UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): August 22, 2018
INDOOR HARVEST CORP.
(Exact name of registrant as specified in its charter)
| Texas | 000-55594 | 45-5577364 | ||
|
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
|
5300 East Freeway Suite A Houston, Texas |
77020 | |
| (Address of Principal Executive Offices) | (Zip Code) |
832-649-3998 (Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| [ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| [ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| [ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| [ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company [X]
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Item 1.01 Entry Into a Material Definitive Agreement.
On August 22, 2018, Indoor Harvest Corp (the “Company”) entered into an Engagement Letter (the “EL”) with Ideal Business Partners (“IBP”). Pursuant to the EL, the Company engaged IBP to provide legal, regulatory, business advisory and other services as set forth in the EL, to the Company. The term of the EL is one year from the execution of the EL (the “Term”).
In exchange for the services to be provided by IBP to the Company under the EL, the Company agreed to pay IBP quarterly compensation for the Term of the EL of $50,000, consisting of (i) cash payments of $5,000 per month (or $15,000 per quarter) and the issuance of $35,000 of the Company’s common stock per each quarter. The Company further provided a $5,000 retainer to IBP pursuant to the EL.
Pursuant to the EL, it was further agreed that Mr. Glenn Truitt will provide the legal services to the Company on behalf of IBP under the EL, and will act as the General Counsel for the Company on behalf of IBP. Pursuant to the EL, it was also further agreed that Mr. David Housey will provide business advisory services for the Company on behalf of IBP. The Company and IBP do not intend for the foregoing individuals to be an “officer” or an “executive officer” as such terms are defined in Rule 16a-1(f) and Rule 3b-7, both under the Securities Exchange Act of 1934 (the “Exchange Act”) and do not intend such individuals to be subject to the Section 16 requirements under the Exchange Act; further, such individuals do not have the authority and are not able to bind the Company into a binding obligation.
The foregoing description of the EL is only a summary of the material terms of the EL, does not purport to be complete, and is qualified in its entirety by reference to the EL, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated by reference herein.
Item 7.01 Regulation FD Disclosure.
On August 24, 2018, the Company issued a press release announcing, among other things, its financial results for the quarter ended June 30, 2018 and providing certain business updates. A copy of this press release is attached hereto as Exhibit 99.1 and incorporated herein by reference.
On August 24, 2018, the Company’s Chief Executive Officer, issued a letter to shareholders, a copy of which attached hereto as Exhibit 99.2 and incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| INDOOR HARVEST CORP. | ||
| Date: August 24, 2018 | By: | /s/ Daniel Weadock |
| Daniel Weadock | ||
| Chief Executive Officer | ||
Indoor Harvest Corp Announces Second Quarter Results and Provides Business Update
HOUSTON, TX – (Globe Newswire) – August 23, 2018 – Indoor Harvest Corp. (OTCQB: INQD) (“Indoor Harvest”), a precision agriculture technology company focused on delivering pharmaceutical grade cannabis for researchers, and the development of next generation personalized medicines, is pleased to announce its financial results for the three and six months ended June 30, 2018, and to provide a business update.
Financial Results Summary
Some highlights from Indoor Harvest’s financial results for the six months ended June 30, 2018 are as follows:
| ● | 34% reduction in net loss from $1,780,636 at June 30, 2017 to $1,180,541. | |
| ● | 49% reduction in total operating expenses from $1,147,284 at June 30, 2017 to $584,125. | |
| ● | 38% decrease in general and administrative expenses from $752,497 at June 30, 2017 to $465,031. | |
| ● | 69% reduction in professional fees from $366,908 at June 30, 2017 to $113,039. | |
| ● | 27% increase in total liabilities from $1,132,644 at December 31, 2017 to $1,437,778. |
For our complete second quarter 2018, please review our Quarterly Report on Form 10-Q, as filed with the Securities and Exchange Commission, available by clicking on the following link: https://www.sec.gov/Archives/edgar/data/1572565/000149315218012366/form10-q.htm.
