Item
2.01. Completion of Acquisition or Disposition of Assets.
Pursuant
to an Agreement and Plan of Merger dated effective as of September 30, 2016 (the “Merger Agreement”), by and among
Pacific Oil Company, a Nevada corporation (the “Company”), its subsidiary Pacific Merger Corp., a Texas corporation
(“Pacific Merger Corp”), and Financial Gravity Holdings, Inc., a Texas corporation (“Financial Gravity”),
Pacific Merger Corp merged with and into Financial Gravity, with Financial Gravity remaining as the surviving corporation and
becoming a subsidiary of the Company (the “Merger”). On October 6, 2016, a certificate of merger was filed with the
Texas Secretary of State.
Also
pursuant to the Merger Agreement, each of the 32,248,183 shares of Financial Gravity Common Stock issued and outstanding prior
to the Merger has been automatically converted into and exchangeable for an equivalent number of fully paid and non-assessable
shares of Company Common Stock.
Also
pursuant to the Merger Agreement, the officers and directors of the Company prior to the Merger resigned on the effective date
of the Merger. Also pursuant to the Merger Agreement, and prior to his resignation, Mr. Anthony Sarvucci, then the sole director, elected
Messrs. John Pollock, Paul Williams, David Crowley, Ed Lyons, and George Crumley to the Company’s Board of Directors.
Accordingly,
as a consequence of the change in the Company’s stock ownership and the change in the composition of the Company’s
Board of Directors, the Merger has resulted in a change of control of the Company.
For
accounting purposes, the Merger has been accounted for as a merger, with Financial Gravity as the accounting acquirer (legal acquiree).
On the effective date of the Merger, Financial Gravity’s business became the only business of the Company, which prior to
the Merger was a shell company.
The
Merger Agreement is filed as an Exhibit to this Current Report on Form 8-K. The foregoing description of the Merger Agreement
and the transactions contemplated thereby do not purport to be complete and are qualified in their entireties by reference to
the Merger Agreement.
Unless
the context otherwise requires, all future references in this Report to “we,” “us,” “our company,”
“our,” or the “Company” refer to the blended enterprise comprised of Pacific Oil Company, Financial Gravity
Holdings, Inc., and Financial Gravity Holdings, Inc.’s subsidiaries, and all references in this Report to “Financial
Gravity Holdings, Inc.” refer to Financial Gravity Holdings, Inc. and its subsidiaries.
Description
of Business of Financial Gravity Holdings, Inc.
Business Overview
Financial
Gravity Holdings, Inc. was incorporated in Texas on September 29, 2014 and, through its subsidiaries, delivers a wide range of
accounting, tax planning and management services to high net worth individuals and businesses in the Dallas/Fort Worth region,
with further expansion into other markets in accordance with its long term growth plan and its strategic business plan.
Products
and Services
Financial
Gravity works with its clients, who are high net worth individuals and businesses, to provide a wide range of accounting, tax planning
and management services. The following outline briefly describes Financial Gravity’s various subsidiaries and the products
and services they offer:
Financial
Gravity Operations, Inc.
Financial Gravity Operations manages operational expenses for the shared services
of the subsidiaries.
Financial
Gravity Tax, Inc. formerly Business Legacy, Inc.
Financial Gravity Tax is a bookkeeping, tax planning and payroll
service provider for small companies and individuals.
Financial
Gravity Wealth, Inc. formerly Pollock Advisory Group, Inc.
Financial Gravity Wealth is a registered investment advisor
and provides asset management services.
Financial
Gravity Business, Inc. formerly Cloud9b2b, LLC
Financial Gravity Business provides business consulting services to Small Business
Owners that identify way to leverage a business’ current assets (people, platforms and processes) and reduce exposure to
risk, both short-term and long-term, while simplifying the business and increasing profitability.
Financial
Gravity Ventures, LLC formerly Cloud9 Accelerator, LLC
Financial Gravity Ventures holds acquired companies and business assets
until they are integrated into the main stream Financial Gravity business structure.
Sash Corporation
dba Metro Data Processing
Metro Data Processing provides payroll services, software and support solutions to business owners.
TaxCoach
Software, LLC
TaxCoach Software provides three primary services including monthly subscriptions to the “TaxCoach”
software system, coaching and email marketing services.
Competition
The
market is comprised of a very large selection of varied suppliers that provide financial advisory, accounting, and tax needs.
These include accounting firms, CPA's, bookkeeping businesses, estate planners, lawyers, wealth management consultants, estate
offices, private offices, banks, and large financial institutions. However, many of these firms are either too big to provide
the customized services that small business owners are seeking, are too expensive, or simply do not have the customized services
that Financial Gravity offers to meet the needs of small business owners and high net worth individuals.
