Commission File No.: 000-55450
SCHEDULE 14C/A1
(Rule 14c-101)
INFORMATION REQUIRED IN INFORMATION STATEMENT
SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section
14(c) of
the Securities Exchange Act of 1934
Check the appropriate box:
x
Preliminary Information Statement
¨
Confidential, for Use of the Commission Only (as permitted by Rule 14c-5(d)(2))
¨
Definitive Information Statement
Medicine
Man Technologies, Inc.
(Name of Registrant as Specified in its Charter)
Payment of Filing Fee (check the appropriate box):
x
None required
¨
Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
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1)
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Title of each class of securities
to which transaction applies:
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2)
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Aggregate number of securities
to which transaction applies:
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3)
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Per unit price or other underlying
value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth amount on which filing fee is calculated and
state how it was determined):
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4)
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Proposed maximum aggregate
value of transaction:
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¨
Fee paid previously with preliminary materials.
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¨
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Check box if any part of
the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offering fee was paid
previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of
the filing.
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1)
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Amount previously paid:
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2)
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Form, Schedule or Registration
Statement No.:
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NOTICE REGARDING THE INTERNET AVAILABILITY
OF
INFORMATION STATEMENT MATERIALS
MEDICINE
MAN TECHNOLOGIES, INC.
4880 Havana Street
Suite 200 South
Denver, Colorado 80239
NOTICE OF ACTION TAKEN BY WRITTEN CONSENT
OF OUR MAJORITY STOCKHOLDERS
To the Stockholders of Medicine Man Technologies,
Inc.:
We are furnishing this notice to all holders
of record of shares of common stock of Medicine Man Technologies, Inc. (the “Company”) as of close of business on February
28, 2017 (the “Record Date”), pursuant to Section 14 of the Securities Exchange Act of 1934, as amended, and the rules
promulgated by the U.S. Securities and Exchange Commission thereunder. This notice is intended to inform you of the availability
of an Information Statement on our website advising you that the Company has entered into two separate agreements to acquire
other unrelated companies, including (i) an Agreement and Plan of Merger (the “Pono Agreement") with Pono Publications
Ltd., a privately held Colorado corporation ("Pono") based in Denver, Colorado, that also includes Medicine Man Consulting
Inc., our wholly owned subsidiary (“MMC”) and (ii) a Share Exchange Agreement (the “SN Agreement”) with
Success Nutrients, Inc., a Colorado corporation (“SN”) to facilitate our acquisition of these companies. SN will become
a wholly owned subsidiary of our Company while Pono shall be merged with and into MMC, which shall remain as the surviving corporation.
Pursuant to the terms of the Pono and SN
Agreements, we will be issuing 3.5 million shares of our Common Stock, par value $0.001 per share to the shareholders of both Pono
and SN, in exchange for all of their issued and outstanding shares of common stock. Upon effectiveness, there will then be 17,470,944
shares of our Common Stock issued and outstanding. Both the Pono Agreement and SN Agreement will be effected by authority of our
Board of Directors and the written consent of the holders of a majority of our Common Stock. However, voting control of our Company
will not change and, except for the appointment of Charles Haupt as a director, all of our directors and executive officers will
remain.
The Pono Agreement and SN Agreement have
been approved unanimously by our Board of Directors. On February 28, 2017, holders of a majority of the shares of our Common Stock
acted by written consent to ratify both Agreements.
This communication is not a form for voting
and presents only an overview of the more complete Information Statement that is available to you on the Internet or by mail. We
encourage you to access and review all of the important information contained in the Information Statement. The Company is making
the Information Statement available through the Internet rather than utilizing the full set delivery option in an attempt to save
additional expenses associated with the printing and mailing of the Information Statement.
Follow the instructions below to view the
materials or request printed or e-mail copies.
Any shareholder who wishes to receive a
copy without charge of the Information Statement and the Company’s Annual Report on Form 10-K may contact us by any of the
following means:
Mail
: Any shareholder who wishes
to receive a copy without charge of the Information Statement and the Company’s Annual Report on Form 10-K may contact us
by any of the following means:
Mail
: Medicine Man Technologies,
Inc., 4880 Havana Street, Suite 200 South, Denver, Colorado 80239; Attn: Investor Relations.
Telephone:
(303) 371-0387
E
-
mail:
info@medicinemantechnologies.com
PLEASE NOTE THAT THE NUMBER OF VOTES
RECEIVED IS SUFFICIENT TO SATISFY THE STOCKHOLDER VOTE REQUIREMENT FOR THESE ACTIONS AND NO ADDITIONAL VOTES WILL CONSEQUENTLY
BE NEEDED TO APPROVE THESE ACTIONS
No action is required by you. The accompanying
Information Statement is furnished only to inform our stockholders of the action described above before it takes effect in accordance
with Rule 14c-2 promulgated under the Securities Exchange Act of 1934, as amended.
WE ARE NOT ASKING YOU
FOR A PROXY AND YOU ARE
REQUESTED NOT TO SEND
US A PROXY.
Neither the Pono Agreement nor the SN Agreement
will become effective until applicable Statement of Merger (for the Pono Agreement) is filed with the Colorado Secretary of State
and Statement of Share Exchange and Articles of Exchange (for the SN Agreement) are filed with the Colorado and Nevada Secretaries
of State. We intend to file these documents approximately 20 calendar days after this Information Statement is first mailed to
our stockholders.
This Information Statement is being mailed
to you on or about _____________, 2017.
____________, 2017
Very Truly Yours
/s/ Andrew Williams
Andrew Williams, Chief Executive Officer
MEDICINE
MAN TECHNOLOGIES, INC.
4880 Havana Street
Suite 200
Denver, Colorado 80239
INFORMATION STATEMENT
PURSUANT TO SECTION 14(c)
OF THE SECURITIES EXCHANGE
ACT OF 1934 AND
REGULATION 14C THEREUNDER
This Information Statement (this “Information
Statement”) has been filed with the United States Securities and Exchange Commission (the “SEC”) and is being
mailed or otherwise furnished to the registered holders of the common stock, $0.001 par value per share (“Common Stock”),
of Medicine Man Technologies, Inc. (the “Company”), in accordance with the relevant sections of the Nevada Revised
Statutes. solely for the purpose of informing you, as one of our shareholders, in the manner required under Regulation 14(c) promulgated
under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that, upon the authorization of the Company’s
Board of Directors (the “Board”) on February 27, 2017, the holders of a majority of the issued and outstanding shares
of Common Stock (the “Majority Shareholders”) have executed a written consent approving the corporate actions described
herein (the “Written Consent”). The Record Date for determining the shareholders entitled to receive this Information
Statement was February 27, 2017, at which time the Company had 10,470,944 shares of Common Stock issued and outstanding. The Common
Stock represents the only outstanding voting securities of the Company. Holders of approximately 51.7% of our voting securities
approved the actions described below.
WE ARE NOT ASKING YOU
FOR A PROXY
AND YOU ARE REQUESTED
NOT TO SEND US A PROXY.
The Information Statement is being delivered
only to inform you of the corporate action described herein before it takes effect in accordance with Rule 14c-2 promulgated under
the Securities Exchange Act of 1934, as amended (the "Exchange Act").
THIS IS NOT A NOTICE
OF A MEETING OF STOCKHOLDERS AND NO STOCKHOLDERS'
MEETING WILL BE HELD
TO CONSIDER ANY MATTER DESCRIBED HEREIN.
NO VOTE OR OTHER CONSENT
OF OUR STOCKHOLDERS IS SOLICITED IN
CONNECTION WITH THIS
INFORMATION STATEMENT. WE ARE NOT ASKING YOU
FOR A PROXY AND YOU
ARE REQUESTED NOT TO SEND US A PROXY.
