SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
THE GREATER CANNABIS COMPANY, INC.
(Exact name of registrant as specified in its charter)
(State or other Jurisdiction of
incorporation or organization)
(Primary Standard Industrial
Classification Code Number)
244 2nd Ave N., Suite 9, St. Petersburg, FL 33701
(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)
244 2nd Ave N., Suite 9
St. Petersburg, FL 33701
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Please send copies of all communications to:
John T. Root, Jr., Esq.
P.O. Box 701
Greenbrier, Arkansas 72058
As soon as practicable after the effective date of this Registration Statement.
(Approximate date of commencement of proposed sale to the public)
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box: [ ]
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act of 1933, please check the following box and list the Securities Act of 1933 registration statement number of the earlier effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act of 1933, check the following box and list the Securities Act of 1933 registration statement number of the earlier effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act of 1933, check the following box and list the Securities Act of 1933 registration statement number of the earlier effective registration statement for the same offering. [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
|Large accelerated filer||[ ]||Accelerated filer||[ ]|
|Non-accelerated filer||[ ]||Smaller reporting company||[X]|
|(Do not check if a smaller reporting company)|
Calculation of Registration Fee
|Title of Each Class of Securities to be Registered||
Maximum Aggregate Offering
|Common Stock offered by Selling Stockholders, par value $0.001 per share (3)||$||.25||$||696.19||*|
|(1)||Estimated solely for purposes of calculating the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended (“Securities Act”). The selling shareholders will offer their shares at $.25 per share until the Company’s shares are quoted on the OTC Markets (https://www.otcmarkets.com) Bulletin Board as an OTCQB qualified security and, assuming we secure this qualification, thereafter at prevailing market prices or privately negotiated prices. We will not receive proceeds from the sale of shares from the selling shareholders.|
|(2)||Calculated pursuant to Rule 457(o) under the Securities Act based on an estimate of the proposed maximum aggregate offering price.|
|(3)||Pursuant to Rule 416 under the Securities Act, the securities being registered hereunder include such indeterminate number of additional shares of common stock as may be issued after the date hereof as a result of stock splits, stock dividends or similar transactions.|
* Previously paid
The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.
The information in this prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
PRELIMINARY PROSPECTUS - SUBJECT TO COMPLETION Dated August 7 , 2017
The Greater Cannabis Company, Inc.
This prospectus is part of a registration statement that we filed with the Securities and Exchange Commission (the “SEC”). This prospectus relates to the offering of up to 24,027,493 shares of our common stock, par value $0.001 per share (“Common Stock”). The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
The Selling shareholders are offering up to 24,027,493 shares of common stock. The selling shareholders will offer their shares at $0.25 per share until our shares are quoted on the OTC Bulletin Board and, assuming we secure this qualification, thereafter at prevailing market prices or privately negotiated price. We will not receive proceeds from the sale of shares from the selling shareholders.
There are no underwriting commissions involved in this offering. We have agreed to pay all the costs and expenses of this offering. Selling shareholders will pay no offering expenses. As of the date of this prospectus, there is no trading market in our common stock, and we cannot assure you that a trading market will develop. Our common stock is not currently listed on any national securities exchange, the NASDAQ stock market, OTC Bulletin Board, or the OTC Pink Sheets. There is no guarantee that our securities will ever trade on the OTC Bulletin Board or other exchange.
This offering is highly speculative and these securities involve a high degree of risk and should be considered only by persons who can afford the loss of their entire investment. Additionally, auditors have expressed substantial doubt as to our Company’s ability to continue as a going concern. See “Risk Factors” beginning on page, infra .
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.
The date of this prospectus is August 7 , 2017.
We are applying to list our Common Stock on the OTC Bulletin Board under the symbol “GCAN”. No assurance can be given that our application will be approved.
Our common stock involves a high degree of risk. You should read the “RISK FACTORS” section beginning on page 14 before you decide to purchase any of our Common Stock.
We qualify as an “emerging growth company” as defined in the Jumpstart our Business Startups Act (“JOBS Act”). For more information, see the prospectus subsection titled “Emerging Growth Company Status” starting on page 11.
The Company has minimal revenues to date and there can be no assurance that the Company will be successful in furthering its operations and/or revenues. Persons should not invest unless they can afford to lose their entire investment. Investing in our securities involves a high degree of risk. You should purchase these securities only if you can afford a complete loss of your investment. See “Risk Factors” beginning on page 14 of this prospectus.
Neither the SEC nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
The date of this prospectus is August 7 , 2017.
TABLE OF CONTENTS
|SUMMARY FINANCIAL DATA||12|
|NOTE ABOUT FORWARD-LOOKING STATEMENTS||28|
|USE OF PROCEEDS||29|
|DESCRIPTION OF SECURITIES||42|
|DESCRIPTION OF BUSINESS||43|
|MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION||55|
|DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS||63|
|SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT||67|
|MARKET FOR COMMON STOCK / SHARES ELIGIBLE FOR FUTURE SALE||69|
|WHERE YOU CAN FIND MORE INFORMATION||70|
You should rely only on the information contained in this prospectus and any free writing prospectus prepared by us or on our behalf. We have not authorized anyone to provide you with different or additional information. If anyone provides you with different or additional information, you should not rely on it. The information in this prospectus is accurate only as of the date on the front of this prospectus. Our business, financial condition, results of operations and prospects may have changed since the date of this prospectus. This prospectus is not an offer or solicitation relating to the securities in any jurisdiction in which such an offer or solicitation relating to the securities is not authorized. You should not consider this prospectus to be an offer or solicitation relating to the securities if the person making the offer or solicitation is not qualified to do so, or if it is unlawful for you to receive such an offer or solicitation.
This summary highlights certain information appearing elsewhere in this prospectus. This summary is not complete and does not contain all of the information you should consider prior to investing. After you read this summary, you should read and consider carefully the more detailed information and financial statements and related notes that we include in this prospectus, especially the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” If you invest in our securities, you are assuming a high degree of risk.
Unless we have indicated otherwise or the context otherwise requires, references in the prospectus to “Greater Cannabis Company” the “Company,” “we,” “us” and “our” or similar terms are to The Greater Cannabis Company, Inc.
The Greater Cannabis Company, Inc. Story - Our Company
The Greater Cannabis Company, Inc. ( f/k/a The Greater Cannabis Company, LLC) was formed in Florida on March 14, 2014. The Company’s business plan is to concentrate on cannabis related investment and development opportunities through direct retail sales, investments in private and/or public entities, joint ventures, licensing agreements or acquisitions.
The Company’s business segments are divided into four operating segments:
1. E-commerce - Through the Company’s wholly owned subsidiary, GCC Superstore, LLC, the Company has established an online store whose merchandise includes pipes, vaporizers, grinders, hemp related products, CBD (Cannabidiol) related products and additional products focusing on the cannabis industry. The online store, GCC Superstore, was opened in June 2017 and can be found at www.gccsuperstore.com. At present, the GCC Superstore carries in excess of 1000 products from 20 suppliers and over 50 brands. The online store operates under a “drop-ship” model which affords it the benefit of less capital expenditure on inventory.
2. Advertising - With the development of the GCC Superstore, the Company will place directed advertising throughout the online store. Advertising will originate through Google AdSense or direct-advertising sales by the Company. The company will also use social media outlets such as Facebook, Twitter and Instagram in an effort to attract customers with product specific advertisements or posts.
3. Licensing - The Company is actively seeking licensing opportunities in the cannabis sector, for intellectual property, products and dispensary means. At present, the Company does not have any active licensing agreements. On July 31, 2014, the Company entered into a Licensing Agreement with Artemis Dispensing Technologies for the development and resell of an automated dispensing product. Under the collaboration and license agreement, Artemis was to be responsible for the development of a high end automated dispensing product. Upon launch and sales of the product, Artemis was to be responsible for the installation, training and customer support for the hardware and software. The Company was to be responsible for direct sales, addition of key distributors and sublicensing of specific territories within the U.S. The initial term of the Agreement expired December 31, 2016 and in the opinion of management the Agreement is no longer in effect. Please see NOTE C- ARTEMIS LICENSING AGREEMENT for further information.
4. Direct Investments - The Company may, at its election, directly invest in private entities within the cannabis sector either through stock purchase agreements, debentures, joint ventures or a hybrid of each. The Company’s planned investments will focus on those entities whose near-term goals are to maximum shareholder value through the filing of an initial public offering or a corporate event that takes the entity from private to public.
The Company is a development stage Enterprise and has not commenced planned principal operations. The Company had minimal revenues and has incurred losses of $695,026 for the period March 14, 2014 (inception) through the quarter ended June 30, 2017 and negative working capital of $102,418 at June 30, 2017. In addition, the Company incurred losses of $108,788 for the period March 14, 2014 (inception) through December 31, 2016 and negative working capital of $108,788 at December 31, 2016. These factors raise substantial doubt about the Company’s ability to continue as a going concern.
There can be no assurance that sufficient funds required during the next year or thereafter will be generated from operations or that funds will be available from external sources such as debt or equity financings or other potential sources. The lack of additional capital resulting from the inability to generate cash flow from operations or to raise capital from external sources would force the Company to substantially curtail or cease operations and would, therefore, have a material adverse effect on its business. Furthermore, there can be no assurance that any such required funds, if available, will be available on attractive terms or that they will not have a significant dilutive effect on the Company’s existing stockholders.
The Company intends to overcome the circumstances that impact its ability to remain a going concern through a combination of the commencement of revenues, with interim cash flow deficiencies being addressed through additional equity and debt financing. The Company anticipates raising additional funds through public or private financing, strategic relationships or other arrangements in the near future to support its business operations; however, the Company may not have commitments from third parties for a sufficient amount of additional capital. The Company cannot be certain that any such financing will be available on acceptable terms, or at all, and its failure to raise capital when needed could limit its ability to continue its operations. The Company’s ability to obtain additional funding will determine its ability to continue as a going concern. Failure to secure additional financing in a timely manner and on favorable terms would have a material adverse effect on the Company’s financial performance, results of operations and stock price and require it to curtail or cease operations, sell off its assets, seek protection from its creditors through bankruptcy proceedings, or otherwise. Furthermore, additional equity financing may be dilutive to the holders of the Company’s common stock, and debt financing, if available, may involve restrictive covenants, and strategic relationships, if necessary to raise additional funds, and may require that the Company relinquish valuable rights. Please see NOTE B- GOING CONCERN for further information.