Financial
Gravity has a unique product and service delivery model that has been proven to work over the past years. Financial Gravity believes
that its superior products, services and overall customer service will enable it to achieve its target sales and revenue.
In
addition, Financial Gravity considers a number of its small to medium-sized business competitors to potentially be attractive
acquisition targets.
Intellectual
Property
Financial
Gravity maintains copyrights or trademarks on all of its printed marketing materials, the
financialgravity.com
website
and other web pages, and proprietary software. Financial Gravity’s goal is to preserve its trade secrets, and operate
without infringing on the proprietary rights of other parties.
To
help protect its proprietary know-how, which is not patentable, Financial Gravity currently relies and will in the future rely
on trade secret protection and confidentiality agreements to protect its interests. To this end, Financial Gravity requires all
of its employees, consultants, advisors and other contractors to enter into confidentiality agreements that prohibit the disclosure
of confidential information and, where applicable, require disclosure and assignment to Financial Gravity of the ideas, developments,
discoveries and inventions important to its business.
Employees
As
of September 30, 2016, Financial Gravity had approximately 24 full-time employees. None of the Company’s employees are covered
by a collective bargaining agreement. Financial Gravity believes that it maintains good relations with its employees.
Description
of Property
The
Company’s corporate offices are located at 800 N Watters Road, Suite 120, Allen, Texas 75013, where Financial Gravity has
4,015 square feet of office space under lease. Pursuant to an office lease dated December 3, 2014, Financial Gravity is required
to make monthly lease payments of $6,995 per month (including operating expenses). The lease expires on October 31, 2018.
Metro Data Processing’s
offices are located at 1545 S. Harvard Avenue, Tulsa, Oklahoma 74112, where they occupy 1,590 square feet of office space under
lease. Pursuant to an office lease dated September 18, 2016, Metro Data Processing is required to make monthly lease payments
of $1,182 per month (including operating expenses). The lease automatically renews every 12 months.
TaxCoach Software’s
offices are located at 2619 Erie Ave., Suite 2D, Cincinnati, Ohio 75208. Monthly lease payments of $1,250 per month (including
operating expenses) and are on a month to month agreement with a 30 day notice to terminate.
Legal
Proceedings
From time to time, we
are a party to or otherwise involved in legal proceedings, claims and other legal matters, arising in the ordinary course of our
business or otherwise. A subsidiary of the Company is currently involved in one legal proceeding, the outcome of which will not
be material to our ability to operate or market our services, our consolidated financial position, results of operations or cash
flows.
Government
Regulation
The
services provided by the Financial Gravity, through its subsidiaries, are extensively regulated by federal and state authorities
in the United States. Financial Gravity believes it is in compliance with federal and state qualification and registration requirements
in order that it may continue to provide services to its clients consistent with applicable laws and regulations.
Risk
Factors
Our
limited operating history may not serve as an adequate basis to judge our future prospects and results of operations
. Financial
Gravity has a relatively limited operating history. Our limited operating history and the unpredictability of the wealth management
industry make it difficult for investors to evaluate our business. An investor in our securities must consider the risks, uncertainties
and difficulties frequently encountered by companies in rapidly evolving markets.
We
will need additional financing to implement our business plan.
The Company will need additional financing to fully implement
its business plan in a manner that not only continues to expand an already established direct-to-consumer approach, but also allows
the Company to establish a stronger brand name in all the areas in which it operates. In particular, the Company will need additional
financing to:
|
·
|
effectuate
its business plan and further develop its product and service lines;
|
|
·
|
expand
its facilities, human resources, and infrastructure; and
|
|
·
|
increase
its marketing efforts and lead generation.
|
There
are no assurances that additional financing will be available on favorable terms, or at all. If additional financing is not available,
the Company will need to reduce, defer or cancel development programs, planned initiatives and overhead expenditures. The failure
to adequately fund its capital requirements could have a material adverse effect on the Company’s business, financial condition
and results of operations. Moreover, the sale of additional equity securities to raise financing will result in additional dilution
to the Company’s stockholders, and incurring additional indebtedness could involve the imposition of covenants that restrict
the Company’s operations.
Our
products and services are subject to changes in applicable laws and regulations.
The Company’s business is
particularly subject to changing federal and state laws and regulations related to the provision of financial services to consumers.
The Company’s continued success depends in part on its ability to anticipate and respond to these changes, and the Company
may not be able to respond in a timely or commercially appropriate manner. If the Company fails to adjust its products and services
in response to changing legal and/or regulatory requirements, the ability to deliver its products and services may be hindered,
which in turn could have an adverse effect on the Company’s business, financial condition and results of operations.