On February 27, 2017, we entered into a
Merger Agreement with Pono Publications Ltd., as well as a Share Exchange Agreement with Success Nutrients, Inc., each a Colorado
corporation, in order to facilitate our acquisition of both of these entities. On February 27, 2017, majority holders of our Common
Stock ratified in writing their approval of the proposed Merger with Pono and Share Exchange with Success Nutrients.
The controlling stockholders have not consented
to or considered any other corporate action. Because stockholders holding at least a majority of the voting rights of our outstanding
common stock at the Record Date have voted in favor of the foregoing proposals and have sufficient voting power to approve such
proposals through their ownership of common stock, no other stockholder consents will be solicited in connection with the transactions
described in this Information Statement. Pursuant to Rule 14c-2 under the Exchange Act, the proposals will not become effective
until a date at least 20 calendar days after the date on which this Information Statement is first mailed to the stockholders.
We anticipate that the actions contemplated herein will be effected on or about the close of business on ______________, 2017.
CAUTIONARY
STATEMENT REGARDING FORWARD LOOKING INFORMATION
This Information Statement and other reports
that we file with the SEC contain certain forward-looking statements that involve risks and uncertainties relating to, among other
things, the closing of the Merger transaction and our future financial performance or future events. Forward-looking statements
give management's current expectations, plans, objectives, assumptions or forecasts of future events. All statements other than
statements of current or historical fact contained in this Information Statement, including statements regarding our future financial
position, business strategy, budgets, projected costs and plans and objectives of management for future operations, are forward-looking
statements. In some cases, you can identify forward-looking statements by terminology such as "anticipate," "estimate,"
"plans," "potential," "projects," "ongoing," "expects," "management believes,"
"we believe," "we intend," and similar expressions. These statements involve estimates, assumptions and uncertainties
that could cause actual results to differ materially from the results set forth in the information statement. You should not place
undue reliance on these forward-looking statements. You should be aware that our actual results could differ materially from those
contained in the forward-looking statements due to a number of factors such as:
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continued development of our business;
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dependence on key personnel;
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changes in federal law relating to the cannabis industry
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the operation of our business; and
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general economic conditions.
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These forward-looking statements speak
only as of the date on which they are made, and except to the extent required by federal securities laws, we undertake no obligation
to update any forward-looking statements to reflect events or circumstances after the date on which the statement is made or to
reflect the occurrence of unanticipated events. In addition, we cannot assess the impact of each factor on our business or the
extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any
forward-looking statements.
For a detailed discussion of these and
other risk factors, please refer to our filings with the SEC on Forms 10-K, 10-Q and 8-K. You can obtain copies of these reports
and other filings for free at the SEC's Web site at www.sec.gov or from commercial document retrieval services.
GENERAL
This Information Statement is being furnished
to all of our stockholders of record on February 27, 2017 in connection with the approval by our Board of Directors and our controlling
stockholders of a Merger Agreement (the “Pono Agreement”) with Pono Publications Ltd.,(“Pono”) as well
as a Share Exchange Agreement (the “SN Agreement”) with Success Nutrients, Inc. (“SN”) (the Merger with
Pono and the Share Exchange with SN are hereinafter jointly referred to as the “Transactions” or a “Transaction”),
each a Colorado corporation, in order to facilitate our acquisition of both of these entities. The Pono Agreement and SN Agreement
have each been approved by both our Board of Directors and the consent of the holders of a majority of our issued and outstanding
common shares. The filing of the Statement of Merger for the Pono transaction and the Statement of Share Exchange and Articles
of Exchange for the SN Transaction are required by the laws of the state of Colorado and Nevada, as applicable.
Pursuant to both the Pono Agreement and
SN Agreement, we will, among other things, issue 3,500,000 “restricted” shares of our authorized but previously unissued
common stock to the stockholders of both Pono and SN in exchange for all of their issued and outstanding common stock. There will
then be 17,470,944 shares of our Common Stock issued and outstanding. Each share of common stock being issued to the shareholders
of Pono and SN in the Transactions shall be voting securities and shall contain the same rights as those held by our current shareholders.
We have no other classes of our securities issued or outstanding.
On the Effective Date of both Transactions
we will be a holding company with two wholly owned subsidiaries, including Success Nutrients Inc., a Colorado corporation, and
Medicine Man Consulting Inc, which will include our current consulting business as well as Pono’s current business. Our voting
control will not change. Charles Haupt shall become a director of our Company and Joshua Haupt will be appointed as our Chief Cultivation
Officer, but the remainder of our directors and executive officers will remain as they consist currently.
The Pono and SN Agreements closed on February
27, 2017, and will each become effective upon the filing of Statement of Merger with the Secretary of State in Colorado and Statement
of Share Exchange and Articles of Exchange with the Colorado Secretary and State and Nevada Secretary of State, respectively, which
is expected to occur twenty (20) days after the dissemination of this Information Statement. For accounting purposes, the effective
date of these transactions will be March 1, 2017.
The elimination of the need for a special
meeting of stockholders to approve the proposals set forth above is authorized by Section 320 of the Nevada Revised Statutes (referred
to herein as the "NRS"), which provides that any action required or permitted to be taken at a meeting of stockholder
may be taken without a meeting if a written consent is signed by stockholders holding at least a majority of the voting power of
the corporation, except that if a different proportion of voting power is required for such action at a meeting, then that proportion
of written consents is required. Where an action is authorized by written consent, no meeting of stockholders need be called nor
notice given.
Pursuant to the NRS, a majority of the
outstanding shares of voting stock entitled to vote thereon is required in order to approve the proposed actions set forth herein.
In order to eliminate the costs and management time involved in holding a special meeting of stockholders and in order to approve
the Transactions, the Board of Directors decided to use the written consent of the holders of a majority of our outstanding common
stock in lieu of a stockholders' meeting.
Our controlling stockholders, who currently
beneficially own approximately 51.7% of our outstanding common stock gave their written consent to the foregoing on February 27,
2017. Accordingly, the Transactions will not be submitted to our other stockholders for a vote and this Information Statement is
being furnished to our stockholders only to provide the prompt notice of the taking of such actions.
The following shareholders are the Majority
Shareholders who voted unanimously for the proposal, making up a total of 5,415,384 shares of Common Stock, or 51.7% of the total
shares of Common Stock outstanding as of the Record Date:
Name of Shareholder
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# of Shares
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Affiliation with Company
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A
ndrew Williams
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1,675,500
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Officer/director
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Brett Roper
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180,000
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Officer/director
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Peter Williams
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1,766,975
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Shareholder
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Michelle Zeman
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700,000
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Shareholder
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Sally Vander Veer
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392,372
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Shareholder
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Frank Best
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204,813
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Shareholder
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Andrew Telsey
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76,516
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Shareholder/Legal Counsel
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Kimberly Ghanta
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238,855
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Shareholder
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Josh Berg
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180,353
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Shareholder
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We will pay all costs associated with the
distribution of this Information Statement.
SUMMARY
This summary highlights selected information
set forth herein and may not contain all of the information that is important to you. To understand fully the Transactions you
should carefully read this entire Information Statement and the accompanying documents to which we refer. See "Where You Can
Find More Information." The Pono Agreement, SN Agreement, the Colorado Statement of Merger and the Colorado Statement of Share
Exchange and Nevada Articles of Exchange are attached as exhibits to this Information Statement. We encourage you to read these
documents.
