | - | - | |||||||||
Net loss
|
$ | (664,483 | ) | $ | (278,327 | ) | $ | (3,265,542 | ) | |||
Loss per weighted average number of shares outstanding (basic and diluted)
|
$ | (0.010 | ) | $ | (0.004 | ) | ||||||
Weighted average number of shares outstanding (basic and diluted)
|
67,723,122 | 62,277,766 | ||||||||||
Comprehensive loss:
|
||||||||||||
Net loss
|
$ | (664,483 | ) | $ | (278,327 | ) | $ | (3,265,542 | ) | |||
Foreign exchange translation adjustment
|
34,565 | 12,262 | 79,323 | |||||||||
Comprehensive loss
|
$ | (629,918 | ) | $ | (266,065 | ) | $ | (3,186,219 | ) |
Common Stock
|
Additional
Paid-In
|
Shares to be
|
Deficit Accumulated During the Development
|
Accumulated Other Comprehensive
|
||||||||||||||||||||||||
Shares
|
Amount
|
Capital
|
Issued
|
Stage
|
Income (Loss)
|
Total
|
||||||||||||||||||||||
Balance, November 29, 2011 (Date of inception)
|
- | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | |||||||||||||||
Issuance of shares for seed capital, November 2011 at $0.0002 per share
|
25,000,000 | 5,000 | - | - | (4,902 | ) | - | 98 | ||||||||||||||||||||
Foreign currency translation loss
|
- | - | - | - | - | (228 | ) | (228 | ) | |||||||||||||||||||
Net loss
|
- | - | - | - | (34,334 | ) | - | (34,334 | ) | |||||||||||||||||||
Balance, December 31, 2011 (audited)
|
25,000,000 | $ | 5,000 | $ | - | $ | - | $ | (39,236 | ) | $ | (228 | ) | $ | (34,464 | ) | ||||||||||||
Common shares issued for cash at $0.025 per share, November 2012
|
400,000 | 80 | 9,920 | - | - | - | 10,000 | |||||||||||||||||||||
Common shares issued for cash at $0.03 per share, November 2012
|
4,366,667 | 873 | 130,127 | - | - | - | 131,000 | |||||||||||||||||||||
Effect of reverse acquisition, November 21, 2012
|
29,477,766 | 5,895 | - | - | - | - | 5,895 | |||||||||||||||||||||
Common shares issued for settlement of loans at $0.05 per share, November 2012
|
800,000 | 160 | 39,840 | - | - | - | 40,000 | |||||||||||||||||||||
Issuance of shares and warrants at $0.05 per share as the result of a private placement, November 2012
|
1,900,000 | 380 | 94,731 | - | - | - | 95,111 | |||||||||||||||||||||
Issuance of shares and warrants at $0.05 per share as the result of a private placement, December 2012
|
333,333 | 67 | 16,600 | - | - | - | 16,667 | |||||||||||||||||||||
Foreign currency translation loss
|
- | - | - | - | - | (2,846 | ) | (2,846 | ) | |||||||||||||||||||
Net loss
|
- | - | - | - | (1,063,803 | ) | - | (1,063,803 | ) | |||||||||||||||||||
Balance, December 31, 2012 (audited)
|
62,277,766 | $ | 12,455 | $ | 291,218 | $ | - | $ | (1,103,039 | ) | $ | (3,074 | ) | $ | (802,440 | ) | ||||||||||||
Common shares issued for cash at $0.035 per share, 200,000 shares were issued on September 25, 2013, 76,485 shares were issued on November 19, 2013
|
276,485 | 55 | 9,622 | - | - | - | 9,677 | |||||||||||||||||||||
Common shares issued for consultant fees at $0.053 on September 25, 2013
|
942,784 | 189 | 49,811 | - | - | - | 50,000 | |||||||||||||||||||||
Common shares issued on settlement of related party loan at fair value, 1,000,000 shares were issued on September 25, 2013, 428,571 were issued on November 19, 2013
|
1,428,571 | 286 | 61,143 | - | - | - | 61,429 | |||||||||||||||||||||
Loss on common shares issued on settlement of related party loan
|
- | - | (11,429 | ) | - | - | - | (11,429 | ) | |||||||||||||||||||
Common shares issued on settlement of shareholder loan at fair value, 973,960 were issued on September 25, 2013, 417,411 were issued on November 19, 2013
|
1,391,371 | 278 | 59,551 | - | - | - | 59,829 | |||||||||||||||||||||
Loss on common shares issued on settlement of shareholder loan
|
- | - | (11,129 | ) | - | - | - | (11,129 | ) | |||||||||||||||||||
Common shares issued for cash at $0.05 per share on October 8, 2013
|
50,000 | 10 | 2,490 | - | - | - | 2,500 | |||||||||||||||||||||
Common shares issued for consultant fees at $0.05 on November 27, 2013
|
400,000 | 80 | 19,920 | - | - | - | 20,000 | |||||||||||||||||||||
Common shares issued for consultant fees at $0.0583 on November 27, 2013
|
300,000 | 60 | 17,440 | - | - | - | 17,500 | |||||||||||||||||||||
Common share subscription for settlement of consulting fees at $0.05
|
- | - | - | 10,000 | - | - | 10,000 | |||||||||||||||||||||
Common share subscription for settlement of consulting fees at $0.142
|
- | - | - | 10,000 | - | - | 10,000 | |||||||||||||||||||||
Common shares subscribed to for cash at $0.035
|
- | - | - | 17,500 | - | - | 17,500 | |||||||||||||||||||||
Embedded conversion feature of debenture
|
- | - | 797,000 | 797,000 | ||||||||||||||||||||||||
Foreign currency translation gain
|
- | - | - | - | - | 47,835 | 47,835 | |||||||||||||||||||||
Net loss
|
- | - | - | - | (1,502,922 | ) | - | (1,502,922 | ) | |||||||||||||||||||
Balance, December 31, 2013 (audited)
|
67,066,977 | $ | 13,413 | $ | 1,285,637 | $ | 37,500 | $ | (2,605,961 | ) | $ | 44,761 | $ | (1,224,650 | ||||||||||||||
Common shares issued on settlement of consulting fees at fair value on January 8, 2014
|
200,000 | 40 | 37,960 | (10,000 | ) | - | - | 28,000 | ||||||||||||||||||||
Common shares issued for cash at $0.035 on January 8, 2014
|
500,000 | 100 | 17,400 | (17,500 | ) | - | - | - | ||||||||||||||||||||
