NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
For the Six Months Ended June 30, 2017 and 2016
1. Organization and Summary of Significant Accounting Policies:
Nature of Corporation:
Ultra Sun Corp (the “Company,” “we” or “our”) was incorporated under the laws of Nevada in November 2004. On November 13, 2013, we changed our name to Cannabis Sativa, Inc. Our wholly-owned subsidiary Kush was acquired by us in June 2014 in exchange for shares of our common stock. Our wholly-owned subsidiary Wild Earth Naturals, Inc. (“Wild Earth”) was acquired by us in July 2013 in exchange for shares of our common stock. From our inception through September 30, 2013 we were engaged in the tanning salon business and operated a tanning salon in Saratoga Springs, Utah under the name “Sahara Sun Tanning.” As a result of our acquisition of Wild Earth in July 2013, we became engaged in the herbal skin care products business. On September 30, 2013, we sold the assets of the tanning salon business to a third party. As a result of our acquisition of Kush in June 2014, along with our Wild Earth operations we are now engaged in the developing and promoting of natural cannabis products. On November 2, 2015, Kush was spun out of the Company. On August 8, 2016, the Company entered into a securities purchase agreement with iBudtender Inc. to purchase 50.1% of iBudtender Inc.
Basis of Presentation:
The accompanying condensed consolidated balance sheet at December 31, 2016, has been derived from audited consolidated financial statements and the unaudited consolidated financial statements as of June 30, 2017 and 2016, have been prepared in accordance with generally accepted accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements, and should be read in conjunction with the audited consolidated financial statements and related footnotes included in our Annual report on Form 10-K for the year ended December 31, 2016 (the “2016 Annual Report”), filed with the Securities and Exchange Commission (the “SEC”). It is management’s opinion, however, that all material adjustments (consisting of normal recurring adjustments), have been made which are necessary for a fair financial statements presentation. The consolidated financial statements include all material adjustments (consisting of normal recurring accruals) necessary to make the consolidated financial statements not misleading as required by Regulation S-X, Rule 10-01. Operating results for the six months ended June 30, 2017, are not necessarily indicative of the results of operations expected for the year ending December 31, 2017.
Principles of Consolidation:
The consolidated financial statements include the accounts of Cannabis Sativa, Inc., and its wholly owned subsidiary; Wild Earth Naturals, Inc., Hi-Brands International, Inc. and Eden Holdings LLC and its 50.1% ownership of iBudtender Inc. (the “Company”). All significant inter-company balances have been eliminated in consolidation.
Method of Accounting:
The Company maintains its books and prepares its condensed consolidated financial statements on the accrual basis of accounting.
6
CANNABIS SATIVA, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
For the Six Months Ended June 30, 2017 and 2016
Use of Estimates:
The preparation of these condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Such management estimates include the valuation of digital currency, allowance for doubtful accounts, realizability of inventories, valuation of intangible assets, recoverability of long-lived assets and goodwill, and the valuation of equity based instruments. . Actual results could differ from those estimates.
Liquidity
Our operations have been financed primarily through proceeds from notes payable, convertible notes payable, sale of common stock and revenue generated from sales of our products. These funds have provided us with the resources to operate our business, sell and support our products, attract and retain key personnel and add new products to our portfolio. We have experienced net losses and negative cash flows from operations each year since our inception. As of June 30, 2017, we had an accumulated deficit of approximately $63,000,000.
We have raised funds through the issuance of debt and the sale of common stock. We have also issued equity instruments in certain circumstances to pay for services from professionals and consultants. During 2017, a total of $771,236 was raised in gross proceeds from the issuance of common stock. See Note 9 for additional going concern considerations.
Inventory:
Inventory cost includes those costs directly attributable to the product before sale. Inventory consists of salves, ointments, lotions, creams, balms, and marketing merchandise and is carried at the lower of cost or net realizable value, using first-in, first-out method of determining cost. At June 30, 2017, there was $3,383 in raw materials and $15,183 in finished goods inventory. At December 31, 2016 the Company has $8,783 in raw materials and $345 in finished goods inventory.
7
CANNABIS SATIVA, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
For the Six Months Ended June 30, 2017 and 2016
Fair Value of Financial Instruments:
The estimated fair values for financial instruments are determined at discrete points in time based on relevant market information. These estimates involve uncertainties and cannot be determined with precision. The carrying amounts of accounts receivable, accounts payable, accrued liabilities, and notes payable approximate fair value given their short term nature or effective interest rates.