Letter to Stockholders
In connection with the release of Indoor Harvest’s second quarter 2018 financial results, Dan Weadock, Indoor Harvest’s Chief Executive Officer, today issued a letter to Indoor Harvest’s shareholders. A copy of the letter is included below.
To our Valued Shareholders,
It has been my great pleasure to assume leadership of Indoor Harvest Corp as we seek to prepare the company for short- and long-term success in the rapidly evolving legal cannabis industry. I am writing to you to share some of the strategic relationships we’ve recently forged and those that are on the horizon that we believe are exciting. The potential “legalization” of cannabis (which includes a substantial number of political, social and scientific developments) has created what we believe to be unprecedented opportunities. I am pleased to report that Indoor Harvest is seeking to take advantage of the latest technological and scientific developments and what we anticipate will represent value in the current market and beyond.
Importantly, I am not undertaking this effort alone. Collaboration is the new innovation, and success comes from curating the right collaborators. We believe that it is important to recognize the newly engaged strategic assets and partners that we expect can help us both leverage current market opportunities and identify market shifts before they happen and pivot Indoor Harvest to take advantage. Further, we believe that to understand where we stand and where we’re going, it’s important to review where we came from, and how we got here.
History of Indoor Harvest
Indoor Harvest was founded as a precision agriculture technology platform, focused on high pressure aeroponics, targeting the nascent vertical farming/controlled environment agriculture space. The original mission of the company was to revolutionize farming by eliminating harmful chemicals, reducing water and other overall inputs while simultaneously increasing nutrient uptake, biomass and quality to feed the ever expanding population in a sustainable way.
In 2014, in recognition of the burgeoning cannabis industry and the value it potentially represented to the company, we pivoted and turned our focus away from traditional leafy greens, toward the production of pharmaceutical grade cannabis for the research and development community, and the exploration of new, personalized medicines. We believed then, and now, that aeroponic platform technology is an integral element in the future of indoor farming.
We believe that, high pressure aeroponics holds great potential, not just for cannabis, but for traditional farming, as the global population continues to explode, farmable land continues to be depleted and/or contaminated, and water becomes increasingly and alarmingly more scarce. We believe that all these forces point toward a dire need for more sustainable and more precise agricultural technology. We believe that aeroponics delivers on each of these fronts.
We believe further that cannabis is presently the most attractive and interesting application of Indoor Harvest’s technology, not only because we believe that it is a high value crop in a fast growing industry, but also because of its disruptive potential and role as next generation medicine.
Within this unprecedented market, we anticipate that Indoor Harvest’s innovative intellectual property can shine, as we refine our focus of seeking to deliver true pharmaceutical grade product.
Since joining the company, internally restructuring, and building both a new team and a new strategy to execute on our mission, there have been challenges that continue to plague this industry and these are precisely the challenges that we believe our technology was built to solve.
Strategic Partnerships
I am proud to highlight some of the people and platforms that comprise the team selected and entrusted to assist the company with our efforts needed to execute on our mission and vision:
Electrum Partners/Leslie Bocskor
We believe that the current cannabis business landscape is littered with armies of “consultants” promising decades of experience in a market that’s hardly old enough to have generated any such tenure, let alone all that’s represented in marketing materials. However, we believe that a few persistent voices have continued to rise above the noise and we believe that Leslie Bocskor’s is one of them. Leslie heads Electrum Partners (“Electrum”), a multifaceted cannabis consultancy.
As reported on our Current Report on Form 8-K filed with the Securities and Exchange Commission on July 3, 2018, we have engaged Electrum, and Leslie has agreed to work with Indoor Harvest personally and directly, to assist with strategic guidance and develop additional complementary partnerships to integrate Indoor Harvest’s intellectual property into some of what we believe to be the industry’s most important and valuable enterprises, seeking to ensure long-term profitability and value for the company and its shareholders.
Chad Sykes
I have had the great pleasure of continuing to work with Indoor Harvest’s founder and original CEO, Chad Sykes. Chad currently serves as our Chief of Cultivation, principal financial officer and principal accounting officer. We expect that Chad will continue working with Indoor Harvest and will focus his short-term efforts on the development of our planned Integrated & Controlled High-Pressure Aeroponic platform showcase (“ICHPA”).