We are a Florida for-profit corporation. Our corporate address is 244 2nd Ave N., Suite 9, St Petersburg, FL 33701, our telephone number is (727) 482-1505 and our website is www.greatercannabiscompany.com. The information on our website and/or mobile apps (which is in development) is not a part of this prospectus.
Cannabis is currently a Schedule I controlled substance under the CSA and is, therefore, illegal under federal law. Even in those states in which the use of cannabis has been legalized pursuant to state law, its use, possession or cultivation remains a violation of federal law. A Schedule I controlled substance is defined as one that has no currently accepted medical use in the United States, a lack of safety for use under medical supervision and a high potential for abuse. The U.S. Department of Justice (the “DOJ”) defines Schedule I controlled substances as “the most dangerous drugs of all the drug schedules with potentially severe psychological or physical dependence.” If the federal government decides to enforce the CSA in Colorado with respect to cannabis, persons that are charged with distributing, possessing with intent to distribute or growing cannabis could be subject to fines and/or terms of imprisonment, the maximum being life imprisonment and a $50 million fine.
Notwithstanding the CSA, as of the date of this filing, 28 U.S. states, the District of Columbia and the U.S. territories of Guam and Puerto Rico allow their residents to use medical cannabis. Voters in the states of Alaska, California, Colorado, Maine, Massachusetts, Nevada, Oregon and Washington have approved ballot measures to legalize cannabis for adult recreational use. Such state and territorial laws are in conflict with the federal CSA, which makes cannabis use and possession illegal at the federal level.
In light of such conflict between federal laws and state laws regarding cannabis, the previous administration under President Obama had effectively stated that it was not an efficient use of resources to direct federal law enforcement agencies to prosecute those lawfully abiding by state-designated laws allowing the use and distribution of medical cannabis. For example, the prior DOJ Deputy Attorney General of the Obama administration, James M. Cole, issued a memorandum (the “Cole Memo”) to all United States Attorneys providing updated guidance to federal prosecutors concerning cannabis enforcement under the CSA (see “-The Cole Memo”). In addition, the Financial Crimes Enforcement Network (“FinCEN”) provided guidelines (the “FinCEN Guidelines”) on February 14, 2014, regarding how financial institutions can provide services to cannabis-related businesses consistent with their Bank Secrecy Act (“BSA”) obligations (see “-FinCEN”).
Additional existing and pending legislation provides, or seeks to provide, protection to persons acting in violation of federal law but in compliance with state laws regarding cannabis. The Rohrabacher-Farr Amendment to the Commerce, Justice, Science and Related Agencies Appropriations Bill, which funds the DOJ, prohibits the DOJ from using funds to prevent states with medical cannabis laws from implementing such laws. The Rohrabacher-Farr Amendment is effective through April 28, 2017, but as an amendment to an appropriations bill, it must be renewed annually. The Compassionate Access Compassionate Access, Research Expansion, and Respect States Act (the “CARERS Act”) has been introduced in the U.S. Senate, which proposes to reclassify cannabis under the CSA to Schedule II, thereby changing the plant from a federally criminalized substance to one that has recognized medical uses. More recently, the Respect State Marijuana Laws Act of 2017 has been introduced in the U.S. House of Representatives, which proposes to exclude persons who produce, possess, distribute, dispense, administer or deliver marijuana in compliance with state laws from the regulatory controls and administrative, civil and criminal penalties of the CSA.
However, as of the date of this filing, neither the CARERS Act nor the Respect State Marijuana Laws Act of 2017 has been enacted, the Rohrabacher-Farr Amendment has not yet been renewed beyond April 28, 2017, and the new administration under President Trump has not yet indicated whether it will change the previously stated policy of low-priority enforcement of federal laws related to cannabis set forth in the Cole Memo or the FinCEN Guidelines. The Trump administration could change this policy and decide to strongly enforce the federal laws applicable to cannabis. Any such change in the federal government’s enforcement of current federal laws could cause significant financial damage to us. While we do not currently harvest, distribute or sell cannabis, we may be irreparably harmed by a change in enforcement policies of the federal government. However, as of the date of this filing, we have provided products and services to state-approved cannabis cultivators and dispensary facilities. As a result of our providing ancillary products and services to state-approved cannabis cultivators and dispensary facilities, we could be deemed to be aiding and abetting illegal activities, a violation of federal law.
Absent any future changes in cannabis-related policies under the Trump administration, we intend to remain within the guidelines outlined in the Cole Memo (see “-The Cole Memo”) and the FinCEN Guidelines (see “-FinCEN”), where applicable; however, we cannot provide assurance that we are in full compliance with the Cole Memo, the FinCEN Guidelines or any applicable federal laws or regulations.
The Cole Memo
Because of the discrepancy between the laws in some states, which permit the distribution and sale of medical and recreational cannabis, from federal law that prohibits any such activities, DOJ Deputy Attorney General James M. Cole issued the Cole Memo concerning cannabis enforcement under the CSA. The Cole Memo guidance applies to all of the DOJ’s federal enforcement activity, including civil enforcement and criminal investigations and prosecutions, concerning cannabis in all states.
The Cole Memo reiterates Congress’s determination that cannabis is a dangerous drug and that the illegal distribution and sale of cannabis is a serious crime that provides a significant source of revenue to large-scale criminal enterprises, gangs, and cartels. The Cole Memo notes that the DOJ is committed to enforcement of the CSA consistent with those determinations. It also notes that the DOJ is committed to using its investigative and prosecutorial resources to address the most significant threats in the most effective, consistent, and rational way. In furtherance of those objectives, the Cole Memo provides guidance to DOJ attorneys and law enforcement to focus their enforcement resources on persons or organizations whose conduct interferes with any one or more of the following important priorities (the “Enforcement Priorities”) in preventing:
|●||the distribution of cannabis to minors;|
|●||revenue from the sale of cannabis from going to criminal enterprises, gangs, and cartels;|
|●||the diversion of cannabis from states where it is legal under state law in some form to other states;|
|●||state-authorized cannabis activity from being used as a cover or pretext for the trafficking of other illegal drugs or other illegal activity;|
|●||violence and the use of firearms in the cultivation and distribution of cannabis;|
|●||drugged driving and the exacerbation of other adverse public health consequences associated with cannabis use;|
|●||the growing of cannabis on public lands and the attendant public safety and environmental dangers posed by cannabis production on public lands; and|
|●||cannabis possession or use on federal property.|
We intend to conduct rigorous due diligence to verify the legality of all activities that we engage in and ensure that our activities do not interfere with any of the Enforcement Priorities set forth in the Cole Memo.
FinCEN provided guidance regarding how financial institutions can provide services to cannabis-related businesses consistent with their BSA obligations. For purposes of the FinCEN guidelines, a “financial institution” includes any person doing business in one or more of the following capacities:
|●||bank (except bank credit card systems);|
|●||broker or dealer in securities;|
|●||money services business;|
|●||card club; and|
|●||a person subject to supervision by any state or federal bank supervisory authority.|
In general, the decision to open, close, or refuse any particular account or relationship should be made by each financial institution based on a number of factors specific to that institution. These factors may include its particular business objectives, an evaluation of the risks associated with offering a particular product or service, and its capacity to manage those risks effectively. Thorough customer due diligence is a critical aspect of making this assessment.
In assessing the risk of providing services to a cannabis-related business, a financial institution should conduct customer due diligence that includes: (i) verifying with the appropriate state authorities whether the business is duly licensed and registered; (ii) reviewing the license application (and related documentation) submitted by the business for obtaining a state license to operate its cannabis-related business; (iii) requesting from state licensing and enforcement authorities available information about the business and related parties; (iv) developing an understanding of the normal and expected activity for the business, including the types of products to be sold and the type of customers to be served (e.g., medical versus recreational customers); (v) ongoing monitoring of publicly available sources for adverse information about the business and related parties; (vi) ongoing monitoring for suspicious activity, including for any of the red flags described in this guidance; and (vii) refreshing information obtained as part of customer due diligence on a periodic basis and commensurate with the risk. With respect to information regarding state licensure obtained in connection with such customer due diligence, a financial institution may reasonably rely on the accuracy of information provided by state licensing authorities, where states make such information available.
As part of its customer due diligence, a financial institution should consider whether a cannabis-related business implicates one of the Cole Memo Enforcement Priorities or violates state law. This is a particularly important factor for a financial institution to consider when assessing the risk of providing financial services to a cannabis-related business. Considering this factor also enables the financial institution to provide information in BSA reports pertinent to law enforcement’s priorities. A financial institution that decides to provide financial services to a cannabis-related business would be required to file suspicious activity reports.
While we believe we do not qualify as a financial institution in the United States, we cannot be certain that we do not fall under the scope of the FinCEN guidelines. We plan to use the FinCEN Guidelines, as may be amended, as a basis for assessing our relationships with potential tenants, clients and customers. As such, as we engage in financing activities, we intend to adhere to the guidance of FinCEN in conducting and monitoring our financial transactions. Because this area of the law is uncertain but expected to evolve rapidly, we believe that FinCEN’s guidelines will help us best operate in a prudent, reasonable and acceptable manner. There is no assurance, however, that our activities will not violate some aspect of the CSA. If we are found to violate the federal statute or any other in connection with our activities, our company could face serious criminal and civil sanctions.
Moreover, since the use of cannabis is illegal under federal law, we may have difficulty acquiring or maintaining bank accounts and insurance, and our stockholders may find it difficult to deposit their stock with brokerage firms.
Licensing and Local Regulations
Where applicable, we will apply for state licenses that are necessary to conduct our business in compliance with local laws.
Local laws at the city, county and municipal level add an additional layer of complexity to legalized cannabis. Despite a state’s adoption of legislation legalizing cannabis, cities, counties and municipalities within the state may have the ability to otherwise restrict cannabis activities, including but not limited to cultivation, retail or consumption.