Parties to the Pono Merger:
Medicine Man Technologies,
Inc. and its wholly owned subsidiary, Medicine Man Consulting, Inc.
4880 Havana St.
Suite 102 South
Denver, CO 80239
Pono Publications Ltd.
6660 East 47
th
Ave.
Denver, CO 80216
Parties to the SN Share Exchange:
Medicine Man Technologies,
Inc.
4880 Havana St.
Suite 102 South
Denver, CO 80239
Success Nutrients Inc.
6660 East 47
th
Ave.
Denver, CO 80216
Business of Success Nutrients Inc.
SN was incorporated in Colorado on May
5, 2015. Since inception SN has been engaged in the manufacturing and wholesale and retail distribution of nine different plant
nutrients for cannabis, each of which comes in three separate sizes and which has been primarily marketed to the cannabis industry,
more specifically, cultivation experts and other growers in the cannabis industry in Colorado. The custom manufacturing is contracted
with Innovak Industries, Inc., El Paso, Texas. Each of SN’s nine product lines are sold in three separate sizes, with retail
pricing ranging from $25-$30 for small packages up to a range of $200-$300 for large packages.
The development of SN’s product line
was the result of consolidation of all the micro and macro nutrients found to produce the most grams of cannabis flower per square
foot while achieving the highest quality possible. Until January 2017, SN’s operations were primarily directed towards in
the cannabis industry in the state of Colorado. Subsequently, SN’s products were successfully registered with the state agricultural
departments for California, Oregon, Washington, Arizona and Michigan, as well as in Canada. Prior to obtaining this registration
the SN products were only able to be purchased online. As a result of being registered, all SN products can now be displayed on
retail shelves in those aforesaid states.
SN’s goal is to revolutionize modern
cannabis gardening as it is currently known with an emphasis on stronger plants, healthy flowers and an overall cleaner product.
Generally, growers of cannabis have been able to generate approximately 1.5 lbs per grow light. By using both the nutrients offered
by SN, together with the process offered by Pono, results have more than doubled in some cases. While no assurances can be provided,
we believe that this will add substantial growth to our existing cannabis consulting operation, especially as the cannabis industry
continues to grow and expand as additional states approve the use and cultivation of medical and recreational marijuana. We believe
that if we offer prospective new clients the opportunity to learn cultivation techniques that allow them to increase production
over their competitors, our business will increase, which is one of the primary purposes of the Transactions.
Pursuant to the terms of the SN Agreement,
SN is obligated to provide independent audited financial statements since its inception in 2015 to us, which shall be filed as
an amendment to our Form 8-K to be filed with the US Securities and Exchange Commission relating to our acquisition of SN upon
effectiveness within 75 days of such effective date. SN was incorporated in May 2015 but did not commence operations until June
2015. Therefore, information provided for 2015 represents only a partial initial year of operations.
Statement of Operations:
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Year Ended December 31,
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2015
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2016
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Revenues
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$
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0
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$
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779.292
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Cost of Goods Sold
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$
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0
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$
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(222,759
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)
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Total Operating Expense
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$
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(20,135
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)
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$
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(320.365
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Taxes Paid
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$
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–
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$
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(9,742
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)
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Net Income (Loss) from Operations
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$
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(20,135
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)
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$
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225,802
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Balance Sheet:
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Year Ended
December 31, 2016
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Cash
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$
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155,036
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Current assets
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$
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249,453
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Total assets
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$
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287,578
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Current liabilities
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$
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(8.560
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Total liabilities
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$
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(71,909
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Total stockholders’ equity (deficit)
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$
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215,667
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Business of Pono
Pono was incorporated in the State of Colorado
on February 16, 2015. It is the holder of all intellectual property rights relating to the cannabis cultivation of full scale commercial
grow operations utilized and proposed to be utilized by our current and future clients. No patents have been filed to protect the
various methods and expertise utilized for these commercial grows because of the federal prohibition on cannabis.
“Three-a-light” is a tutorial
for how to grow cannabis plants for the individual grower growing for his own benefit or caregiver growing for their patients in
a limited grow. The book is currently offered on Amazon at a price of $500 per copy, the highest price for a book offered by Amazon.
To date, approximately 1,100 books have been sold.
There are key differences between growing
cannabis indoors and outdoors. While outdoor crops can yield more, the quality of indoor cannabis cannot be matched. This book
teaches the secrets of getting the greatest yield without sacrificing quality and includes a step-by-step marijuana growing guide
from seed to finished flower. It provides a simple approach to a very painstaking and complex process. It contains illustrations
on how to grow cannabis and covers the nine vital components of growing marijuana indoors in order to achieve the highest average
yield per light.
The following is selected unaudited
financial data of Pono. Pursuant to the terms of the Pono Agreement, Pono is obligated to provide independent audited
financial statements since its inception in 2015 to us, which shall be filed as an amendment to our Form 8-K to be filed with
the US Securities and Exchange Commission relating to our acquisition of SN upon effectiveness within 75 days of such
effective date. Pono was incorporated in February 2015 but did not commence operations until November 2015. Therefore,
information provided for 2015 represents only a very short initial year of operations.
Statement of Operations:
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Year Ended December 31,
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2015
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2016
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Revenues
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$
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37,951
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$
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362,808
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Cost of Goods Sold
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$
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5,025
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$
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73,267
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Total operating expenses
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$
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46.504
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$
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300,860
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Taxes paid
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–
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$
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136
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Income (Loss) from operations
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$
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(13,578
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)
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$
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(11,533
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)
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Balance Sheet:
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Year Ended
December 31, 2016
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Cash
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$
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86,418
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Current assets
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$
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146,261
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Total assets
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$
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146,261
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Current liabilities
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$
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91
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Total liabilities
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$
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161,372
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Total stockholders’ equity (deficit)
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$
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(15,111
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)
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Structure of the Transactions
Upon filing of Statement of Merger with
the Colorado Secretary of State relative to the Pono Transaction and the Statement of Share Exchange and Articles of Exchange with
the office of the Secretary of State of Nevada and Colorado relative to the SN Transaction, respectively, referred to herein as
the "Effective Time” we will issue an aggregate of 7,000,000 shares of our common stock to the Pono and SN stockholders
in exchange for 100% of the issued and outstanding shares of each of their capital stock. SN will become a wholly owned subsidiary
of our Company, while Pono will be consolidated with and into our current cannabis consulting company, Medicine Man Consulting,
Inc. (“MMC”), currently a wholly owned subsidiary of our Company. All our current management will remain in place,
but Charles Haupt will be added as a member of our Board of Directors and Josh Haupt will become the Chief Cultivation Officer
of MMT and MMC.
As a result of the issuance of shares of
our common stock in exchange for the outstanding shares of Pono and SN capital stock, at the Effective Time the stockholders of
both Pono and SN will become stockholders of our Company and each of Pono and SN shareholders will own approximately 20% of our
then issued and outstanding shares of common stock and our current stockholders will own approximately 60% of our issued and outstanding
shares of common stock.
Upon completion of the Transactions we
will assume SN and Pono’s assets, liabilities and plans of operation, but will only receive nominal cash. All liabilities
will be paid in full. As a result of these Transactions we may require additional financing to implement our anticipated expansion
fully. There can be no assurance that any future financing can be secured on reasonable terms, or at all.
Our current stockholders will be diluted by
the issuance of shares of our common stock in the Transactions and may be diluted by future issuances of securities and sales of
our securities to satisfy our working capital needs.
Reasons for the Transactions
Our Board of Directors considered various
factors in approving the terms of the Transactions and believes the acquisition of SN and Pono will be in the best interest of
our stockholders. Our Board analyzed both company’s operations, prospects and managerial resources and believes that acquiring
both SN and Pono will increase the quality of our consulting operations.
