UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 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 23, 2015

 

TERRA TECH CORP.

(Exact name of registrant as specified in its charter)

 

Nevada

 

000-54258

 

26-3062661

(State or other jurisdiction of incorporation)

 

(Commission File Number)

 

(IRS Employer Identification No.)

 

4700 Von Karman, Suite 100

Newport Beach, California 92660

(Address of principal executive offices) (Zip Code)

  

Registrant's telephone number, including area code: (855) 447-6967

 

Not Applicable

(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 the 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-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

Section 8 – Other Events

 

Item 8.01. Other Events

 

On December 23, 2015, Terra Tech Corp., a Nevada corporation (the "Company," "us," "we," or "our"), Generic Merger Sub, Inc., a California corporation ("Merger Sub"), and Black Oak Gallery, a California corporation ("Black Oak") entered into an Agreement and Plan of Merger (the "Merger Agreement"), pursuant to which, among other things, and subject to the satisfaction or waiver of the closing conditions set forth in the Merger Agreement, Merger Sub will merge with and into Black Oak, with Black Oak as the surviving corporation, and becoming our wholly-owned subsidiary (the "Merger"). The Merger is intended to qualify for federal income tax purposes as a tax-free reorganization under the provisions of Section 368(a) of the Internal Revenue Code of 1986, as amended.

 

Subject to the terms and conditions of the Merger Agreement, at the closing of the Merger, the outstanding shares of common stock of Black Oak held by (i) two of the current shareholders of Black Oak (the "Group A Shareholders") will be converted into the right to receive approximately 8,167 shares of our Series Z Preferred Stock, of which approximately 1,176 shares of Series Z Preferred Stock will be issued and paid at closing, and approximately 8,668,700 shares of our Series B Preferred Stock, of which approximately 1,248,300 shares of Series B Preferred Stock will be issued and paid at closing and (ii) the remaining shareholders of Black Oak (the "Group B Shareholders") will be converted into the right to receive approximately 21,380 shares of our Series Q Preferred Stock, of which approximately 3,696 shares of Series Q Preferred Stock will be issued and paid at closing. The shares of Series Z Preferred Stock, Series B Preferred Stock, and Series Q Preferred Stock that are issued but not paid to the Black Oak shareholders at closing will be subject to certain holdback and lock-up provisions, and held in an escrow account as security for the satisfaction of any post-closing adjustments or indemnification claims, as provided for in the Merger Agreement. Each share of our Series Q Preferred Stock is to be converted into 5,000 shares of our common stock and each share of our Series Z Preferred Stock is to be converted into 1,857 shares of our Series B Preferred Stock, in each case immediately upon our filing with the Secretary of State of the State of Nevada an Amendment to our Articles of Incorporation to increase our authorized capital for, among other reasons, satisfaction of the terms of this potential transaction. Accordingly, the approximately 21,380 shares of Series Q Preferred Stock to be issued to the Group B Shareholders is convertible into approximately 106,899,383 shares of common stock and the approximately 8,167 shares of our Series Z Preferred Stock to be issued to the Group A Shareholders is convertible into approximately 15,164,569 shares of our Series B Preferred Stock. The Series Z Preferred Stock is intended to mirror the rights of the holders of our Series B Preferred Stock. Each share of our Series B Preferred Stock remains convertible into 5.384325537 shares of our common stock. Immediately following the effectiveness of the Merger, the current Black Oak shareholders (both the Group A Shareholders and the Group B Shareholders) are expected to own approximately 36.57% of our common stock on a fully "as-converted basis," which percentage does not include certain shares of common stock, Series A Preferred Stock that may be converted into shares of common stock, or Series B Preferred Stock that may be converted into shares of common stock, as applicable, each as currently held by the Group A Shareholders. Derek Peterson, our President and Chief Executive Officer, is one of the Group A Shareholders. The Group B Shareholders may also receive cash consideration equal to approximately $2,088,000.

 

Consummation of the Merger is subject to certain closing conditions, including, among other things, receipt of all necessary approvals under federal and state securities laws, receipt of all authorizations required relating to the issuance of our securities and transfer of all the shares pursuant to the terms of the Merger Agreement. Black Oak and we have currently agreed that the closing of the Merger shall be as soon as reasonably practicable (but in any event, no later than the second business day) after the day on which the final closing conditions have been satisfied or validly waived, which satisfaction or waiver date shall not be prior to March 1, 2016. Consistent with that, we have reserved the right to terminate the Merger Agreement for any reason, in our discretion, prior to March 1, 2016. Further, Black Oak committed to use commercially reasonable efforts to assist us in our preparation of its financial statements, which statements are to be reasonably capable of being audited under GAAP and which audit shall be complete not later than May 16, 2016 (75 days after March 1, 2016).