Zoning sets forth the approved use of land in any given city, county or municipality. Zoning is set by local governments or local voter referendum, and may otherwise be restricted by state laws. For example, under certain state laws a seller of liquor may not be allowed to operate within 1,000 feet of a school. There may be similar restrictions imposed on cannabis operators, which will restrict where cannabis operations may be located and the manner and size to which they can grow and operate. Zoning can be subject to change or withdrawal, and properties can be re-zoned. The zoning of our properties will have a direct impact on our business operations.
Our primary business plan includes our online store which sells cannabis, hemp, vape and CBD related products. We intend to remain within the guidelines outlined in the Cole Memo1 (as more fully described in this prospectus), which does not alter the Department of Justice’s authority to enforce Federal law, including Federal laws relating to cannabis, but does recommend that U.S. Attorneys prioritize enforcement of Federal law away from the cannabis industry operating as permitted under certain state laws so long as certain conditions are met. However, we cannot provide complete assurance that we are in full compliance with the Cole Memo or any other laws or regulations relating to the cannabis industry. In addition, we cannot provide any assurance that such federal and state enforcement policies may deviate from the current policies in effect or in the future. See the “Risk Factors” and “Description of Business - Government Regulation” sections of this prospectus for more information.
Emerging Growth Company
We are an “emerging growth company,” as defined in the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies.
Section 107(b) of the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have irrevocably opted out of the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the JOBS Act.
We could remain an “emerging growth company” for up to five years, or until the earliest of (i) the last day of the first fiscal year in which our annual gross revenues are $1 billion, as adjusted, or more, (ii) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which would occur if the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter, and (iii) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three-year period.
1 See https://www.justice.gov/iso/opa/resources/3052013829132756857467.pdf The “ Cole ” Memo, Office of Public Affairs, issued by Deputy Attorney General James M. Cole, DAG Memo 8-29-13.
|Securities offered||Up to 24,027,493 shares of our Common Stock|
|Offering price||$.25 per share of Common Stock|
|Common Stock Issued and Outstanding Before This Offering||29,005,969 (1)(2)|
|Common Stock Issued and Outstanding After This Offering||31,505,969 (2)(3)(4)(5)|
|Risk Factors||See “Risk Factors” beginning on page 14 and the other information set forth in this prospectus for a discussion of factors you should consider before deciding to invest in our securities.|
|Market for Common Stock||None|
|Dividends||We have not declared or paid any dividends on our common stock since our inception, and we do not anticipate paying any such dividends for the foreseeable future.|
|(1)||The number of shares of our common stock outstanding before this Offering is 29,005,969 as of August 2, 2017.|
|(2)||On May 25 , 2017, the Company entered into a Securities Purchase Agreement with Emet Capital Partners, LLC (“EMET”). As per the terms of the Agreement, the Company is required to reserve Two Million Five Hundred Thousand shares (2,500,000) of the Company’s common stock. Simultaneous with the entry into the Securities Purchase Agreement, the Company issued a Convertible Note to EMET in the amount of Fifty-Five Thousand and NO/100 Dollars ($55,000.00). The shares reserved in the EMET transaction will not be issued until the Company receives a Notice of Conversion, and are not included in the shares calculated in the common stock issued and outstanding before this offering within “The Offering” table. Please see NOTE E- NOTES PAYABLE TO THIRD PARTIES for further information.|
|(3)||In addition, EMET was issued a warrant to purchase 440,000 shares of the Company’s common stock. The shares to be issued under the warrant were not included in the offering nor in the calculation of the shares outstanding as of August 1, 2017. In the event that EMET were to fully exercise their warrant, the total number of shares outstanding would increase to 31,945,969. Please see NOTE H- ISSUANCE OF COMMON STOCK AND WARRANTS for further information.|
|(4)||We will however, receive proceeds from the issuance of 440,000 shares of our common stock underlying the warrant issued to EMET pursuant to the Securities Purchase Agreement dated May 25, 2017. The warrants have an exercise price of $0.50 and are exercisable for a period of five years.|
|(5)||The Two Million Five Hundred Thousand (2,500,000) shares of common stock issuable on conversion of the Convertible Note issued to EMET are included in the number of shares of common stock issued and outstanding after the offering as the Company anticipates that the Convertible Note will be converted contemporaneous with the secondary offering.|
SUMMARY FINANCIAL DATA
The following summary of our financial data should be read in conjunction with, and is qualified in its entirety by reference to, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements, appearing elsewhere in this prospectus.
Statements of Operations Data
December 31, 2016
|Loss from operations||$||(561,426||)||$||(100,000||)||$||(206||)|
Balance Sheet Data
June 30, 2017
December 31, 2016
December 31, 2015
|Total stockholders’ (deficiency)||$||(278,814||)||$||(108,788||)||$||(5,788||)|
You should carefully consider the risks described below and other information in this prospectus, including the financial statements and related notes that appear at the end of this prospectus, before deciding to invest in our securities. These risks should be considered in conjunction with any other information included herein, including in conjunction with forward-looking statements made herein. If any of the following risks actually occur, they could materially adversely affect our business, financial condition, operating results or prospects. Additional risks and uncertainties that we do not presently know or that we currently deem immaterial may also impair our business, financial condition, operating results and prospects.
Risks Relating to Our Financial Condition
Our independent registered accounting firm has expressed concerns about our ability to continue as a going concern.
The report of our independent registered accounting firm expresses concern about our ability to continue as a going concern based on the absence of significant revenues, our significant losses from operations and our need for additional financing to fund all of our operations. It is not possible at this time for us to predict with assurance the potential success of our business. The revenue and income potential of our proposed business and operations are unknown. If we cannot continue as a viable entity, we may be unable to continue our operations and you may lose some or all of your investment in our common stock.
We have limited operational history in an emerging industry, making it difficult to accurately predict and forecast business operation.
As we have less than three years of corporate operational history and have yet to generate revenue, it is extremely difficult to make accurate predictions and forecasts on our finances. This is compounded by the fact that we operate in both the technology, retail and cannabis industries, which are three rapidly transforming industries. There is no guarantee that our products or services will remain attractive to potential and current users as these industries undergo rapid change or that potential customers will utilize our services.
As a growing company, we have yet to achieve a profit and may not achieve a profit in the near future, if at all.
We have not yet produced a net profit and may not in the near future, if at all. While we expect our revenue to grow, we have not achieved profitability and cannot be certain that we will be able to sustain our current growth rate or realize sufficient revenue to achieve profitability. Further, many of our competitors in the cannabis field, such as MassRoots, Inc. (“MSRT”), have a significantly larger user base and revenue stream, but have yet to achieve profitability. Our ability to continue as a going concern may be dependent upon raising capital from financing transactions, increasing revenue throughout the year and keeping operating expenses below our revenue levels in order to achieve positive cash flows, none of which can be assured.
We may require additional capital to support business growth, and this capital might not be available on acceptable terms, if at all.
We intend to continue to make investments to support our business growth and may require additional funds to respond to business challenges, including the need to develop new features and products or enhance our existing products, improve our operating infrastructure or acquire complementary businesses and technologies. Accordingly, we may need to engage in continued equity or debt financings to secure additional funds. If we raise additional funds through future issuances of equity or convertible debt securities, our existing stockholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences and privileges superior to those of our common stock. Any debt financing we secure in the future could involve restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions. We may not be able to obtain additional financing on terms favorable to us, if at all. If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to continue to support our business growth and to respond to business challenges could be impaired, and our business may be harmed.
We expect our quarterly financial results to fluctuate.
We expect our net sales and operating results to vary significantly from quarter to quarter due to a number of factors, including changes in:
|●||Demand for our products;|
|●||Our ability to obtain and retain existing customers or encourage repeat purchases;|
|●||Our ability to manage our product inventory;|
|●||General economic conditions, both domestically and in foreign markets;|
|●||Advertising and other marketing costs; and|
|●||Costs of creating and expanding product lines.|
As a result of the variability of these and other factors, our operating results in future quarters may be below the expectations of our stockholders.
Risks Relating to Our Business and Industry
Our proposed business is dependent on laws pertaining to the marijuana industry.
Continued development of the marijuana industry is dependent upon continued legislative authorization and/or voter approved referenda of marijuana at the state level. Any number of factors could slow or halt progress in this area. Further, progress for the industry, while encouraging, is not assured. While there may be ample public support for legislative action, numerous factors impact the legislative process. Any one of these factors could slow or halt use of marijuana, which would negatively impact our proposed business.
As of April 30, 2017, 29 states and the District of Columbia allow its citizens to use medical marijuana. Voters in the states of Colorado, Washington, Alaska, Oregon, California, Maine, Nevada, Massachusetts and the District of Columbia have approved ballot measures to legalize cannabis for adult use. The state laws are in conflict with the federal Controlled Substances Act, which makes marijuana use, cultivation and/or possession illegal on a national level. As discussed in the “ Cole Memo ” the former Obama administration has effectively stated that it is not an efficient use of resources to direct law federal law enforcement agencies to prosecute those lawfully abiding by state-designated laws allowing the use and distribution of medical marijuana. Any change in the federal government’s enforcement of current federal laws could cause significant financial damage to us and our shareholders.
Cannabis remains illegal under Federal law.
Despite the development of a legal cannabis industry under the laws of certain states, these state laws legalizing medical and adult cannabis use are in conflict with the Federal Controlled Substances Act, which classifies cannabis as a “Schedule-I” controlled substance and makes cannabis use and possession illegal on a national level. The United States Supreme Court has ruled that the Federal government has the right to regulate and criminalize cannabis, even for medical purposes, and thus Federal law criminalizing the use of cannabis preempts state laws that legalize its use. However, the Obama Administration has determined that it is not an efficient use of resources to direct Federal law enforcement agencies to prosecute those lawfully abiding by state laws allowing the use and distribution of medical and recreational cannabis. There is no guarantee that the Trump Administration will not change the Federal government’s stated policy regarding the low-priority enforcement of Federal laws in states where cannabis has been legalized. Any such change in the Federal government’s enforcement of Federal laws could cause significant financial damage to us and our shareholders.