Cost and Expenses of the Transactions
The SN and Pono Agreements provides that
all costs and expenses in connection with the two Transactions will be paid by the party incurring such costs and expenses.
Dissenting Shareholders Rights
Under applicable Nevada law, our stockholders
have the right to demand appraisal of their shares in connection with either of the Transactions. Pursuant to NRS 92A.430(c), we
hereby provide notice to those shareholders of our Company who wish to exercise their dissenting shareholder rights. In this regard,
we state as follows:
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1.
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Each dissenting shareholder must have owned his or her shares in our Company on August 12, 2016,
the date on which we first made a public announcement of our intent to engage in the Transactions;
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2.
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To exercise their dissenting shareholder rights a shareholder shall provide the Notice attached
hereto as Attachment A, duly executed, which must be received by the Company’s legal counsel, Andrew I. Telsey, P.C., 12835
E. Arapahoe Road, Tower 1 Penthouse #803, Centennial, Colorado 80112, not less than thirty (30) nor more than sixty (60) days following
the date of this Information Statement.
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3.
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Attached hereto and included herewith as Attachment B is a copy of NRS 92A 300 to 92A500, inclusive.
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4.
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A dissenting shareholder who is eligible to exercise dissenting shareholder rights and who adheres
to the procedures established in the Nevada Revised Statutes for dissenting shareholders shall receive payment for his shares within
thirty (30) days after receipt by the Company of the demand for payment. Such payment shall be determined by the Company by estimating
the fair value of the shares based upon the Company’s balance sheet as of December 31, 2016, the end of its most recent fiscal
year, its statement of income, and changes in its statement of stockholder equity during its previous fiscal year.
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A dissenting shareholder should complete
the information required under Nevada law, sign their notice before a notary public and send the notice as described above.
Directors and Executive Management
Following the Transactions
Following completion of the Transactions,
all of the existing members of our Board of Directors will remain, with our Board of Directors increased to four (4) members and
Charles Haupt will be appointed as a director.
SUMMARY
OF TERMS OF
MERGER
AND SHARE EXCHANGE AGREEMENTS
The following is only a summary of the
material provisions of the Agreement and Plan of Merger, dated February 27, 2017, between us and Pono Publications Inc. (the "Pono
Agreement") and Share Exchange Agreement (the “SN Agreement”) with Success Nutrients, Inc. (“SN”)
(the Merger with Pono and the Share Exchange with SN are hereinafter jointly referred to as the “Transactions” or a
“Transaction”), each a Colorado corporation, in order to facilitate our acquisition of both of these entities. The
Pono Agreement is attached to this Information Statement as Appendix A and the SN Agreement is attached as Appendix B. Please read
both Agreement in their entirety.
Our Reasons for the Transactions
In considering and approving the Pono and
SN Agreements, our Board of Directors considered various factors including:
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our prospects for the future;
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Pono’s intellectual property, SN’s technology and quality
of products, business plan and prospects for growth and expansion;
|
|
·
|
the professional expertise in cultivation of Joshua Haupt; and
|
|
·
|
anticipated increase in our stockholder values as a result of the
Transactions.
|
SN and Pono’s Reasons for the Transactions
In considering and voting upon approving
the Transactions the respective Boards of Directors of Pono and SN considered the following:
|
·
|
enhanced access to the capital markets; and
|
|
·
|
perceived credibility and enhanced corporate image of being consolidated
into a publicly traded company.
|
Neither we nor Pono or SN retained the
services of an investment banker or requested a fairness opinion in connection with the Transactions, but the terms of each Transaction
were negotiated on an arms-length basis.
The above discussion of the material factors
considered by each company’s board of directors is not intended to be exhaustive, but sets forth the principal factors considered.
In view of the variety of factors considered in connection with their evaluation of the Pono Agreement and SN Agreement, the respective
boards considered the factors as a whole and did not find it practicable to and did not quantify or otherwise assign relative weight
to the specific factors considered in reaching their determinations. In addition, individual members of the boards may have given
different weight to different factors.
Material Terms of the Pono
and SN Agreeme
nts
Subject to the terms and conditions of
the Pono and SN Agreements at the Effective Time, SN will become a wholly owned subsidiary of our Company while Pono will be consolidated
with and into our current cannabis consulting company, Medicine Man Consulting, Inc. (“MMC”), currently a wholly owned
subsidiary of our Company. All our current management will remain in place, but Charles Haupt will be added as a member of our
Board of Directors and Joshua Haupt will become the Chief Cultivation Officer of both our Company and MMC.
Effective Time of the Merger
The Pono and SN Agreements provides that
the Transactions will each become effective upon the filing of Statement of Merger with the Colorado Secretary of State as to the
Pono Transaction, and Statement of Share Exchange and Articles of Exchange with the Secretaries of State of Colorado and Nevada
as to the SN Transaction, which is expected to occur twenty (20) days after the dissemination of this Information Statement. For
accounting purposes, the parties have agreed that effective date of the Transactions will be March 1, 2017.
Merger Consideration
Upon consummation of the Merger, each share
of outstanding Pono and SN common stock shall be converted into thirty-five (35) shares of our common stock. There are 100,000
shares of both Pono and SN issued and outstanding. Accordingly, following the exchange, holders of Pono and SN capital stock will
hold 7,000,000 shares of our common stock.
As a result of the Pono Transaction, the
shares of Pono capital stock will no longer be outstanding, will automatically be cancelled and retired and will cease to exist,
and each holder of a certificate representing such share immediately prior to the Effective Time will cease to have any rights
with respect to such certificate, except the right to receive the shares of our common stock described above. As a result of the
SN Transaction, the shares of SN capital stock will be held by Medicine Man Technologies, Inc.
Representations and Warranties
The Pono and SN Agreements contains customary
representations and warranties of the parties. Each party has made representations and warranties to the other relating to, among
other things, Corporate Existence and Power, Corporate Authorization, Governmental Authorization, Non-Contravention, Capitalization,
Subsidiaries, Absence of Litigation, Financial Statements, Absence of Certain Changes, Material Contracts, Litigation, Finders’
Fees, Taxes, Employee Benefits Plans, Properties, Intellectual Property, Insurance Coverage, Licenses and Permits, Employees, Labor
Matters, Environmental Matters, Books and Records; and State Takeover Statutes. For a more detailed description of these representations
and covenants, see Sections __ and ___ of the Pono Agreement, attached hereto as Appendix “A,” and Sections __ and
___ of the SN Agreement, attached hereto as Appendix “B”.
Conditions to the Transactions
The respective obligations of the parties
to the Transactions are subject to the satisfaction or waiver of various conditions, including normal and customary closing conditions
such as the accuracy of all representations and warranties, the performance and compliance with all covenants, agreements and conditions,
the delivery of certificates, documents and legal opinions and the compliance with applicable state laws. No regulatory approval
is required to be obtained in connection with the consummation of either of the Transactions.
Termination
Both the Pono and SN Agreements may be terminated
and the Transactions may be abandoned at any time prior to the Effective Time (notwithstanding any approval of the Agreements by
our shareholders):
|
(a)
|
by mutual written agreement of the parties; and
|
|
(b)
|
By Medicine Man Technologies, Inc, in its sole discretion,
if the audited financial statements to be provided by both Pono and SN deviate by more than 10% from the unaudited financial statements
provided by Pono and SN to MMT.
|
If either the Pono or SN Agreement is terminated,
that Agreement shall become void and of no effect with no liability on the part of any party (or any stockholder, director, officer,
employee, agent, consultant or representative of such party) to the other party hereto, provided that, if such termination shall
result from the willful failure of either party to perform a covenant hereof, such party shall be fully liable for any and all
liabilities and damages incurred or suffered by the other party as a result of such failure.