Common share issued for settlement of consulting fees at $0.1426 on March 28, 2014
|
280,433 | 56 | 39,944 | (10,000 | ) | - | - | 30,000 | ||||||||||||||||||||
Common share issued for settlement of consulting fees at $0.1293 on March 28, 2014
|
270,597 | 54 | 34,946 | - | - | - | 35,000 | |||||||||||||||||||||
Common shares to be issued to settle advertising production costs at $0.10
|
- | - | - | 84,500 | - | - | 84,500 | |||||||||||||||||||||
Common shares to be issued for acquisition of subsidiary at $0.11
|
- | - | - | 55,000 | - | - | 55,000 | |||||||||||||||||||||
Embedded conversion feature of debenture
|
- | - | 178,000 | - | - | - | 178,000 | |||||||||||||||||||||
Foreign currency translation gain
|
- | - | - | - | - | 34,564 | 34,564 | |||||||||||||||||||||
Net loss
|
- | - | - | - | (664,483 | ) | - | (664,483 | ) | |||||||||||||||||||
Balance, March 31, 2014 (unaudited)
|
68,318,007 | $ | 13,663 | $ | 1,593,887 | $ | 139,500 | $ | (3,270,444 | ) | $ | 79,325 | $ | (1,444,069 | ) |
For the Three Months
Ended
March 31,
2014
|
For the Three Months
Ended
March 31,
2013
|
For the Period from November 29, 2011
(Date of Inception) to
March 31,
2014
|
||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES :
|
||||||||||||
Net loss
|
$
|
(664,483)
|
$
|
(278,327)
|
$
|
(3,265,542)
|
||||||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||||||
Depreciation
|
700
|
341
|
2,895
|
|||||||||
(Gain) loss on loan receivable written-off
|
(19,867)
|
-
|
1,538
|
|||||||||
Amortization of debt discount
|
8,847
|
-
|
18,361
|
|||||||||
Loss on acquisition Snoke Distribution Canada Ltd.
|
-
|
-
|
292,226
|
|||||||||
Loss on settlement of debt
|
27,563
|
27,563
|
||||||||||
Loss on deposit written-off
|
-
|
-
|
162,371
|
|||||||||
Cash acquired in acquisition of Drinan Marketing Ltd.
|
8,812
|
-
|
8,812
|
|||||||||
Loans to subsidiary prior to acquisition
|
(109,978)
|
-
|
(109,978)
|
|||||||||
Shares issued for services
|
65,000
|
-
|
172,500
|
|||||||||
Changes in operating assets and liabilities
|
||||||||||||
Accounts receivable
|
56
|
-
|
(44)
|
|||||||||
Funds held in trust
|
20,000
|
-
|
-
|
|||||||||
Prepaid expenses and vendor deposits
|
(55,658)
|
502
|
(70,987)
|
|||||||||
Inventory deposit
|
-
|
-
|
(162,371)
|
|||||||||
Inventory
|
32,708
|
-
|
(58,206)
|
|||||||||
Accounts payable
|
12,240
|
15,462
|
138,606
|
|||||||||
Accrued liabilities
|
(29,599)
|
20,341
|
46,910
|
|||||||||
Related party payables
|
119,753
|
131,147
|
731,603
|
|||||||||
Accrued interest-related party
|
(74,274)
|
-
|
3,244
|
|||||||||
Net cash used in operating activities
|
(658,180)
|
(110,534)
|
(2,060,499)
|
|||||||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||||||
Factoring loan
|
-
|
(19,867)
|
(19,867)
|
|||||||||
Development of website
|
(20,000)
|
-
|
(62,789)
|
|||||||||
Acquisition of property and equipment
|
-
|
-
|
(6,123)
|
|||||||||
Net cash used in investing activities
|
(20,000)
|
(19,867)
|
(88,779)
|
|||||||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||||||
Shareholder loan received (paid)
|
452,583
|
-
|
451,492
|
|||||||||
Net proceeds from loans payable
|
-
|
-
|
282,840
|
|||||||||
Net proceeds from related parties
|
35,525
|
121,479
|
371,615
|
|||||||||
Proceeds from promissory note
|
-
|
-
|
200,000
|
|||||||||
Repayment of related party note payable
|
(225,000)
|
-
|
(225,000)
|
|||||||||
Repayment of debt
|
-
|
-
|
(50,000)
|
|||||||||
Proceeds from sale of convertible debentures
|
80,000
|
-
|
846,000
|
|||||||||
Proceeds from share subscriptions
|
-
|
-
|
17,500
|
|||||||||
Proceeds from sale of common stock
|
-
|
-
|
264,955
|
|||||||||
Net cash provided by financing activities
|
343,108
|
121,479
|
2,159,402
|
|||||||||
Effect of exchange rate changes on cash
|
21,693
|
4,080
|
32,357
|
|||||||||
Net increase in cash
|
$
|
(313,379)
|
$
|
(4,842)
|
$
|
42,481
|
||||||
Cash at beginning of year
|
355,860
|
11,444
|
-
|
|||||||||
Cash at end of year
|
$
|
42,481
|
$
|
6,602
|
$
|
42,481
|
||||||
Supplemental Schedule of Cash Flow Information:
|
||||||||||||
Cash paid for interest
|
$
|
96,051
|
$
|
-
|
$
|
120,466
|
||||||
Cash paid for income taxes
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||
Non cash financing activities:
|
||||||||||||
Common stock issued in settlement of related party and shareholder loans
|
$
|
-
|
$
|
-
|
$
|
138,700
|
||||||
Common stock issued for reverse acquisition
|
$
|
-
|
$
|
-
|
$
|
5,895
|
||||||
Common stock issued for payment of consulting fees payable
|
$
|
65,000
|
$
|
-
|
$
|
172,500
|
||||||
Debentures issued for settlement of consulting fees payable to related party
|
$
|
-
|
$
|
-
|
$
|
50,000
|
||||||
Debentures issued for settlement of related party and shareholder loans
|
$
|
53,000
|
$
|
-
|
$
|
504,000
|
Assets acquired:
|
$
|
4
|
||
Liabilities assumed:
|
(286,360
|
)
|
||
Common stock retained:
|
(5,895
|
)
|
||
Foreign Exchange Difference
|
25
|
|||
Net loss:
|
$
|
(292,226
|
)
|
● |
Level 1
|
-
|
Unadjusted quoted prices in active markets for identical assets or liabilities;
|
|
● |
Level 2
|
-
|
Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities; and
|
|
● |
Level 3
|
-
|
Inputs that are not based on observable market data.
