| CAPITAL TRANSACTIONS | NOTE
9 CAPITAL TRANSACTIONS Sale
of Common Stock As
of March 31, 2014, the Company sold 1,480,000 units through a private placement. Each unit consists of one share of common
stock, one A warrant, expiring in three years, with an exercise price of $1.00 and one B warrant, expiring in five years, with
an exercise price of $2.00. The price was $0.50 per unit. As
of June 21, 2014, the Company sold 4,520,000 units through a private placement. Each unit consists of one share of common
stock, one A warrant, expiring in three years, with an exercise price of $1.00 and one B warrant, expiring in five years, with
an exercise price of $2.00. The price was $0.50 per unit. As
of September 30, 2014, the Company sold units through a private placement at $0.50 per unit. Each unit consists of one
share of common stock, one A warrant, expiring in three years, with an exercise price of $1.00 and one B warrant, expiring in
five years, with an exercise price of $2.00. As a result of this offering, The Company issued an aggregate of 9,937,720
shares of common stock, 10,937,720 A warrants and 10,937,720 B warrants 1,000,000 cashless warrants exercisable at $0.55 per share, inclusive of warrants issued to the placement agent
and its affiliates. On
September 26, 2014 the Company filed a S-1 Securities Registration Statement. Pursuant to Growbloxs registration statement
on Form S-1 which became effective February 11, 2015, the common stock included in the units and the shares of common stock issuable
under both the A warrants and B warrants were registered for resale. During the
fiscal year ended March 31, 2015, Growblox issued 5,450,000 shares of common stock pursuant to the employment contracts of four
executive officers. Two of those officers received 150,000 shares in total, 1,500,000 shares were cancelled due to employment
termination, and 3,000,000 shares issued to Craig Ellins in June 2014 were cancelled in June 2015 and exchanged for three year
warrants exercisable at $0.45 per share. The remaining shares will be held by Growblox until such time as certain milestones are
reached and vesting periods have run. In
order to encourage the exercise of its B warrants, on February 12, 2015, the board of directors of Growblox passed a
resolution to temporarily reduce, until April 30, 2015, the exercise price of such B warrants from $2.00 per share to $0.20
per share, and the holders of the B warrants were notified of such temporary exercise price reduction. On April 30, 2015,
Growbloxs board of directors extended to 5:00 PDT on May 15, 2015 the temporary voluntary reduction of the exercise
price of the B Warrants to $0.20 per share and notified the holders of the B Warrants. As at May 15, 2015, B warrants to
purchase 2,748,115 shares of common stock were exercised at $0.20 per share, resulting in net proceeds of $549,623 to
Growblox. On
April 22, 2015, Cesar Cordero-Kruger, the Chief Executive Officer of Growblox Sciences Puerto Rico LLC, purchased from Growblox,
for $592,200 or $0.21 per share, an aggregate of 2,820,000 shares of Growblox common stock. Growblox agreed to register such common
stock for resale under the Securities Act pursuant to a registration rights agreement. Between
February, 2015 and May 15, 2015, certain holders of B Warrants sold back to Growblox for $0.01 each, B warrants to purchase an
aggregate of 5,600,000 shares of common stock. During the same period, in addition to the 2,820,000 shares purchased by Mr. Cordero-Kruger,
Growblox sold an additional 2,442,023 shares of common stock to 25 other investors for $0.21 per share, resulting in total additional
proceeds to Growblox of $512,825. In May and
June 2015, ten persons were issued an aggregate of 1,818,750 shares of common stock in settlement and release of certain obligations
owed by the Company to such person aggregating $528,750 In May 2015,
Network 1 Financial Services and its affiliates exercised B warrants on a cashless basis and received a total of 1,000,000 shares
of common stock. All of the
foregoing securities, including Growblox common stock, were issued in reliance on the exemption from registration provided by
Section 4(2) of the Securities Act of 1933 (the Securities Act Asset
Purchase On
March 13, 2014, the Company, entered into a definitive agreement with Mr. Craig Ellins for the acquisition of assets. The
assets include:
a provisional patent application
concepts associated with the Mr. Ellins
or his associates
trademarks
business plans
investor presentations and histories
websites
trade secrets including without limitation trade secrets involving
nutrient mixes
drawings and digital artwork
raw materials
production equipment and related assets including without limitation
electrical equipment, plastic molds and internal parts
proof-of-concept equipment
URLs Under the
terms of such agreement, Growblox agreed to issue a total of 12,500,000 restricted shares of Growbloxs common stock. At
the time of the transfer of the assets, a total of 4,500,000 were issued, 4,000,000 shares were issued after Growblox raised an