Amendment and Waiver
Any provision of either the Pono or SN
the Agreement may be amended or waived prior to the Effective Time if, but only if, such amendment or waiver is in writing and
is signed, in the case of an amendment, by each party to the Agreement or, in the case of a waiver, by each party against whom
the waiver is to be effective.
On the Effective Date of both transactions
we will be a holding company with two wholly owned subsidiaries, including Success Nutrients Inc., a Colorado corporation, and
Medicine Man Consulting Inc, which will include our current consulting business as well as Pono’s current business. Our voting
control will not change. Charles Haupt shall become a director of our Company and Joshua Haupt will be appointed as our Chief Cultivation
Officer, but the remainder of our directors and executive officers will remain as they consist currently.
Upon the closing of the Transactions, current
stockholders of Pono and SN will beneficially own, in the aggregate, approximately 40.1% of our issued and outstanding common stock
and our current stockholders will own approximately 59.9%. The purpose of the Transaction is to enhance our current cannabis consulting
business.
CERTAIN
TRANSACTIONS AND INFORMATION RELATED TO THE TRANSACTIONS
Certain Federal Income Tax Consequences
Because no action is being taken in connection
with the current outstanding shares of our common stock, no gain or loss is anticipated to be recognized by our stockholders in
connection with either Transaction. It is expected that the issuance of our shares of common stock to both the SN and Pono stockholders
pursuant to each Transaction will be tax-free to those persons.
Accounting Treatment of the Merger
The Transactions will each be accounted
for as an acquisition right meaning that purchase price accounting will be applied and goodwill will be booked up to the impairment
analysis right.
Federal Securities Law Consequences
The shares of our common stock to be issued
to the SN and Pono stockholders in connection with the Transactions will not be registered under the Securities Act at the Effective
Time. It is intended that such shares will be issued pursuant to the exemption from registration provided by Regulation D of the
Securities Act, as the shares of our common stock to be issued in each Transaction will be issued to less than 35 “non-accredited”
investors, as that term is defined in Rule 501(a) of Regulation D promulgated under the Securities Act of 1933, as amended. . These
shares shall be "restricted" and will bear an appropriate restrictive legend indicating that the resale of such shares
may be made only pursuant to registration under the Securities Act or pursuant to an available exemption from such registration.
Under the provisions of Rule 144, restricted securities may be sold into the public market after being held for a minimum of six
months, subject to limitations set forth under the Rule. In general, under Rule 144 as currently in effect, a person (or persons
whose shares are aggregated) who has beneficially owned restricted shares for at least six months may sell their shares free of
restriction. Any person who may be deemed to be an "affiliate," as defined under the Securities Act, is entitled to sell,
within any three-month period, an amount of shares that does not exceed the greater of 1% of the shares then outstanding in a broker’s
transaction, providing that we are current in our filings pursuant to the Securities Exchange Act of 1934, as amended.
Our Operations after the Transactions
Following the Transactions our current
business activities will remain but are expected to be significantly enhanced. At the Effective Time of the Transactions, Charles
Haupt shall become a director of our Company and Joshua Haupt will be appointed as our Chief Cultivation Officer, but the remainder
of our directors and executive officers will remain as they consist currently.
We will continue to be a reporting company
under the Exchange Act and will continue to file periodic reports and be subject to the proxy solicitation requirements of the
Exchange Act.
We intend to utilize Pono’s intellectual
property relating to cannabis cultivation in our cannabis consulting efforts. We also hope to continue to expand the distribution
channels for the nutrient products offered by Success Nutrients. While no assurances can be provided, we anticipate increased revenues
from the sale of nutrients, with increased revenues derived from increased outlets, plus revenues of approximately $25-40,000 per
month from the sale of the book. In addition, as a result of the cannabis production historically produced from Josh Haupt’s
cultivation locations, we intend to develop what we are referring to as Cultivation Max, which is a program we will be offering
to both existing cannabis cultivation locations, as well as new clients generated from our cannabis consulting business. Our intention
is to offer our expertise to these entities wherein we shall be paid a percentage of the increased production arising from the
implementation of our systems by our clients. Our existing cannabis clients will pay us 4% of revenues generated from the sale
of cannabis over 3,000 lbs. For larger cultivation systems we intend to partner with these third parties and be paid 15% of all
revenues over what that relevant cultivation location had historically produced. There are no assurances that we will generate
any revenues from these new opportunities.
Pono and SN uses a combination of copyright,
trade secret laws and confidentiality agreements to protect its proprietary intellectual property. We intend to aggressively register
for patent protection if and when the federal government eliminates cannabis prohibition. Intellectual property counsel has advised
that any effort to register a patent relating to the cultivation of marijuana would currently be unsuccessful.
Enforcement of intellectual property rights
is costly and time consuming. To date, Pono and SN have relied primarily on proprietary processes and know-how to protect intellectual
property. It is uncertain if and when its other patent applications may be allowed and whether they will provide us with a competitive
advantage.
From time to time, Pono and SN may encounter
disputes over rights and obligations concerning intellectual property. Pono and SN believe its service offering does not infringe
the intellectual property rights of any third party. However, there can be no assurance that either Pono or SN will prevail in
any intellectual property dispute.
Employees
As of February 27, 2017, we had eight (8)
employees, including five (5) full time employees and three (3) part time employees, including 2 in management, 5 in operations
and 1 in finance.. As a result of the Transactions we anticipate that the aggregate number of employees will increase to twelve
(12) including four additional full time employees in operations and one part time contract person. None of Pono or SN’s
employees is represented by a labor union or a collective bargaining agreement. Pono and SN consider its relations with its employees
to be good.
Facilities
Effective March 1, 2017 our principal place
of business is being moved to Suite 200 from Suite 102, located at 4880 Havana Street, Denver, Colorado 80239. Our telephone number
is (303) 371-0387. This new space consists of 12,097 sq. feet of rentable space, primarily executive office space and conference
room, for which we have agreed to pay a rent of $6,479.60 for the initial year of a 36 month term. This rent will escalate to approximately
$12,000 per annum in August 2017 and increase approximately $1,000 each year thereafter through May 30, 2018. It is anticipated
that this space shall be sufficient for our needs for the foreseeable future.
Our location is subleased from one of our
shareholders, ChineseInvestors.com Inc., pursuant to an oral agreement. This space consists approximately 3,500 square feet and
is comprised of executive offices, work areas, conference rooms, a restroom, and storage space located in a Class A office building.
We pay monthly rent of $1,600. We share this space with Future Vision, Inc., an affiliated company.
Success Nutrients Inc. also is party to
a lease at 6660 East 47
th
Ave Drive, Denver, CO, which consists of approximately 12,800 rentable sq. ft. of office and
warehouse space. Monthly base rent for this location is currently $7,200, which increases to $7,467 in December 2017, to $7,733
in December 2018 and to $8,000 in December 2019, running through November 30, 2020.
INFORMATION
RELATING TO OUR SECURITIES
As of the date of this Information Statement
there are 10,470,944 shares of our Common Stock issued and outstanding. Each share entitles the record holder to one vote on all
matters that are presented to shareholders for their consideration. The Common Stock is our only issued and outstanding security.
Following the consummation of the Transactions
we will have 17,470,944 shares of Common Stock issued and outstanding. We have 90,000,000 shares of our Common Stock authorized.
