Capital Stock | NOTE 12 – CAPITAL STOCK Preferred Stock The Company is authorized to issue 10,000,000 shares of $0.001 par value preferred stock in one or more designated series, each of which shall be so designated as to distinguish the shares of each series of preferred stock from the shares of all other series and classes. The Company’s board of directors is authorized, without stockholders’ approval, within any limitations prescribed by law and the Company’s Articles of Incorporation, to fix and determine the designations, rights, qualifications, preferences, limitations and terms of the shares of any series of preferred stock. Series A Non-Convertible Preferred Stock On November 1, 2016, the Company filed a Certificate of Designation with the Secretary of State of Nevada therein designating out of the 10,000,000 authorized shares of Preferred Stock, a class of Preferred Stock as “Series A Non-Convertible Preferred Stock” consisting of 100 shares (the “ Series A Certificate of Designation “). On March 2, 2017, the Company filed with the Secretary of State of Nevada an amendment to increase the number of shares provided for in the Series A Certificate of Designation from 100 shares to 400 shares. Set forth below is a summary of the Series A Certificate of Designation, as amended. Voting Generally, the outstanding shares of Series A Non-Convertible Preferred Stock shall vote together with the shares of common stock and other voting securities of the Company as a single class and, regardless of the number of shares of Series A Non-Convertible Preferred Stock outstanding, and as long as at least one share of Series A Non-Convertible Preferred Stock is outstanding, such shares shall represent 80% of all votes entitled to be voted at any annual or special meeting of stockholders of the Company or action by written consent of stockholders. Each outstanding share of the Series A Non-Convertible Preferred Stock shall represent its proportionate share of the 80% which is allocated to the outstanding shares of Series A Non-Convertible Preferred Stock. Dividends The holders of shares of Series A Non-Convertible Preferred Stock shall not be entitled to receive any dividends. Ranking The Series A Non-Convertible Preferred Stock shall, with respect to distribution rights on liquidation, winding up and dissolution, (i) rank senior to any of the shares of common stock of the Company, and any other class or series of stock of the Company which by its terms shall rank junior to the Series A Non-Convertible Preferred Stock, and (ii) rank junior to any other series or class of preferred stock of the Company and any other class or series of stock of the Company which by its term shall rank senior to the Series A Non-Convertible Preferred Stock. So long as any shares of Series A Non-Convertible Preferred Stock are outstanding, the Company shall not alter or change any of the powers, preferences, privileges or rights of the Series A Non-Convertible Preferred Stock, without first obtaining the approval by vote or written consent, in the manner provided by law, of the holders of at least a majority of the outstanding shares of Series A Non-Convertible Preferred Stock, as to changes affecting the Series A Non-Convertible Preferred Stock. Issued Shares On November 1, 2016, the Company issued 100 shares of its Series A Non-Convertible Preferred Stock, par value $0.001 per share (“Series A Preferred Stock”) to the CEO. On March 8, 2017, the Company issued 100 shares of the Series A Preferred Stock, to each of the COO, CSO and CFO. In connection with an independent valuation using the “Market Approach”, the Company determined that the value attributable to the Series A Preferred Stock issued was nominal. On February 5, 2018, in connection with the COO’s resignation and termination, the COO agreed to forfeit and the cancellation of the 100 shares of the Series A Preferred Stock previously issued. Effective April 13, 2018, in connection with the Reorganization, the CEO, CFO and CSO each agreed to forfeit and the cancellation their 100 shares of the Series A Preferred Stock previously issued. On June 6, 2018, the Company approved resolutions to cancel and terminate the Series A Preferred Stock designation and file a certificate of amendment with the State of Nevada, withdrawing the designation of the Series A Preferred Stock. On June 14, 2018, the Company filed a Certificate of Withdrawal with the Secretary of State of Nevada thereby withdrawing and terminating all previously issued designations of the Company’s Series A Preferred Stock. As a result of the aforementioned actions, as of June 14, 2018, there were no designations of Series A Preferred Stock authorized or outstanding. Series B Convertible Preferred Stock On November 1, 2016, the Company filed a Certificate of Designation with the Secretary of State of Nevada therein designating out of the 10,000,000 authorized shares of Preferred Stock, a class of Preferred