|
Assets acquired:
|
||||
Cash
|
$ | 8,828 | ||
Receivables
|
112,576 | |||
Inventory
|
60,777 | |||
Loan receivable
|
84,936 | |||
Fixed, assets
|
3,826 | |||
Goodwill
|
167,422 | |||
Total assets acquired
|
$ | 438,365 | ||
Liabilities assumed:
|
||||
Accounts payable
|
$ | 253,247 | ||
Loans payable
|
130,118 | |||
Total liabilities assumed
|
$ | 383,365 | ||
Consideration-500,000 Common Shares, to be issued
|
$ | 55,000 |
March 31,
2014
|
December 31,
2013
|
|||||||
E-cigarettes and accessories
|
$ |
102,185
|
$ | 74,419 | ||||
Packaging
|
16,495
|
16,495 | ||||||
$ | 118,680 | $ | 90,914 |
March 31,
2014
|
December 31,
2013
|
|||||||||||||||
Cost
|
Accumulated Depreciation
|
Net
|
Net
|
|||||||||||||
Furniture and equipment
|
$ | 2,530 | $ | 1,300 | $ | 1,230 | $ | 1,439 | ||||||||
Computer hardware
|
3,471 | 1,335 | 2,136 | 2,443 | ||||||||||||
Motor vehicle
|
4,822 | 1,205 | 3,617 | - | ||||||||||||
$ | 10,823 | $ | 3,840 | $ | 6,983 | $ | 3,882 |
March 31,
2014
|
December 31,
2013
|
|||||||
Non-interest bearing, unsecured, no specific terms of repayment
|
$ | 6,455 | $ | 6,512 | ||||
Bears interest of 10% per annum on a cumulative basis, secured by the assets of the Company, matures on August 13, 2014
|
452,300 | - | ||||||
Bears interest of 1% per month on a cumulative basis, secured by the assets of the Company, no specific terms of repayment
|
- | 14,103 | ||||||
$ | 458,755 | $ | 20,615 |
● |
Issued 200,000 Common Shares at a fair value of $0.19 as settlement of $10,000 in consulting fees owing to an unrelated party. The amount allocated to Shareholders’ Deficiency, based on the fair value, amounted to $38,000. The balance of $28,000 represents a loss on the settlement;
|
|
● |
Issued 500,000 Common Shares valued at $0.035 for cash proceeds of $17,500;
|
|
● |
Issued 280,433 Common Shares valued at $0.1426 for settlement of $40,000 consulting fees owing to an unrelated party; and
|
|
● |
Issued 270,597 Common Shares valued at $0.1293 for settlement of $35,000 consulting fees owing to an unrelated party.
|
● |
Issued 276,485 Common Shares valued at $0.035 for cash proceeds of $9,677;
|
|
● |
Issued 942,784 Common Shares at an average price of $0.053 as settlement of $50,000 in consulting fees owing to an unrelated party;
|
|
● |
Issued 1,428,571 Common Shares at a fair value of $0.043 per share as settlement of a related party loan in the amount of $50,000. The amount allocated to Shareholders’ Deficiency, based on the fair value, amounted to $61,429. The balance of $11,429 represents a loss on the settlement of the related party debt and was also allocated to equity;
|
|
● |
Issued 1,391,371 Common Shares at a fair value of $0.043 per share as settlement of a loan from shareholder in the amount of $48,700. The amount allocated to Shareholders’ Deficiency, based on the fair value, amounted to $59,829. The balance of $11,129 represents a loss on the settlement of the shareholder loan and was also allocated to equity;
|
|
● | Issued 50,000 Common Shares valued at $0.05 for cash proceeds of $2,500; | |
● | Issued 400,000 Common Shares valued at $0.05 as settlement of $20,000 in consulting fees owing to unrelated parties; and | |
● | Issued 300,000 Common Shares valued at $0.0583 as settlement of $17,500 in consulting fees owing to unrelated parties. |
March 31,
2014
|
December 31,
2013
|
|||||||||||||||
No. of Warrants
|
WAEP
|
No. of Warrants
|
WAEP
|
|||||||||||||
Beginning of year
|
-
|
$
|
-
|
1,516,667
|
$
|
0.10
|
||||||||||
Issued
|
1,000,000
|
0.25
|
-
|
-
|
||||||||||||
Expired
|
-
|
-
|
(1,516,667)
|
(0.10)
|
||||||||||||
End of year
|
1,000,000
|
$
|
0.25
|
-
|
$
|
-
|
Risk-free interest rate
|
0.90
|
%
|
|
Expected life
|
3 years
|
||
Estimated volatility in the market price of the Common Shares
|
340
|
%
|
|
Dividend yield
|
Nil
|
Risk-free interest rate
|
0.09
|
%
|
|
Expected life
|
6 months
|
||
Estimated volatility in the market price of the Common Shares
|
461
|
%
|
|
Dividend yield
|
Nil
|
● |
The Company acquired all of the issued and outstanding shares of Drinan Marketing Limited with 500,000 Common shares of the Company valued at $0.11, the shares have not yet been issued; and
|
|
● |
The Company settled $84,500 in amounts owing as a result of the production costs of advertising with 845,000 Common Shares of the Company valued at $0.10, the shares have not yet been issued.