Laws and regulations affecting the medical marijuana industry are constantly changing, which could detrimentally affect our proposed operations.
Local, state and federal medical marijuana laws and regulations are broad in scope and subject to evolving interpretations, which could require us to incur substantial costs associated with compliance or alter our business plan. In addition, violations of these laws, or allegations of such violations, could disrupt our business and result in a material adverse effect on our operations. In addition, it is possible that regulations may be enacted in the future that will be directly applicable to our proposed business. We cannot predict the nature of any future laws, regulations, interpretations or applications, nor can we determine what effect additional governmental regulations or administrative policies and procedures, when and if promulgated, could have on our business.
As the possession and use of cannabis is illegal under the Federal Controlled Substances Act, we may be deemed to be aiding and abetting illegal activities through the services that we provide to users and advertisers. As a result, we may be subject to enforcement actions by law enforcement authorities, which would materially and adversely affect our business.
Under Federal law, and more specifically the Federal Controlled Substances Act, the possession, use, cultivation, and transfer of cannabis is illegal. Our business provides services to customers that are engaged in the business of possession, use, cultivation, and/or transfer of cannabis. As a result, law enforcement authorities, in their attempt to regulate the illegal use of cannabis, may seek to bring an action or actions against us, including, but not limited, to a claim of aiding and abetting another’s criminal activities. The Federal aiding and abetting statute provides that anyone who “commits an offense against the United States or aids, abets, counsels, commands, induces or procures its commission, is punishable as a principal.” 18 U.S.C. §2(a). As a result of such an action, we may be forced to cease operations and our investors could lose their entire investment. Such an action would have a material negative effect on our business and operations.
The alternative medicine industry faces strong opposition.
It is believed by many that well-funded, significant businesses may have a strong economic opposition to the medical marijuana industry as currently formed. We believe that the pharmaceutical industry clearly does not want to cede control of any compound that could become a strong selling drug. For example, medical marijuana will likely adversely impact the existing market for Marinol® aka ronabinol, the current “marijuana pill” sold by AbbVie, Inc. The “traditional” pharmaceutical industry is well funded with a strong and experienced lobby that eclipses the funding of the medical marijuana movement. Any inroads the pharmaceutical industry makes in halting or rolling back the medical marijuana movement could have a detrimental impact on the market for our services and products and thus on our business, operations and financial condition.
Federal enforcement practices could change with respect to services provided to participants in the cannabis industry, which could adversely impact us. If the Federal government were to change its practices, or were to expend its resources on enforcement actions against service providers in the cannabis industry, such actions could have a materially adverse effect on our operations, our customers, or the sales of our products.
It is possible that additional Federal or state legislation could be enacted in the future that would prohibit our advertisers from selling cannabis and/or cannabis-related products, and, if such legislation were enacted, such advertisers may discontinue the use of our services, our potential source of customers would be reduced, and our revenues would decline. Further, additional government disruption in the cannabis industry could cause potential customers and users to be reluctant use and advertise on our products, which would be detrimental to the Company. We cannot predict the nature of any future laws, regulations, interpretations or applications, nor can we determine what effect additional governmental regulations or administrative policies and procedures, when and if promulgated, could have on our business.
Our potential customers clients and companies which we may elect to invest directly with may have difficulty accessing the service of banks, which may make it difficult for them to operate.
On February 14, 2014, the U.S. government issued rules allowing banks to legally provide financial services to state-licensed cannabis businesses. A memorandum issued by the Justice Department to federal prosecutors reiterated guidance previously given, this time to the financial industry that banks can do business with legal marijuana businesses and “may not” be prosecuted. FinCEN issued guidelines to banks noting that it is possible to provide financial services to state-licensed cannabis businesses and still be in compliance with federal anti-money laundering laws. The guidance, however, falls short of the explicit legal authorization that banking industry officials had requested the government provide, and, to date, it is not clear if any banks have relied on the guidance to take on legal cannabis companies as clients. The aforementioned policy can be changed, including in connection with a change in presidential administration, and any policy reversal and or retraction could result in legal cannabis businesses losing access to the banking industry.
Because the use, sale and distribution of cannabis remains illegal under federal law, many banks will not accept deposits from or provide other bank services to businesses involved with cannabis. The inability to open bank accounts may make it difficult for our existing and potential customers, clients and tenants to operate and may make it difficult for them to contract with us.
Operating an online store open to all internet users may result in legal consequences.
Our Terms and Conditions clearly state that our online store, GCC Superstore, is only to be used by users who are over 21 years old and located where the use of cannabis is permissible under state law and only in a manner which would be permissible under the applicable state law. However, it is impractical to independently verify that all visitors to our online store fit into this description. As such, we run the risk of federal and state law enforcement prosecution.
We have implemented an aggressive content reporting review policy to remove any content which violates our Terms and Conditions. We have introduced a system that automatically flags any posts for review, removal, and possible account suspension that includes certain words such as “gun” or “acid.” As soon as content is flagged by one of GCC Superstore’s automated systems or by another user, it is removed from view until we have had the time to review the content. The Obama Administration determined that it was not an efficient use of resources to direct Federal law enforcement agencies to prosecute those following certain state laws allowing for the use and distribution of medical and recreational cannabis, there can be no assurance that the Trump administration, or future administrations, will not change its stated policy and begin enforcement of the Federal laws against us or our users. Additionally, there can be no assurance that we will not face criminal prosecution from states where the use of cannabis is permitted for the use of cannabis in ways which do not fall under the state law. Finally, even if we attempt to prevent the use of our product in states where cannabis use is not permitted under state law, use of our app by those in such states may still occur and state authorities may still bring an action against us for the promotion of cannabis related material by those residing in such states.
Loss of key contracts with our suppliers, renegotiation of such agreements on less favorable terms or other actions these third parties may take could harm our business .
Most of our agreements with suppliers for products carried on our online store, wholesale agreements, are short term. The loss of these agreements, or the renegotiation of these agreements on less favorable economic or other terms, could limit our ability to carry certain products. This, in turn, could negatively affect our ability to meet consumer demand for certain products and thus possibly end our relationship with a customer. Upon expiration or termination of these agreements, our competitors may be able to enter into wholesale agreements to carry products from our existing suppliers which will put the company at a competitive disadvantage in the market. Our current largest supplier is Vapor Outlet. In the event that Vapor Outlet would elect to terminate our relationship, our business could be negatively impacted in the event we were not able to identify a new supplier for the same products.
Failure to properly scale our network could result in diminished user experience.
As our customer base increases at our online store, the network’s infrastructure as it relates to storage space, bandwidth, processing ability, speed and other factors may begin to deteriorate or fail completely. This may result in deteriorating user experience, system failures or system outages for continued periods of time. Additionally, issues with cross-compatibility of our Android, iOS and Web properties may cause system errors, failures or other technical issues.
New online store features or changes to existing online store features for the Company’s GCC Superstore could fail to attract new customers, retain existing customers, or generate revenue.
Our business strategy is dependent on our ability to develop online store features to attract new customers and retain existing ones. Staffing changes, changes in customer behavior or development of competing networks may cause customers to switch to competing online stores or decrease their use of our online store. To date, our GCC Superstore, our online retail portal, is only in its beginning stages and it has begun to generate minimal revenue. There is no guarantee that individual customers will use these features and as a result, we may fail to generate revenue. Additionally, any of the following events may cause decreased use of our online store:
|●||Emergence of competing websites and online retail stores;|
|●||Inability to convince potential customers to shop at our online store;|
|●||A decrease or perceived decrease in the quality of products at our online store;|
|●||An increase in content that is irrelevant to our users;|
|●||Technical issues on certain platforms or in the cross-compatibility of multiple platforms;|
|●||An increase in the level of advertisements may discourage user engagement;|
|●||A rise in safety or privacy concerns; and|
|●||An increase in the level of spam or undesired content on the network.|
Conflicts of interest may arise from other business activities of our directors and officers.
Our sole officer and director, Wayne Anderson, currently serves in the role as President and Chairman of another publicly traded entity, Sylios Corp (a non-reporting publicly traded company “UNGS” on the OTC Pinksheets). As such, Mr. Anderson may not be able to dedicate the required time to the Company.
We are highly dependent on the services of key executives, the loss of whom could materially harm our business and our strategic direction. If we lose key management or significant personnel, cannot recruit qualified employees, directors, officers, or other personnel or experience increases in our compensation costs, our business may materially suffer.
We are highly dependent on our management team, specifically Wayne Anderson. We currently do not have an Employment Agreement in place with Mr. Anderson. If we lose key employees, our business may suffer. Furthermore, our future success will also depend in part on the continued service of our management personnel and our ability to identify, hire, and retain additional key personnel. We do not carry “key-man” life insurance on the lives of any of our executives, employees or advisors. We experience intense competition for qualified personnel and may be unable to attract and retain the personnel necessary for the development of our business. Because of this competition, our compensation costs may increase significantly.
We will need to raise additional capital to continue operations over the coming year.
We anticipate the need to raise approximately $500,000 in capital to fund our operations through December 31, 2017. We expect to use these cash proceeds, primarily to accelerate our user growth, implement consumer-facing features to boost engagement and sales, expand on our product base at our online store, enter into different cannabis related business portals and remain in full legal and accounting compliance with the SEC. We cannot guarantee that we will be able to raise these required funds or generate sufficient revenue to remain operational.
Our monetization strategy is dependent on many factors outside our control.
There is no guarantee that our efforts to monetize The Greater Cannabis Company, Inc. nor its online store, GCC Superstore, will be successful. Furthermore, our competitors may introduce more advanced consumer portals that deliver a greater value proposition to customers shopping for similar products and to cannabis related businesses looking to advertise over the coming months. Customers may stop using our online store for many reasons, including the addition of advertising, preventing any monetization from occurring. The development of our online retail store may take longer than expected and cost more money than projected. Dispensaries may not have credit or bank cards due to banking regulations, which could significantly increase the cost and time required for us to generate revenue. All these factors individually or collectively may preclude us from effectively monetizing our business.
Government actions or digital distribution platform restrictions could result in our products and services being unavailable in certain geographic regions, harming future growth.