Stock as “Series B Convertible Preferred Stock” consisting of 1,000,000 shares (“Series B Certificate of Designation”). Set forth below is a summary of the Series B Certificate of Designation. Conversion Each holder of Series B Preferred Stock shall have the right, at such holder’s option, at any time or from time to time from and after the day immediately following the date the Series B Preferred Stock is first issued, to convert each share of Series B Preferred Stock into 20 fully-paid and non-assessable shares of common stock. Rank Except as specifically provided below, the Series B Preferred Stock shall, with respect to dividend rights, rights on liquidation, winding up and dissolution, rank junior to the Series A Non-Convertible Preferred Stock of the Company and senior to (i) all classes of common stock of the Company and (ii) any class or series of capital stock of the Company hereafter created (unless, with the consent of the holder(s) of Series B Preferred Stock). Issued Shares On November 1, 2016, the Company entered into a Share Exchange Agreement with Mr. Mitrani. Pursuant to the Share Exchange Agreement, Mr. Mitrani agreed to exchange 20,000,000 shares of his common stock of the Company for an aggregate of 1,000,000 shares Series B Convertible Preferred Stock on a 1-for-20 basis (the “Series B Exchange Agreement”). The terms of the Series B Exchange Agreement were never consummated. On March 8, 2017, the Board and Mr. Mitrani decided to unwind the Series B Exchange Agreement and deem it null and void ab initio. On June 6, 2018, the Company approved resolutions to cancel and terminate the Series B Preferred Stock designations and file a certificate of amendment with the State of Nevada, withdrawing the designation of the Series B Preferred Stock. On June 14, 2018, the Company filed a Certificate of Withdrawal with the Secretary of State of Nevada thereby withdrawing and terminating all previously issued designations of the Company’s Series B Preferred Stock. As a result of the aforementioned actions, as of June 14, 2018, there were no designations of Series B Preferred Stock authorized or outstanding. Common Stock On September 1, 2015, the Company filed a Certificate of Amendment with the Secretary of State of Nevada increasing the amount of authorized common stock from 90,000,000 shares to 250,000,000 shares. On September 17, 2015, the Company completed an eighteen-for-one forward stock split. The consolidated financial statements and notes reflect a retroactive adjustment for the forward stock split. On June 6, 2017, the Board of Directors of the Company and the stockholders holding the Company’s outstanding Series A Preferred Stock, having the voting equivalency of 80% of the outstanding capital stock, approved the filing of an amendment to the Articles of Incorporation of the Company to increase the authorized amount of common stock from 250,000,000 to 750,000,000, without changing the par value of the common stock or authorized number and par value of “blank check” Preferred Stock. On June 19, 2017, the Company filed a Definitive 14C with the SEC regarding the corporate action. On June 22, 2017, the Company filed a Certificate of Amendment to the Company’s Articles of Incorporation with the Secretary of State of Nevada to effectuate the corporate action on July 10, 2017. On May 8, 2018, the Board adopted resolutions to (i) amend its Articles of Incorporation to reduce the number of authorized shares of common stock from 750,000,000 to 250,000,000 and (ii) reverse split the issued and outstanding shares of the Company’s common stock on a ratio of seventeen (17) current shares for one (1) share of new shares. On May 9, 2018, shareholders holding a majority in interest of the voting power of the Company (86.9%) approved the amendment and the reverse stock split. On June 1, 2018, the Company filed a Company-Related Action Notification with FINRA (“Notification Form”) to provide notice of certain proposed actions by the Company, including the amendment and reverse stock split. However, due to the Company’s delinquency its Exchange Act reports with the SEC at the time of the filing (by failing to file the October 31, 2017 Annual Report and its Quarterly Reports for the quarters ended January 31, 2018 and April 30, 2018, FINRA did not announce or effectuate the Name Change or Reverse Split in the marketplace. FINRA has since informed the Company that a new Issuer Company-Related Notification Form will be required to be submitted should the Company desire to effectuate the Name Change and Reverse Split in the future, provided the Company is current in its Exchange Act filings. Issuances of Common Stock - Sales: During January 2017, the Company sold 100,000 shares of common stock to an “accredited investor” at $0.05 per share for an aggregate purchase price of $5,000. During January 2017 and February 2017, the Company sold an aggregate of 600,000 Units and 300,000 