We believe that Chad is an important part of Indoor Harvest’s history and now, an important part of Indoor Harvest’s future. We believe further that the ICHPA demonstration showcase is Indoor Harvest’s most significant short-term milestone, and Chad’s concentrated assignment demonstrates our commitment to its accomplishment.
MD Global Partners/Owen May
We believe that one of the most challenging aspects of undertaking business in the cannabis space is the special challenge of accessing modern capital markets. For this reason, we are pleased to note that we are working closely with Owen May, the founder and CEO of MD Global Partners, a pioneer in investment banking for alternative markets, including small cap and middle market companies as well as emerging and unique markets like domestic cannabis.
We believe that Owen represents a critical bridge between Indoor Harvest and the capital necessary to accomplish our objectives. We have engaged MD Global to provide both financial advisory and investment banking services and he has already helped shape our approach, strategy and messaging.
Ideal Business Partners
On August 22, 2018, we entered into an Engagement Letter (the “EL”) with Ideal Business Partners (“IBP”). Pursuant to the EL, the Company engaged IBP to provide legal, regulatory, business advisory and other services as set forth in the EL, to the Company. Pursuant to the EL, it was further agreed that Mr. Glenn Truitt will provide the legal services to the Company on behalf of IBP under the EL, and will act as the General Counsel for the Company on behalf of IBP. Pursuant to the EL, it was also further agreed that Mr. David Housey will provide business advisory services for the Company on behalf of IBP.
Next Steps
Of course, assembling a great team is virtually meaningless without an associated game plan for them to execute.
1. Capital Raise. First things first, there are a number of capital-intensive maneuvers that are an essential part of our strategy. We are working with MD Global Partners and Owen to explore our options.
2. Technology Showcase. It is challenging to sell modern agri-tech without a demonstrable proof-of-concept. We believe that an ICHPA system showcase will provide potential investors, partners, vendors, consumers and stakeholders an opportunity to see and touch Indoor Harvest’s technology and expertise at work (in the same way it will be deployed in a modern cultivation operation). We believe that this demonstration will also assist with potential partnership with established commercial cultivation and research assets.
3. Acquire Strategic Assets/Positions. Organic growth is a great story, but is often inefficient and unreliable, especially in a market moving as fast as the current cannabis market is. By employing liquidity and favorable available debt financing, we believe that Indoor Harvest can acquire both equity positions in large strategically-aligned enterprises as well as whole corporate subsidiaries to leverage their advantages where the combination of those assets with Indoor Harvest’s own yield greater value. We expect that Electrum’s market knowledge can help us to locate, negotiate and obtain these positions.
I expect to develop a more detailed strategic plan as we proceed and look forward to making it available to each of you and the public to ensure both accountability and alignment.
In the meantime, I look forward to working on moving the ball forward with our new team and executing on our mission and vision.
Sincerely,
Dan Weadock, CEO
About Indoor Harvest Corp
Indoor Harvest Corp (OTCQB: INQD ), is a precision agriculture technology company focused on delivering pharmaceutical grade cannabis for researchers, and the development of next generation personalized medicines.