Due to our connections to the cannabis industry, governments and government agencies could ban or cause our network or future apps to become unavailable in certain regions and jurisdictions. This could greatly impair or prevent us from registering new customers at our online store in affected areas and prevent current customers from accessing the network. In addition, government action taken against our service providers, suppliers or partners could cause our network to become unavailable for extended periods of time.
Failure to generate customer growth or engagement could greatly harm our business model.
Our business model is reliant on its ability to attract and retain new customers at our online store. There is no guarantee that growth strategies used in the past will continue to bring new customers to our online store. Changes in relationships with our partners, contractors, suppliers and businesses we retain to grow our online store and expand product availability may result in significant increases in the cost to acquire new customers. Additionally, new customers may fail to engage with the network to the same extent current users are, resulting in decreased usage of the network and a potential decrease in revenue. Decreases in the size of our customer base and/or decreased product availability at our online store would greatly impair our ability to generate revenue.
Failure to attract advertising clients could greatly harm our ability to generate revenue.
Our ability to generate revenue is dependent on the continued growth of the online store and its ability to convince advertisers of its value. Should we prove unable to continue to grow our customer base or register advertising partners as the online store grows could significantly impact our ability to generate advertising revenue. There is no guarantee businesses will want to advertise on our online store or that we will be able to generate future revenue from its existing advertising base.
User engagement and growth depends on software and device updates beyond our control.
Our online store is currently available through the internet. With the development of our GCC Superstore mobile “app”, we anticipate it will be available on multiple operating systems, including iOS and Android, across multiple different manufacturers, including Motorola, LG, Apple and Samsung, on thousands of different individual devices. Changes to the device infrastructure or software updates on these devices could render our platforms and services useless or inoperable and require users to utilize our website rather than through the specific application for the user’s device. This could decrease engagement among current users and devalue our value proposition to advertisers. There is no guarantee that the GCC Superstore app will be approved for downloading through the iOS or Android platforms.
We may be unable to manage growth, which may impact our potential profitability.
Successful implementation of our business strategy requires us to manage our growth. Growth could place an increasing strain on our management and financial resources. To manage growth effectively, we will need to:
|●||Establish definitive business strategies, goals and objectives;|
|●||Maintain a system of management controls; and|
|●||Attract and retain qualified personnel, as well as, develop, train and manage management-level and other employees.|
If we fail to manage our growth effectively, our business, financial condition or operating results could be materially harmed, and our stock price may decline.
We operate in a highly competitive environment, and if we are unable to compete with our competitors, our business, financial condition, results of operations, cash flows and prospects could be materially adversely affected.
We operate in a highly competitive environment. Our competition includes all other companies that are in the business of distributing or reselling hemp-based products for personal use or consumption. A highly competitive environment could materially adversely affect our business, financial condition, results of operations, cash flows and prospects.
We may not be able to compete successfully with other established companies offering the same or similar services and, as a result, we may not achieve our projected revenue and user targets.
If we are unable to compete successfully with other businesses in our existing market, we may not achieve our projected revenue and/or customer targets. We compete with both start-up and established retail and technology companies. Compared to our business, some of our competitors may have greater financial and other resources, have been in business longer, have greater name recognition and be better established in the technological or cannabis markets.
Our lack of adequate D&O insurance may also make it difficult for us to retain and attract talented and skilled directors and officers.
We may in the future be subject to additional litigation, including potential class action and stockholder derivative actions. Risks associated with legal liability are difficult to assess and quantify, and their existence and magnitude can remain unknown for significant periods of time. To date, we have not obtained directors and officers liability (“D&O”) insurance. While neither Florida law nor our Articles of Incorporation or bylaws require us to indemnify or advance expenses to our officers and directors involved in such a legal action, we have entered into an indemnification agreement with our President and intend to enter into similar agreements with other officers and directors in the future. Without adequate D&O insurance, the amounts we would pay to indemnify our officers and directors should they be subject to legal action based on their service to the Company could have a material adverse effect on our financial condition, results of operations and liquidity. Furthermore, our lack of adequate D&O insurance may make it difficult for us to retain and attract talented and skilled directors and officers, which could adversely affect our business.
If we are unable to maintain effective internal control over our financial reporting, the reputational effects could materially adversely affect our business.
Under the provisions of Section 404(a) of the Sarbanes-Oxley Act of 2002, as amended by the Dodd Frank Wall Street Reform and Consumer Protection Act of 2010, the SEC adopted rules requiring public companies to perform an evaluation of Internal Control over Financial Reporting (Internal Controls) and to report on our evaluation in our Annual Report on Form 10-K. Our Internal Controls constitute a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with GAAP. In the event we discover material weakness in our internal controls and our remediation of such reported material weakness is ineffective, or if in the future we are unable to maintain effective Internal Controls, additional resulting material restatements could occur, regulatory actions could be taken, and a resulting loss of investor confidence in the reliability of our financial statements could occur.
Expansion by our well-established competitors into the cannabis industry could prevent us from realizing anticipated growth in users and revenues.
Competitors in the social network space, such as Twitter and Facebook, have continued to expand their businesses in recent years into other social network and advertising markets. If they decided to expand their business networks into the cannabis community, this could hurt the growth of our business, customer base, potential sales and advertising revenue and cause our revenues to be lower than we expect.
Government regulation of the Internet and e-commerce is evolving, and unfavorable changes could substantially harm our business and results of operations.
We are subject to general business regulations and laws as well as Federal and state regulations and laws specifically governing the Internet and e-commerce. Existing and future laws and regulations may impede the growth of the Internet, e-commerce or other online services, and increase the cost of providing online services. These regulations and laws may cover taxation, tariffs, user privacy, data protection, pricing, content, copyrights, distribution, electronic contracts and other communications, consumer protection, broadband residential Internet access and the characteristics and quality of services. It is not clear how existing laws governing issues such as property ownership, sales, use and other taxes, libel and personal privacy apply to the Internet and e-commerce. Unfavorable resolution of these issues may harm our business and results of operations.
The failure to enforce and maintain our intellectual property rights could enable others to use names confusingly similar to The Greater Cannabis Company, Inc. and other names and marks used by our business, which could adversely affect the value of the brand.
The success of our business depends on our continued ability to use our existing trade name in order to increase our brand awareness. In that regard, we believe that our trade name is valuable asset that is critical to our success. As of the date of this prospectus, we have not submitted our trademark application for our name, The Greater Cannabis Company, Inc. In the event we elect to submit an application to the U.S. Patent and Trademark Office, there is no guarantee that they will grant us a trademark. The unauthorized use or other misappropriation of our trade name could diminish the value of our business concept and may cause a decline in our revenue.
We expect to incur substantial expenses to meet our reporting obligations as a public company. In addition, failure to maintain adequate financial and management processes and controls could lead to errors in our financial reporting and could harm our ability to manage our expenses.
We estimate that it will cost approximately $50,000 annually to maintain the proper management and financial controls for our filings required as a public reporting company. In addition, if we do not maintain adequate financial and management personnel, processes and controls, we may not be able to accurately report our financial performance on a timely basis, which could cause a decline in our stock price and adversely affect our ability to raise capital.
Due to our involvement in the cannabis industry, we may have a difficult time obtaining the various insurances that are desired to operate our business, which may expose us to additional risk and financial liabilities.
Insurance that is otherwise readily available, such as workers’ compensation, general liability, and directors and officer’s insurance, is more difficult for us to find and more expensive, because we are a service provider to companies in the cannabis industry. There are no guarantees that we will be able to find such insurances in the future, or that the cost will be affordable to us. If we are forced to go without such insurances, it may prevent us from entering into certain business sectors, may inhibit our growth, and may expose us to additional risk and financial liabilities. In 2017, The Greater Cannabis Company, Inc. expects to begin offering health, dental and vision insurance to its employees at an estimated monthly cost of $5,000-$10,000. The Greater Cannabis Company, Inc. carries general liability insurance. We do not currently hold any other forms of insurance, including directors’ and officers’ insurance. Because we do not have any other types of insurance, if we are made a party of a legal action, we may not have sufficient funds to defend the litigation. If that occurs a judgment could be rendered against us that could cause us to cease operations.
Participants in the cannabis industry may have difficulty accessing the service of banks, which may make it difficult for us to operate.
Despite recent rules issued by the United States Department of the Treasury mitigating the risk to banks who do business with cannabis companies operating in compliance with applicable state laws, as well as recent guidance from the United States Department of Justice, banks remain wary of accepting funds from businesses in the cannabis industry. Since the use of cannabis remains illegal under Federal law, there remains a compelling argument that banks may be in violation of Federal law when accepting for deposit funds derived from the sale or distribution of cannabis and/or related products. Consequently, businesses involved in the cannabis industry continue to have trouble establishing banking relationships. Our inability to open a bank account may make it difficult (and potentially impossible) for us, or some of our advertisers, to do business with us.
Risks Relating to our Common Stock and Offering
There is currently no trading market for our common stock, and liquidity of shares of our common stock is limited.
There is not yet an established public trading market for our securities. Hence, there is no central place, such as a stock exchange or electronic trading system, to resell common stock. As such, stockholders will have to locate a buyer and negotiate a private sale until a market is established. It is our plan to utilize a market maker who will apply to have our common stock quoted on the Over the Counter Bulletin Board in the United States. Our shares are not and have not been listed or quoted on any exchange or quotation system. There can be no assurance that a market maker will agree to file the necessary documents with FINRA which operates the Over the Counter Bulletin Board, nor can there be any assurance that such an application for quotations will be approved or that a regular trading market will develop or that if developed, will be sustained. In the absence of a trading market, an investor will be unable to liquidate his investment except by private sale.
Failure to develop or maintain a trading market could negatively affect its value and make it difficult or impossible for you to sell your shares. Even if a market for common stock does develop, the market price of common stock may be highly volatile. In addition to the uncertainties relating to future operating performance and the profitability of operations, factors such as variations in interim financial results or various, as yet unpredictable, factors, many of which are beyond our control, may have a negative effect on the market price of our common stock.
Should our stock become listed on the OTC Bulletin Board, if we fail to remain current on our reporting requirements, we could be removed from the OTC Bulletin Board which would limit the ability of broker-dealers to sell our securities in the secondary market.
