UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
10-Q
(Mark
One)
[X]
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the quarterly period ended September 30, 2017.
|
[ ]
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For
the transition period from ______ to ______.
Commission
File
Number 000-26108
AMERICAN
CANNABIS COMPANY, INC.
(Exact
name of registrant as specified in its charter)
|
|
|
|
Delaware
(State or other jurisdiction of
incorporation or organization)
|
|
|
90-1116625
(I.R.S. Employer
Identification No.)
|
5690
Logan St. Unit A
Denver, Colorado
(Address of principal executive offices)
|
|
|
80216
(Zip Code)
|
(303) 974-4770
(Registrant's telephone number, including area code)
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing requirements for the past
90 days. Yes [X] No [ ]
Indicate
by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every
Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of
this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and
post such files). Yes [X] No
[ ]
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.
|
|
|
|
|
|
|
Large accelerated
filer [ ]
|
|
Accelerated
filer [ ]
|
|
Non-accelerated
filer [ ]
(Do not check if a
smaller reporting company)
|
|
Smaller reporting
company [X]
|
|
|
|
|
|
|
Emerging growth
company [ ]
|
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange
Act. [ ]
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [
] No [X]
On
November 20, 2017, 51,434,050 shares of common stock were outstanding.
TABLE
OF CONTENTS
|
PART
I. FINANCIAL INFORMATION
|
Page
|
|
|
|
Item 1.
|
FINANCIAL STATEMENTS
(Unaudited):
|
3
|
|
|
|
|
CONSOLIDATED
BALANCE SHEETS AS OF SEPTEMBER 30, 2017 AND DECEMBER 31, 2016.
|
3
|
|
|
|
|
CONSOLIDATED
STATEMENT OF OPERATIONS FOR THREE AND NINE
|
|
|
MONTHS
ENDED SEPTEMBER 30, 2017 AND 2016.
|
4
|
|
|
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOW FOR THE NINE MONTHS ENDED
|
|
|
SEPTEMBER
30, 2017 AND 2016.
|
5
|
|
|
|
|
NOTES
TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS.
|
6
|
|
|
|
Item
2.
|
MANAGEMENT'S
DISCCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
|
|
|
RESULTS
OF OPERATIONS
|
12
|
|
|
|
Item 3.
|
QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK
|
16
|
|
|
|
Item 4.
|
CONTROLS AND PROCEDURES
|
16
|
|
|
|
|
PART
II. OTHER INFORMATION
|
|
|
|
|
Item 1.
|
LEGAL PROCEEDINGS
|
17
|
|
|
|
Item 1A.
|
RISK FACTORS
|
17
|
|
|
|
Item 2.
|
UNREGISTERED SALES
OF EQUITY SECURITIES AND USE OF PROCEEDS
|
17
|
|
|
|
Item 3.
|
DEFAULTS UPON SENIOR
SECURITIES
|
17
|
|
|
|
Item 5.
|
OTHER INFORMATION
|
17
|
|
|
|
Item 6.
|
EXHIBITS
|
18
|
|
|
|
SIGNATURES
|
19
|
PART
I—FINANCIAL INFORMATION
|
ITEM
1.
|
FINANCIAL
STATEMENTS
|
AMERICAN
CANNABIS COMPANY, INC.