We
may continue to encounter substantial competition in our business.
The Company believes that existing and new competitors
will continue to improve their products and services, as well as introduce new products and services with competitive price and
performance characteristics. The Company expects that it must continue to innovate, and to invest in product development and productivity
improvements, to compete effectively in the several markets in which the Company participates. The Company’s competitors
could develop a more efficient product or service or undertake more aggressive and costly marketing campaigns than those implemented
by the Company, which could adversely affect the Company’s marketing strategies and have an adverse effect on the Company's
business, financial condition and results of operations.
Important
factors affecting the Company's current ability to compete successfully include:
|
·
|
lead
generation and marketing costs;
|
|
·
|
service
delivery protocols;
|
|
·
|
branded
name advertising; and
|
|
·
|
product
and service pricing.
|
In
periods of reduced demand for the Company's products and services, the Company can either choose to maintain market share by reducing
product and service pricing to meet the competition, or maintain its product and service pricing, which would likely sacrifice
market share. Sales and overall profitability may be reduced in either case. In addition, there can be no assurance that additional
competitors will not enter the Company's existing markets, or that the Company will be able to continue to compete successfully
against its competition.
We
may not successfully manage our growth.
Our success will depend upon the expansion of our operations and the effective management
of our growth, which will place a significant strain on our management and on our administrative, operational and financial resources.
To manage this growth, we must expand our facilities, augment our operational, financial and management systems, and hire and
train additional qualified personnel. If we are unable to manage our growth effectively, our business would be harmed.
We
rely on key executive officers, and their knowledge of our business and technical expertise would be difficult to replace.
We
are highly dependent on our executive officers. If one or more of the Company's senior executives or other key personnel are unable
or unwilling to continue in their present positions, the Company may not be able to replace them easily or at all, and the Company’s
business may be disrupted. Competition for senior management personnel is intense, the pool of qualified candidates is very limited,
and we may not be able to retain the services of our senior executives or attract and retain high-quality senior executives in
the future. Such failure could have a material adverse effect on the Company's business, financial condition and results of operations.
We
may never pay dividends to our common stockholders.
The Company currently intends to retain its future earnings
to support operations and to finance expansion; accordingly, the Company does not anticipate paying any cash dividends in the
foreseeable future.
The
declaration, payment and amount of any future dividends on common stock will be at the discretion of the Company's Board of Directors,
and will depend upon, among other things, earnings, financial condition, capital requirements, level of indebtedness and other
considerations the Board of Directors considers relevant. There is no assurance that future dividends will be paid on common stock
or, if dividends are paid, the amount thereof.
Our
common stock is quoted through the OTC Markets, which may have an unfavorable impact on our stock price and liquidity.
The
Company’s common stock is quoted on the OTC Markets, which is a significantly more limited market than the New York Stock
Exchange or NASDAQ. The trading volume may be limited by the fact that many major institutional investment funds, including mutual
funds, follow a policy of not investing in OTC Markets stocks and certain major brokerage firms restrict their brokers from recommending
OTC Markets stocks because they are considered speculative and volatile.
The
trading volume of the Company’s common stock has been and may continue to be limited and sporadic. As a result,
the quoted price for the Company’s common stock on the OTC Markets may not necessarily be a reliable indicator of its fair
market value.
Additionally,
the securities of small capitalization companies may trade less frequently and in more limited volume than those of more established
companies. The market for small capitalization companies is generally volatile, with wide price fluctuations not necessarily related
to the operating performance of such companies.
Our
common stock is subject to price volatility unrelated to our operations.
The market price of the Company’s
common stock could fluctuate substantially due to a variety of factors, including market perception of the Company’s ability
to achieve its planned growth, operating results of the Company and of other companies in the same industry, trading volume in
the Company’s common stock, changes in general conditions in the economy and the financial markets or other developments
affecting the Company or its competitors.
Our
common stock is classified as a “penny stock.”
Rule
3a51-1 of the Securities Exchange Act of 1934 establishes the definition of a “penny stock,” for purposes relevant
to us, as any equity security that has a minimum bid price of less than $5.00 per share or with an exercise price of less than
$5.00 per share, subject to a limited number of exceptions which are not available to us. It is likely that the Company’s
common stock will be considered to be a penny stock for the immediately foreseeable future.
For
any transaction involving a penny stock, unless exempt, the penny stock rules require that a broker or dealer approve a person’s
account for transactions in penny stocks and the broker or dealer receive from the investor a written agreement to the transaction,
setting forth the identity and quantity of the penny stock to be purchased. In order to approve a person’s account for transactions
in penny stocks, the broker or dealer must obtain financial information and investment experience and objectives of the investor,
make a reasonable determination that transactions in penny stocks are suitable for that person, and make a reasonable determination
that that person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions
in penny stocks.
