In addition, the Company continues to look at strategic acquisitions in product and service developments for future growth. On June 30, 2018 we acquired 80% of CBJ Distributing, a cannabis supply company in Nevada. On December 12, 2019 we entered into a settlement agreement with minority shareholders of CBJ Distributing, where MCIG would relinquish its ownership of CBJ Distributing in exchange for $120,000 and the return of 4,526,419 shares of MCIG common stock owned by the minority shareholders of CBJ Distributing. The payment of the $120,000 will be paid over a 13 month period, with $45,000 paid on December 12, 2019, $25,000 due on January 25, 2020, and the remainder to be paid in 12 equal month installments of $4,166.
MCIG entered into a joint venture agreement with BRRX, Inc., to manage multiple pharmaceutical operations, in anticipation of the development of a premiere retail CBD division.
During this fiscal year, we operated multiple websites (which are not incorporated as part of this Form 10Q report). The Company’s primary website is www.mciggroup.com
Subsidiaries of the Company
The Company currently operates, in addition to mCig, Inc., the following subsidiaries which are consolidated:
CAL Foundation (FKA Newco2, Inc)
NewCo2, Inc., was created on January 19, 2018 as a California not-for-profit company. We own 80% of the not-for-profit business. NewCo2, Inc., maintains three cannabis licenses in the State of California. On August 6, 2018 the name was changed to Cal Acres Foundation, Inc.
CBJ Distributing, LLC
On June 30, 2018 the company elected to exercise its option to acquired Cannabiz Supply with an effective date of May 1, 2018. The purchase price was $3,457,796.
mCig Internet Sales, Inc.
On June 1, 2016, the Company incorporated mCig Internet Sales, Inc., (“mCig Internet”) in the state of Florida in order to operate our CBD business and to consolidate all wholesale and online retail sales from various websites. mCig Internet is a wholly owned subsidiary of the Company.
Tuero Asset Management, Inc.
We incorporated Tuero Asset Management, Inc., in which to manage all our intellectual and intangible assets.
Vapolution, Inc.
On January 23, 2014, the Company entered into a Stock Purchase Agreement acquiring 100% ownership in Vapolution, Inc., which manufactures and retails home-use vaporizers. As part of this transaction, .mCig, Inc. issued 5,000,000 common shares to shareholders of Vapolution, Inc. in two separate payments of 2,500,000 common shares. The shareholders of Vapolution, Inc. retained the right to rescind the transaction, which expired on January 23, 2015 but was extended to May 23, 2015. Subsequently, on August 25, 2015, the final payment to the shareholders of Vapolution as extended to September 30, 2015 and the right to rescind the transaction was extended to June 30, 2017. On April 30, 2015 the Company impaired the $625,000 initial investment into Vapolution, Inc., but maintains the $67,500 investment on its balance sheet for the second payment.
On January 23, 2014, Paul Rosenberg, CEO of mCig, Inc. cancelled an equal amount (2,500,000 shares) of common shares owned by him resulting in a net non-dilutive transaction to existing mCig, Inc. shareholders. The remaining 2,500,000 of common shares owned by Paul Rosenberg were cancelled to offset the 2,500,000 new shares issued from the treasury to complete the purchase of Vapolution, Inc.
On January 17, 2017 the Company entered into a settlement agreement with the previous owners of Vapolution, Inc., whereby they returned to the Company 1,700,000 shares of MCIG common stock, $961 in cash, and $40,541 in inventory. Prior to this, Vapolution was not incorporated in to the consolidated financial statements of the Company. Effective January 17, 2017 we began consolidating Vapolution with the Company’s financial reports. Vapolution, Inc., is wholly owned by mCig, Inc. We closed the Vapolution operation on December 12, 2019.
VitaCig, Inc.
On May 26, 2016 we incorporated VitaCig, Inc., (“VitaCig”) in the state of Florida. VitaCig headquarters our global e-cig operations. VitaCig, Inc., is a wholly owned subsidiary of the Company. We closed the VitaCig operation on October 31, 2019.
8
|