CONSOLIDATED
BALANCE SHEETS
(Unaudited)
|
|
September 30, 2017
|
|
December 31, 2016
|
ASSETS
|
|
|
|
|
|
|
|
|
Current Assets
|
|
|
|
|
|
|
|
|
Cash and equivalents
|
|
$
|
1,877,249
|
|
|
$
|
751,038
|
|
Accounts receivable, net
|
|
|
404,894
|
|
|
|
164,451
|
|
|
|
|
|
|
|
|
|
|
Inventory
|
|
|
30,640
|
|
|
|
42,500
|
|
Prepaid expenses and other current assets
|
|
|
14,135
|
|
|
|
9,825
|
|
Total Current Assets
|
|
|
2,326,919
|
|
|
|
967,814
|
|
|
|
|
|
|
|
|
|
|
Property and equipment - net
|
|
|
12,625
|
|
|
|
11,639
|
|
Other Assets
|
|
|
4,500
|
|
|
|
4,500
|
|
|
|
|
|
|
|
|
|
|
TOTAL ASSETS
|
|
|
2,344,044
|
|
|
|
983,953
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
Current Liabilities
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
11,142
|
|
|
|
55,782
|
|
Accounts payable, related party
|
|
|
—
|
|
|
|
14,325
|
|
Advances from clients
|
|
|
57,800
|
|
|
|
222,188
|
|
Accrued and other current liabilities
|
|
|
23,702
|
|
|
|
36,724
|
|
|
|
|
|
|
|
|
|
|
Total Current Liabilities
|
|
|
92,644
|
|
|
|
329,019
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities
|
|
|
92,644
|
|
|
|
329,019
|
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders’ Equity
|
|
|
|
|
|
|
|
|
Preferred stock, $0.01 par value; 5,000,000 shares authorized; 0 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively
|
|
|
—
|
|
|
|
—
|
|
Common stock, $0.00001 par value; 100,000,000 shares authorized; 51,434,050 and 49,847,593 issued and outstanding at September 30, 2017 and December 31, 2016, respectively
|
|
|
514
|
|
|
|
498
|
|
Additional paid-in capital
|
|
|
6,486,870
|
|
|
|
5,389,384
|
|
Accumulated deficit
|
|
|
(4,235,984
|
)
|
|
|
(4,734,948
|
)
|
Total Shareholders’ Equity
|
|
|
2,251,400
|
|
|
|
654,934
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
$
|
2,344,044
|
|
|
$
|
983,953
|
|
The
accompanying notes are an integral part of these unaudited consolidated financial statements
.
AMERICAN CANNABIS COMPANY, INC.
RESULTS OF OPERATIONS
(Unaudited)
|
|
For the three months ended September 30,
|
|
For the nine months ended September 30,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Revenues
|
|
|
|
|
|
|
|
|
Consulting Services
|
|
$
|
916,676
|
|
|
$
|
143,610
|
|
|
$
|
2,331,735
|
|
|
$
|
603,083
|
|
Product and equipment
|
|
|
73,637
|
|
|
|
93,290
|
|
|
|
228,516
|
|
|
|
617,869
|
|
Total Revenues
|
|
|
990,313
|
|
|
|
236,900
|
|
|
|
2,560,251
|
|
|
|
1,220,952
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of consulting services
|
|
|
124,677
|
|
|
|
38,120
|
|
|
|
273,753
|
|
|
|
137,920
|
|
Cost of products and equipment
|
|
|
38,824
|
|
|
|
66,614
|
|
|
|
170,029
|
|
|
|
447,470
|
|
Total Cost of Revenues
|
|
|
163,501
|
|
|
|
104,734
|
|
|
|
443,782
|
|
|
|
585,390
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit
|
|
|
826,812
|
|
|
|
132,166
|
|
|
|
2,116,469
|
|
|
|
635,562
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative
|
|
|
362,966
|
|
|
|
353,292
|
|
|
|
1,442,992
|
|
|
|
884,733
|
|
Investor relations
|
|
|
10,381
|
|
|
|
11,129
|
|
|
|
27,371
|
|
|
|
29,197
|
|
Selling and marketing
|
|
|
72,115
|
|
|
|
22,855
|
|
|
|
149,419
|
|
|
|
63,332
|
|
Research and development
|
|
|
63,685
|
|
|
|
520
|
|
|
|
7,048
|
|
|
|
1,932
|
|
Total Operating expenses
|
|
|
451,830
|
|
|
|
387,796
|
|
|
|
1,626,830
|
|
|
|
979,194
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain (Loss) from Operations
|
|
|
374,982
|
|
|
|
(255,630
|
)
|
|
|
489,639
|
|
|
|
(343,632
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income (Expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on debt extinguishment
|
|
|
—
|
|
|
|
(59,128
|
)
|
|
|
—
|
|
|
|
(59,128
|
)
|
Change in derivative liabilities
|
|
|
—
|
|
|
|
66,449
|
|
|
|
—
|
|
|
|
66,449
|
|
Interest (expense)
|
|
|
156
|
|
|
|
19,605
|
|
|
|
9,325
|
|
|
|
(29,935
|
)
|
Total Other Income (expense)
|
|
|
156
|
|
|
|
(14,314
|
)
|
|
|
9,325
|
|
|
|
(24,644
|
)
|
Net Income (Loss) before taxes
|
|
|
375,138
|
|
|
|
(269,944
|
)
|
|
|
498,964
|
|
|
|
(368,276
|
)
|
NET INCOME (LOSS)
|
|
$
|
375,138
|
|
|
$
|
(269,944
|
)
|
|
$
|
498,964
|
|
|
$
|
(368,276
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic gain (loss) per common share
*
|
|
$
|
0.01
|
|
|
$
|
(0.00
|
)*
|
|
$
|
0.01
|
|
|
$
|
(0.00
|
)
|
Diluted loss per share of common stock
|
|
$
|
0.01
|
|
|
$
|
(0.00
|
)
|
|
|
0.01
|
|
|
|
(0.00
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted average common shares outstanding
|
|
|
51,434,050
|
|
|
|
46,375,168
|
|
|
|
51,434,050
|
|
|
|
45,628,580
|
|
Diluted weighted average common shares outstanding
|
|
|
51,468,214
|
|
|
|
46,375,168
|
|
|
|
51,462,284
|
|
|
|
45,628,580
|
|
* denotes a loss of less than $(0.01).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The
accompanying notes are an integral part of these unaudited consolidated financial statements
.