The
broker or dealer must also provide disclosure to its customers, prior to executing trades, about the risks of investing in penny
stocks in both public offerings and in secondary trading, the commissions payable to both the broker-dealer and the registered
representative, and the rights and remedies available to an investor in cases of fraud in penny stock transactions.
Because
of these regulations, broker-dealers may not wish to furnish the necessary paperwork and disclosures and/or may encounter difficulties
in their attempt to buy or sell shares of the Company’s common stock, which may in turn affect the ability of Company stockholders
to sell their shares.
Accordingly,
the penny stock classification adversely affects any market liquidity for the Company’s common stock, and subjects the shares
to certain risks associated with trading in penny stocks. These risks include difficulty for investors in purchasing or disposing
of shares, difficulty in obtaining accurate bid and ask quotations, difficulty in establishing the market value of the shares,
and a lack of securities analyst coverage.
Management’s
Discussion and Analysis of Financial Condition and Results of Operations
The
following discussion of the financial condition and results of operation of Financial Gravity should read in conjunction with
the financial statements and the notes to those statements included in this Report.
Company
Overview
For
accounting purposes, the Merger has been accounted for as a merger, with Financial Gravity as the accounting acquirer (legal acquiree).
The Company's revenue increased
to $1,898,043 in 2015 from $0 in 2014. The Company reported a net loss of $1,196,201 for fiscal year 2015 compared to a net loss
of $22,263 for fiscal year 2014. The increase in revenue reflects consolidating multiple entities into the new holding
company, in particular TaxCoach Software and Metro Data Processing. The increase in net loss reflects acquiring three companies
and the accounting and audit costs preparing for a public transaction.
The
Company's revenue increased to $1,302,634 from $816,205 for the six months ended June 30, 2016 and 2015, respectively. The Company
reported net loss of $720,297 and $348,020 for the six months ended June 30, 2016 and 2015, respectively. The increase in revenue
reflects increase in service income, primarily new customer product and service sales, which more than doubled over the same period.
The increase in net loss for the six months ended June 30, 2016 was attributable primarily (to higher professional service fees
and General and Administrative expenses.
The
Company's revenue increased to $690,297 from $405,766 for the three months ended June 30, 2016 and 2015, respectively. The Company
reported net loss of $343,859 and $265,202 for the three months ended June 30, 2016 and 2015, respectively. The increase
in revenue reflects new customer product and service sales. The increase in net loss for the three months ended June 30, 2016
was attributable primarily to increase in General and Administrative expenses.
Return
on average equity was negative 62% and negative 2% for the fiscal years 2015 and 2014, negative 29% and negative 27% for the six
months ended June 30, 2016 and 2015 and negative 15% and 18% for the three months ended June 30, 2016 and 2015, respectively. Return
on average assets was negative 55% and negative 2% for the fiscal years 2015 and 2014, negative 26% and negative 25% for the six
months ended June 30, 2016 and 2015 and 13% and 17% for the three months ended June 30, 2016 and 2015, respectively.
Total
assets of Financial Gravity totaled $3,053,525 at December 31, 2015, compared to $1,301,008 at December 31, 2014. Increases
were noted primarily in intangible assets and Goodwill due to three acquisitions. Total assets of Financial Gravity totaled $2,562,061
at June 30, 2016, compared to $1,522,886 at June 30, 2015. Increases were noted primarily in intangible assets and Goodwill due
to three acquisitions.
Significant
Accounting Policies
Certain
critical accounting policies affect the more significant judgments and estimates used in the preparation of Financial Gravity’s
consolidated financial statements. These policies are contained in Note 1 to the consolidated financial statements.
Use
of Estimates and Assumptions
. The preparation of consolidated financial statements in conformity with accounting
principles generally accepted in the United States of America requires management to make estimates and assumptions that affect
reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated
financial statements and the reported amounts of revenues and expenses during the reported period. Actual results could differ
from those estimates.
Revenue
Recognition and Accounts Receivable
.
Investment
management fees are recognized as services are provided by the Company. Investment management fees include fees earned from assets
under management by providing professional services to manage clients’ investments.
Services
income is recognized as consulting and other professional services are performed by the Company.
Commission
revenue is derived from the sale of premiums on life insurance policies held by third parties. The revenue is recognized at the
time the policy is issued.
Revenue
represents gross billings less discounts, net of sales tax, as applicable. Amounts invoiced for work not yet completed are shown
as deferred revenue in the accompanying consolidated balance sheets.