Units, respectively. Each Unit cost $0.10 and consisted of two shares of common stock, one Class A Warrant and one Class B Warrant. The Company issued a total of 1,800,000 common shares, Class A warrants to purchase 900,000 common shares and Class B warrants to purchase 900,000, common shares. The Class A Warrant and Class B Warrant have exercise prices of $0.075 and $0.150, respectively, and have a three-year term. The aggregate grant date fair value of the warrants issued in connection with this offering was $33,480. The total proceeds received from the above sales occurring in January 2017 and February 2017 were $60,000 and $30,000, respectively. During February 2017, the Company sold 250,000 shares of common stock to a related party at $0.04 per share for an aggregate purchase price of $10,000. On March 8, 2017, in consideration for consulting services rendered to the Company and Mint Organics, Inc., the Board approved the issuance of 100,000 shares of unregistered common stock valued at $0.03 per share, the closing price of the common stock of the Company on that date, to a consultant. The Company recorded $3,000 of stock-based compensation expense based on the grant date fair value of these shares. On March 29, 2017, in connection with the terms of the SPA, the Company issued the Agent, Werber and Bothwell a total of 2,000,000, 1,000,000 and 1,000,000 common shares of the Company, respectively, valued in the aggregate at $63,680, based on the closing price of the common stock of the Company on the date the stock was issued. On May 17, 2017, in connection with the Taddeo Agreement, the Company granted Taddeo 1,000,000 shares of unregistered common stock. The value of the stock grant was determined to be $12,000 based on the closing price of the common stock of the Company on the date of grant ($0.12 per share). The shares vest on the date Mint Organics, through one of its subsidiaries, obtains a license from a state to dispense cannabis or December 31, 2017, whichever is earlier, and provided that Taddeo’s employment has not been terminated prior to the time the vesting conditions have been met. The Company has recorded amortization expense totaling $8,800 for the period from date the stock grant was issued through October 31, 2017 as additional stock-based compensation. During January 2018, the Company sold 4,062,500 shares of common stock to four “accredited investors” at $0.016 per share for an aggregate purchase price of $65,000. During February 2018, the Company sold 1,250,000 shares of common stock to an “accredited investor” at $0.016 per share for an aggregate purchase price of $20,000. The proceeds were used for working capital. During March 2018, the Company sold 312,500 shares of common stock to an “accredited investor” at $0.016 per share for an aggregate purchase price of $5,000. The proceeds were used for working capital. During April 2018, the Company sold 625,000 shares of common stock to two “accredited investors” at $0.016 per share for an aggregate purchase price of $10,000. The proceeds were used for working capital. As described in Note 5, effective April 13, 2018 in connection with the Reorganization, the Company agreed to issue to MBA an aggregate of 222,425,073 shares of its common stock, representing at the time 51% of the outstanding shares of the common stock of the Company on fully-diluted basis, for $0.001 per share (or an aggregate of $222,425), in consideration for MBA’s founder and Chief Executive Officer, Mr. Manuel Iglesias’ agreement to serve as the Company’s Chief Executive Officer and a member of the Board of the Company. On March 7, 2019, the Company sold an aggregate of 7,500,000 shares of common stock and granted warrants to purchase an aggregate 2,000,000 common shares to three “accredited investors” investors. The warrants have exercise prices of $0.08, and have a one -year term. The aggregate grant date fair value of the warrants issued in connection with these issuances were $6,600. The proceeds were used for working capital. During April 2019, the Company sold 5,102,000 shares of common stock to seven “accredited investors” at $0.03 per share for an aggregate purchase price of $154,500. The proceeds were used for working capital. During July 2019, the Company sold 2,500,000 shares of common stock to one “accredited investors” at $0.02 per share for an aggregate purchase price of $50,000. The proceeds were used for working capital. During August 2019 through September 2019, the Company sold 5,250,000 shares of common stock to four “accredited investors” at $0.02 per share for an aggregate purchase price of $105,000. The proceeds were used for working capital. During November 2019 through January 2020, the Company sold 3,250,000 shares of common stock to three “accredited investors” at $0.02 per share for an aggregate purchase price of $65,000. The proceeds were used for working capital. Issuances of Common Stock – Stock Compensation: In connection with