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: May 3, 2019
PURE HARVEST CANNABIS GROUP, INC.
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(Name of registrant as specified in its charter)
Colorado 333-212055 71-0952431
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State of Commission File IRS Employer
Incorporation Number Identification No.
929 Colorado Ave
Santa Monica, CA 90401
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Address of principal executive offices
(800) 560-5148
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Telephone number, including Area code
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Former name or former address if changed since last report
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of registrant under any of the
following provisions:
[ ] 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-14(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 13a of the
Exchange Act. [ ]
Securities registered pursuant to Section 12(b) of the Act:
Title of each Trading Name of each exchange on which
class Symbol(s) registered
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None N/A N/A
1
Item 1.01 Entry Into a Material Definitive Agreement
On May 3, 2019 the Company leased two one-story commercial buildings,
consisting of approximately 2,750 combined square feet, located along Interstate
70 approximately 35 miles west of Denver, Colorado. The lease expires on April
30, 2022, but may be renewed for an additional five years at the option of the
Company. The monthly rent is $8,000 for the initial three year term, increasing
to $12,000 per month for the final year of the renewal term if the Company
elects to extend the term of the lease.
The lease is a "triple net" lease, which means the Company, in addition to
the monthly rent, is required to pay the cost of all utilities, insurance,
repairs, maintenance and real estate taxes.
The Company plans to remodel the buildings on the property so that they can
be used as a retail marijuana dispensary and for other purposes.
The Company has an option to purchase the property according to the
following terms:
Purchase Plus the following
If option is exercised price will be % of Gross Sales (1)
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Before May 1, 2020 $1,400,000 4%
Between May 2, 2020 but
before May 1, 2021 $1,500,000 5%
Between May 1, 2021 but
before May 1, 2022 $1,600,000 6%
(1) Percentage of the gross sales derived from all business operations
conducted on or from the building for period of five years commencing on
the date of the sale of the building. Gross sales will be net of any
discounts and taxes.
Additional purchase options are provided for the twelve months ending May
1, 2023, through May 1, 2027.
As additional consideration for the lease, the Company granted the landlord
the following options:
o The first option, which expires on April 30, 2022, allows the landlord
to acquire 1,600,000 post-split shares of the Company's restricted
common stock, plus warrants which will allow the landlord to purchase
up to 1,600,000 post-split shares of the Company's common stock at a
price of $2.00 per share. The warrants expire three years after the
option is exercised.
2
o The second option, which expires on April 30, 2027, allows the
landlord to acquire 1,800,000 post-split shares of the Company's
restricted common stock, plus warrants which will allow the landlord
to purchase up to 1,800,000 post-split shares of the Company's common
stock at a price of $2.00 per share. The warrants expire three years
after the option is exercised. The second option may only be exercised
if the Company elects to renew the lease for an additional five years.
To exercise either option, the landlord must convey the property the
Company has leased, free and clear of any encumbrances, to the Company.
If the first option is exercised, the second option terminates.
The Company issued the landlord 400,000 shares of its post-split restricted
common stock in consideration for the option to purchase the buildings.
Item 3.02. Unregistered Sale of Equity Securities.
The Company relied upon the exemption from registration provided by Section
4(a)2 of the Securities Act of 1933 with respect to the issuance of the shares
and warrants described in Section 1.01 of this report. The person that acquired
the shares and warrants was a sophisticated investor that was provided full
information regarding the Company's business and operations. There was no
general solicitation in connection with the issuance of these securities. The
person that acquired the shares and warrants acquired these securities for its
own account. The securities cannot be sold unless pursuant to an effective
registration statement or an exemption from registration.
Item 8.01. Other Events.
On May 13, 2019 the Company issued a press release, filed as Exhibit 99,
concerning the lease of the property described in Item 1.01 of this report.
Item 9.01 Financial Statement and Exhibits
Number Description
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99 Press Release
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
May 14,2019
PURE HARVEST CANNABIS GROUP, INC.
By: /s/ David Lamadrid
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David Lamadrid
Chief Executive Officer