Companies trading on the Over the Counter Bulletin Board, such as we are seeking to become, must be reporting issuers under Section 12 of the Securities Exchange Act of 1934, as amended, and must be current in their reports under Section 13, in order to maintain price quotation privileges on the OTC Bulletin Board. As a result, the market liquidity for our securities could be severely adversely affected by limiting the ability of broker-dealers to sell our securities and the ability of stockholders to sell their securities in the secondary market. In addition, we may be unable to get relisted on the OTC Bulletin Board, which may have an adverse material effect on the Company.
We do not expect to pay dividends in the future; any return on investment may be limited to the value of our common stock.
We do not currently anticipate paying cash dividends in the foreseeable future. The payment of dividends on our common stock will depend on earnings, financial condition and other business and economic factors affecting it at such time as the board of directors may consider relevant. Our current intention is to apply net earnings, if any, in the foreseeable future to increasing our capital base and development and marketing efforts. There can be no assurance that the Company will ever have sufficient earnings to declare and pay dividends to the holders of our common stock, and in any event, a decision to declare and pay dividends is at the sole discretion of our board of directors. If we do not pay dividends, our common stock may be less valuable because a return on your investment will only occur if its stock price appreciates.
Authorization of preferred stock.
Our Certificate of Incorporation authorizes the issuance of up to 10,000,000 shares of preferred stock with designations, rights and preferences determined from time to time by its Board of Directors. Accordingly, our Board of Directors is empowered, without stockholder approval, to issue preferred stock with dividend, liquidation, conversion, voting, or other rights which could adversely affect the voting power or other rights of the holders of the common stock. In the event of issuance, the preferred stock could be utilized, under certain circumstances, as a method of discouraging, delaying or preventing a change in control of the Company. Although we have no present intention to issue any shares of our authorized preferred stock, there can be no assurance that the Company will not do so in the future.
The Company arbitrarily determined the offering price and terms of the Shares offered through this Prospectus .
The price of the Shares has been arbitrarily determined and bears no relationship to the assets or book value of the Company, or other customary investment criteria. No independent counsel or appraiser has been retained to value the Shares, and no assurance can be made that the offering price is in fact reflective of the underlying value of the Shares offered hereunder. Each prospective investor is therefore urged to consult with his or her own legal counsel and tax advisors as to the offering price and terms of the Shares offered hereunder.
The Shares are an illiquid investment and transferability of the Shares is subject to significant restriction .
There are substantial restrictions on the transfer of the Shares. Therefore, the purchase of the Shares must be considered a long-term investment acceptable only for prospective investors who are willing and can afford to accept and bear the substantial risk of the investment for an indefinite period of time. There is not a public market for the resale of the Shares. A prospective investor, therefore, may not be able to liquidate its investment, even in the event of an emergency, and Shares may not be acceptable as collateral for a loan.
The market price for our common stock may be particularly volatile given our status as a relatively unknown company, with a limited operating history and lack of profits which could lead to wide fluctuations in our share price. You may be unable to sell your common stock at or above your purchase price, which may result in substantial losses to you.
Our stock price may be particularly volatile when compared to the shares of larger, more established companies that trade on a national securities exchange and have large public floats. The volatility in our share price will be attributable to a number of factors. First, our common stock will be compared to the shares of such larger, more established companies, sporadically and thinly traded. As a consequence of this limited liquidity, the trading of relatively small quantities of shares by our shareholders may disproportionately influence the price of those shares in either direction. The price for our shares could decline precipitously in the event that a large number of shares of our common stock are sold on the market without commensurate demand. Second, we are a speculative or “risky” investment due to our limited operating history and lack of profits to date, and uncertainty of future market acceptance for our potential products. As a consequence of this enhanced risk, more risk-adverse investors may, under the fear of losing all or most of their investment in the event of negative news or lack of progress, be more inclined to sell their shares on the market more quickly and at greater discounts than would be the case with the stock of a larger, more established company that trades on a national securities exchange and has a large public float. Many of these factors are beyond our control and may decrease the market price of our common stock, regardless of our operating performance. We cannot make any predictions or projections as to what the prevailing market price for our common stock will be at any time. Moreover, the OTC Bulletin Board is not a liquid market in contrast to the major stock exchanges. We cannot assure you as to the liquidity or the future market prices of our common stock if a market does develop. If an active market for our common stock does not develop, the fair market value of our common stock could be materially adversely affected.
Our shares are subject to the U.S. “Penny Stock” Rules and investors who purchase our shares may have difficulty re-selling their shares as the liquidity of the market for our shares may be adversely affected by the impact of the “Penny Stock” Rules.
Our stock is subject to U.S. “Penny Stock” rules, which may make the stock more difficult to trade on the open market. Our common shares are not currently traded on the OTC Bulletin Board, but it is the Company’s plan that the common shares be quoted on the OTC Bulletin Board. A “penny stock” is generally defined by regulations of the U.S. Securities and Exchange Commission (“SEC”) as an equity security with a market price of less than US$5.00 per share. However, an equity security with a market price under US $5.00 will not be considered a penny stock if it fits within any of the following exceptions:
|(i)||the equity security is listed on NASDAQ or a national securities exchange;|
|(ii)||the issuer of the equity security has been in continuous operation for less than three years, and either has (a) net tangible assets of at least US $5,000,000, or (b) average annual revenue of at least US $6,000,000; or|
|(iii)||the issuer of the equity security has been in continuous operation for more than three years, and has net tangible assets of at least US $2,000,000.|
Our common stock does not currently fit into any of the above exceptions.
If an investor buys or sells a penny stock, SEC regulations require that the investor receive, prior to the transaction, a disclosure explaining the penny stock market and associated risks. Furthermore, trading in our common stock will be subject to Rule 15g-9 of the Exchange Act, which relates to non-NASDAQ and non-exchange listed securities. Under this rule, broker/dealers who recommend our securities to persons other than established customers and accredited investors must make a special written suitability determination for the purchaser and receive the purchaser’s written agreement to a transaction prior to sale. Securities are exempt from this rule if their market price is at least $5.00 per share. Since our common stock is currently deemed penny stock regulations, it may tend to reduce market liquidity of our common stock, because they limit the broker/dealers’ ability to trade, and a purchaser’s ability to sell, the stock in the secondary market.
The low price of our common stock has a negative effect on the amount and percentage of transaction costs paid by individual shareholders. The low price of our common stock also limits our ability to raise additional capital by issuing additional shares. There are several reasons for these effects. First, the internal policies of certain institutional investors prohibit the purchase of low-priced stocks. Second, many brokerage houses do not permit low-priced stocks to be used as collateral for margin accounts or to be purchased on margin. Third, some brokerage house policies and practices tend to discourage individual brokers from dealing in low-priced stocks. Finally, broker’s commissions on low-priced stocks usually represent a higher percentage of the stock price than commissions on higher priced stocks. As a result, the Company’s shareholders may pay transaction costs that are a higher percentage of their total share value than if our share price were substantially higher.
Because we can issue additional shares of common stock, purchasers of our common stock may incur immediate dilution and experience further dilution.
We are authorized to issue up to 500,000,000 shares of common stock, of which 29,005,969 shares of common stock are issued and outstanding as of August 2, 2017. Our Board of Directors has the authority to cause us to issue additional shares of common stock and to determine the rights, preferences and privileges of such shares, without consent of any of our stockholders. Consequently, the stockholders may experience more dilution in their ownership of our stock in the future.
A reverse stock split may decrease the liquidity of the shares of our common stock.
The liquidity of the shares of our common stock may be affected adversely by a reverse stock split given the reduced number of shares that will be outstanding following a reverse stock split, especially if the market price of our common stock does not increase as a result of the reverse stock split.
Following a reverse stock split, the resulting market price of our common stock may not attract new investors, including institutional investors, and may not satisfy the investing requirements of those investors. Consequently, the trading liquidity of our common stock may not improve.
Although we believe that a higher market price of our common stock may help generate greater or broader investor interest, we cannot assure you that a reverse stock split will result in a share price that will attract new investors.
We are classified as an “emerging growth company” as well as a “smaller reporting company” and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies and smaller reporting companies will make our common stock less attractive to investors.
We are an “emerging growth company,” as defined in the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public 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. We cannot predict if investors will find our common stock less attractive because we may 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.
Section 107 of the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have irrevocably opted out of the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the JOBS Act.
We could remain an “emerging growth company” for up to five years, or until the earliest of (i) the last day of the first fiscal year in which our annual gross revenues exceed $1 billion, (ii) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter, and (iii) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three-year period.
Notwithstanding the above, we are also currently a “smaller reporting company.” Specifically, similar to “emerging growth companies,” “smaller reporting companies” are able to provide simplified executive compensation disclosures in their filings; are exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that independent registered public accounting firms provide an attestation report on the effectiveness of internal control over financial reporting; and have certain other decreased disclosure obligations in their SEC filings. Decreased disclosures in our SEC filings due to our status as an “emerging growth company” or “smaller reporting company” may make it harder for investors to analyze our results of operations and financial prospects.
Because directors and officers currently and for the foreseeable future will continue to control The Greater Cannabis Company, Inc., it is not likely that you will be able to elect directors or have any say in the policies of The Greater Cannabis Company, Inc.
Our shareholders are not entitled to cumulative voting rights. Consequently, the election of directors and all other matters requiring shareholder approval will be decided by majority vote. The directors, officers and affiliates of The Greater Cannabis Company, Inc. beneficially own approximately 25% of our outstanding common stock. Due to such significant ownership position held by our insiders, new investors may not be able to effect a change in our business or management, and therefore, shareholders would have no recourse as a result of decisions made by management.
In addition, sales of significant amounts of shares held by our directors, officers or affiliates, or the prospect of these sales, could adversely affect the market price of our common stock. Management’s stock ownership may discourage a potential acquirer from making a tender offer or otherwise attempting to obtain control of us, which in turn could reduce our stock price or prevent our stockholders from realizing a premium over our stock price.
Since we intend to retain any earnings for development of our business for the foreseeable future, you will likely not receive any dividends for the foreseeable future.