the Sale of the ANU assets on February 5, 2018, and the immediate resignation and termination of the Company’s Chief Operating Officer, the Chief Operating Officer agreed to forfeit 53,300,000 warrants to purchase shares of the Company’s common stock held at the time of the resignation and the Company agreed to grant the Chief Operating Officer 7,500,000 shares of newly issued common stock of the Company valued at $0.011 per share, the closing price of the common stock of the Company on the date of the Sale. The Company has recorded $83,250 of stock-based compensation expense based on the grant date fair value of these shares during the year ended October 31, 2018. In connection with the Sale of the ANU assets on February 5, 2018, and the immediate resignation and termination of the Company’s Chief Technology Officer, the Chief Technology Officer agreed to forfeit 23,850,000 warrants to purchase shares of the Company’s common stock held at the time of the resignation and the Company agreed to grant the Chief Technology Officer 7,500,000 shares of newly issued common stock of the Company valued at $0.011 per share, the closing price of the common stock of the Company on the date of the Sale. The Company has recorded $83,250 of stock-based compensation expense based on the grant date fair value of these shares during the year ended October 31, 2018. Effective April 13, 2018, the CFO and CSO were each granted 4,675,439 and 2,092,105 shares of common stock of the Company, respectively valued at $0.0124 per share based on the closing price of the common stock of the Company on the effective date of the grant. The newly granted shares vest immediately and the Company has recorded stock-based compensation of $57,975 and $25,942, respectively, during the year ended October 31, 2018. On April 23, 2018, in connection with the Reorganization, the Company agreed to issue to MBA an aggregate of 222,425,073 shares of its common stock associated with Mr. Iglesias’s agreement to serve as the Company’s Chief Executive Officer. The common stock was valued at $0.0124 per share based on the closing price of the common stock of the Company on the effective date of Reorganization. The newly issued shares vest immediately and the Company has recorded stock-based compensation of $2,758,071 during the year ended October 31, 2018. On June 5, 2018, as further amended, the Company and a third party (“Consultant”) entered into a consulting agreement whereby the Consultant agreed to provide business development and other services to the Company (“Consulting Agreement”). The Consulting Agreement terminated on May 31, 2019. Under the terms of the Consulting Agreement, the Company agreed to grant the Consultant 4,500,000 shares of common stock of the Company (“Consultant Shares”). The Consultant Shares vested as follows; 1,700,000 shares upon execution of the Consultant Agreement; 1,700,000 shares on December 5, 2018; and 1,100,000 shares on January 1, 2019. The common stock was valued at $0.027 per share based on the closing price of the common stock of the Company on the execution date of the Consulting Agreement. The Company has recorded $45,900, $45,900 and $29,700 of stock-based compensation expense on June 5, 2018, December 5, 2018 and January 1, 2019 respectively. During September 2018, in consideration for agreeing to serve as the Company’s Chief Medical Officer (“CMO”) and render other medical consulting and advisory services to the Company, the Board approved the issuance to the CMO of 2,500,000 shares of unregistered common stock valued at $0.0138 per share, the closing price of the common stock of the Company on that date. The Company recorded $34,500 of stock-based compensation expense based on the grant date fair value of these shares during the year ended October 31, 2018. In connection with the CMO’s appointment to the Board of Directors of the Company during February 2019, during May 2019 and August 2019, the Board approved the issuance to the CMO of 2,000,000 and 3,000,000 shares, respectively, of unregistered common stock valued at $0.025 per share and $0.028 per share, respectively, the closing price of the common stock of the Company on the grant dates. The Company will record $50,000 and $84,000, during the quarters ended July 31, 2019 and October 31, 2019, respectively, of stock-based compensation expense based fair value of these shares on the grant date. During the period November 1, 2018 through January 31, 2019, in consideration for agreeing to render medical consulting and advisory services to the Company, the Board approved the issuance to eight individuals an aggregate of 4,200,000 shares of unregistered common stock valued between $0.0055 and $0.0244 per share, the closing price of the common stock of the Company on the respective grants dates. The Company will record $28,680 of stock-based compensation expense based on the grant date fair value of these shares during the quarter ended