Forward-Looking Statements
This release contains certain “forward-looking statements” relating to the business of Indoor Harvest and its subsidiary companies, which can be identified by the use of forward-looking terminology such as “estimates,” “believes,” “anticipates,” “intends,” expects” and similar expressions. Such forward-looking statements involve known and unknown risks and uncertainties that may cause actual results to be materially different from those described herein as anticipated, believed, estimated or expected. Certain of these risks and uncertainties are or will be described in greater detail in our filings with the Securities and Exchange Commission. These forward-looking statements are based on Indoor Harvest’s current expectations and beliefs concerning future developments and their potential effects on Indoor Harvest. There can be no assurance that future developments affecting Indoor Harvest will be those anticipated by Indoor Harvest. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond the control of the Company) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by such forward-looking statements. Indoor Harvest undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
Contact Information
Indoor Harvest Corp
Dan Weadock, Chief Executive Officer
dweadock@indoorharvest.com
FOR IMMEDIATE RELEASE
| From: | Dan Weadock, Chief Executive Officer, Indoor Harvest Corp . |
| RE: | STATE OF THE COMPANY |
To our Valued Shareholders,
It has been my great pleasure to assume leadership of Indoor Harvest Corp as we seek to prepare the company for short- and long-term success in the rapidly evolving legal cannabis industry. I am writing to you to share some of the strategic relationships we’ve recently forged and those that are on the horizon that we believe are exciting. The potential “legalization” of cannabis (which includes a substantial number of political, social and scientific developments) has created what we believe to be unprecedented opportunities. I am pleased to report that Indoor Harvest is seeking to take advantage of the latest technological and scientific developments and what we anticipate will represent value in the current market and beyond.
Importantly, I am not undertaking this effort alone. Collaboration is the new innovation, and success comes from curating the right collaborators. We believe that it is important to recognize the newly engaged strategic assets and partners that we expect can help us both leverage current market opportunities and identify market shifts before they happen and pivot Indoor Harvest to take advantage. Further, we believe that to understand where we stand and where we’re going, it’s important to review where we came from, and how we got here.
History of Indoor Harvest
Indoor Harvest was founded as a precision agriculture technology platform, focused on high pressure aeroponics, targeting the nascent vertical farming/controlled environment agriculture space. The original mission of the company was to revolutionize farming by eliminating harmful chemicals, reducing water and other overall inputs while simultaneously increasing nutrient uptake, biomass and quality to feed the ever expanding population in a sustainable way.
In 2014, in recognition of the burgeoning cannabis industry and the value it potentially represented to the company, we pivoted and turned our focus away from traditional leafy greens, toward the production of pharmaceutical grade cannabis for the research and development community, and the exploration of new, personalized medicines. We believed then, and now, that aeroponic platform technology is an integral element in the future of indoor farming.
We believe that, high pressure aeroponics holds great potential, not just for cannabis, but for traditional farming, as the global population continues to explode, farmable land continues to be depleted and/or contaminated, and water becomes increasingly and alarmingly more scarce. We believe that all these forces point toward a dire need for more sustainable and more precise agricultural technology. We believe that aeroponics delivers on each of these fronts.
We believe further that cannabis is presently the most attractive and interesting application of Indoor Harvest’s technology, not only because we believe that it is a high value crop in a fast growing industry, but also because of its disruptive potential and role as next generation medicine.
Within this unprecedented market, we anticipate that Indoor Harvest’s innovative intellectual property can shine, as we refine our focus of seeking to deliver true pharmaceutical grade product.
Since joining the company, internally restructuring, and building both a new team and a new strategy to execute on our mission, there have been challenges that continue to plague this industry and these are precisely the challenges that we believe our technology was built to solve.
Strategic Partnerships
I am proud to highlight some of the people and platforms that comprise the team selected and entrusted to assist the company with our efforts needed to execute on our mission and vision:
Electrum Partners/Leslie Bocskor
We believe that the current cannabis business landscape is littered with armies of “consultants” promising decades of experience in a market that’s hardly old enough to have generated any such tenure, let alone all that’s represented in marketing materials. However, we believe that a few persistent voices have continued to rise above the noise and we believe that Leslie Bocskor’s is one of them. Leslie heads Electrum Partners (“Electrum”), a multifaceted cannabis consultancy.
As reported on our Current Report on Form 8-K filed with the Securities and Exchange Commission on July 3, 2018, we have engaged Electrum, and Leslie has agreed to work with Indoor Harvest personally and directly, to assist with strategic guidance and develop additional complementary partnerships to integrate Indoor Harvest’s intellectual property into some of what we believe to be the industry’s most important and valuable enterprises, seeking to ensure long-term profitability and value for the company and its shareholders.