Net Loss per Share:
Net loss per share is computed by dividing net loss available to common shareholders by the weighted average number of common shares outstanding for the period and contains no dilutive securities. Diluted earnings per share reflect the potential dilution of securities that could share in the earnings of an entity. Common stock equivalents from convertible notes payable and preferred stock were approximately $857,000 and $732,000 at June 30, 2017 and 2016, respectively and are excluded from the calculation of diluted net loss per share because the effect is anti-dilutive.
Revenue Recognition:
The Company recognizes revenue from product sales or services rendered when the following four revenue recognition criteria are met: persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the selling price is fixed or determinable, and collectability is reasonably assured.
Digital Currencies Translations and Re-measurements
The Company accounts for digital currencies, which it considers to be an operating asset, at their initial cost and subsequently re-measures the carrying amounts of digital currencies it owns at each reporting period based on their current fair value. The changes in the fair value of digital currencies are included as a component of income or loss from operations. The Company currently classifies digital currencies as a current asset. The Company estimates the equivalency rate of hempcoins to bitcoins to USD from Coinmarketcap.com. The equivalency rate of garycoins to bitcoins to USD is estimated from C-cex.com and Coinmarketcap.com. The Company also estimates a liquidity discount. The equivalency rate obtained from Coinmarket represents a generally well recognized quoted price in an active market for bitcoins, which market and related database are accessible to the Company on an ongoing basis.
8
CANNABIS SATIVA, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
For the Six Months Ended June 30, 2017 and 2016
Intangible Assets:
Intangible assets are comprised of patents, trademarks, the Company’s “CBDS.com” website domain and intellectual property rights. The patent is being amortized using the straight-line method over its economic life, which is estimated to be twenty (20) years. The trademarks are being amortized between 15 and 20 years. CBDS.com website is being amortized using the straight-line method over its economic life, which is estimated to be fifteen (15) years. The intellectual property rights are being amortized using the straight-line method over its economic life, which is estimated to be between (5 - 15) years.
Stock
-Based Compensation:
Stock-based compensation is computed in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 718. FASB ASC 718 requires all share-based payment to employees, including grants of employee stock options, to be recognized as compensation expense in the financial statements based on their fair values. That expense will be recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period). The Company has selected the Black-Scholes option pricing model as the most appropriate fair value method for our awards and has recognized compensation costs immediately as our awards are 100% vested.
The Company’s accounting policy for equity instruments issued to consultants and vendors in exchange for goods and services follows the provisions of FASB ASC 505-50. The measurement date for the fair value of the equity instruments issued is determined at the earlier of (i) the date at which a commitment for performance by the consultant or vendor is reached or (ii) the date at which the consultant or vendor’s performance is complete.
In the case of equity instruments issued to consultants, the fair value of the equity instrument is recognized over the term of the consulting agreement. Stock-based compensation related to non-employees is accounted for based on the fair value of the related stock or options or the fair value of the services, whichever is more readily determinable in accordance with ASC 718.
Advertising Expense:
Advertising costs are expensed as incurred and are included in general and administrative expense in the accompanying consolidated statements of operations. Advertising costs were approximately $397,000 and $32,530 for the six months ended June 30, 2017 and 2016, respectively.
9
CANNABIS SATIVA, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
For the Six Months Ended June 30, 2017 and 2016
Accounting Pronouncements:
There have been no recent accounting pronouncements issued which are expected to have a material effect on the Company’s financial statements. Management continues to monitor and review recently issued accounting guidance upon issuance.
In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230) – Classification of Certain Cash Receipts and Cash Payments. This ASU provides clarification regarding how certain cash receipts and cash payments are presented and classified in the statement of cash flows. This ASU addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. The issues addressed in this ASU that will affect us is classifying debt prepayments or debt extinguishment costs and contingent consideration payments made after a business combination. This update is effective for annual and interim periods beginning after December 15, 2017, and interim periods within that reporting period and is to be applied using a retrospective transition method to each period presented. Early adoption is permitted. The adoption of this ASU did not have a material impact on our condensed consolidated financial position, results of operations and related disclosures and had no other impact to the accompanying condensed consolidated statement of cash flows for the six months ended June 30, 2017 and 2016.
In March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting, which amends ASC Topic 718, Compensation - Stock Compensation. The ASU involves several aspects of the accounting for share-based payment transactions, including the income tax consequences, forfeitures, classification of awards as either equity or liabilities and classification on the statement of cash flows. Certain of these changes are required to be applied retrospectively, while other changes are required to be applied prospectively. ASU 2016-09 is effective for public business entities for annual reporting periods beginning after December 15, 2016, and interim periods within that reporting period. Early adoption will be permitted in any interim or annual period, with any adjustments reflected as of the beginning of the fiscal year of adoption. As a result of the adoption of this ASU as of January 1, 2017, we have made an entity-wide accounting policy election to account for forfeitures when they occur. There is no cumulative-effect adjustment as a result of the adoption of this ASU as our estimated forfeiture rate prior to adoption of this ASU was 0%. The adoption of this ASU did not have a material impact on our condensed consolidated financial statements and related disclosures.