We have never declared or paid any cash dividends or distributions on our capital stock. We currently intend to retain our future earnings to support operations and to finance expansion and therefore we do not anticipate paying any cash dividends on our common stock in the foreseeable future.
NOTE ABOUT FORWARD-LOOKING STATEMENTS
Statements under “Prospectus Summary,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Description of Business” and elsewhere in this prospectus may be “forward-looking statements.” Forward-looking statements include, but are not limited to, statements that express our intentions, beliefs, expectations, strategies, predictions or any other statements relating to our future activities or other future events or conditions. These statements include, among other things, statements regarding:
|●||the growth of our business and revenues and our expectations about the factors that influence our success;|
|●||our plans to continue to invest in systems, facilities, and infrastructure, increase our hiring and grow our business;|
|●||our plans for the build out and expansion of our online store and portal, GCC Superstore, and the strategy and timing of any plans to monetize our network;|
|●||our user growth expectations;|
|●||our ability to attain funding and the sufficiency of our sources of funding;|
|●||our expectation that our cost of revenues, development expenses, sales and marketing expenses, and general and administrative expenses will increase;|
|●||fluctuations in our capital expenditures; and|
|●||our plans for potential business partners and any acquisition plans;|
as well as other statements regarding our future operations, financial condition and prospects, and business strategies. These statements are based on current expectations, estimates and projections about our business based, in part, on assumptions made by management. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may, and are likely to, differ materially from what is expressed or forecasted in the forward-looking statements due to numerous factors, including those described above and those risks discussed from time to time in this registration statement, of which this prospectus is a part, including the risks described under “Risk Factors.” Any forward-looking statements speak only as of the date on which they are made, and we do not undertake any obligation to update any forward-looking statement to reflect events or circumstances that occur in the future.
If one or more of these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may vary materially from what we may have projected. Any forward-looking statements you read in this prospectus reflect our current views with respect to future events and are subject to these and other risks, uncertainties and assumptions relating to our operations, results of operations, financial condition, growth strategy and liquidity. You should specifically consider the factors identified in this prospectus that could cause actual results to differ before making an investment decision. In addition, as discussed in “Risk Factors,” our shares may be considered a “penny stock” and, as a result, the safe harbors provided for forward-looking statements made by a public company that files reports under the federal securities laws may not be available to us.
We are not providing any tax advice as to the acquisition, holding or disposition of the securities offered herein. In making an investment decision, investors are strongly encouraged to consult their own tax advisor to determine the U.S. Federal, state and any applicable foreign tax consequences relating to their investment in our securities.
USE OF PROCEEDS
This prospectus relates to shares of our common stock that may be offered and sold from time to time by the selling stockholders. We will not receive any proceeds from the sale of shares of common stock in this offering.
DETERMINATION OF OFFERING PRICE
The pricing of the Shares has been arbitrarily determined and established by the Company. No independent accountant or appraiser has been retained to protect the interest of the investors. No assurance can be made that the offering price is in fact reflective of the underlying value of the Shares. Each prospective investor is urged to consult with his or her counsel and/or accountant as to offering price and the terms and conditions of the Shares. Factors to be considered in determining the price include the amount of capital expected to be required, the market for securities of entities in a new business venture, projected rates of return expected by prospective investors of speculative investments, the Company’s prospects for success and prices of similar entities.
Not applicable. We are not offering any shares in this registration statement. All shares are being registered on behalf of our selling shareholders.
This prospectus covers the resale from time to time by the selling shareholders identified in the table below of up to 24,027,493 shares of our common stock, which were issued in various transactions exempt from registration under the Securities Act, as follows:
|●||21,527,493 of the shares registered hereby were issued to shareholders of Sylios Corp as a spin-off with Payment Date March 10, 2017; and|
|●||2,500,000 of the shares registered hereby are issuable upon conversion of the Convertible Note, which we sold to Emet Capital Partners, LLC on May 25, 2017.|
The selling shareholders named below are selling the securities. The table assumes that all of the securities will be sold in this offering. However, any or all of the securities listed below may be retained by any of the selling shareholders, and therefore, no accurate forecast can be made as to the number of securities that will be held by the selling shareholders upon termination of this offering. The selling shareholders will offer their shares at $0.25 per share until the Company’s shares are quoted on the OTC Bulletin Board and, assuming we secure this qualification, thereafter at prevailing market prices or privately negotiated prices. We will not receive proceeds from the sale of shares from the selling shareholders. These selling shareholders acquired their shares though a spin-off, Record date February 3, 2017, from Sylios Corp. The shares were paid out to shareholders on Payment Date, March 10, 2017, with the exception of the shares reserved for future issuances to Emet Capital Partners, LLC. Prior to the spin-off, The Greater Cannabis Company, Inc. was a wholly owned subsidiary of Sylios Corp. We believe that the selling shareholders listed in the table have sole voting and investment powers with respect to the securities indicated. We will not receive any proceeds from the sale of the securities by the selling shareholders. Each selling shareholder who is also an affiliate of a broker dealer as noted below has represented that: (1) the selling shareholder purchased in the ordinary course of business; and (2) at the time of purchase of the securities being registered for resale, the selling shareholder had no agreements or understandings, directly or indirectly, with any person to distribute the securities.
|Stockholder||Beneficial Ownership Before Offering (ii)||
of Common Stock
|Shares of Common Stock Included in Prospectus||
Ownership After the Offering
of Common Stock
After the Offering
|Fisch & Co||1||*||1||0||0.0||%|
|Kenneth J. Adams||1||*||1||0||0.0||%|
|Bronson & Mary Alexander Jt Ten||2||*||2||0||0.0||%|
|Amcor Holdings, Inc.||1||*||1||0||0.0||%|
|American Energy Holdings LLC||1||*||1||0||0.0||%|
|American Enterprise Investment Services Inc||14||*||14||0||0.0||%|
|American Advisor Services Inc.||1||*||1||0||0.0||%|
|Jimmy Wayne Anderson (vi)||7,397,499||23.16||%||19,023||7,378,476||23.10||%|
|Nancy P Anderson||1||*||1||0||0.0||%|
|Kathleen Emily Anderson, UTMA||2||*||2||0||0.0||%|
|Lauren Layne Anderson, UTMA||1||*||1||0||0.0||%|
|Matthew Anderson, UTMA||2||*||2||0||0.0||%|
|Sarah Anderson, UTMA||2||*||2||0||0.0||%|
|Around the Clock Partners, LP||96||*||96||0||0.0||%|
|Around the Clock Trading & Capital Management, LLC||1||*||1||0||0.0||%|
|Albert Edward Attianese||1||*||1||0||0.0||%|
|B & S Land||1||*||1||0||0.0||%|
|Mattie K. Baker||1||*||1||0||0.0||%|
|Vera F. Baker||1||*||1||0||0.0||%|
|Myron Baker, Jr.||1||*||1||0||0.0||%|
|Vera F. Baker, Trust , Vera F. Baker, TTEE||1||*||1||0||0.0||%|
|Bank Julius Baer & Co LTD *||32||*||32||0||0.0||%|
|J. Paxton Barnett and Janice C. Barnett||1||*||1||0||0.0||%|