|
● |
The Company settled $10,000 in consulting fees payable to an unrelated party with 200,000 Common Shares valued at $0.05, the shares were issued on January 8, 2014;
|
|
● |
The Company received $17,500 in cash for the purchase of 500,000 Common Shares valued at $0.035, the shares were issued on January 8, 2014; and
|
|
● |
The Company settled $10,000 in consulting fees payable to an unrelated party with 70,423 Common Shares valued at $0.142, the shares were issued on March 28, 2014.
|
(a)
|
The Company’s current and former officers and shareholders have advanced funds on an unsecured, non-interest bearing basis to the Company for travel related and working capital purposes. The Company has not entered into any agreement on the repayment terms for these advances.
|
March 31,
2014
|
December 31,
2013
|
|||||||
Advances by Officers of the Company, two of which are also Directors
|
$ | 297,083 | $ | 226,430 | ||||
Advances by a corporation owned by two Officers, one of which is also a Director
|
294,329 | 255,215 | ||||||
Advances by persons related to an Officer and Director of the Company
|
63,741 | 55,907 | ||||||
Advances by Officers of the Company one of which is also a Director, bears interest at 1.5% per month
|
188,510 | 214,265 | ||||||
Advances by a corporation related by virtue of common Officers and Directors
|
19,364 | 15,609 | ||||||
$ | 863,027 | $ | 767,426 |
(b)
|
Interest accrued to related parties during the periods ended March 31, 2014 and December 31, 2013 were as follows:
|
March 31,
2014
|
December 31,
2013
|
|||||||
Interest accrued on advances by Officers of the Company, one of which is also a Director
|
$ | 4,388 | $ | 57,461 | ||||
Interest accrued on related party Secured Note (note 10)
|
- | 6,000 | ||||||
Interest accrued on related party Convertible Revolving Credit Note (note 10)
|
- | 15,377 | ||||||
$ | 4,388 | $ | 78,838 |
(c)
|
Transactions with related parties during the periods ended March 31, 2014 and 2013 were as follows:
|
March 31,
2014
|
March 31,
2013
|
|||||||
Directors
|
$ | 33,900 | $ | 67,800 | ||||
Officers
|
- | 33,900 | ||||||
Corporation owned by two Officers, one of which is also a Director
|
108,428 | - | ||||||
Persons related to an Officer and Director
|
19,500 | 27,975 | ||||||
$ | 161,828 | $ | 129,675 |
December 31, 2014
|
$
|
1,448
|
||
$
|
1,448
|
December 31, 2014
|
$
|
3,472
|
||
$
|
3,472
|
March 31,
2014
|
December 31,
2013
|
|||||||
Canada
|
$ | 1,269 | $ |
3,960
|
||||
United States
|
512,064
|
524,784
|
||||||
Ireland
|
225,721 | |||||||
$ |
739,054
|
$ |
528,744
|
March 31,
2014
|
March 31,
2013
|
|||||||
Canada
|
$ | - | $ | - | ||||
United States
|
- | - | ||||||
Ireland
|
19,261 | - | ||||||
$ | 19,261 | $ | - |
● |
Level 1
|
-
|
Unadjusted quoted prices in active markets for identical assets or liabilities;
|
|
● |
Level 2
|
-
|
Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities; and
|
|
● |
Level 3
|
-
|
Inputs that are not based on observable market data.
|
Incorporated by Reference
|
||||||||||
Exhibit
Number
|
|
Exhibit Description
|
|
Filed
Herewith
|
|
Form
|
Exhibit
|
Filing Date
|
||
10.11
|
Secured Promissory Note from the Company to Gravitas Financial Inc., dated February 13, 2014.
|
8-K
|
10.11
|
2/19/2014
|
||||||
10.12
|
General Security Agreement, by and between the Company and Gravitas Financial Inc., dated February 13, 2014.
|
8-K
|
10.12
|
2/19/2014
|
||||||
Letter Agreement, by and among the Company and Drinan Marketing Limited, dated January 22, 2014.
|
X
|
|||||||||
Purchase and Sale Agreement, by and among the Company, Drinan Marketing Limited, Andrew Hennessy and Michele Hennessy, dated January 23, 2014.
|
X
|
|||||||||
Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
X
|
|||||||||
Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
X
|
|||||||||
Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
|
X
|
|||||||||
Certifications of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
|
X
|
|||||||||
101.INS
|
XBRL Instance Document
|
X
|
||||||||
101.SCH
|
XBRL Taxonomy Extension Schema
|
X
|
||||||||
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase
|
X
|
||||||||
101.DEF
|
XBRL Taxonomy Definition Linkbase
|
X
|
||||||||
101.LAB
|
XBRL Taxonomy Extension label Linkbase
|
X
|
||||||||
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase
|
X
|
GILLA INC.