10
CANNABIS SATIVA, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
For the Six Months Ended June 30, 2017 and 2016
In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes. Current U.S. GAAP requires an entity to separate deferred income tax liabilities and assets into current and noncurrent amounts in a classified statement of financial position. To simplify the presentation of deferred income taxes, the amendments in this update require that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The amendments in this update apply to all entities that present a classified statement of financial position. The current requirement that deferred tax liabilities and assets of a tax-paying component of an entity be offset and presented as a single amount is not affected by the amendments in this update. The amendments in this update will align the presentation of deferred income tax assets and liabilities with International Financial Reporting Standards (IFRS) and are effective for fiscal years after December 15, 2016, including interim periods within those annual periods. The adoption of this ASU as of January 1, 2017 did not have a material impact on our condensed consolidated financial statements and related disclosures.
In July 2015, the FASB issued ASU No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory. Topic 330. Inventory, currently requires an entity to measure inventory at the lower of cost or market. Market could be replacement cost, net realizable value, or net realizable value less an approximately normal profit margin. The amendments apply to all other inventory, which includes inventory that is measured using first-in, first-out (FIFO) or average cost. An entity should measure in scope inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The amendments in this ASU more closely align the measurement of inventory in U.S. GAAP with the measurement of inventory in IFRS. For public business entities, the amendments are effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The amendments should be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period.
The adoption of this ASU as of January 1, 2017 did not have a material impact on our condensed consolidated financial statements and related disclosures.
In August 2014, the FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. This ASU 2014-15 describes how an entity should assess its ability to meet obligations and sets rules for how this information should be disclosed in the consolidated financial statements. The standard provides accounting guidance that will be used along with existing auditing standards. The ASU 2014-15 is effective for the annual period ending after December 15, 2016. Early application is permitted. The adoption of this ASU as of January 1, 2017 did not have a material impact on our condensed consolidated financial statements and related disclosures.
2. Eden Holdings LLC
During the quarter ended September 30, 2014, the Company created Eden Holdings LLC. The purpose of the entity is to hold the intellectual property of Cannabis Sativa, Inc. As of June 30, 2017 and 2016, there has been no activity in the LLC.
3. Fair Value Measurements
We adopted ASC Topic 820 for financial instruments measured at fair value on a recurring basis. ASC Topic 820 defines fair value, establishes a framework for measuring fair value in accordance with accounting principles generally accepted in the United States and expands disclosures about fair value measurements.
11
CANNABIS SATIVA, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
For the Six Months Ended June 30, 2017 and 2016
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 establishes a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:
|
|
·
|
Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets;
|
|
|
·
|
Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and
|
|
|
·
|
Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
|
The estimated fair values for financial instruments are determined at discrete points in time based on relevant market information. These estimates involve uncertainties and cannot be determined with precision. The carrying amounts of accounts receivable, inventory, accounts payable and accrued liabilities approximate fair value given their short term nature or effective interest rates. We measure certain financial instruments at fair value on a recurring basis.
As of June 30, 2017, assets and liabilities measured at fair value on a recurring basis were as follows:
|
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
Digital Currency
|
|
$ 21,304
|
|
$ -
|
|
$ 21,304
|
|
$ -
|
|
Total assets measured at fair value - unaudited
|
$ 21,304
|
|
$ -
|
|
$ 21,304
|
|
$ -
|
As of December 31, 2016, assets and liabilities measured at fair value on a recurring basis were as follows:
|
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
Digital Currency
|
|
$ 41,191
|
|
$ -
|
|
$ 41,191
|
|
$ -
|
|
Total assets measured at fair value
|
|
$ 41,191
|
|
$ -
|
|
$ 41,191
|
|
$ -
|
4. Hempcoins
At June 30, 2017 and December 31, 2016, the Company has possession of approximately 110,000,000 Hempcoins. Hempcoins are reported as digital currency. Every 10 Hempcoins are backed by 1 share of Rocky Mountain Inc (RMTN). At June 30, 2017 and December 31, 2016 the value of Hempcoins was $5,500 and $14,911, respectively, computed by converting first to bitcoin and then to US Dollars. (See Note 1). 100,000,000 hempcoins were contributed to the Company in 2015 by a director with a cost basis of $4,731. Approximately 10,000,000 were earned by the Company during 2015 with a cost basis of $207.
