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): March 15, 2017

 

Freedom Leaf Inc.

(Exact name of registrant as specified in its charter)

 

Nevada

(State or Other Jurisdiction of Incorporation)

 

000-55687 46-2093679
(Commission File Number) (IRS Employer Identification No.)
   

3571 E. Sunset Road, Suite 420

Las Vegas, NV

89120
(Address of Principal Executive Offices) (Zip Code)

 

(877) 442-0411  

(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))

 

 

 

 
 

 

 

ITEM 1.01 ENTRY INTO A DEFINITIVE MATERIAL AGREEMENT

 

On March 15, 2017, Freedom Leaf Inc. (the “Company”) entered into an Exclusive Distribution Agreement (the “Distribution Agreement”) with NuAxon Bioscience, Inc. (“NuAxon”) to sell NuAxon’s CO2 extraction equipment pursuant to which the Company would be paid increasing commissions depending on gross sales of the equipment.

 

On March 16, 2017, the Company issued a purchase order (the “Purchase Order”) to NuAxon to purchase extraction equipment for one of the Company’s customers.

 

The foregoing descriptions of the Distribution Agreement and the Purchase Order are qualified in their entirety by the full text of such agreements, which are filed as Exhibits 10.4 and 10.5 to, and incorporated by reference in, this report.

 

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

 

The exhibits listed in the following Exhibit Index are filed as part of this report:

 

10.4       Distribution Agreement with NuAxon Bioscience, Inc.

10.5       Purchase Order with NuAxon Bioscience, Inc.

 

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.

 

Date: March 17, 2017

 

  FREEDOM LEAF, INC.
   
  By: /s/ Clifford J. Perry     
  Clifford J. Perry
  Chief Executive Officer & Director

 

Exhibit 10.4

NuAxon Bioscience, Inc. and Freedom Leaf, Inc.

EXCLUSIVE DISTRIBUTION AGREEMENT

 

 

This Exclusive Product Distribution Agreement (this "Agreement") is made effective as of March 15, 2017 between NuAxon Bioscience, Inc., of 899 S College Mall Rd., Unit 161, Bloomington, Indiana 47401 (“NuAxon”), and Freedom Leaf Inc., of 3571 East Sunset Road, Suite 420, Las Vegas, Nevada 89120 (“Freedom Leaf”).

 

The parties agree as follows:

 

I. RIGHT TO SELL. NuAxon, owns, manufactures and sells CO2 Extraction Equipment ("Extraction Equip"). In accordance with this Agreement, NuAxon, grants Freedom Leaf an exclusive right to sell their Extraction Equip under the terms of this Agreement. NuAxon agrees to deliver Extraction Equip directly to Freedom Leaf’s purchasers for all sales by Freedom Leaf. Freedom Leaf agrees to devote its best efforts to the sale of the Extraction Equip. NuAxon shall determine all sales prices and terms of sale.

 

II. PROCEEDS OF SALES. NuAxon will pay to Freedom Leaf a portion of the sales proceeds which shall be calculated as follows: Seven percent (7%) of the proceeds from the sale of the Extraction Equip until Freedom Leaf has reached One million dollars ($1,000,000) in gross sales at which time the commission will increase to ten percent (10%) retroactive to the first sale. Each purchaser (“Purchaser”) of Extraction Equip sold by Freedom Leaf will pay NuAxon directly with NuAxon paying the commission to Freedom Leaf within ten (10) days of receipt of funds. Commissions will only be calculated on the gross price of the equipment, not on shipping, installation, packing, Customs Duty or Smartphone App. On clients that NuAxon have been working with directly and a sale is consummated by NuAxon or clients that are in other than the Cannabis Industry who may not desire to work with Freedom Leaf and a sale is consummated by NuAxon, NuAxon will pay a Two percent (2%) override to Freedom Leaf regardless of Freedom Leaf’s inclusion in the sale process.

 

III. TITLE TO MERCHANDISE. Merchandise shall remain the property of NuAxon until sold and delivered to Purchaser at which time the property will be titled to the Purchaser.

 

IV. LOSS AND INSURANCE. NuAxon shall be responsible for all shortages, loss, or damage, while the merchandise is under the control of NuAxon.

 

V. PAYROLL TAXES. Freedom Leaf shall be exclusively liable for, and shall indemnify NuAxon against such liability for, all employee payroll taxes and insurance arising out of wages payable to persons employed by Freedom Leaf in connection with the performance of this Agreement.