Upon consummation of the Transactions, the number of authorized shares of Common Stock will not change.
The following table sets forth the number
of common shares issued and outstanding as of the date of this Information Statement and upon consummation of the Transactions,
and shares of unissued shares of Common Stock available for issuance as of the date of this Information Statement and upon consummation
of the Transactions.
Pre Transactions:
|
|
Common Stock Issued and Outstanding
|
10,470,944
|
Common Share Authorized but Unissued
|
89,529,056
|
|
|
Post Transactions
|
|
Common Stock Issued and Outstanding
|
17,470,944
|
Common Share Authorized but Unissued
|
82,529,056
|
SECURITY
OWNERSHIP OF BENEFICIAL OWNERS, MANAGEMENT
AND
AFFILIATES PRIOR THE MERGER
The following table sets forth as of the
date of this Information Statement certain information with respect to those persons known by us to be record or beneficial owners
of more than 5% of our outstanding Common Stock, with respect to each Officer and Director, and with respect to all Directors and
Officers as a group. All ownership is direct unless otherwise noted. Percentage ownership is based on the 10,470,944 shares currently
outstanding.
Title of
Class
|
|
|
Name and Address
Of Beneficial Owner
|
|
Amount and Nature
Of Beneficial Ownership
|
|
|
Percent
Of Class
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
|
|
|
Andrew Williams
(1)(2)
4880 Havana Street
Suite 102 South
Denver, Colorado 80239
|
|
|
1,675,500
|
|
|
|
16%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
|
|
|
Peter Williams
4880 Havana Street
Suite 102 South
Denver, Colorado 80239
|
|
|
1,766,975
|
|
|
|
16.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
|
|
|
Michelle Zeman
4880 Havana Street
Suite 102 South
Denver, Colorado 80239
|
|
|
700,000
|
|
|
|
6.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
|
|
|
Brett Roper
(1)
4880 Havana Street
Suite 102 South
Denver, Colorado 80239
|
|
|
249,161
(3)
|
|
|
|
2.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
|
|
|
Paul Dickman
(1)
4880 Havana Street
Suite 102 South
Denver, Colorado 80239
|
|
|
55,000
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
|
|
|
All Officers and Directors
As a Group (4 persons)
|
|
|
1,979,661
|
|
|
|
18.9%
|
|
_________________________
(1)
(2)
|
Officer and Director of our Company.
Includes 1,615,500 shares held in the name
of the Andrew Johns Williams Revocable Trust
|
(3)
|
Includes 69,151 shares owned by ChineseInvestors.com, Inc. and 180,000 shares owned by Mr. Roper, an officer and director of ChineseInvestors.com, Inc. and as such, is in a position to control this disposition of these shares. Mr. Roper disclaims beneficial ownership of the ChineseInvestors.COM shares.
|
SECURITY OWNERSHIP OF BENEFICIAL OWNERS,
MANAGEMENT
AND AFFILIATES FOLLOWING THE TRANSACTIONS
The following table sets forth certain
information with respect to the anticipated beneficial ownership of our common stock, after giving effect to the Transactions by
each stockholder expected by us to be the beneficial owner of more than 5% of our common stock and by each of our directors and
executive officers and by all of the directors and executive officers as a group. Unless otherwise indicated in the footnotes,
shares will be owned of record and beneficially by the named person. For purposes of the following table, a person is deemed to
be the beneficial owner of any shares of common stock (a) over which the person has or shares, directly or indirectly, voting or
investment power, or (b) of which the person has aright to acquire beneficial ownership at any time within 60 days after the expected
effective time of the Merger. "Voting power" is the power to vote or direct the voting of shares and "investment
power" includes the power to dispose or direct the disposition of shares. The information contained below is based upon 17,470,944
shares of Common Stock to be issued and outstanding on a post-Transactions basis.
Title of
Class
|
|
|
Name and Address
Of Beneficial Owner
|
|
Amount and Nature
Of Beneficial Ownership
|
|
|
Percent of
Class
|
|
|
|
|
|
|
|
|
|
|
|
Common
|
|
|
Joshua Haupt
(1)
4880 Havana Street
Suite 102 South
Denver, Colorado 80239
|
|
|
4,420,556
|
|
25.3%
|
|
|
|
|
|
|
|
|
|
|
|
Common
|
|
|
Andrew Williams
(1)(2)
|
|
|
1,675,500
|
|
9.6%
|
|
|
|
|
4880 Havana Street
Suite 102 South
Denver, Colorado 80239
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
|
|
|
Peter Williams
|
|
|
1,766,975
|
|
10.2%
|
|
|
|
|
4880 Havana Street
Suite 102 South
Denver, Colorado 80239
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
|
|
|
Brett Roper
(1)
4880 Havana Street
Suite 102 South
Denver, Colorado 80239
|
|
|
249,161
|
|
1.40%
|
|
|
|
|
|
|
|
|
|
|
|
Common
|
|
|
Paul Dickman
(1)
4880 Havana Street
Suite 102 South
Denver, Colorado 80239
|
|
|
55,000
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
Common
|
|
|
All Officers and Directors
As a Group (6 persons)
|
|
|
6,400,217
|
|
36.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
_________________________
(1)
(2)
|
Officer and Director of our
Company.
Including 1,615,500 shares held
in the name of the Andrew Johns Williams Revocable Trust
|
(3)
|
Includes 69.1512 shares owned by ChineseInvestors.com, Inc. and 180,000 shares owned by Mr. Roper, an officer and director of ChineseInvestors.com, Inc. and as such, is in a position to control this disposition of these shares. Mr. Roper disclaims beneficial ownership of the ChineseInvestors.COM shares.
|
DIRECTORS
AND EXECUTIVE OFFICERS
The following sets
forth the names and ages of all of our Directors and Executive Officers and the positions held by such person, Each has served
their position since our inception. Each position will serve until the next annual meeting of our shareholders, or until their
death, resignation, retirement, removal, or disqualification, or until their successors have been duly elected and qualified.
Name
|
Age
|
Position
|
|
|
|
Andrew Williams
|
49
|
President, Chief Executive Officer
|
|
|
|
Brett Roper
|
63
|
Chief Operating Officer, Secretary
and Chairman of the Board of Directors
|
|
|
|
James S. Toreson
|
74
|
Director
|
|
|
|
Paul Dickman
|
37
|
Chief Financial Officer
|
Resumes
Andrew Williams
, our founder,
has been our President and CEO since our inception in April 2014. In addition to his positions with our Company, since September
2009, Mr. Williams has also been President and CEO of Medicine Man Denver, a cannabis company and the entity that licensed us our
intellectual property, and since January 2016, he has been President of MX LLC, a cannabis infused-product company he co-founded.
See
“Related Party Transactions.” From August 2006 through August 2010, Mr. Williams was a project portfolio
manager with Jeppesen, a Boeing company. Mr. Williams received a Bachelor of Science degree in Industrial Engineering from the
University of Southern Colorado in 1995. Prior to this, he served in the US Army as a Calvary Scout from 1986 to 1989 and received
an honorable discharge. He devotes approximately 10% of his time to our affairs.
Brett Roper
has been our
Chief Operating Officer, Secretary and a Director since our inception in March 2014. In addition to his positions with our Company,
since March 2001, Mr. Roper has been the COO, Senior Public Company Strategies Advisor, and Secretary of ChineseInvestors.com,
an OTCQB status company (“CIIX”). From August 2006 through April 2010, Mr. Roper was the Director of Construction and
Development, Property Manager, and an Asset Manager for Northstar Commercial Partners, Denver, Colorado, a company engaged in various
real estate related investments. From March 1995 through August 2006, Mr. Roper worked for the Hollingsworth Companies (East Tennessee
Based) in a wide variety of management roles for that business in the southeast US. He currently devotes a substantial amount of
his time to our business.