Trade
accounts receivable are carried at the invoiced amount less estimate made for doubtful accounts based on management’s review
of outstanding balances. The collectability of the Company’s accounts receivable is reviewed on an ongoing basis, using
historical payment trends and review of specific accounts. Accounts receivable are written off after all reasonable collection
efforts have been exhausted and when management determines the amounts to be uncollectible. Recoveries of receivables previously
written off are recorded when received.
In
the normal course of business, the Company extends credit on an unsecured basis to its customers, substantially all of whom are
located in the United States of America. The Company does not believe that it is exposed to any significant risk of loss on accounts
receivable.
Stock-Based
Compensation.
The
Company recognizes the fair value of stock-based compensation awards as wages in the accompanying statements of operations on
a straight-line basis over the vesting period, using the Black-Scholes option pricing model, which is based on a risk free rate
of 0.75% at 2015, dividend yield of 0%, expected life of 2 years and volatility of 1.00.
Liquidity
and Capital Resources
Capital for the growth of
Financial Gravity has been provided through private sales of its equity securities to investors. These sales resulted
in $1,150,000 and $850,000 during the fiscal years ended December 31, 2014 and 2015, respectively, $180,000 during the six months
ended June 30, 2016 and $180,000 subsequent to June 30, 2016.
The
following provides a summary of our cash flows:
|
|
(Unaudited)
Six Months Ended
June 30,
|
|
Year Ended
December 31,
|
|
(Unaudited)
Six Months Ended
June 30,
|
|
|
2016
|
|
2015
|
|
2014
|
|
2015
|
|
|
|
|
|
|
|
|
|
Net Cash (Used in) Operating Activities
|
|
|
(591,765
|
)
|
|
|
(1,113,074
|
)
|
|
|
(22,263
|
)
|
|
|
(302,973
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Cash (Used in) Investing Activities
|
|
|
(11,613
|
)
|
|
|
(94,780
|
)
|
|
|
(16,272
|
)
|
|
|
(1,346
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Cash Provided by Financing Activities
|
|
|
199,466
|
|
|
|
724,669
|
|
|
|
1,109,177
|
|
|
|
431,956
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Acquired Upon Acquisition of Subsidiary
|
|
|
–
|
|
|
|
83,496
|
|
|
|
30,840
|
|
|
|
22,350
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Increase(Decrease) in Cash
|
|
|
(403,912
|
)
|
|
|
(399,689
|
)
|
|
|
1,101,482
|
|
|
|
149,987
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash, Beginning of Period
|
|
|
701,793
|
|
|
|
1,101,482
|
|
|
|
–
|
|
|
|
1,101,482
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash, End of Period
|
|
$
|
297,881
|
|
|
$
|
701,793
|
|
|
$
|
1,101,482
|
|
|
$
|
1,251,469
|
|
The
Company believes that its cash and cash equivalents balances, cash flows from operations, and funding from the financing sources
discussed above will be sufficient to meet the normal operating requirements during the next fiscal year. The Company will need
additional financing to fully implement its business plan and to fund additional capital expenditures. The Company continually
considers supplementing the cash flows generated by operations with funds provided by financing activities, via both debt and
equity, to balance the Company's cash requirements and to finance specific capital projects.
Line
of Credit and Notes Payable
The
Company has a revolving line of credit with a bank in the amount of $55,000. Amounts drawn under this line of credit are due on
demand, and monthly interest and principal payments are required. The interest rate on the line of credit is 7.5%. This line of
credit is secured by the personal guarantee of the majority stockholder. The balance outstanding on this line of credit was $19,994
as of June 30, 2016.
With the acquisition of
TaxCoach Software, LLC, the Company also acquired a note payable to a financial institution which permits maximum borrowings of
$100,000. Interest is paid monthly at prime plus 1.25% and the balance is due on demand. The facility matures in February 2017,
is collateralized by substantially all assets of the TaxCoach Software, LLC, and is secured by a personal guarantee from a stock
holder. The balance outstanding under this note payable was $93,797 at June 30, 2016.