|
||
(Registrant)
|
||
May 20, 2014
|
By:
|
/s/ J. Graham Simmonds
|
Name: J. Graham Simmonds
|
||
Title: Chief Executive Officer and Director
|
By:
|
/s/ Ashish Kapoor
|
|
Name: Ashish Kapoor
|
||
Title: Chief Financial Officer and
Principal Accounting Officer
|
1.
|
Background of Gilla
: Gilla is a public company and the common shares of Gilla (the “
Gilla Common Shares
”) are listed for trading on the OTCQB (the "
OTC
") under the symbol GLLA. There are currently 67,766,977 Gilla Common Shares issued and outstanding and $1,222,000 of convertible debentures issued at a conversion price of $0.07 per Gilla Common Shares.
|
2.
|
Background of Drinan
: Drinan is a private company incorporated under the laws of Ireland
that has only common shares (the "
Drinan
Common Shares
") issued and outstanding, and no other outstanding stock options, warrants, anti-dilution or other rights to purchase Drinan Common Shares. Drinan has no debt, liabilities or unsecured payables not disclosed in its Trial Balance for the period ended December 31, 2013 (the “
Drinan Financial Statements
”).
|
3.
|
Acquisition of Drinan
: At the Closing, Gilla will issue 500,000 Common Shares to Andrew Hennessy and Michele Hennessy (250,000 Common Shares each) in exchange for Andrew and Michele Hennessy’s entire shareholding in Drinan Marketing Limited. In addition Andrew Hennessy and Michele Hennessy will be entitled to an earnable deferred consideration of Gilla Common Share Purchase Warrants
1
to be commercialized and set forth in the Formal Agreement.
|
4.
|
Management Agreements
: The parties acknowledge that upon closing of the transaction, Gilla or a subsidiary of Gilla (“
Gilla Group
”) will enter into a management agreement with Andrew Hennessy (effective at the time of the closing of the Acquisition) with the understanding that Andrew Hennessy will become an employee of Gilla Group. The management agreement will contain standard provisions common to a management agreement of this type, including non-competition and change of control clauses. Key terms of the management agreement will include the following:
|
(a)
|
€6,250
per month of net salary after payroll tax deduction;
|
(b)
|
the ability to participate in management bonus compensation plan to be determined by the Board of Directors of Gilla;
|
(c)
|
the opportunity to participate in the board approved management stock option plan of Gilla.
|
5.
|
Gilla
Representations and Warranties
: Gilla represents and warrants to Drinan as follows:
|
(a)
|
Gilla is duly incorporated and is validly subsisting under the laws of Nevada;
|
(b)
|
Gilla has fully owned subsidiaries named Snoke Distribution Canada Ltd., Gilla Operations LLC, Gilla Enterprises Inc., and Charlie’s Club, Inc.;
|
(c)
|
Gilla is in compliance with all of its obligations as a reporting issuer in the jurisdictions where it is a reporting issuer, including those imposed pursuant to securities legislation, and the regulations and policies thereunder;
|
(d)
|
Gilla is in compliance with all of the policies of the OTC and the Financial Industry Regulatory Authority (“FINRA”) and is eligible for electronic book-entry delivery and settlement depository services by the Depository Trust Company (“DTC”);
|
(e)
|
Gilla currently has 67,766,977 Gilla Common Shares issued and outstanding, all of which are validly issued and outstanding as fully paid and non-assessable;
|
(f)
|
Gilla has no agreement, option, understanding, warrant, call, conversion right, commitment or any right or privilege of any kind which obligates Gilla to allot or issue any Gilla Common Shares or any equity interests, carried interest, licenses, sublicenses, fees, indemnities, royalties, profit sharing or any similar agreement or participation of any nature or kind, contingent or otherwise, other than the $1,222,000 of convertible debentures issued at a conversion price of $0.07 per Gilla Common Shares;
|
(g)
|
Gilla is not a party to any employment agreements with any of its officers or employees;
|
(h)
|
the financial statements of Gilla for the period ended September 30, 2013 were true and correct and present fairly in all material respects the financial position of Gilla as at the date thereof and were prepared in accordance with U.S. generally accepted accounting principles consistently applied;
|
(i)
|
(A) Gilla is a Section 12(g) "reporting issuer" within the meaning of the
U.S. Securities Act of 1933
, as amended (the “
Securities Act
”) and the
Securities Exchange Act of 1934
, as amended (the “
Exchange Act
”) and the respective rules and regulations promulgated thereunder by the United States Securities & Exchange Commission (the “SEC”); (B) neither the SEC nor any securities commission, nor FINRA, nor DTC nor the OTC, has issued any order preventing the Acquisition or cessation of trading of any securities of Gilla; (C) DTC not imposed a chill on the trading of the shares of Common Stock of Gilla; (D) Gilla is in good standing in the state of its incorporation and in each other state and province where it is required to be registered to conduct business; and (E) Gilla is fully compliant as a reporting issuer with the
Securities Act
, the
Exchange Act
and all other applicable national, state and provincial securities laws and regulations, as well as all FINRA OTC policies.