Paul Dickman
has been our
Chief Financial Officer since March 2015. In addition to his positions with our Company, since December 2009, Mr. Dickman has been
the owner of Breakwater Corporate Finance, a Colorado based company, and Paul Dickman CPA LLC, a company serving a variety of clients
in accounting and financial consulting. Also since December 2009, Mr. Dickman has been the Chief Financial Officer of ChineseInvestors.com,
Inc., a publicly held company that advises Chinese nationals on US investments. ChineseInvestors.com is also one of our principal
shareholders. Mr. Dickman received a Bachelor of Science degree in Financial Management from Bob Jones University in 2002. He devotes
only such time as necessary to our affairs, which is not expected to exceed 20% of his business time.
James S. Toreson
was appointed
as a director of our Company in March 2015. In addition to his position with our Company, Mr. Toreson has been the owner and Chief
Executive Officer of Toreson Industries, Inc., Alamo, Nevada, a real property development company he founded in 1983. Toreson Industries
filed a voluntary petition under Chapter 11, Title 11 of the US Code in the Federal Court in the District of Nevada located in
Las Vegas, Nevada (Case #14-12481-abl). This was done to stay foreclosure proceedings on real property owned by Toreson Industries.
This matter was dismissed by the bankruptcy court on February 25, 2015. Mr. Toreson has over 30 years’ experience in executive
management, including marketing, engineering, manufacturing and finance. He is also a director of ChineseInvestors.com, Inc. and
Freedom Motors, Inc., each a reporting company under the Securities Exchange Act of 1934, as amended. Mr. Toreson received a BSEE
degree and MSEE degree, each with honors from the University of Michigan in 1967 and 1968, respectively, and a Dr. of Science degree
from the University of Nevada-Reno in 1985. He devotes only such time as necessary to our affairs, which is not expected to exceed
20% of his business time.
BIOGRAPHIES
OF NEW DIRECTOR AND OFFICER
Upon Effectiveness of the Transactions,
the following persons will be appointed to our Board of Directors or as an officer of our Company. Each position will serve until
the next annual meeting of our shareholders or board of directors, as applicable, or until their death, resignation, retirement,
removal, or disqualification, or until their successors have been duly elected and qualified.
Name
|
Age
|
Position
|
|
|
|
Charles Haupt
|
54
|
Director
|
|
|
|
Joshua Haupt
|
30
|
Chief Cultivation Officer
|
Charles Haupt and Joshua Haupt are father
and son. There are no other family relationships between any of our directors or executive officers.
Charles Haupt
will be appointed
as a director of our Company upon effectiveness of the Transactions, which is expected to occur in March or April 2017. In addition
to his position with our Company, since 2003 Mr. Haupt has been President and founder of New Energy Technology, Inc., a privately
held Colorado corporation, which is a software based energy information and management company serving the commercial building
market. Mr. Haupt received a Bachelor of Science degree from Arizona State University in 1989. He intends to devote only such time
as necessary to our business upon his appointment.
Joshua Haupt
will be appointed as
our Chief Cultivation Officer upon effectiveness of the Trasnactions. Josh was the founder of both Pono and SN, where he has been
employed as President since their inception in 2015. From 2014 through 2017, he was president and principal shareholder of Debest
Consulting, Inc., a privately held Colorado corporation engaged in the cultivation of Cannabis and duly licensed by the Colorado
Marijuana Enforcement Division. From 2007 to January 2014, he was President and principal shareholder of Tall T Productions Inc.,
Breckenridge, CO, a clothing company that manufactures and sells tee shirts and other clothing to the ski and snowboard market.
He intends to devote approximately 90% of his time to our business affairs upon closing of the Transactions.
COMPENSATION
OF DIRECTORS & STANDARD ARRANGEMENTS
The following table sets forth information
concerning all cash and non-cash compensation awarded to, earned by or paid to our executive officers. We do not currently have
an established policy to provide compensation to members of our Board of Directors for their services in that capacity, although
we may choose to adopt a policy in the future.
SUMMARY COMPENSATION TABLE
Name and Principal Position
|
|
Year
|
|
Salary
|
|
|
Stock Awards
|
|
|
All Other
Compensation
|
|
|
Total
Compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Andrew Williams, CEO President
|
|
2014
|
|
$
|
41,595
|
|
|
$
|
_
|
|
|
$
|
–
|
|
|
$
|
41,595
|
|
|
|
2015
|
|
$
|
12,000
|
|
|
|
_
|
|
|
$
|
43,750
|
|
|
$
|
55,750
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sally Williams, Director
(1)
|
|
2014
|
|
$
|
18,000
|
|
|
$
|
–
|
|
|
$
|
–
|
|
|
$
|
18,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brett Roper, COO and Secretary
(2)
|
|
2014
|
|
$
|
29,392
|
|
|
$
|
–
|
|
|
$
|
–
|
|
|
$
|
29,392
|
|
|
|
2015
|
|
$
|
12,000
|
|
|
$
|
_
|
|
|
$
|
48,750
|
|
|
$
|
60,750
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Paul Dickman, Chief Financial Officer
(3)
|
|
2015
|
|
$
|
12,000
|
|
|
$
|
10,250
|
|
|
$
|
–
|
|
|
$
|
22,250
|
|
____________________
(1)
|
Ms. Williams resigned as a Board member in January 2015.
|
(2)
|
A portion of Mr. Roper’s salary continues to be borne by ChineseInvestors.com as a part of the consideration and agreement applicable to the issuance of shares awarded ChineseInvestors.com in 2014.
|
(3)
|
These funds were paid to Breakwater Corporate Finance, a company owned by Mr. Dickman.
|
Salaries for officers and directors will
be established by the Compensation Committee in the future. As of the date of this Information Statement officer and director salaries
had been established by our Board of Directors. Salaries for our employees are established by our Chief Operating Officer, Mr.
Brett Roper, in consultation with the Board. None of our employees are employed pursuant to an employment agreement.
Upon closing of the Transactions, we will
enter into an Employment Agreement with Joshua Haupt, which shall provide, among other things, for the following: (i) a salary
of $156,000 per annum; (ii) a car allowance of $1,000 per month; (iii) bonuses payable in the event SN’s quarterly results
exceed profits of $100,001 to $200,000 (EBIT) of 5%; $200,001 to $300,000 of 7.5%, and profits in excess of $300,001 (10%) so long
as he remains employed by us; bonuses payable in the event our Culitvation MAX quarterly results exceed profits of $200,001 to
$400,000 (EBIT) of 5%; $400,001 to $600,000 of 7.5%, and profits in excess of $600,001 (10%) so long as he remains employed by
us. Net Profits (EBIT) is described as the specific reporting of the profit center related to both business lines noting such expenses
generally would include both the operations of the business unit as well as any proportionate cost of the general and administrative
expenses that may be reasonably assigned to that specific unit by management in consultation with our accounting and audit associates.
In addition, the Employment Agreement also
provides that in the event Mr. Haupt decides to leave our employ, he shall give at least ninety (90) days advance notice of the
date of his last day of employment. If such an election occurs within the first year of the agreement, he is required to surrender
approximately 50% of our shares issued in the Transactions, currently determined to be 2,000,000 shares of our common stock.
The Employment Agreement also includes
a non-compete and non-solicitation provisions, confidentiality provisions, a term of five (5) years, an arbitration clause and
other terms commonly included in agreements of this kind.
