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): December 18, 2015
MEDBOX, INC.
(Exact
name of registrant as specified in its charter)
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| Nevada |
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000-54928 |
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45-3992444 |
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of incorporation) |
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(Commission
File Number) |
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(I.R.S. Employer
Identification Number) |
600 Wilshire Blvd. Ste. 1500
Los Angeles, CA 90017
(Address of principal executive offices) (zip code)
(800)-762-1452
(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):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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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 Material Definitive Agreement |
Farming Agreement
On December 18, 2015, Medbox, Inc. (the “Company”) and its subsidiary EWSD I, LLC (“EWSD”), entered into a
Farming Agreement (the “Farming Agreement”) with Whole Hemp Company (“Whole Hemp”), pursuant to which Whole Hemp will manufacture products from hemp and cannabis crops it will grow on EWSD farmland,
and the Company will build greenhouses for such activities up to an aggregate size of 200,000 square feet. Whole Hemp will pay all preapproved costs of such construction on or before September 30, 2017 as partial consideration for a revocable
license to use the greenhouses and a separate 10-acre plot of EWSD farmland (the “10 Acres”). EWSD will retain ownership of the greenhouses.
For the first growing season commencing October 1, 2016, the Company will receive a percentage of gross sales of all Whole Hemp products on a monthly
basis, and the Company’s share will increase incrementally based on the extent of crops planted on EWSD farmland according to a mutually agreed schedule. The Company will continue to share in the gross sales of all Whole Hemp products during
each subsequent growing season, to be paid on a monthly basis, provided that the Company has used commercially reasonable efforts to provide certain marketing services in international markets and certain other marketing related services and
assistance developing a seed program. In addition, the Company will receive 50% of Whole Hemp’s gross profits from the farming activities on the 10 Acres.
Commencing in the second growing season, the Company may provide marketing, sales, and related services to Whole Hemp in connection with the sale of products
generated from the EWSD farmland, of which the Company will retain a percentage of gross sales. Further, the Company will receive half of the gross profits from the sale of products produced from crops grown on a dedicated 40-acre parcel of Whole
Hemp’s farmland in exchange for marketing, sales, and related services provided by the Company on an exclusive basis.
Whole Hemp is responsible for
obtaining all requisite permits and approvals from governmental authorities necessary to conduct the farming activities and for compliance with all federal, state and local regulations and procedures related to its business.
Pursuant to the Farming Agreement, the Company also granted Whole Hemp a warrant (the “Warrant”) to purchase 4,000,000 shares of
Company common stock at an exercise price of $0.50 per share, exercisable at any time within 5 years.
The Farming Agreement is effective until
September 30, 2026 and may be extended by either party for a 5-year period.
Growers’ Agent Agreement
On December 18 2015, the Company also entered into a Growers’ Agent Agreement (the “Growers’ Agent Agreement”) with
Whole Hemp, pursuant to which the Company will provide marketing, sales, and related services on behalf of Whole Hemp in connection with the sale of its Cannabidiol oil product, from which the Company will receive a percentage of gross revenues
(other than the sale of such product generated from the EWSD 10 Acres and the Whole Hemp 40-acre plot subject to the Farming Agreement). The Growers’ Agent Agreement is effective until September 30, 2025.
Under the Growers’ Agent Agreement, for the period ending December 31, 2015, the Company will act as agent for Whole Hemp in connection with the
sale of up to 25 kilograms of product in exchange for a fee of up to $600,000. Thereafter, the Company will sell the product on behalf of Whole Hemp on a commission basis.
The Company may not act as agent of any other grower, distributor or manufacturer of the same product unless such other party agrees, and Whole Hemp refuses,
to sell a set amount of such product to a purchaser below the minimum price then in effect under the Growers’ Agent Agreement.
The foregoing descriptions of the Farming Agreement, the Growers’ Agent Agreement and the Warrant are not
complete and are qualified in their entirety by reference to the full text of the documents, which the Company intends to file as Exhibits to the Annual Report on Form 10-K for its fiscal year ending December 31, 2015.
| Item 3.02 |
Unregistered Sales of Equity Securities. |
The information set forth under Item 1.01 is incorporated
by reference into this Item 3.02.
The offers, sales and issuances of the securities described above were deemed to be exempt from registration under
the Securities Act in reliance upon Section 4(a)(2) of the Securities Act. The offers, sales and issuances of the securities that were deemed to be exempt in reliance upon Section 4(a)(2) were each transactions not involving any public
offering, and the recipient of these securities was an accredited investor within the meaning of Rule 501 of Regulation D of the Securities Act who was acquiring the applicable securities for investment and not distribution and had represented that
they could bear the risks of the investment. The recipient of securities in these transactions had adequate access, through business or other relationships, to information about the Company.
No underwriters were involved in the foregoing issuances of securities.
On December 21, 2015, the Company issued a press release announcing its agreement
with Whole Hemp. A copy of the press release is appended hereto as Exhibit 99.1 and is incorporated herein by reference.
| Item 9.01 |
Financial Statements and Exhibits |
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.