Chad Sykes
I have had the great pleasure of continuing to work with Indoor Harvest’s founder and original CEO, Chad Sykes. Chad currently serves as our Chief of Cultivation, principal financial officer and principal accounting officer. We expect that Chad will continue working with Indoor Harvest and will focus his short-term efforts on the development of our planned Integrated & Controlled High-Pressure Aeroponic platform showcase (“ICHPA”).
We believe that Chad is an important part of Indoor Harvest’s history and now, an important part of Indoor Harvest’s future. We believe further that the ICHPA demonstration showcase is Indoor Harvest’s most significant short-term milestone, and Chad’s concentrated assignment demonstrates our commitment to its accomplishment.
MD Global Partners/Owen May
We believe that one of the most challenging aspects of undertaking business in the cannabis space is the special challenge of accessing modern capital markets. For this reason, we are pleased to note that we are working closely with Owen May, the founder and CEO of MD Global Partners, a pioneer in investment banking for alternative markets, including small cap and middle market companies as well as emerging and unique markets like domestic cannabis.
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We believe that Owen represents a critical bridge between Indoor Harvest and the capital necessary to accomplish our objectives. We have engaged MD Global to provide both financial advisory and investment banking services and he has already helped shape our approach, strategy and messaging.
Ideal Business Partners
On August 22, 2018, we entered into an Engagement Letter (the “EL”) with Ideal Business Partners (“IBP”). Pursuant to the EL, the Company engaged IBP to provide legal, regulatory, business advisory and other services as set forth in the EL, to the Company. Pursuant to the EL, it was further agreed that Mr. Glenn Truitt will provide the legal services to the Company on behalf of IBP under the EL, and will act as the General Counsel for the Company on behalf of IBP. Pursuant to the EL, it was also further agreed that Mr. David Housey will provide business advisory services for the Company on behalf of IBP.
Next Steps
Of course, assembling a great team is virtually meaningless without an associated game plan for them to execute.
1. Capital Raise. First things first, there are a number of capital-intensive maneuvers that are an essential part of our strategy. We are working with MD Global Partners and Owen to explore our options.
2. Technology Showcase. It is challenging to sell modern agri-tech without a demonstrable proof-of-concept. We believe that an ICHPA system showcase will provide potential investors, partners, vendors, consumers and stakeholders an opportunity to see and touch Indoor Harvest’s technology and expertise at work (in the same way it will be deployed in a modern cultivation operation). We believe that this demonstration will also assist with potential partnership with established commercial cultivation and research assets.
3. Acquire Strategic Assets/Positions. Organic growth is a great story, but is often inefficient and unreliable, especially in a market moving as fast as the current cannabis market is. By employing liquidity and favorable available debt financing, we believe that Indoor Harvest can acquire both equity positions in large strategically-aligned enterprises as well as whole corporate subsidiaries to leverage their advantages where the combination of those assets with Indoor Harvest’s own yield greater value. We expect that Electrum’s market knowledge can help us to locate, negotiate and obtain these positions.
I expect to develop a more detailed strategic plan as we proceed and look forward to making it available to each of you and the public to ensure both accountability and alignment.
In the meantime, I look forward to working on moving the ball forward with our new team and executing on our mission and vision.
Sincerely,
Dan Weadock, CEO
Forward-Looking Statements
This shareholder letter contains certain “forward-looking statements” relating to the business of Indoor Harvest and its subsidiary companies, which can be identified by the use of forward-looking terminology such as “estimates,” “believes,” “anticipates,” “intends,” expects” and similar expressions. Such forward-looking statements involve known and unknown risks and uncertainties that may cause actual results to be materially different from those described herein as anticipated, believed, estimated or expected. Certain of these risks and uncertainties are or will be described in greater detail in our filings with the Securities and Exchange Commission. These forward-looking statements are based on Indoor Harvest’s current expectations and beliefs concerning future developments and their potential effects on Indoor Harvest. There can be no assurance that future developments affecting Indoor Harvest will be those anticipated by Indoor Harvest. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond the control of the Company) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by such forward-looking statements. Indoor Harvest undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
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