Security
Ownership of Certain Beneficial Owners and Management
The
following table sets forth certain information with respect to the beneficial ownership of the Company’s common stock, as
of September 30, 2016 (after giving effect to the Merger). The Company’s common stock is the only outstanding class of voting
securities, and the following table sets forth the voting power resulting from such beneficial ownership, by
|
·
|
each
stockholder known by the Company to be the beneficial owner of more than 5% of the Company’s
outstanding common stock;
|
|
·
|
each
director of the Company;
|
|
·
|
each
executive officer of the Company; and
|
|
·
|
all
directors and executive officers of the Company as a group.
|
Amount of Beneficial
Ownership (1)
|
Beneficial
Owner (1)
|
Shares
|
Percentage
of Shares
|
John Pollock (2)
|
15,037,962
|
41.5%
|
Dave Crowley (2)
|
3,000,000
|
8.3%
|
Keith VandeStadt (2, 4)
|
2,821,500
|
7.8%
|
Edward A. Lyon (2)
|
2,593,500
|
7.2%
|
Paul Williams (2)
|
1,896,414
|
5.2%
|
James F. Reggio (2,3)
|
778,100
|
*
|
Rick Johnson (2, 3)
|
650,000
|
*
|
George Crumley (2)
|
150,000
|
*
|
|
|
|
Directors and executive officers
as a group (seven persons)
|
23,952,706
|
64.8%
|
____________________
(1)
|
Except as noted below,
each beneficial owner has sole voting and investment power with respect to all shares attributable to that owner.
|
(2)
|
The address for each such beneficial
owner is 800 N. Watters Road, Suite 120, Allen, Texas 75013.
|
(3)
|
Includes 1,330,000 options that
vested upon the closing of the merger on September 30, 2016.
|
(4)
|
Non director or executive officer with a more than 5% ownership
|
*
|
Indicates an ownership percentage
of less than one percent.
|
Directors
and Executive Officers
On
September 30, 2016, the effective date of the Merger, the officers and directors of Pacific Oil Company prior to the Merger
resigned. Immediately preceding the resignations, the board of Pacific Oil Company elected each of John Pollock, Dave
Crowley, Paul Williams, George Crumley and Edward A. Lyon as new directors, and the new Board of Directors elected new executive
officers of the Company. Set forth below is certain information regarding the persons who currently serve as directors
and executive officers of the Company.
Name
|
Positions
with the Company
|
John Pollock
|
Chairman of the Board, Chief Executive Officer
|
Dave Crowley
|
President, Chief Strategy Officer, Secretary, Treasurer
and Board Member
|
Rick Johnson
|
Chief Operating Officer
|
James F. Reggio
|
Chief Technology Officer and Chief Marketing Officer
|
Paul Williams
|
Vice Chairman of the Board, Chief Financial Officer,
Assistant Secretary and Assistant Treasurer
|
Edward A. Lyon
|
Chief Tax Strategist and Board Member
|
George Crumley
|
Board Member
|
John
Pollock
is the CEO of Financial Gravity Holdings Inc. and President of Pollock Advisory Group, Inc., a Registered Investment
Advisory firm.
He
has been featured in Forbes Magazine. He is a frequent contributor on television and Radio. John wrote the books The Nest Egg
Cookbook – Your Recipe for a Comfortable Retirement. He contributed to the books Secrets of a Tax Free Life, and Tax Breaks
of the Rich & Famous. John is also a featured speaker at conferences around the country.
Dave
Crowley
has worked with Financial Gravity since Jan 2013, contributing to the creation of the Financial Gravity plan. Dave
has applied his successes as an engineer towards assisting in developing the concepts and systems that are now being deployed
in Financial Gravity. With his expertise in process engineering and sales management in the insurance industry Dave brings a depth
of experience and working knowledge that underpins the sales and operating structure of Financial Gravity. Dave’s prior
successes are in business coaching, personal development, insurance, and agency management arena.
Rick
Johnson
brings over thirty years of business experience, where he has provided executive leadership in various capacities,
including operations and finance with emerging growth companies. A thirteen year veteran of Accenture, and a seasoned entrepreneur
with almost twenty years of experience as an officer or senior executive in emerging growth companies, Rick understands firsthand
the challenges and opportunities in leading an emerging growth company. As an executive and as a consultant, Rick has successfully
provided emerging growth businesses with the best-practices of world-class enterprises amidst the controlled chaos of entrepreneurship.
Rick brings a passion for enabling businesses to successfully plan and execute to profitably grow their business.
James
F. Reggio
is an artist and a technologist, Jim currently employs both skill sets to achieve Financial Gravity’s aggressive
marketing goals. Jim has provided technology solutions to business challenges for almost 30 years. A results-oriented executive
manager, he has worked in insurance, distribution, retail, manufacturing, and software. Jim currently directs the marketing efforts
for Financial Gravity. Successful in bringing significant value to business by providing innovative solutions, he has held key
responsibilities in strategic and operational planning, mergers and acquisitions, integration, and governance as pertaining to
technology. Jim has served as CIO/CTO for EFA Processing, Affirmative Ins. Holdings, Instant Ins. Holdings, The St. Paul Specialty
Auto Group, and Titan Holdings.
