Item 5.02 Departure of Directors or Certain Officers; Election
of Directors, Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Appointment of Interim President, Members of the Board of
Directors
On October
26, 2017, the Board of Directors (the “Board”) of Grow Solutions Holdings, Inc., a Nevada corporation (the “Company”),
appointed Mr. Gerard Danos as interim President of the Company and Ms. Jacquelyn Gogin and Ms. Alyce Schreiber as members of the
Board, effective immediately upon the resignations as disclosed below.
The Board believes that the leadership experience
of Mr. Danos, Ms. Gogin and Ms. Schreiber make them ideally qualified to assist the Company towards restructuring and growth.
Below
is a description of the professional work experience of Mr. Danos, Ms. Gogin and Ms. Schreiber.
Gerard Danos, Age 40, Interim
President
Gerard Danos has over 15 years of experience
in both private and public markets, holding management positions and having consulting roles with companies in a wide range of
industry and market sectors including oil and gas, healthcare, and agriculture, where he has successfully restructured and reorganized
businesses by overhauling management, reducing debt, securing revenue producing assets, and completing mergers and acquisitions.
Mr. Danos began his career as a sales representative for Millennium Medical, which provided products and services to hospitals,
nursing homes, physical therapy clinics, and home health agencies, before joining Magnolia Management Corporation, a privately
held company that operates more than 65 long-term care facilities throughout Louisiana and Mississippi in an administrative capacity.
Mr. Danos also served as Vice President and Director for Medico, LLC, a subsidiary of Magnolia, which led him to assisting in the
formation and becoming an owner and principal of St. Catherine’s Hospice, where he helped guide the company from startup
to one of the region's leading hospice providers. He later entered into the public markets by investing in a start-up oil and gas
exploration company where he became its Chief Operating Officer, Secretary, and Board Member, while also provided consulting services
to several other small to mid-size publicly traded companies. Mr. Danos currently performs consulting and business advisory services
on behalf of TCA (as defined below). Mr. Danos received his Bachelor’s Degree from Louisiana State University, Baton Rouge,
LA.
Jacquelyn Gogin, Age 32,
Member of the Board of Directors
Jacquelyn Gogin joined
TCA in 2013 and has over 9 years of wide-ranging administrative experience working with high-profile leaders in the South Florida
education, legal, and business markets. Ms. Gogin’s experience includes creating and managing executive projects related
to finance, marketing, business, law, and public relations for chief executives, deans, and attorneys. She also independently
represented former organizations in company seminars and events. Ms. Gogin brings extensive high-quality administrative and managerial
business skills. She holds a Bachelor’s of Science in Legal studies and a Masters of Business Administration in Finance,
both respectably earned at Nova Southeastern University in Florida.
Alyce Schreiber, Age
53, Member of the Board of Directors
Prior to joining TCA
in July 2015, Ms. Schreiber was president of her own management advisory firm since 2001 specializing in business growth and funding
strategies, mergers and acquisitions, divestitures and strategic management services for small and midsize private and public companies
across industry and market segments. Ms. Schreiber started her career as a Tax Specialist with Laventhol & Horwath, a national
accounting firm, before joining various public and private companies in the US as an officer and director, including specialty
finance companies engaged in lending activities related to consumer finance and mortgage banking.
Currently, Ms. Schreiber
manages many strategic projects and evaluates overall operations for a private equity firm. She is primarily responsible for overseeing
regulatory compliance policies and procedures. Ms. Schreiber holds a Bachelor of Science in Business Administration with a concentration
in Accounting from Boston University and a Juris Doctor degree from Benjamin N. Cardozo School of Law and is a member of the New
York Bar.
Resignation of President, Members of the
Board of Directors
On October 26, 2017, the Company was informed
that Mr. Jeffrey Beverly voluntarily resigned as President of the Company, a member of the Board, and all other positions with
the Company and the Subsidiaries (as defined below) to which he has been assigned regardless of whether he served in such capacity,
effective immediately.
Additionally, on the same date, Mr. Peter
Lau, Mr. Leslie Bocskor, and Mr. Howard Karasik (the “Directors”) voluntarily resigned as members of the Board and
all other positions with the Company and the Subsidiaries to which the Directors have been assigned, regardless of whether the
Directors served in such capacity, effective immediately.
Family Relationships
Mr.