 

On January 12, 2016, we issued a press release relating to the Merger. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated by reference herein.

 

 
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Caution Concerning Forward-Looking Statements

 

Statements that are not historical in nature constitute forward-looking statements. These forward-looking statements are accompanied by words such as "anticipate," "expect," "project," "will," "believe," "estimate," and similar expressions. Such expectations are based upon certain preliminary information, internal estimates, and management assumptions, expectations, and plans, and are subject to a number of risks and uncertainties inherent in projecting future conditions, events, and results. Actual results could differ materially from those expressed or implied in the forward-looking statements if one or more of the underlying assumptions or expectations prove to be inaccurate or are unrealized. Important factors that could cause actual results to differ materially from those suggested by the forward-looking statements include, but are not limited to, the occurrence of any event, change, or other circumstances that could give rise to the termination of the Merger Agreement, the risk that the necessary regulatory approvals may not be obtained or may be obtained subject to conditions that are not anticipated, the risk that the proposed Merger will not be consummated in a timely manner, the risk that Black Oak is unable to prepare and deliver audited financial statements by the Audit Date, risks related to disruption of management time from ongoing business operations due to the proposed Merger, the risk that we fail to realize the benefits expected from the proposed Merger, the risk that we fail to promptly and effectively integrate the Merger, and the risk that we are unable to retain current customers, suppliers, and key personnel of Black Oak following the Merger. Additional factors that could cause actual results to differ materially from those contemplated within this Current Report Form 8-K can also be found in our Risk Factor disclosures in our Form 10-K for the year ended December 31, 2014 filed with the Securities and Exchange Commission and available on our website. The information contained in this Current Report on Form 8-K is as of the date indicated. We do not assume any obligation to update any forward-looking statements contained in this Current Report on Form 8-K as a result of new information or future events or developments.

 

SECTION 9 – FINANCIAL STATEMENTS AND EXHIBITS

 

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits

 

Exhibits

 

Description of Exhibit

 

 

 

99.1*

 

Press Release dated January 12, 2016

_________

*Filed herewith.

 

 
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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.

 

 

 

TERRA TECH CORP.

 
Date: January 12, 2016

By:

/s/ Derek Peterson

 

Derek Peterson

 

President and Chief Executive Officer

 

 

 

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EXHIBIT 99.1

  

 

Terra Tech and Blüm

Announce Definitive Merger Agreement

 

Company acquires one of California's highest-volume medical cannabis dispensaries

 

NEWPORT BEACH, Ca. – January 12, 2016 – Terra Tech Corp. (OTCQX: TRTC) ("Terra Tech" or the "Company"), a vertically-integrated, cannabis-focused agriculture company, today announced a definitive merger agreement under which Terra Tech will acquire 100% of the outstanding shares of Black Oak Gallery, DBA: Blüm Oakland, an established, retail medical cannabis dispensary in Oakland, CA.

 

Blüm Oakland, which holds over 42,000 registered patients, has been operating since November 2012 and services close to 1,000 patients each day. The acquisition includes Blüm's fully integrated supply chain, which consists of a sophisticated onsite cultivation facility, its portfolio of proprietary strains, as well as its high volume retail storefront. Trailing 12-month non-GAAP revenue for Blüm Oakland is over $14 million, which tracks the revenue reported by Blüm Oakland in its associated sales tax and marijuana tax reporting and payments.

 

"Today, we can proudly claim the title of the only US-based, publicly-traded company that touches every aspect of the cannabis lifecycle—from cultivation, to extraction, to branding, and now, with the acquisition of Blüm, to retail sale," said Derek Peterson, CEO of Terra Tech. "In addition to enhancing our cash-flow, this merger positions us to capitalize on the new regulatory landscape in California, which will change significantly with the implementation of the Marijuana Regulation and Safety Act in 2016. The new legislation, which more strictly regulates the medical marijuana industry, should both reduce our competition and increase our total addressable market. In addition, the new legislation allows companies to operate on a for-profit basis. Also, California's pursuit to legalize adult use cannabis is gaining significant traction and support by major stakeholders in the state. This merger with Blüm strategically enables us to take advantage of the regulatory changes and to maximize value for Terra Tech stockholders."