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MEDBOX, INC. |
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| Dated: December 28, 2015 |
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By: |
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/s/ Jeffrey Goh |
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Name: |
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Jeffrey Goh |
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Title: |
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Interim Chief Executive Officer and President |
EXHIBIT INDEX
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| Exhibit
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Description |
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| 99.1 |
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Press Release. |
Exhibit 99.1
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| December 21, 2015 |
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Medbox Enters Business Agreement to Create Large U.S. Source of CBD Oil
Agreement with Hemp Processor Expected to Drive Meaningful Revenues
Medbox to Conduct Special Conference Call Tuesday, December 22, at 9 a.m. EST, 6 a.m. PST; See Details Below
Los Angeles, California (FSCwire) - Medbox, Inc. (OTCQB: MDBX), a provider of specialized services to the cannabis sector, including operators of dispensaries,
cultivation centers, manufacturers and research facilities in those states where approved, today announced that it has entered into an agreement with Whole Hemp Company, one of the world’s leading growers and processors of hemp products, based
in Colorado Springs, Colorado.
Under the terms of the agreement:
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Medbox will provide marketing and related services to Whole Hemp in connection with the sale of its Cannabidiol (CBD) products, from which it will share in the revenues; |
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Medbox will receive 50% of gross margins from the sale of hemp and cannabis crops grown on a dedicated 40-acre parcel of land on Whole Hemp’s farm and on approximately 10 acres of land on the Medbox farm in Pueblo,
Colorado, working as a contractor under the Medbox license; |
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Medbox will build greenhouses in 10,000 square-foot increments on its Pueblo property, expressly for the use of Whole Hemp, and also will share in the proceeds from crops grown on the property by Whole Hemp, which will
pay the full cost of the greenhouse construction; |
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Whole Hemp and Medbox plan to collaborate in 2016 on the cultivation of hemp on 1,000 acres of farmland owned by Whole Hemp in Colorado, which the companies believe will create one of the largest hemp operations in the
United States. |
“Our agreement with Whole Hemp marks a major achievement for Medbox that is expected to bring in a meaningful revenue
stream and provide multiple paths for additional growth in the years ahead,” said Jeff Goh, President and interim Chief Executive Officer of Medbox. “This agreement combines the strengths of both organizations to create tremendous value
for all stakeholders.”
Kashif Shan, CEO of Whole Hemp Company, said, “We are bringing together the talent and unique expertise of
both companies to create a truly world-class operation. There is tremendous global demand for CBD oil, which we extract from the hemp plants for sale directly to food supplement and nutraceutical companies. Many such companies currently are
importing CBD from China and Eastern Europe. They are seeking a U.S. source for assurance of best manufacturing practices and quality control that we provide. We look forward to a long and mutually rewarding partnering with Medbox to the benefit of
all involved.”
Special Conference Call
Medbox
will conduct a special conference call to discuss further details of the agreement and answer questions. Investors are encouraged to email questions in advance of the call to investor@pondel.com. Live questions will not be taken on the call.
When: Tuesday, December 22, 2015
Time: 9 a.m. EST; 6
a.m. PST
Phone: 877-876-9176 or 785-424-1667
A live
webcast also will be available online on the Investor Relations section of Medbox’s website at http://www.medbox.com. A replay of the webcast will be available approximately one hour following conclusion of the call.
About Medbox, Inc.
Medbox, Inc., a leader in the rapidly
emerging cannabis sector, provides specialized services to operators of dispensaries, cultivation centers, manufacturers and research facilities in those states where approved. Through trusted clients and affiliates, the company promotes efficient,
consistent, high quality products that are priced right, readily available and safely packaged. For more information about the company or to explore partnership, please visit www.medbox.com.
About Whole Hemp Company
Whole Hemp Company is a premier
grower of industrial hemp and manufactures phyto Cannabinoid rich hemp oil (PC-rich) that can be used in many commercial applications. Partnering with Orochem, Whole Hemp is able to stay at the cutting edge of technology and can provide PC-rich hemp
oil which is THC free. Whole Hemp industrial hemp is grown using organic farming practices, is non-GMO and is of the highest quality available in the marketplace. All processing of materials meets GMP standards, and the company openly publishes and
promotes the transparency of its products and processes to its customers. Whole Hemp currently serves customers in the nutraceutical, pet and cannabis industries. For more information about Whole Hemp, please visit www.wholehempcompany.com;
for more information about Orochem, please visit www.orochem.com.
Forward-Looking Statements
Certain statements in this press release constitute forward-looking statements within the meaning of federal securities laws. Such statements, including, but
not limited to, bringing
in a meaningful revenue stream, are based on current beliefs and expectations and are inherently subject to significant business, economic, regulatory and competitive uncertainties and
contingencies, many of which are beyond the company’s control. In addition, certain forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. Potential risks and
uncertainties also include, but are not limited to, regulatory developments in the industry, as well as political and economic conditions present within the industry. For a more detailed description of the risk factors associated with the company,
please refer to the company’s latest Annual Report on Form 10-K, and in particular, the section entitled “Risk Factors” therein, and in other periodic reports the company files with the Securities and Exchange Commission thereafter.
The company does not assume any obligation to update any forward-looking statement to reflect events or developments after a forward-looking statement was made, unless required by law.
For more information, contact:
Janet Simmons
PondelWilkinson Inc.
310-279-5980
pwinvestor@pondel.com