|
(j)
|
there is no "material fact" or "material change" (as those terms are defined in applicable securities legislation) in the affairs of Gilla that has not been generally disclosed to the public; Gilla has not made any material misstatements or omitted any material information in any filing made with the SEC or in connection with the sale or placement of any of its securities; there are no undisclosed liabilities in any financial statement of Gilla filed with the SEC or in any of the books and records of Gilla which have been delivered to Drinan. All information and materials provided by Gilla to Drinan is true and correct in all respects; and
|
(k)
|
there is no action, suit, litigation, arbitration, investigation, inquiry or other proceeding in progress, or, to the best of Gilla's knowledge, pending or threatened against or relating to Gilla or its material assets and there is no circumstance, matter or thing known to Gilla which might give rise to any such proceeding or to any governmental investigation relative to Gilla and there is not outstanding against Gilla any judgment, decree, injunction, rule or order of any court, government department, commission, agency or arbitrator.
|
6.
|
Drinan Representations and Warranties
: Drinan represents and warrants to Gilla as follows:
|
(a)
|
Drinan is duly incorporated and is validly subsisting under the laws of Ireland;
|
(b)
|
other than as disclosed herein, Drinan has no outstanding agreements, options, understandings, warrants, calls, conversion rights, commitments or any rights or privileges of any kind which obligate Drinan to allot or issue any shares in its capital;
|
(c)
|
Drinan has the sole and exclusive right to all of its assets and technologies to conduct its business relating thereto;
|
(d)
|
there is no action, suit, litigation, arbitration, investigation, inquiry or other proceeding in progress, or, to the best of Drinan's knowledge, pending or threatened against or relating to Drinan, its subsidiaries or the Drinan Assets, or Drinan’s other material assets and there is no circumstance, matter or thing known to Drinan which might give rise to any such proceeding or to any governmental investigation relative to Drinan and there is not any outstanding proceedings against Drinan or in respect of the Drinan Assets, any judgment, decree, injunction, rule or order of any court, government department, commission, agency or arbitrator; and
|
(e)
|
Drinan has no debt, liabilities, or payables not disclosed in the Drinan Financial Statements.
|
7.
|
Regulatory Requirements
: This agreement is subject to any required regulatory approvals and upon closing, Gilla agrees to file any and all documents required to comply with applicable securities laws.
|
8.
|
Closing
: The parties agree the date of Closing (the "
Closing Date
") will occur on or before February 3, 2014.
|
9.
|
Costs
: The parties agree each party will pay for their own respective costs incurred pursuant to the Acquisition and the other transactions contemplated in this Agreement, whether or not the transactions contemplated herein are completed.
|
10.
|
Due Diligence
: For the purposes of allowing Gilla and Drinan to review the business and affairs of each other so as to enable each other to determine if there are any facts relating to which, if known to the other party, would cause it to elect to not proceed with the Acquisition, Drinan and Gilla hereby permit each other and their auditors and agents to conduct, upon the execution of this Agreement, up to and including the Closing Date, such investigations as each party may deem reasonably necessary or advisable in order to ensure that each of the representations, warranties, covenants and agreements as are required by each party are true and accurate.
|
11.
|
Conditions
: The obligations of the parties to consummate the Acquisition will be subject to the fulfilment of the following conditions:
|
(a)
|
the receipt of all necessary approvals;
|
(b)
|
the latest available financial statements of Gilla are true and correct and have been prepared in accordance with generally accepted accounting principles consistently applied;
|
(c)
|
the audited and unaudited financial statements of Drinan required to complete the Acquisition are delivered to Gilla on or before January 31, 2014 and such financial statements are true and correct and have been;
|
(d)
|
there will be no adverse material change in the business, affairs or operations of Gilla between the date of the latest available financial statements of Gilla and the Closing;
|
(e)
|
there will be no adverse material change in the business, affairs or operations of Drinan between the date of the latest available financial statements of Drinan and the Closing;
|
(f)
|
the review to the sole satisfaction of Drinan of the financial condition, business, properties, title, assets and affairs of Gilla;
|
(g)
|
the review to the sole satisfaction of Gilla of the Drinan Assets and of the financial condition, business, properties, title, assets and affairs of Drinan;
|
(h)
|
the approval of the Acquisition by the board of directors of each of Gilla and Drinan;
|
(i)
|
amounts owed by Drinan to Gilla are repaid or accounted for appropriately as a liability;
|
(j)
|
the Drinan security holders will have received certificates representing the Gilla Common Shares to which they are entitled pursuant to paragraph 3;
|
(k)
|
the representations and warranties contained herein and in the Formal Agreement shall be deemed to have been made again on the Closing Date and shall then be true and correct in all material respects as of that date;
|
(l)
|
no inquiry or investigation (whether formal or informal) in relation to Gilla or Drinan or their directors or officers, shall have been commenced or threatened by any officer or official of the OTC or any securities commission, or similar regulatory body having jurisdiction such that the outcome of such inquiry or investigation could have a material adverse effect on applicable party; and
|
|
(w)
|
each party making available all relevant financial statements, documents, reports, files, books, papers, documents and agreements, and all other relevant information relating to its business, assets, operations, prospects, financial condition and affairs, such that the other party shall satisfactorily complete its due diligence review of such materials on the later of: (i) the date on which the filing statement in respect of the Acquisition is filed on EDGAR with the U.S. Securities and Exchange Commission and in accordance with the policies of OTC; and (i) such other date as agreed to by the parties.
|
12.
|
Confidential Information:
The information provided by each of Gilla and Drinan, in any form whether written, electronic or verbal, as to financial condition, business, properties, title, assets and affairs (including any material contracts) as may reasonably be requested by the other party, including information contemplated by paragraph 10, will be kept confidential by each party (the "
Confidential Information
"), other than information that:
|
(a)
|
has become generally available to the public;
|
(b)
|
was available to a party or its representatives on a non-confidential basis before the date of this Agreement; or
|
(c)
|
has become available to a party or its representatives on a non-confidential basis from a person who is not, to the knowledge of the party or its representatives, otherwise bound by confidentiality obligations to the provider of such information or otherwise prohibited from transmitting the information to the party or its representatives.