January 31, 2019. During the period February 1, 2019 through April 30, 2019, in consideration for agreeing to provide medical consulting and advisory services to the Company, the Board approved the issuance to seven individuals an aggregate of 1,750,000 shares of unregistered common stock valued between $0.024 and $0.049 per share, the closing price of the common stock of the Company on the respective grants dates. The Company will record $55,500 of stock-based compensation expense based on the grant date fair value of these shares during the quarter ended April 30, 2019. During the period February 1, 2019 through April 30, 2019, in consideration for agreeing to provide lab and administrative consulting services to the Company, the Board approved the issuance to eight individuals an aggregate of 225,000 shares of unregistered common stock valued between $0.0265 and $0.080 per share, the closing price of the common stock of the Company on the respective grants dates. The Company will record $11,888 of stock-based compensation expense based on the grant date fair value of these shares during the quarter ended April 30, 2019. During the period May 1, 2019 through July 31, 2019, in consideration for agreeing to provide medical consulting and advisory services to the Company, the Board approved the issuance to twelve individuals an aggregate of 3,475,000 shares of unregistered common stock (of which 2,000,000 of the common stock issued shall vest over 36 months beginning July 2019) valued between $0.019 and $0.040 per share, the closing price of the common stock of the Company on the respective grants dates. The Company will record $46,186 of stock-based compensation expense based on the grant date fair value of these shares during the quarter ended July 31, 2019. During the period May 1, 2019 through July 31, 2019, in consideration for agreeing to provide lab and administrative consulting services to the Company, the Board approved the issuance to six individuals an aggregate of 2,675,000 shares of unregistered common stock valued between $0.023 and $0.040 per share, the closing price of the common stock of the Company on the respective grants dates. The Company will record $70,725 of stock-based compensation expense based on the grant date fair value of these shares during the quarter ended July 31, 2019. During May 2019, the Company entered into a sales representation agreement (“Sales Rep Agreement”) with a third party (“Sales Representative”) to market, promote and sell the Company’s products. As part of the Sales Rep Agreement, the Company agreed to provide the Sales Representative 1,000,000 million shares of common stock of the Company upon execution of the Sales Rep Agreement (valued at $0.035 per share, the closing price of the common stock of the Company on that date). The Company will record $35,000 of stock-based compensation expense based on the grant date fair value of these shares during the quarter ended July 31, 2019. The initial term of the Sales Rep Agreement was one year, subject to earlier termination as provided for in the Sales Rep Agreement. In addition, under the terms of the Sales Rep Agreement, the Sales Representative was entitled to receive performance incentives for up to 10,500,000 million additional shares of common stock of the Company based on the Sales Representative achieving certain future quarterly sales milestones. None of the performance incentive shares were earned by the Sales Representative. Effective September 30, 2019, the Sales Representative and the Company mutually agreed to terminate the Sales Rep Agreement. As described in Note 14, upon execution of the VP Agreements, each of the Sales Executives were granted 1,000,000 shares of unregistered common stock of the Company valued at $0.035 per share, the closing price of the common stock of the Company on the grant date. The Company will record $35,000 of stock-based compensation expense on the grant date for each issuance. The VP Agreements also provide teach Sales Executives the right to receive an additional 750,000 shares of common stock at the end of each quarterly anniversary of the VP Agreements throughout the Initial Term (maximum 9,000,000 shares) (“Performance Shares”), provided that the VP Agreements remain in effect during the applicable quarterly period. The vesting of the Performance Shares may also be accelerated based on achievement of certain revenue milestones. The Company will record stock-based compensation expense for each respective quarterly period that the Performance Shares vest. In connection with the previous appointment of an independent member to the Board of Directors of the Company, during August 2019, the Board approved the issuance to the director of 5,000,000 shares of unregistered common stock valued at $0.028 per share, the closing price of the common stock of the Company on the grant date. The Company will record $140,000 of stock-based compensation expense during