 

 

Initials: JPE           RPM

 

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VI. DEFAULTS. If Freedom Leaf fails to abide by the obligations of this Agreement, including the obligation to remit the consignment payment to NuAxon when due, NuAxon shall have the option to cancel this Agreement by providing 45 (forty-five) days' written notice to Freedom Leaf. Freedom Leaf shall have the option of preventing the termination of this Agreement by taking corrective action that cures the default, if such corrective action is taken prior to the end of the time period stated in the previous sentence, and if there are no other defaults during such time period.

 

VII. DISPUTE RESOLUTION. The parties will attempt to resolve any dispute arising out of or relating to this Agreement through friendly negotiations amongst the parties. If the matter is not resolved by negotiation, the parties will resolve the dispute using the below Alternative Dispute Resolution (ADR) procedure.

 

Any controversies or disputes arising out of or relating to this Agreement will be submitted to mediation in accordance with any statutory rules of mediation. If mediation does not successfully resolve the dispute, the parties may proceed to seek an alternative form of resolution in accordance with any other rights and remedies afforded to them by law.

 

VIII. TRANSFER OF RIGHTS. This Agreement shall be binding on any successors of the parties.

 

IX. TERMINATION. This Agreement shall terminate automatically on March 14, 2018 unless Freedom’s Leaf’s gross sales of Extraction Equip reach a minimum of Two million dollars ($2,000,000). Based upon the minimum being reached, the Agreement will be automatically renewed for an additional year. The following minimums will be required to automatically renew the Agreement for the following additional years:

 

Year March 15, 2018 until March 14, 2019 requires a minimum of Three million five hundred dollars ($3,500,000) gross sale to renew for the next year.

 

Year March 15, 2019 until March 14, 2020 requires a minimum of Five million dollars ($5,000,000) gross sale to renew for the next year.

 

Year March 15, 2020 until March 14, 2021 requires a minimum of Six million five hundred dollars ($6,500,000) gross sale to renew for the next year.

 

Year March 15, 2021 until March 14, 2022 requires a minimum of Eight million dollars ($8,000,000) gross sale to renew for the next year.

 

Year March 15, 2022 until March 14, 2023 requires a minimum of Nine million five hundred dollars ($9,500,000) gross sale to renew for the next year.

 

Year March 15, 2023 until March 14, 2024 requires a minimum of Ten million five hundred dollars ($10,500,000) gross sale to renew for the next year.

 

Year March 15, 2024 until March 14, 2025 requires a minimum of Eleven million five hundred dollars ($11,500,000) gross sale to renew for the next year.

 

 

 

Initials: JPE           RPM

 

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Year March 15, 2025 until March 14, 2026 requires a minimum of Twelve million five hundred dollars ($12,500,000) gross sale to renew for the next year.

 

 

Year March 15, 2026 until March 14, 2027 requires a minimum of Thirteen million five hundred dollars ($13,500,000) gross sale to renew for the next year.

 

Any year the minimum is not reached, NuAxon and Freedom Leaf will employ their best efforts to negotiate a new Agreement.

 

 

X. ENTIRE AGREEMENT. This Agreement contains the entire agreement of the parties with respect to the subject matter of this Agreement and there are no other promises or conditions in any other agreement, whether oral or written. This Agreement supersedes any prior written or oral agreements between the parties with respect to the subject matter of this agreement.

 

XI. AMENDMENT. This Agreement may be modified or amended, if the amendment is made in writing and is signed by both parties.

 

XII. SEVERABILITY. If any provision of this Agreement shall be held to be invalid or unenforceable for any reason, the remaining provisions shall continue to be valid and enforceable. If a court finds that any provision of this Agreement is invalid or unenforceable, but that by limiting such provision it would become valid or enforceable, then such provision shall be deemed to be written, construed, and enforced as so limited.

 

XIII. WAIVER OF CONTRACTUAL RIGHT. The failure of either party to enforce any provision of this Agreement shall not be construed as a waiver or limitation of that party's right to subsequently enforce and compel strict compliance with every provision of this Agreement.

 

XIV. APPLICABLE LAW. This Agreement shall be governed by the laws of the State of Nevada.

 

XV. SIGNATORIES. This Agreement shall be signed on behalf of NuAxon by Jason Edwards, CEO, and on behalf of Freedom Leaf by Raymond P Medeiros, Vice President. This Agreement is effective as of the date first written above.