|
13.
|
Press Releases
: The parties will advise each other, in advance, of any public statement or press release which they propose to make in respect of the Acquisition, provided that no party will be prevented from making any public statement or press release which is required to be made by law or any rule of a stock exchange or similar organization to which it is bound. Upon the execution of this letter agreement, Gilla will issue a Form 8-K as required under the
Exchange Act
.
|
14.
|
Termination
: This Agreement may be terminated in writing at any time by the parties hereto in accordance with the terms contained herein or if closing has not occurred on or before February 14, 2014.
|
15.
|
This Agreement will be governed by the laws of the Province of Ontario and the federal laws of Canada applicable therein.
|
16.
|
This Agreement constitutes an enforceable legal agreement, the consideration for which will be the mutual covenants of the parties contained herein.
|
Yours truly,
|
|||||
GILLA INC. | |||||
Per: | /s/ J. Graham Simmonds | ||||
J. Graham Simmonds | |||||
Chief Executive Officer | |||||
ACKNOWLEDGED AND AGREED TO this
22 day of January, 2014.
|
|||||
DRINAN MARKETING LIMITED | |||||
Per: | /s/ Andrew Hennessy | ||||
Andrew Hennessy | |||||
Director & Secretary | |||||
Per: | /s/ Michele Hennessy | ||||
Michele Hennessy | |||||
Director |
|
Andrew and Michele Hennessy
|
|
(collectively the “Vendor”)
|
|
DRINAN MARKETING LIMITED
|
|
(“DML”)
|
|
GILLA INC.
|
|
(the “Purchaser”)
|
A.
|
The Purchaser is interested in expanding its electronic cigarette business into Ireland and Europe through the acquisition of DML as described in a Letter Agreement executed by Parties on January 22, 2014.
|
B.
|
The Vendor is the beneficial owner of all the issued and outstanding shares in the capital of DML.
|
C.
|
DML is an electronic cigarette distributor and consultant to the tobacco industry (the “DML Business”) with one location in Swords, Co. Dublin, Ireland.
|
D.
|
The Purchaser wishes to acquire and the Vendor agrees to sell one hundred percent (100%) of the issued and outstanding common shares of DML (the “Shares”) and this will include any subsidiaries of DML.
|
1.
|
Interpretation
|
1.1
|
Definitions
|
|
(a)
|
“Agreement” means this agreement and all amendments made hereto by written agreement between the Vendor and the Purchaser;
|
|
(b)
|
“Closing Date” means January 31
st
2014 or such other date as may be mutually agreed upon in writing by the parties;
|
|
(c)
|
“Time of Closing” means 11:00 a.m. EST
on the Closing Date.
|
1.2
|
Headings
|
1.3
|
Extended Meanings
|
2.
|
Purchase Price
|
(a)
|
Five hundred thousand (500,000) common shares of the Purchaser (OTCQB: GLLA),
|
(b)
|
One million (1,000,000) common share purchase warrants (the “Warrants”) of the Purchaser (OTCQB: GLLA) with an exercise price of US$0.25 per share and a term of three years from the Closing Date. The Warrants will have a vesting provision that will allow the Warrants to become vested upon DML achieving cumulative electronic cigarette sales revenue of over one million five hundred thousand United States Dollars beginning on the Closing Date.
|
3.
|
Vendor’s Representations and Warranties
|
3.1
|
Corporate and Share Representations
|
(a)
|
the Vendor is a Vendor incorporated and subsisting under the laws of the Country of Ireland, has all legal capacity and requisite corporate power to own its properties and to conduct its business as it is presently being conducted, and is duly registered or otherwise qualified to carry on business in all jurisdictions in which the nature of its assets or business makes such registration or qualification necessary or advisable;.
|
(b)
|
DML has no subsidiaries;
|
(c)
|
DML has no outstanding debt, accounts payable, intercompany loans, or liabilities to the Vendor or FANO as per the attached debt settlement agreement and release;
|
(d)
|
to the best of its knowledge and belief, the Vendor is the registered and beneficial owner of 100% of the issued and outstanding Shares, free and clear of all liens, charges, pledges, security interests, demands, adverse claims, rights or any other encumbrances whatsoever and no Person has any right, option, agreement or arrangement capable of becoming an agreement for the acquisition of any of the Shares or any interest therein;
|
(e)
|
the Vendor has the full legal capacity and corporate power to enter into this Agreement and to take, perform or execute all proceedings, acts and instruments necessary or advisable to consummate the other actions and transactions contemplated in this Agreement and to fulfill their respective obligations under this Agreement;
|
(f)
|
this Agreement has been duly executed and delivered by the Vendor and this Agreement constitutes a legal, valid and binding obligation of the Vendor enforceable against the Vendor in accordance with its terms, except as such terms may be limited by bankruptcy, insolvency, re-organization or other laws relating to the enforcement of creditors’ rights generally;
|
(g)
|
neither the execution, nor delivery of this Agreement, nor the consummation of the transactions contemplated hereby, nor compliance with and fulfillment of the terms and provisions of this Agreement will:
|
(h)
|
no person, firm or vendor has any agreement or option or any right or privilege (whether by law, pre-emptive or contractual) capable of becoming an agreement or option, including convertible securities, warrants or convertible obligations of any nature, for the purchase of any unissued shares in the securities of the Vendor;
|
(i)
|
save and except for matters which are disclosed in DML’s Financial Statements or otherwise expressly set out in this Agreement, DML has not (nor has agreed to):
|
(j)
|
the corporate records and minute books of DML as provided to the Purchaser or its legal counsel contain complete and accurate minutes of all meetings of and corporate actions or written consents by the directors and shareholders of DML;
|
(k)
|