5. Garycoins
At June 30, 2017 and December 31, 2016, the Company has possession of 900,005,098 cryptocurrency coins named “President Johnson” trading under symbol “GARY,” which were contributed to the Company by a director during 2016 with a cost basis of $5,931. President Johnson coins are reported as digital currency. At June 30, 2017 and December 31, 2016 the value of these coins was estimated to be $15,804 and $26,280, respectively, computed by converting to a bitcoin value in US Dollars. (See Note 1).
12
CANNABIS SATIVA, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
For the Six Months Ended June 30, 2017 and 2016
6. Intangibles
Intangible assets consisted
of the following at June 30, 2017 and December 31, 2016:
|
|
Unaudited
|
|
|
|
June 30,
|
December 31,
|
|
|
2017
|
2016
|
|
|
|
|
|
CBDS.com website (Cannabis Sativa)
|
$ 13,999
|
$ 13,999
|
|
Intellectual Property Rights (Cannabis Sativa)
|
2,894,250
|
2,894,250
|
|
Intellectual Property Rights Vaporpenz (White Rabbit)
|
210,100
|
-
|
|
Intellectual Property Rights (iBudtender)
|
400,000
|
400,000
|
|
Patents and Trademarks (Cannabis Sativa)
|
17,348
|
17,348
|
|
Patents and Trademarks (Wild Earth)
|
4,425
|
4,425
|
|
|
3,540,122
|
3,330,022
|
|
Less: Accumulated Amortization
|
570,162
|
389,054
|
|
|
|
|
|
Net Intangible Assets
|
$ 2,969,960
|
$ 2,940,968
|
Amortization expense for the six months ended June 30, 2017 and 2016 was $181,108 and $12,946 respectively. Amortization for each of the next 5 years is $355,660 annually.
Goodwill of $247,051 consisted of the acquisition of iBudtender at June 30, 2017 and December 31, 2016, respectively.
7. Related Parties
The Company has received advances from related parties and officers of the Company to cover operating expenses. At June 30, 2017 and December 31, 2016, net amounts due to the related parties were $302,793 and $451,879, respectively. During the six months ended June 30, 2017 and 2016, the Company has imputed interest on these notes at the rates between 5% and 8% per annum and has recorded interest expense related to these balances in the amount of $11,880 and $1,732, respectively. Because the related parties do not expect the imputed interest to be repaid, the interest has been recorded as a contribution of capital.
At June 30, 2017 and December 31, 2016 the Company has a note receivable from a related party in the amount of $15,742 and $15,000, respectively, which is due on demand.
8. Stockholders’ Equity
Preferred Stock
The Company is authorized to issue up to 5,000,000 shares of preferred stock. The Company designated and determined the rights of Series A preferred stock (“Series A”) with a par value of $0.001. The Company is authorized to issue 5,000,000 shares of Series A. The holders of Series A are entitled to dividends if the Company declares a dividend on common shares, have no liquidation preference, have voting rights equal to 1 vote per share, and can be converted into one share of common.
13
CANNABIS SATIVA, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
For the Six Months Ended June 30, 2017 and 2016
Common Stock
During the year ended December 31, 2016 the board of directors approved the issuance of 1,077,433 shares of common stock for services in the amount of $2,721,150. Approximately $417,000 was recorded as prepaid consulting due to the non-forfeitable nature of the shares issued. During the six months ended June 30, 2017, the Company amortized approximately $101,583 to professional fees in the accompanying consolidated statement of operations.
During the year ended December 31, 2016 the board of directors approved the issuance of 150,000 shares of common stock to purchase iBudtender Inc., with a fair value of $300,000 (see Note 10). At June 30, 2017 and December 31, 2016, 50,000 shares have yet to be issued.
The Company approved a Private Placement Memorandum on October 14, 2016. The total offering proceeds can be up to $1,500,000 by offering 625,000 of the Company’s stock at $2.40 per share. Each unit will consist of 1 (one) share of common stock and 1 (one) warrant. Each warrant entitles the holder to purchase 1(one) common share at the exercise price of $4.00 which expire in January 2020. The offering terminated on December 14, 2016 but can be extended for up to 60 additional days. At March 31, 2017, and December 31, 2016, the Company had received $356,100 and $197,730, respectively, for a total of $553,830. At March 31, 2017all the stock had been issued to investors totalling, 230,775 shares common stock including the shares underlying the $197,730 included in stock payable at December 31, 2016. At December 31, 2016 no stock had yet been issued. Such amount was included in stock subscriptions payable in the accompanying balance sheet at December 31, 2016.