Paul
Williams
is CEO of Bison Financial Group, Inc. and has over 30 years of business experience primarily in capital markets,
mergers and acquisitions. Mr. Williams has served as the Chairman, CEO or CFO of numerous companies operating in various industries,
both domestic and international, including two other publicly traded companies. Mr. Williams is heavily involved in local, state
and national civic affairs and was appointed to three terms on the Board of Texas Economic Development Council in Austin. In 2009,
he was awarded the CFO of the Year Award by the Dallas Business Journal. In 2007, he served as the Chairman of the Board for the
Frisco Chamber of Commerce and still serves on their Board and Executive Committee. Mr. Williams graduated from Austin College
in Sherman with a double major in Economics and Business Administration and graduated from the Institute of Organization Management.
Edward
A. Lyon
is an authority on tax planning – an author, consultant, speaker, and a co-founder of TaxCoach™ Software,
LLC, as well as the American Institute of Certified TaxCoaches. He’s actively involved in mentoring members during our
weekly Member Call-Ins and through individual coaching with advanced TaxCoach™ members. Ed leads the effort in ensuring
that the latest tax practices are researched and provided to all members. He’s a member many elite tax groups, as well as
small business owner mentoring networks. Ed has written seven books on tax and financial planning, and is a sought-after speaker
to accountants, financial professionals, and business owners throughout the country. He has appeared on over 300 radio and television
broadcasts, with over two dozen national television appearances, including interviews on CNN, Fox News, MSNBC, and CNBC.
George
Crumley
is a Partner at Pittenger, Nuspl & Crumley (ppnclaw.com). Selected as one of the Top 100 Attorneys in the entire
DFW Region by peers in SuperLawyers, and consistently rated as one of the Top Attorneys in Texas by Texas Monthly, Mr. Crumley
received the highest possible rating by Martindale Hubbell by judges and peers, 5.0 out of 5. Representing clients all over Texas
since 1993 including trial and appellate experience all the way up to the Texas Supreme Court in matters involving business, construction,
divorce and child custody, personal injury, contracts, products liability, commercial litigation, estate planning and probate
matters, including probate disputes.
Executive
Compensation
Summary
Compensation Table
The
following table sets forth for the fiscal year ended December 31, 2015 (the current fiscal year end for Financial Gravity), the
cash and non-cash compensation awarded to or earned by the chief executive officer of Financial Gravity. Two other officers
of Financial Gravity received in excess of $100,000 in the form of salary and bonus during such fiscal year.
Summary
Compensation Table
Name
and Principal Position
|
Year
|
Salary
($)
|
All
Other Compensation
($)
|
Total
($)
|
John Pollock, CEO
|
2015
|
$87,501
|
$218,990
|
$306,491
|
Dave Crowley, President and CSO
|
2015
|
101,691
|
-
|
101,691
|
Edward A. Lyon, CTS
|
2015
|
42,000
|
198,000
|
240,000
|
Neither
the Named Executive nor any other members of the executive management team has entered into an employment agreement with the Company.
Compensation
of Directors
For
the period ended December 31, 2015 and prior to the Merger, the Company’s directors received no compensation for their
services as directors. Financial Gravity has not established any standard arrangements pursuant to which directors have been compensated
for their services, although all directors are reimbursed for out-of-pocket expenses, including those incurred in connection with
attendance at Board of Directors meetings. Financial Gravity may establish a compensation plan for its directors in the future.
Certain
Relationships and Related Transactions
Except
as set forth below, since January 1, 2016, there have been no transactions, and there are no currently proposed transactions,
in which Financial Gravity was or is to be a participant with any related person to Financial Gravity, or in which any related
person had or will have a direct or indirect material interest.
Independence
of Directors
The
Company’s common stock is quoted through the OTC Markets System. For purposes of determining whether members of the
Company’s Board of Directors are “independent,” the Company’s Board utilizes the standards set forth
in the NASDAQ Stock Market Marketplace Rules. At present, the Company’s entire Board serves as its Audit, Compensation
and Nominating Committees. The Company’s Board of Directors has determined that, of the Company’s present
directors, George Crumley, constituting one of the five members of the Board, is an “independent director,” as
defined under NASDAQ’s Marketplace Rules, for purposes of qualifying as independent members of the Board and an Audit,
Compensation and Nominating Committee of the Board, but that John Pollock, Dave Crowley, Paul Williams, and Edward A. Lyon
are not “independent directors” since they serve as executive officers of the Company.
Description
of Securities
We
currently have authorized capital of 300,000,000 shares, all of which is common stock, par value $.001 per share (the
“Common Stock”). As of September 30, 2016, the Company has outstanding 34,862,900 shares of Common
Stock.