Our officers and directors are currently
compensated at the rate of $1,000 per month for their service. They are also reimbursed for actual expenses incurred relating to
managing as well as marketing our business and, in some cases, receive incentive payments based upon their performance and success
in securing new clients for us.
There have been no events under any bankruptcy
act, any criminal proceedings and any judgments or injunctions material to the evaluation of the ability and integrity of any director
or executive officer during the past five years.
RELATED
PARTY TRANSACTIONS
At our inception we issued 335,000 shares
of our Common Stock in favor of Brett Roper, an officer and director, in consideration for services valued at $335.
On May 1, 2014, we entered into a non-exclusive
Technology License Agreement with Futurevision, Inc., f/k/a Medicine Man Production Corporation, a Colorado corporation, d/b/a
Medicine Man Denver (“Medicine Man Denver”), a company owned and controlled by affiliates of our Company, including
Andrew Williams, our President, CEO and Chairman, whereby Medicine Man Denver granted us a license to use all of their proprietary
processes they have developed, implemented and practiced at its cannabis facilities relating to the commercial growth, cultivation,
marketing and distribution of medical marijuana and recreational marijuana pursuant to relevant state laws and the right to use
and to license such information, including trade secrets, skills and experience (present and future). We issued 5,331,000 million
shares of our Common Stock in consideration for issuance of the license.
During our fiscal year ended December 31,
2016, we operate from our offices at 4880 Havana Street, Suite 102 South, Denver, Colorado 80239, telephone (303) 481-4416. This
location was subleased from Medicine Man Denver pursuant to an oral agreement. This space consists approximately 3,500 square feet
and was comprised of executive offices, work areas, conference rooms, a restroom, and storage space located in a Class A office
building at the address noted herein. We paid monthly rent of $1,600. This lease terminated February 28, 2017. See “Facilities”
above.
SECTION
16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange
Act of 1934 (the “34 Act”) requires our officers and directors and persons owning more than ten percent of the Common
Stock, to file initial reports of ownership and changes in ownership with the Securities and Exchange Commission (“SEC”).
Additionally, Item 405 of Regulation S-K under the 34 Act requires us to identify in our Form 10-K and proxy statement those
individuals for whom one of the above referenced reports was not filed on a timely basis during the most recent year or prior years.
To our best knowledge, all reports that were required to be filed were filed but some were filed late.
WHERE
YOU CAN FIND MORE INFORMATION
As required by law, we file annual and
periodic reports and other information with the SEC. These reports and other information contain additional information about our
Company. You can inspect and copy these materials at the Securities and Exchange Commission public reference rooms at 100 F Street,
N.E., Washington D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on public reference rooms. Some of this
information may also be accessed online at "www.sec.gov."
Statements contained in this Information
Statement or in any document incorporated into this Information Statement by reference regarding the contents of any contract or
other document are not necessarily complete and each such statement is qualified in its entirety by reference to such contract
or other document filed as an exhibit with the SEC.
The SEC allows us to incorporate by reference
into this Information Statement documents we file with the SEC, which means that we can disclose important information by referring
to those documents. The information incorporated by reference into this Information Statement is considered to be a part of this
Information Statement, and later information that we file with the SEC will update and supersede that information. We incorporate
by reference the documents listed:
(i) Our
Annual Report on Form 10-K for the fiscal year ended December 31, 2015;
(ii) Our
Quarterly Report on Form 10-Q for the quarter ended September 30, 2016;
(iii) Our
Current Report on Form 8-K filed on August 12, 2016; and
(iv) Our
Current Report on Form 8-K filed on October 20, 2016;
We will provide without charge, upon written
or oral request by a stockholder, a copy of any and all of the documents referred to above that have been, or may be, incorporated
by reference herein. Written requests should be sent to our principal offices at 4880 Havana Street, Suite 200, Denver, Colorado
80239, attn.: Investor Relations.
Oral requests may be made to our principal
offices, telephone number (303) 371-0387.
YOU SHOULD RELY ONLY ON THE INFORMATION
CONTAINED OR INCORPORATED BY REFERENCE INTO THIS INFORMATION STATEMENT. THE DATE OF THIS INFORMATION STATEMENT IS _________________,
2017. WE HAVE NOT AUTHORIZED ANYONE TO GIVE ANY INFORMATION DIFFERENT FROM THE INFORMATION CONTAINED IN THIS INFORMATION STATEMENT.
YOU SHOULD NOT ASSUME THAT THE INFORMATION CONTAINED OR INCORPORATED BY REFERENCE INTO THIS INFORMATION STATEMENT IS ACCURATE AS
OF ANY LATER DATE THAN THE DATE OF THE INFORMATION STATEMENT, AND THE MAILING OF THIS INFORMATION STATEMENT TO STOCKHOLDERS WILL
NOT CREATE ANY IMPLICATION TO THE CONTRARY.
Attachment A
NOTICE TO MEDICINE MAN TECHNOLOGIES, INC.
OF INTENT TO EXERCISE
DISSENTING SHAREHOLDER RIGHTS.
Pursuant to NRS 92A.430(c), Medicine Man
Technologies, Inc. (the “Company”) hereby provides a form of notice to those shareholders of the Company who wish to
exercise their dissenting shareholder rights. In this regard, the Company states as follows:
1. Each dissenting shareholder must have
owned his or her shares in the Company on August 12, 2016, the date on which the Company first made a public announcement of its
intent to acquire Pono Publications Ltd. and Success Nutrients, Inc.;
2. This notice, duly executed below, must
be received by the Company’s legal counsel, Andrew I. Telsey, P.C., 12835 E. Arapahoe Road, Tower 1 Penthouse #803, Englewood,
Colorado 80112, not less than thirty (30) nor more than sixty (60) days following receipt by the dissenting shareholder of the
Company’s Information Statement, of which this Notice is a part.
3. Included herewith is a copy of NRS 92A
300 to 92A500, inclusive.
4. A dissenting shareholder who is eligible
to exercise dissenting shareholder rights and who adheres to the procedures established in the Nevada Revised Statutes for dissenting
shareholders shall receive payment for his shares within thirty (30) days after receipt by the Company of the demand for payment.
Such payment shall be determined by the Company by estimating the fair value of the shares based upon the Company’s balance
sheet as of December 31, 2016, the end of its most recent fiscal year, its statement of income, changes in its statement of stockholder
equity during its previous fiscal year and the Company’s interim financial statements for the three month period ended March
31, 2017.
A dissenting shareholder should complete
the information below, sign this notice before a notary public and return a completed form as described above.
I _________________________________, hereby
elect to exercise my dissenting shareholder rights to _____________ shares of the common stock of Medicine Man Technologies, Inc.,
a Nevada corporation. In support thereof, the undersigned, being duly sworn, hereby states as follows:
1. I am the beneficial owner of ___________
shares of common stock of Medicine Man Technologies, Inc., or have been duly authorized by the beneficial owner of such shares
to act on his behalf.
2. I acquired my beneficial ownership on
or before August 12, 2016.
3. Included herewith is the certificate
representing ownership of the common shares.
EXECUTED THIS ____ day of ___________________,
2017.
_____________________________
(signature)
_____________________________
(print name)
_____________________________
(address)
_____________________________
COUNTY OF _____________
|
}
|
|
|
}
|
ss.
|
STATE OF ________________
|
}
|
|
SUBSCRIBED AND SWORN
TO BEFORE me by this ____ day of _____________, 2017.
My Commission
Expires:
________________________
Notary Public
Printed Name: ________________
Medicine Man Technologies (CE) (USOTC:SHWZ)
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