additional $1,000,000 in financing, and the remaining 4,000,000 shares will be issued to Mr. Ellins upon reaching the Company
reaching certain milestones relating to the filing of patent applications in respect of its technology. Under the terms of the
asset purchase agreement, Mr. Ellins had the right to assign certain of his shares to other persons who had assisted him and his
predecessor company in the development of the assets sold to Growblox. On September 17, 2014 and October 9, 2014, Mr. Ellins assigned
and transferred 4,980,000 and 600,000, respectively of his 8,500,000 vested shares to eighteen persons, all of whom released Growblox
from any further obligations. None of these persons or their affiliates are officers, directors or affiliates of Growblox. The
shares were issued pursuant to the exemption from registration set forth in Section 4(2) of the Securities Act of 1933. Below
are the assets purchased:
Equipment $ 29,721
Intangibles (patent,
trademarks, URLs) 3,745
Total $ 33,466 The
assets were valued at their historical cost. Employment
Agreements During the
fiscal year ended March 31, 2015, Growblox issued 5,450,000 shares of common stock pursuant to the employment contracts of four
executive officers. Two of the officers received a total of 150,000 shares. The remaining shares will be held by Growblox until
such time as certain milestones are reached and vesting periods have run. The issuance was exempt from the registration requirements
of Section 5 of the Securities Act of 1933 pursuant to Section 4(2) of the Act because there was no public offering in connection
with the issuance of the shares. On June
19, 2014 Craig Ellins entered into an amended employment agreement having a three year term. Mr. Ellins received a salary of $140,000
per annum, year one, $180,000 per annum year two and $240,000 per annum year three. Additionally he received 3,000,000 shares
of the common stock of Growblox which vest over three years in equal 1,000,000 amounts. Effective as of June 19, 2015, Growblox
and Mr. Ellins amended and restated the employment agreement with the same compensation terms and cancelling the 3,000,000 share
stock grant. In consideration for such forfeiture, Mr. Ellins received a three year warrant to purchase 5,000,000 shares of Growblox
common stock at an exercise price of $0.45 per share, the closing price of Growblox common stock on the date of the restated employment
agreement. The warrant contains customary anti-dilution provisions and cashless exercise provisions. The warrant and underlying
shares of common stock issuable upon exercise of the warrant are restricted securities as defined by the Rules and Regulations
promulgated under the Securities Act of 1933, as amended. On June
19, 2014, Dr. Andrea Small-Howard, Chief Science Officer, entered into a three year employment agreement with Growblox. Dr. Small-Howard
received a salary at the annual rate of $78,000 and 450,000 shares of restricted common stock that vest over the three year term
of employment. The stock is restricted as defined by the Rules and Regulations promulgated under the Securities Act of 1933, as
amended. Dr. Howard also received 500,000 of stock options not in connection with her employment agreement, of which 100,000 vested
immediately and the remainder vest according to the equity compensation plan. Cathryn
Kennedy, Chief Financial Officer, entered into an Employment Agreement with Growblox for a three-year term beginning November
15, 2014. Ms. Kennedy receives a salary of $160,000 per annum phased in during year one, $170,000 per annum year two and $180,000
per annum in year three. Ms. Kennedy was compensated with 500,000 shares of restricted common stock, payable over three years
of employment. The stock is restricted as defined by the Rules and Regulations promulgated under the Securities Act of 1933, as
amended. Ms. Kennedy also received 500,000 of stock options not in connection with her employment agreement, of which 100,000
vested immediately and the remainder vest according to the equity compensation plan. Dr. Steven
Weldon, former Chief Financial Officer, entered into an Employment Agreement with Growblox for a three year term. Mr. Weldon would
have been compensated with 1,500,000 shares of restricted common stock, payable upon the completion of three years of employment.
Mr. Weldon resigned on November 19, 2014, and the shares were canceled and no expense was recognized. Note
Conversions During
the year ended March 31, 2013, the Company converted a total of $114,057 of notes payable from certain Note Holders into common
stock of the Company. The Company issued 438,681 shares of common stock to satisfy the principal balances of the notes payable. From
April 2014 to June 2014, the Company converted a total of $1,262,441 of notes payable from certain Note Holders into common stock
of the Company. The Company issued 3,905,612 shares of common stock and recognized an induced dividend of $73,015 to satisfy the principal balances of the notes payable. |