Common
Stock
The
holders of Common Stock are entitled to one vote for each share held of record on all matters submitted to a vote of the stockholders
and do not have cumulative voting rights. Upon liquidation, dissolution or winding up of the Company, holders of Common Stock
will be entitled to share ratably in all of the Company’s assets that are legally available for distribution, after payment
of all debts and other liabilities. The holders of Common Stock have no preemptive, subscription, or redemption rights.
Market
Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters
Price
Range of Common Stock
The
Company’s Common Stock is traded in the over-the-counter market and quoted under the symbol POIL through the OTC Markets
System. The following are the high and low sales prices for the Company’s Common Stock for the periods reflected below,
as reported by Yahoo Finance:
Fiscal
Year Ended September 30, 2014
|
High
|
Low
|
|
|
|
First Quarter
|
$300.00
|
$5.00
|
Second Quarter
|
$7.50
|
$.30
|
Third Quarter
|
$.38
|
$.07
|
Fourth Quarter
|
$.09
|
$.01
|
|
|
|
Fiscal Year Ended
September 30, 2015
|
High
|
Low
|
|
|
|
First Quarter
|
$.02
|
$.01
|
Second Quarter
|
$2.00
|
$.00
|
Third Quarter
|
$1.49
|
$.01
|
Fourth Quarter
|
$1.00
|
$.01
|
|
|
|
Nine Months Ended
June 30, 2016
|
High
|
Low
|
|
|
|
First Quarter
|
$1.00
|
$.02
|
Second Quarter
|
$1.00
|
$.01
|
Third Quarter
|
$1.00
|
$.01
|
The
above prices reflect inter-dealer prices, without retail mark-up, mark-down or commissions and may not represent actual transactions.
Securities
authorized for issuance under equity compensation plans
The following table
provides information as of the period ended December 31, 2015 with respect to Company compensation plans (including individual
compensation arrangements) under which equity securities of the Company are authorized for issuance.
Equity
Compensation Plan Information
|
|
A
(1)
|
B
|
C
|
Plan
category
|
Number
of securities to be
issued upon exercise of
outstanding options, warrants
and rights
|
Weighted-average
exercise
price of outstanding options,
warrants and rights
|
Number
of securities remaining
available for future issuance
under equity compensation
plans (excluding securities
reflected in column
A)
|
Equity
compensation plans approved by security holders
|
3,000,000
(2)
|
$0.64
|
788,854
(3)
|
Equity
compensation plans not approved by security holders
|
-0-
|
-0-
|
-0-
|
Total
|
3,000,000
|
$0.64
|
788,854
|
_______________
(1)
|
As a consequence
of the Merger, outstanding options as to 2,211,146 of the Company's shares have vested.
|
(2)
|
Shares subject to stock options
under the 2015 Stock Option Plan.
|
(3)
|
Shares available for the grant
of stock options and stock purchase rights to employees, directors and consultants under the 2015 Stock Option Plan.
|
Following
is a brief description of the material features of each compensation plan under which equity securities of the Company are authorized
for issuance. The 2015 Stock Option Plan was adopted without the approval of Company security holders:
The
Company has granted stock options to certain employees and contractors under its 2015 Stock Option Plan, assumed from Financial
Gravity. The Company is authorized to issue an aggregate of 3,000,000 options, of which 788, 854 remain available for issuance,
as non-statutory (non-qualified) stock options, under the 2015 Stock Option Plan. Currently outstanding options under the 2015
Stock Option Plan vest over a period no greater than two years, and expire ten years from the date of grant.
Holders
The
approximate number of stockholders of record of the Company’s Common Stock on September 30, 2016 was 1,689.
Dividends
The
Company has never paid any cash dividends on its common stock, and it is anticipated that none will be paid in the foreseeable
future.
Indemnification
of Directors and Officers
Section
78.7502 of the Nevada Revised Statutes provides, in general, that a corporation incorporated under the laws of the State of Nevada,
such as the Company, may indemnify any person who was or is a party, or is threatened to be made a party, to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than a derivative action
by or in the right of the corporation) by reason of the fact that such person is or was a director, officer, employee or agent
of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another
enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by such person in connection with such action, suit or proceeding if such person acted in good faith and in a manner
such person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe such person's conduct was unlawful.
To
the extent that indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons
controlling our Company pursuant to the foregoing provisions, we have been informed that, in the opinion of the Commission, such
indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable. If a claim for indemnification
against such liabilities (other than the payment by us of expenses incurred or paid by a director, officer or controlling person
of our Company in the successful defense of any action, suit or proceeding) is asserted by any of our directors, officers or controlling
persons, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by us is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of that issue.