 

 

 

Initials: JPE           RPM

 

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XVI. All sales of Extraction Equip manufactured by NuAxon or its parent company, Nisarga Biotech PVT LTD . , will be sold by Freedom Leaf to the worldwide market excluding India, and commissions as set forth herein shall be paid to Freedom Leaf for all such sales. All leads that are received by NuAxon will be turned over to Freedom Leaf. Freedom Leaf will inform NuAxon about all leads that are created and being worked on by Freedom Leaf.

 

 

Manufacturer:

NuAxon Bioscience, Inc.

 

 

 

By:    /s/ Jason Edwards

        Jason Edwards

        CEO

 

 

Exclusive Sales Distributor:

Freedom Leaf Inc.

 

 

 

By:    /s/ Raymond P. Medeiros

        Raymond P. Medeiros

        Vice President

 

 

 

Initials: JPE           RPM

 

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Order to ship to Hemp, Inc.Exhibit 10.5

 

 

Proposal & Product Description

PO Box 353 Bloomfield, IN 47424 | Phone 812-762-4400

www.nuaxontech.com

 

Proposal Heading

 

 

Date prepared: March 16, 2017

 

Company : Freedom Leaf, Inc.

Contact : Clifford J Perry or Raymond P Medeiros

Address : 3571 East Sunset Road, Suite 420, Las Vegas, NV 89120

Phone : CJP: 954-895-3316; RPM 415-601-1974

Email : cliff@freedomleaf.com; ray@freedomleaf.com

 

Basic Description of Proposed Equipment

 

Model number: 5L1602FA

System description: Closed loop system for transport of CO2 from gaseous state to liquid state to supercritical fluid state.

Height of Unit : 8 feet

Approximate floor space required : 8’ x 5’

Extraction vessel size: 5 Liter

Number of extraction vessels: 2

Separator vessel size: 2.5 Liter

Number of separator vessels: 2

Number of water separators : 1

Flow Rate: 30 Liters per hour

Lead time until shipment: 12 weeks

Estimated Ship time : 5 weeks

Estimated time for set up : 3 days

 

System Features and Scope of Work

 

1. System designed to meet cGMP.
2. Extraction vessel designed with safety closures and special seals suitable for CO 2 duty and quick closures for separator vessels.
3. Modular steel frame for mounting of extraction vessels and all peripherals including controls.
4. Maximum operating pressure for extractors is 350 bar (5076 psi) and maximum temperature is 55C.
5. Maximum operating pressure for separator #1 ‎is 130 bar (1885 psi) and 70 bar (1015 psi) for separator #2.
6. Additional water separator to trap the higher notes, and the most elusive terpenes.
7. All contact parts are SS 316, noncontact parts are SS 306 and the supporting structure is SS 306 or MS with epoxy coat.
8. Easy to use SCADA system with semiautomatic and manual mode options.
9. System logs all data electronically for analysis.
10. System has remote troubleshooting capabilities via a standard internet connection.
11. Optional smart phone app for management and control oversight.
12. Recycling of CO 2 for environmental and fiscal conservation.
13. Two stage safety with interlocked electronic controls and second stage mechanical safety.
14. High technology pressure regulation system consisting of servo controlled automated back pressure regulator.
15. Specially developed motorized and metering CO 2 pump with controls for variable pressure and flow rate control.

 

 

 

Proposal good for 15 days from date of proposal

  1  

 

 

 

Proposal & Product Description

PO Box 353 Bloomfield, IN 47424 | Phone 812-762-4400

www.nuaxontech.com

 

This is a complete system with the exclusions noted in this proposal. On site erection and commissioning for an extra charge. We will assign a skilled technician for erecting and training of plant operations.

 

All rigging and material movement will be done by you under our supervision. Warranty will be voided on any work done without our project manager onsite.

 

Exclusions and Client Responsibilities

 