 

"We have always prided ourselves on working with those at the forefront of the legal cannabis industry and this new partnership with Terra Tech is an exciting step forward for the Blüm team," commented Salwa Ibrahim, Executive Director of Blum. "I have been fortunate to work with Terra Tech over the past couple of years, primarily in securing the Nevada permits. It is our hope that we can continue to secure permits and to develop sustainable but successful operations in new markets opening up. We're looking forward to bringing together the core teams of both companies and finding other capable operators in this growing industry to join with as we continue to further our business strategy."

 

Upon completion of the merger, general terms of which are detailed below, Terra Tech stockholders will own 100% of the combined company.

 

The purchase price of Blüm Oakland is 1.5 times forward-looking revenue for the 12 months following the closing of the merger. To protect stockholders, 80% of the equity will be held in escrow subject to performance adjustments at the end of the 12-month term. The anticipated closing date for the merger is not later than March 31, 2016. Blüm Oakland and all of its shareholders are obligated to close the merger by that date, while Terra Tech retains the option to cancel the merger through March 1, 2016, pending further due diligence. Terra Tech will file its Current Report on Form 8-K outlining the formal terms of the merger and related disclosure within the required time frames after closing.

 

"As we continue to develop our long-term strategy in Nevada, it has always been our goal to also focus on near-term acquisitions that have immediate value to our stockholders," explains Mike Nahass, Director of Terra Tech. "For this transaction, most of the merger payments are to be made in Terra Tech stock and we are valuing the deal on a forward looking basis. This structure ensures that Terra Tech will only pay for the performance it realizes in the coming year. In addition, if Blüm Oakland achieves all of its sales benchmarks, the number of our shares should only increase by roughly 60% but our expected total revenue is expected to grow by over 175%. We believe this is an extremely accretive transaction not only for Terra Tech but also for our stockholders, as we continue to successfully execute on our business strategy."

 

 
 
 

  

About Terra Tech

 

Terra Tech Corp. (TRTC), through its wholly-owned subsidiary, Edible Garden, cultivates a premier brand of local and sustainably-grown hydroponic produce, sold through major grocery stores, such as Shoprite, Walmart, Krogers, and others throughout New Jersey, New York, Delaware, Maryland, Connecticut, Pennsylvania, and the Midwest. MediFarm LLC is focused on medical cannabis businesses throughout Nevada. IVXX LLC is a wholly-owned subsidiary that produces medical cannabis-extracted products for regulated medical cannabis dispensaries throughout California. GrowOp Technology is a wholly-owned subsidiary that specializes in controlled environment agricultural technologies.

 

To be added to the Terra Tech email distribution list, please email TRTC@kcsa.com with TRTC in the subject line.

 

For more information about Terra Tech Corp, visit: http://www.terratechcorp.com/

For more information about IVXX, visit: http://ivxx.com/

Visit us on Facebook @https://www.facebook.com/terratechcorp/timeline

Follow us on Twitter @terratechcorp

Follow us on Instagram @socal_IVXX

For more information about Edible Garden, visit: http://www.ediblegarden.com/

Visit Edible Garden on Facebook @https://www.facebook.com/ediblefarms?fref=ts

Visit IVXX on Facebook @https://www.facebook.com/ivxxbrand?fref=ts

  

Cautionary Language Concerning Forward-Looking Statements

 

Statements in this press release may be "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "anticipate", "believe", "estimate", "expect", "intend", and similar expressions, as they relate to the Company or its management, identify forward-looking statements. These statements are based on current expectations, estimates, and projections about the Company's business, based, in part, on assumptions made by management. These statements are not guarantees of future performance and involve risks, uncertainties, and assumptions that are difficult to predict. Therefore, actual outcomes and results may, and probably will, differ materially from what is expressed or forecasted in such forward-looking statements due to numerous factors, including those described above and those risks discussed from time to time in Terra Tech Corp.'s filings with the Securities and Exchange Commission. In addition, such statements could be affected by risks and uncertainties related to Terra Tech Corp.'s (i) ability to consummate the prospective merger with Blüm and integrate Blüm into the operations of Terra Tech Corp., (ii) product demand, market and customer acceptance of its products, (iii) ability to obtain financing to expand its operations, (iv) ability to attract qualified sales representatives, (v) competition, pricing and development difficulties, (vi) ability to conduct operations if there are changes in laws, regulations or government policies related to cannabis, (vii) ability to conduct operations if disease, insects or mites affect Terra Tech Corp.'s products and (viii) general industry and market conditions and growth rates and general economic conditions. Any forward-looking statements speak only as of the date on which they are made, and the Company does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this release. Information on Terra Tech Corp.'s website does not constitute a part of this release.

 

 

Contact

 

Philip Carlson / Elizabeth Barker

KCSA Strategic Communications

TRTC@kcsa.com

 

 

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