DML does not operate or engage in any business activities, operations or management of any nature or kind whatsoever other than the business as disclosed to the Purchaser;
|
(l)
|
except as expressly referred to in the DML Financial Statements
|
(m)
|
DML has filed all tax returns required to be filed by them prior to the date hereof in all applicable jurisdictions and have paid, collected and remitted all taxes, customs duties, tax installments, levies, assessments, reassessments, penalties, interest and fines due and payable, collectible or remittable by them at present other than those liabilities expressly disclosed in DML’s Financial Statements. All such tax returns properly reflect, and do not in any respect understate the income, taxable income or the liability for taxes of DML in the relevant period and the liability of DML for the collection, payment and remittance of tax under applicable Tax Laws;
|
(n)
|
adequate provision has been made in DML’s Financial Statements for all taxes, governmental charges and assessments, including interest and penalties thereon, payable by DML for all periods up to the date of the balance sheets comprising part of DML’s Financial Statements;
|
(o)
|
DML has withheld and remitted all amounts required to be withheld and remitted by it in respect of any taxes, governmental charges or assessments in respect of any taxable year or portion thereof up to and including December 31, 2013 other than those amounts expressly disclosed in DML’s Financial Statements;
|
(p)
|
there are no actions, suits or other proceedings, investigations or claims in progress or pending and, to the best of the Vendor and DML’s belief and knowledge, there are no actions, suits or other proceedings or investigations or claims threatened, against DML in respect of any taxes, governmental charges or assessments. No waivers have been filed by DML with any taxing authority;
|
(q)
|
DML conducts and has always conducted the DML Business in substantial compliance with all applicable laws, rules and regulations of each jurisdiction in which the DML Business is carried on, is not currently in breach of any such laws, rules or regulations and is duly licensed, registered or qualified, in each jurisdiction in which DML owns or leases property or carries on the DML Business, to enable the DML Business to be carried on as now conducted and its property and assets to be owned, leased and operated, and all such licenses, registrations and qualifications are valid and subsisting and in good standing and none of the same contains any burdensome term, provision, condition or limitation which has or may have an adverse effect on the operation of the DML Business;
|
(r)
|
to the best of its knowledge and belief, all private placements of any DML Shares have been completed in accordance with all applicable securities regulations;
|
(s)
|
no employee has made any claim or, to the best of DML and the Vendor’s knowledge, has any basis for any action or proceeding against DML, arising out of any statute, ordinance or regulation relating to discrimination in employment or employment practices, harassment, occupational health and safety standards or worker’s compensation;
|
(t)
|
there is no action, lawsuit, claim, proceeding, or investigation pending or, to the best knowledge of DML and the Vendor, threatened against, relating to or affecting DML before any court, government agency, or any arbitrator of any kind. The Vendor and DML are not aware of any existing ground on which any such proceeding might be commenced with any reasonable likelihood of success and there is not presently outstanding against the Vendor or DML any judgment, decree, injunction, rule or order of any court, governmental agency, or arbitrator relating to or affecting DML, the Vendor, the DML Assets or the DML Business;
|
(u)
|
no representation or warranty made by the Vendor or DML in this Agreement and no statement made in any schedule, exhibit, certificate or other document furnished pursuant to this Agreement, contains, or will contain, any untrue statement of a Material Fact or omits, or will omit, to state any Material Fact necessary to make such representation or warranty or any such statement not misleading. The Vendor does not know of any fact which, if known to the Purchaser would deter them from consummating the transactions contemplated herein.
|
4.
|
Purchaser’s Representations and Warranties
|
4.1
|
The Purchaser represents and warrants that:
|
|
(a)
|
the Purchaser is a company duly incorporated, organized and subsisting under the laws of the State of Nevada;
|
|
(b)
|
neither the making of this Agreement, the completion of the transactions contemplated by it, nor the performance of or compliance with its terms will violate the Articles of the Purchaser; and
|
4.2
|
The Purchaser has due and sufficient right, power and authority to enter into this Agreement on the terms and conditions set forth in this Agreement and to perform its obligations under this Agreement.
|
5.
|
Vendor’s Covenants
|
5.1
|
Consents
|
5.2
|
Possession
|
5.3
|
Books and Records
|
5.4
|
Bank Accounts
|
6.
|
Closing Arrangements
|
6.1
|
Closing Location
|
7.
|
General
|
7.1
|
Survival of Vendor’s Representations
|
7.2
|
Survival of Purchaser’s Representations
|
7.3
|
Indemnification by the Vendor
|
7.4
|
Commissions, Legal Fees
|
7.5
|
Notices
|
To the Vendor:
|
Andrew Hennessy
|
Unit K5, Drinan Enterprise Center
|
|
Swords, Co. Dublin, Ireland
|
|
To the Purchaser:
|
Gilla Inc.
|
1602-110 Yonge Street
|
|
Toronto, Ontario
|
|
Attn: Graham Simmonds
|
7.6
|
Time of Essence
|
7.7
|
Further Assurances
|
7.8
|
Proper Law
|
7.9
|
Entire Agreement
|
7.10
|
Assignment
|
7.11
|
Benefit and Binding Nature of the Agreement
|
7.12
|
Amendments and Waiver
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.
|
Date: May 20, 2014
|
By:
|
/s/ J. Graham Simmonds
|
Name: J. Graham Simmonds | ||
Title: Chief Executive Officer |
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.
|
Date: May 20, 2014
|
By:
|
/s/ Ashish Kapoor
|
Name: Ashish Kapoor | ||
Title: Chief Financial Officer |