the quarter ended October 31, 2019. During the period August 1, 2019 through October 31, 2019, in consideration for agreeing to provide lab and administrative consulting services to the Company, the Board approved the issuance to four individuals an aggregate of 5,350,000 shares of unregistered common stock valued between $0.029 and $0.038 per share, the closing price of the common stock of the Company on the respective grants dates. The Company will record $162,700 of stock-based compensation expense during the quarter ended October 31, 2019. During the period August 1, 2019 through October 31, 2019, in consideration for agreeing to provide medical consulting and advisory services to the Company, the Board approved the issuance to two individuals an aggregate of 200,000 shares of unregistered common stock valued between $0.035 and $0.038 per share, the closing price of the common stock of the Company on the respective grants dates. The Company will record $12,133 of stock-based compensation expense during the quarter ended October 31, 2019. During the period November 1, 2019 through January 31, 2020, in consideration for agreeing to provide lab and administrative consulting services to the Company, the Board approved the issuance to three individuals an aggregate of 400,000 shares of unregistered common stock valued between $0.027 and $0.031 per share, the closing price of the common stock of the Company on the respective grants dates. The Company will record $11,400 of stock-based compensation expense during the three months ended January 31, 2020. Issuances of Common Stock – Exercise of warrants, Conversion of Debt and Exchanges: In connection with the Reorganization, The CFO and CSO each agreed to exercise on a cashless basis all of their warrants to purchase 53,300,000 and 23,850,000 shares of common stock of the Company, respectively. Based on the closing price of the Company’s common stock on the Effective Date of $0.012 per share and the warrant exercise price of $0.001 per share, the CFO and CSO were required to use 4,675,439 and 2,092,105 shares of common stock received from the exercise of the warrants, respectively, to pay for the exercise price for exercising all of the warrants. As a result, the net amount of shares received by the CFO and CSO from the exercise of their warrants were 48,624,561 and 21,757,895, respectively, During May 2019, the Company and holders of the $100,000 Debentures agreed to convert the principal amount of $100,000 Debentures plus interest accrued and unpaid through the date of the conversion totaling $100,622 into 3,773,584 shares of common stock of the Company (approximately $0.0267 per share representing a discount to the trading price of $0.0285 as of the effective date of the transaction). During June 2019, the Company and the holder of the $30,000 Debenture agreed to convert the principal amount of the $30,000 Debenture plus interest accrued and unpaid through the date of the conversion totaling $30,478 into 1,111,111 shares of common stock of the Company (approximately $0.0274 per share representing a premium to the trading price of $0.0253 as of the effective date of the transaction). On May 1, 2019, the Company and Mint Organics entered into an exchange agreement whereby the Company agreed to acquire the 150 shares of Mint Series A Preferred Stock and the 150,000 warrants to purchase shares of common stock of the Company originally issued to Mr. Wayne Rohrbaugh in connection with the initial capitalization of Mint Organics (see note 15) in exchange for 4,400,000 shares of common stock of the Company (approximately $0.034 per share representing a discount to the trading price of $0.049 as of the effective date of the transaction). On May 1, 2019, the Company, Mint Organics and the holder of a promissory note issued by Mint Organics (see note 15) agreed to a settlement of the outstanding loan whereby the Company agreed to issue the holder of the note 2,735,000_shares of newly issued common stock of the Company. At the time of the settlement, the outstanding obligation under the note, including late fees and penalties was approximately $72,568. The common stock issued was priced at On May 1, 2019, the Company and Mint Organics Florida entered into an exchange agreement whereby the Company agreed to acquire the 21.25 units from the minority equity holder of Mint Organics Florida (see note 15) in exchange for 2,400,000 shares of common stock of the Company (approximately $0.042 per share representing a discount to the trading price of $0.049 as of the effective date of the transaction). As more fully described in Note 9, the Noteholder fully funded the Funding Facility as prescribed on February 12, 2020 and the Company converted the Funding Facility into 40,000,000 shares of common stock of the Company (approximately $0.013 per share representing a discount of 60.5% to the trading price of $0.032 as of the effective date of the transaction). |