|J Paxton Barnett TTEE, Charlotte Van Ness Barnett Tr U/A 4/21/89||4||*||4||0||0.0||%|
|J. Paxton Barnett TTEE, Joe P. Barnett Grandchild TR||1||*||1||0||0.0||%|
|National Financial Services LLC *||1||*||1||0||0.0||%|
|J. Paxton Barnett||31||*||31||0||0.0||%|
|Joseph Paxton Barnett, Trustee of the Charlotte Van Ness Barnett,||26||*||26||0||0.0||%|
|David W. Barrell Rev Trust, UAD 3/23/95||1||*||1||0||0.0||%|
|Merry Christeena Basye||1||*||1||0||0.0||%|
|Martin L. Bayse||1||*||1||0||0.0||%|
|Robert Lee Blankenship II||40000||*||40000||0||0.0||%|
|Susan Ellen Thorsen Bloom||1||*||1||0||0.0||%|
|BNP Paribas *||14||*||14||0||0.0||%|
|BNP Paribas NY Branch FBO, Consors Bank||25,037||*||25,037||0||0.0||%|
|BNP Paribas NY Branch FBO, Fortis Bank SA/NV||700||*||700||0||0.0||%|
|BNP Paribus NY Branch FBO Karen Yue Mooi||60||*||60||0||0.0||%|
|John G. Bunce||1||*||1||0||0.0||%|
|Sharon A. Burgess TTEE, FBO Sharon A. Burgess REV TR||1||*||1||0||0.0||%|
|Cabo Canyon LLC||1||*||1||0||0.0||%|
|Cantor Fitzgerald & Co||742||*||742||0||0.0||%|
|Coleman R. Cassel||1||*||1||0||0.0||%|
|Cassel Family Trust, December 31, 1999||11||*||11||0||0.0||%|
|CEDE & Co||1||*||1||0||0.0||%|
|Charles Schwab & Co Inc *||1,208,297||3.78||%||1,2082,97||0||0.0||%|
|Citigroup Global Markets Inc *||219,309||*||219,309||0||0.0||%|
|Victoria J. Clark||1||*||1||0||0.0||%|
|Joe F. Cooper and Gloria A. Cooper||1||*||1||0||0.0||%|
|Cor Clearing, LLC *||26,425||*||26,425||0||0.0||%|
|Arthur C. Cox III||1||*||1||0||0.0||%|
|Credential Securities Inc.||25||*||25||0||0.0||%|
|Hendrick L. Cromartie III||1||*||1||0||0.0||%|
|James Leonard Crum||1||*||1||0||0.0||%|
|Darling Capital, LLC||1,123,500||3.52||%||1 ,123,500||0||0.0||%|
|David Lerner Associates Inc||1||*||1||0||0.0||%|
|Davis Family Investments Corp||2||*||2||0||0.0||%|
|Davis Management Corp.||1||*||1||0||0.0||%|
|Alphonse Della-Donna TTEE, U/A dtd 11/09/92||1||*||1||0||0.0||%|
|Ann Della-Donna TTEE, U/A dtd 05/03/1989||1||*||1||0||0.0||%|
|John Anthony Delladonna||7||*||7||0||0.0||%|
|John A Delladonna TTEE, UA 04-09-2004||600,000||1.88||%||600,000||0||0.0||%|
|Ann Della-Donna TTEE, Ann R. Della-Donna TR U/A 5/3/89||1||*||1||0||0.0||%|
|Alphonse Della-Donna TTEE, Alphonse Della-Donna Rev TR U/A 11/9/92||1||*||1||0||0.0||%|
|Ivy Stewart Duggan||1||*||1||0||0.0||%|
|E Trade Clearing LLC *||3||*||3||0||0.0||%|
|First Clearing, LLC *||91||*||91||0||0.0||%|
|First Southwest Company *||1||*||1||0||0.0||%|
|Fortis Bank SA/NV, Care of BNP Paribas RCC||1||*||1||0||0.0||%|
|Steven J. Freer & Bonnie S. Freer, Trees of the Freer Fam TR DTD 06/13/07||1||*||1||0||0.0||%|
|Gerlach & Co. *||52,281||*||52,281||0||0.0||%|
|Bryan P.S. Gray||1||*||1||0||0.0||%|
|William C. Groover||1||*||1||0||0.0||%|
|Hare & Co., LLC *||240||*||240||0||0.0||%|
|Ronald Douglas Higdon Ann Higdon||1||*||1||0||0.0||%|
|Carl William Hilliard||1||*||1||0||0.0||%|
|Hilltop Securities Inc||27||*||27||0||0.0||%|
|William L. Holt||1||*||1||0||0.0||%|
|HSBC Trinkaus & Burkhardt AG *||67||*||67||0||0.0||%|
|Interactive Broker LLC *||28||*||28||0||0.0||%|
|Interactive Brokers Retail Equity Clearing *||1||*||1||0||0.0||%|
|J S International||1||*||1||0||0.0||%|
|James Joseph Jasen Mary Ethel Jasen||1||*||1||0||0.0||%|
|Leland Robert Jessen or Gene Nora Jessen JT TEN||1||*||1||0||0.0||%|
|JPMorgan Clearing Corp *||109||*||109||0||0.0||%|
|Jill Kanan & Steve Kanan TTEES Westbay Management Co UAD DTD 2/1/1999||1||*||1||0||0.0||%|
|Barbara Kanan, TTEE Barbara Kanan, Trust U/A DTD 12/26/96||1||*||1||0||0.0||%|
|Malcolm Kanan, TTEE Malcolm Kanan, Trust U/A DTD 12/26/96||2||*||2||0||0.0||%|
|Peter E. Kann Dennifer P. Kann||1||*||1||0||0.0||%|
|Robert L. Kaplon||1||*||1||0||0.0||%|
|KCG Americas LLC *||174,504||*||174,504||0||0.0||%|
|Keon Transport, LLC||1||*||1||0||0.0||%|
|Cor Clearing FBO Howard Kirschner R/O IRA||1||*||1||0||0.0||%|
|Knight Execution and Clearing Services *||18,392||*||18,392||0||0.0||%|
|Timothy P. Knoy||1||*||1||0||0.0||%|
|John & Segri Koenig||1||*||1||0||0.0||%|
|Nick A. Landolina TTEE Nick A. Landolina Rev TR U/A 1/16/90||1||*||1||0||0.0||%|
|Delaware Charter GRTEE & Trust Legent Clearing FBO Brett Levine, SEP IRA||1||*||1||0||0.0||%|
|Legent Clearing FBO Adam Kaplon, A/C # 1342-1096||1||*||1||0||0.0||%|
|Legent Clearing FBO Michael Kaplon, A/C # 4390-0719||1||*||1||0||0.0||%|
|Legent Clearing FBO Robert & Sandra Kaplon Family Trust,||1||*||1||0||0.0||%|
|Legent Clearing LLC FBO Sandra Kaplon, ACCT#2445-5573||1||*||1||0||0.0||%|
|Legent Clearing LLC FBO Elizabeth O’Brien, ACCT# 7974-2617||1||*||1||0||0.0||%|
|LEK Securities Corporation||38||*||38||0||0.0||%|
|Melvin H. Levine||1||*||1||0||0.0||%|
|Anthony Liantonio Lucille Liantonio||1||*||1||0||0.0||%|
|Rosemary Lindsey TTEE Rosemary Lindseu Trust U/A 7/1/96||1||*||1||0||0.0||%|
|LPL Financial LLC||438||*||438||0||0.0||%|
|M L & C||4||*||4||0||0.0||%|
|Barbara Macrae Andrew Macrae||1||*||1||0||0.0||%|
|Howard E Matheny||4||*||4||0||0.0||%|
|Lois Kathleen McGrady||1||*||1||0||0.0||%|
|Merrill Lynch Pierce Fenner & Smith Incorporated *||459,624||1.44||%||459,624||0||0.0||%|
|MLPF & S Cust FPO Barbara Howard, IRA||1||*||1||0||0.0||%|
|Morgan Stanley & Co LLC *||5||*||5||0||0.0||%|
|Morgan Stanley Smith Barney *||14||*||14||0||0.0||%|
|Morgan Stanley Smith Barney LLC Cust John Donato IRA Standard 12/03/2008||1||*||1||0||0.0||%|
|Morgan Stanley Smith Barney LLC||1||*||1||0||0.0||%|
|National Financial Services LLC||2,571,683||8.05||%||2,571,683||0||0.0||%|
|NBC Clearing Services Inc||1||*||1||0||0.0||%|
|NBCN Inc. *||1,426,380||4.46||%||1,426,380||0||0.0||%|
|NBCN Inc. ITF Pershing LLC (701085)||11||*||11||0||0.0||%|
|NBCN (652136) *||367||*||367||0||0.0||%|
|Nesbitt Burns *||269,568||*||269,568||0||0.0||%|
|Mary Sue Neuman||1||*||1||0||0.0||%|
|Ronald K. Neuman||1||*||1||0||0.0||%|
|NFS Roth IRA FBO Caroline S. Boylan||1||*||1||0||0.0||%|
|NFS Co Cust IRA Rollover FBO Stephen Peng||1||*||1||0||0.0||%|
|NFS Co Cust IRA FBO Daniel R. Wickremasinghe||1||*||1||0||0.0||%|
|NFS Custodian - Roth IRA FBO Randall L. Shields||1||*||1||0||0.0||%|
|NFS Co Cust IRA Rollover FBO Timothy J. Geraghty||1||*||1||0||0.0||%|
|NFS Custodian - Roth IRA FBO Danielle Steiner||1||*||1||0||0.0||%|
|NFS Co Cust IRA Rollover FBO Gregory L. Johnson||1||*||1||0||0.0||%|
|NFS Co Cust IRA Rollover FBO Gerald W. Daily||1||*||1||0||0.0||%|
|NFS Custodian - Roth IRA FBO Lisa Elizabeth Lindsey||1||*||1||0||0.0||%|
|NFS Custodian - Roth IRA FBO Robert F. Degarimore||1||*||1||0||0.0||%|
|NFS Custodian - Roth IRA FBO Mihoko Steiner||1||*||1||0||0.0||%|
|NFS TTEE TN Valley Authority 401K Plan||1||*||1||0||0.0||%|
|Oppenheimer & Co Inc||2||*||2||0||0.0||%|
|Jeffrey Jamison Parker||200,000||*||200,000||0||0.0||%|
|Pershing LLC *||316,526||*||316,526||0||0.0||%|
|Phoenix Marketing Group, Inc.||40,834||*||40,834||0||0.0||%|
|Progressive Axle & Tire Inc||1||*||1||0||0.0||%|
|Qtrade Securities Inc. *||4,178||*||4,178||0||0.0||%|
|Questrade Inc *||39||*||39||0||0.0||%|
|Raymond James & Associates, Inc *||1,360||*||1,360||0||0.0||%|
|Raymond James & Associates Inc CSDN FBO David S. Matheny, IRA||1||*||1||0||0.0||%|
|RBC Dominion Securities Inc. *||249,082||*||249,082||0||0.0||%|
|RBC Capital Markets LLC *||141,599||*||141,599||0||0.0||%|
|Michael Francis Reczek||1||*||1||0||0.0||%|
|Redwood Management, LLC||1||*||1||0||0.0||%|
|Republic Exploration, LLC||1||*||1||0||0.0||%|
|James V. Ricciutti||1||*||1||0||0.0||%|
|John P. Richardson||1||*||1||0||0.0||%|
|John R. Rogers||8||*||8||0||0.0||%|
|NFS Rollover IRA FBO Jay Russo||1||*||1||0||0.0||%|
|Andrew J. Sabetta Sr. Louise F. Sabetta||1||*||1||0||0.0||%|
|Blair F Scanlon IRA Raymond James & Assoc Inc CSDN||1||*||1||0||0.0||%|
|Blair F. Scanlon Jr||11||*||11||0||0.0||%|
|James R.J. Scheltema||334||*||334||0||0.0||%|
|Cor Clearing FBO Donald Schoenfel SEP IRA||1||*||1||0||0.0||%|
|Scotia Capital Inc *||56,861||*||56,861||0||0.0||%|
|Scottrade Inc *||5,768,813||18.06||%||5,768,713||0||0.0||%|
|SLMI Holdings, LLC||18||*||18||0||0.0||%|
|Southwest Securities, Inc. *||348||*||348||0||0.0||%|
|State Street Bank & Trust Co||1||*||1||0||0.0||%|
|Danielle Steiner James Steiner||1||*||1||0||0.0||%|
|James & Mihoko Steiner TTEE The Steiner Insurance Trust U/A 4/20/06||1||*||1||0||0.0||%|
|Stephens, Inc *||15||*||15||0||0.0||%|
|Stifel Nicolaus & Co Inc||1||*||1||0||0.0||%|
|Swiss Quote Group Holding SA||41||*||41||0||0.0||%|
|Steven D. Symms Loretta E. Symms||4||*||4||0||0.0||%|
|Tangiers Investment Group, LLC||1,391,499||4.36||%||1,391,499||0||0.0||%|
|Tangiers Investors, LP|