Danos, Ms. Gogin, and Ms. Schreiber do not have a family relationship with any of the officers or directors of the Company.
Related Party Transactions
There are no applicable
related party transactions.
Compensatory Arrangements
None.
Item 5.01 Changes in Control of Registrant.
As previously disclosed, effective December
7, 2015, the Company closed a Senior Secured Credit Facility Agreement (the “Credit Agreement”) by and among the Company,
as borrower, Grow Solutions, Inc., a Delaware corporation and One Love Garden Supply, a Colorado limited liability company, as
joint and several guarantors (such guarantors, collectively, the “Subsidiaries”) and TCA Global Credit Master Fund,
LP, a Cayman Islands limited partnership, as lender (“TCA”).
The amounts borrowed pursuant to the Credit
Agreement are evidenced by a Revolving Note (the “Revolving Note”) and the repayment of the Revolving Note is secured
by a first position security interest in substantially all of the Company’s assets in favor of TCA, as evidenced by a Security
Agreement by and between the Company and TCA and a first position security interest in substantially all of the Subsidiaries’
assets in favor of TCA, as evidenced by a Security Agreement by and among the Subsidiaries and TCA. The Revolving Note is
in the original principal amount of $950,000, was due and payable, along with interest thereon, on June 7, 2017, and bears interest
at the rate of 18% per annum. Upon the occurrence of an Event of Default (as defined in the Credit Agreement) the interest rate
increases to the Default Rate (as defined in the Credit Agreement). The payments under the Revolving Note are amortized over 18
months.
As additional security, the Company pledged
its ownership interests in the Subsidiaries, pursuant to a Stock Pledge and Escrow Agreement entered into as of December 7, 2015
(the “Pledge Agreement”).
On October 13, 2017, TCA provided notice
to the Company and the Subsidiaries of an Event of Default which occurred and remains continuing and uncured for non-payment. Accordingly,
on or about November 2, 2017, TCA demanded the Escrow Agent (as defined in the Credit Agreement) under the Pledge Agreement to
deliver to TCA the Pledged Securities (as defined in the Pledge Agreement), along with all applicable Transfer Documents (as defined
in the Pledge Agreement), and TCA became the registered owner of the Pledged Securities in accordance with the terms of the Pledge
Agreement.
Additionally, in connection with the actions
taken by TCA under the Pledge Agreement, on November 1, 2017, Grow Solutions Holdings, LLC, a Colorado limited liability company
(the “LLC”), and TCA Share Holdings LLC, a Nevada limited liability company (“TCA Share Holdings”), entered
into an Assignment Agreement whereby the LLC, as assignor, irrevocably transferred and assigned to TCA Share Holdings, as assignee,
all of the LLC’s right, title and interest in and to all of the 51 shares of the LLC’s Series A Preferred Stock, $0.001
par value per share (the “Preferred Voting Stock”), and TCA Share Holdings assumed all of the LLC’s right, title
and interest in and to the Preferred Voting Stock for that certain cash payment as set forth in the Assignment Agreement.
As previously disclosed, among other provisions,
each one (1) share of the Preferred Voting Stock shall have voting rights equal to (x) 0.019607
multiplied by
the
total issued and outstanding shares of common stock of the Company eligible to vote at the time of the respective vote (the “Numerator”),
divided
by
(y) 0.49,
minus
(z) the Numerator. For purposes of illustration only, if the total issued and outstanding
shares of common stock of the Company eligible to vote at the time of the respective vote is 5,000,000, the voting rights of one
share of the Preferred Voting Stock shall be equal to 102,036 (0.019607 x 5,000,000) / 0.49) – (0.019607 x 5,000,000) = 102,036).
The Preferred Voting Stock has no dividend
rights, no liquidation rights and no redemption rights, and was created primarily to be able to obtain a quorum and conduct business
at shareholder meetings. All shares of the Preferred Voting Stock ranks (i) senior to the Company’s common stock and any
other class or series of capital stock of the Company hereafter created, (ii)
pari passu
with any class or series
of capital stock of the Company hereafter created and specifically ranking, by its terms, on par with the Preferred Voting Stock
and (iii) junior to any class or series of capital stock of the Company hereafter created specifically ranking, by its terms, senior
to the Preferred Voting Stock, in each case as to distribution of assets upon liquidation, dissolution or winding up of the Company,
whether voluntary or involuntary.