During the six months ended June 30, 2017 the board of directors approved the issuance of 515,402 shares of common stock for services rendered in the amount of $2,792,175, including a loss on settlement of approximately $37,000. The fair value of the shares issued was based on the market price of the Company’s common stock on the measurement date.
During the six months ended June 30, 2017 a related party purchased 80,000 shares common stock for $415,136 in cash.
During the six months ended June 30, 2017 a related party note payable was repaid in the amount of $100,000 plus $4,469 in interest with the issuance of 43,169 shares of common stock per the terms of the note agreement.
During the six months ended June 30, 2017 the Company paid $150,000 and issued 10,000 shares of common stock to purchase intellectual property. The total investment was valued at $210,100 of which 10,000 shares of common stock issued was valued at 60,100. The Company has recorded the intellectual property rights in intangible assets in the accompanying condensed consolidated balance sheet.
14
CANNABIS SATIVA, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
For the Six Months Ended June 30, 2017 and 2016
9. Going Concern Considerations
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As shown in the accompanying condensed consolidated financial statements, the Company has negative working capital, has incurred operating losses since inception, and has not yet produced significant continuing revenues from operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern.
The condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event that the Company cannot continue as a going concern. Management anticipates that it will be able to raise additional working capital through the issuance of stock and through additional loans from investors.
The ability of the Company to continue as a going concern is dependent on its ability to raise adequate capital to fund operating losses until it is able to engage in profitable business operations. To the extent financing is not available, the Company may not be able to, or may be delayed in, developing its services and meeting its obligations. The Company will continue to evaluate its projected expenditures relative to its available cash and to evaluate additional means of financing in order to satisfy its working capital and other cash requirements. The accompanying financial statements do not reflect any adjustments that might result from the outcome of these uncertainties.
10. Commitments and Contingencies
Lease
The Company leases an office and warehouse facility in Mesquite, Nevada that serves as the principal executive offices and provides manufacturing and warehouse space. The leased space consists of 908 square feet. Rent expense for the six months ended June 30, 2017 and 2016 was $7,112 and $631, respectively. On March 1, 2017, a new lease agreement was signed at a monthly rate of $1,392. Lease term is for 12 (twelve) months with a renewal option available for an additional 12 (twelve) months.
Litigation
In the ordinary course of business, we may face various claims brought by third parties and we may, from time to time, make claims or take legal actions to assert our rights, including intellectual property disputes, contractual disputes and other commercial disputes. Any of these claims could subject us to litigation. Management believes the outcomes of currently pending claims are not likely to have a material effect on our consolidated financial position and results of operations.
In May 2015, a suit was brought against the Company by a subcontractor for non-payment of services. In April 2017, the pending litigation was settled for $19,000, which the Company had accrued.
Stock Payable
During the six months ended June 30, 2017, the Company recorded approximately $490,000 of expense related to common stock to be issued for services rendered.
11. Subsequent Events
Common Stock Issued for Services
During the period from July 1, 2017 through August 1, 2017, 40,000 restricted shares were issued for services provided by the Board of Directors and 1,027,169 restricted shares were issued to acquire 51% of PrestoCorp.
Stock Incentive Plan
15
On July 28, 2017 the Company filed a Form S-8 registration statement authorizing 3,000,000 shares common stock. On July 28, 2017, the Company resolved to adopt the Cannabis Sativa, Inc. 2017 Stock Plan. The purpose of this Plan is to enable the Company, to promote the interests of the Company and its stockholders by attracting and retaining employees, directors and consultants capable of furthering the future success of the Company and by aligning their economic interests more closely with those of the Company's stockholders, by paying their fees or salaries in the form of shares of the Company's common stock. 3,000,000 shares of common stock are registered to this plan at an offering price of $4.40.
PrestoDoctor Acquisition
On July 27, 2017 the Company entered into a Securities Purchase Agreement with Prestocorp to acquire a 51% interest in Prestocorp, operators of the PrestoDoctor telemedicine platform as described in the Form 8-K the Company filed with the SEC on July 31, 2017.
On August 1, 2017, the Company did close on the above transaction and now owns 51% of Prestocorp, a Delaware corporation. The Company has 75 days from August 1, 2017 to file the Form 8-K/A containing the audited pro forma financial statements of Prestocorp. As part of the Prestocorp acquisition, the Company issued 1,027,169 restricted shares of the Company’s common stock based upon a share price of $4.4686 per share and purchase price of $4,590,000. Management is evaluating the purchase price allocation of the business combination
16