1. U stamp pressure vessel certification, extra if required. Optional, and will increase the cost by 5 to 10%. Purchaser must verify local requirements.
2. Any civil work if required must be completed prior to scheduled installation.
3. Client must have an indoor space prepared of great enough size to accommodate the equipment including a concrete floor sufficient to hold the weight of the equipment, and a ceiling high enough to accommodate it.
4. Provision for utilities such as electrical power, water, and heater connections to the plant at specific location.
5. Client must have a licensed refrigeration contractor on site to install and commission the required condensing units as per local regulation.
6. Air compressor (2 HP) for pneumatic operations and piping for air flow as required at site.
7. Installation team will not be scheduled until client can provide documentation and photographic evidence that the compressor is installed and operational.
8. Three phase power 230 V/ 60 Hz connection is required, and client must have a licensed electrician on site at the time of commissioning. If a permanent three phase power supply is not provided with due protection for the extraction unit’s electrical components, then the warranty for the extraction unit will be considered null and void.
9. Adequate CO2 supply (minimum of 200 Liters) at 60 bar to be provided by the client in to the storage tank for the extraction plant. This must be on hand prior to the arrival of the installation team for commissioning. CO2 must be committed for testing only and might not be preserved for use after set up and testing, this is at the client’s expense.
10. Any work outside the battery limits of the plant that is inlet of the CO2 storage tank and exhaust from the separator will be the sole responsibility of the client.
11. Installation team will be working weekends and holidays during the installation and commissioning, client must provide access, personnel and required resources for every day during the scheduled installation period.
12. The equipment is designed as an indoor unit and requires a temperature controlled area for storage and operation. The allowable temperature range for operating the equipment is between 18C (65F) to 30C (85F).
13. A minimum of 2 batches of raw material will be required for proper commissioning and fine tuning of the equipment. The client is solely responsible for procuring material that has been properly dried and ground as required by the commissioning team. Raw material must be committed for testing only and might not be preserved for use after set up and testing, this is at the client’s expense.
14. In the event that installation is delayed beyond 90 days after the equipment is delivered to the client’s ship to address, all additional costs due to storage related issues will be sole responsibility of the client. This includes but is not limited to, seals, pump parts, rusted parts, weathered parts, expedited shipping for said parts, software resets, and extended housing, transportation and food cost for a prolonged commissioning period.

 

 

Proposal good for 15 days from date of proposal

  2  

 

 

 

Proposal & Product Description

PO Box 353 Bloomfield, IN 47424 | Phone 812-762-4400

www.nuaxontech.com

 

Warranty and Terms

 

NuAxon Bioscience, Inc. warrants that this equipment will be free from defect in material and workmanship for a period of 12 months from date of powered startup or 18 months from date of delivery whichever is less.

 

Warranty does not apply to normal wear and tear, consumables, misuse and equipment that is not maintained as per schedule of maintenance. Warranty will not cover explosion, erosion and effects of electro-chemical corrosion and such areas of use which are beyond the control of the manufacturer. Any defects and deficiencies will be rectified / replaced by NuAxon Bioscience, Inc. at their option and judgment. Warranty will be voided on any work done without our project manager onsite.

 

Ongoing service support other than warranted issues, is available but is contracted separately from this document. Likewise routine spares and supplies required for normal maintenance as well as normal wear and tear are quoted and supplied separately.

 

NuAxon accepts wire transfers, bank check (10 business days to clear) or credit card (additional 2.5% fee) for payment. Down payment required with purchase order to begin work on the equipment production.

 

Down payment – 50% due prior to the start of production.

2 nd Instalment – 25% due upon approval of the construction drawings, not later than 60 days after beginning the project.

Final instalment – Balance due within 7 days of notification that unit is ready for shipping from the factory.

Payment terms are based on total invoice amount.

 

All drawings, technical data, product information and operational information are the sole property of NuAxon and may not be shared, distributed, duplicated or transmitted in any form to any party outside the client company without the express written consent of NuAxon.

 

 

Proposal good for 15 days from date of proposal

  3  

 

 

 

Proposal & Product Description

PO Box 353 Bloomfield, IN 47424 | Phone 812-762-4400

www.nuaxontech.com

 

Order to ship to Hemp, Inc.

 

 

Pricing

 

Upfront Costs
Plant complete after deducting 7% commission $195,300
Packing $10,600
Installation $10,000
Total Due Upfront $215,900
   
Plus Other Associated Costs at Actual
Shipping cost estimated (by sea) $6,000
Shipping cost estimated (by air) $10,000
Customs Duty estimated $5,400
Smartphone App $5,000

 

 

This offer accepted by the undersigned will be considered a purchase order and will be fully executed when accompanied by the required down payment.

 

Order to fulfill Hemp, Inc. Order received On February 21, 2017

 

Freedom Leaf, Inc.

 

Name: Raymond P Medeiros

Please Print

 

Title: Vice President Business Development      Date:  March 15, 2017  
Company Position  MM / DD / YY 

 

 

Signature                 /s/ Raymond P Medeiros                  

 

 

Proposal good for 15 days from date of proposal

 

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