AMERICAN
CANNABIS COMPANY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
|
Nine Months
|
|
Nine Months
|
|
|
Ended September 30, 2017
|
|
Ended September 30, 2016
|
|
|
|
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
498,964
|
|
|
$
|
(382,276
|
)
|
Adjustments to reconcile net income (loss) to net cash
|
|
|
|
|
|
|
|
|
provided by (used in) operating activities:
|
|
|
|
|
|
|
|
|
Bad debt expense
|
|
|
73,280
|
|
|
|
66,431
|
|
Depreciation
|
|
|
4,013
|
|
|
|
3,744
|
|
Amortization of discount on convertible note payable
|
|
|
—
|
|
|
|
26,302
|
|
Stock-based compensation to employees
|
|
|
401,809
|
|
|
|
16,240
|
|
Common stock issued for settlement expense
|
|
|
110,000
|
|
|
|
—
|
|
Stock-based compensation to service providers
|
|
|
—
|
|
|
|
9,198
|
|
Change in derivative liabilities
|
|
|
—
|
|
|
|
(64,419
|
)
|
Consulting Services in Exchange for Joint Venture
|
|
|
—
|
|
|
|
—
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
(313,723
|
)
|
|
|
(203,900
|
)
|
Deposits
|
|
|
—
|
|
|
|
2,845
|
|
Inventory
|
|
|
11,860
|
|
|
|
(238
|
)
|
Prepaid expenses and other current assets
|
|
|
(4,310
|
)
|
|
|
(16,150
|
)
|
Advances from Clients
|
|
|
(164,388
|
)
|
|
|
(57,326
|
)
|
Accrued liabilities and other current liabilities
|
|
|
(44,347
|
)
|
|
|
(91,484
|
)
|
Accounts payable
|
|
|
(44,640
|
)
|
|
|
(117,206
|
)
|
Net cash used in operating activities
|
|
|
528,518
|
|
|
|
(619,983
|
)
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
Purchases of property and equipment
|
|
|
(5,000
|
)
|
|
|
(3,290
|
)
|
Net cash used in investing activities
|
|
|
(5,000
|
)
|
|
|
—
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
Proceeds from issuance of convertible notes payable
|
|
|
—
|
|
|
|
139,065
|
|
Proceeds from issuance of common stock
|
|
|
602,693
|
|
|
|
—
|
|
Net cash provided by financing activities
|
|
|
602,693
|
|
|
|
139,065
|
|
Net increase (decrease) in cash and cash equivalents
|
|
|
1,126,211
|
|
|
|
(484,208
|
)
|
Cash and cash equivalents at beginning of period
|
|
|
751,038
|
|
|
|
555,780
|
|
Cash and cash equivalents at end of period
|
|
$
|
1,877,249
|
|
|
$
|
71,572
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
|
|
|
Cash paid for interest
|
|
$
|
—
|
|
|
$
|
—
|
|
Cash paid for income taxes
|
|
$
|
—
|
|
|
$
|
—
|
|
Non-Cash investing and financing activities:
|
|
|
|
|
|
|
|
|
Conversion of note payable to common shares
|
|
$
|
—
|
|
|
$
|
71,500
|
|
Common stock returned and cancelled
|
|
|
1
|
|
|
|
—
|
|
Common stock issued for debt converted in prior year
|
|
|
2
|
|
|
|
|
|
The
accompanying notes are an integral part of these unaudited consolidated financial statements
.
AMERICAN
CANNABIS COMPANY, INC.
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR
THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2017 and 2016
(Unaudited)
Note 1.
Description of the Business
American
Cannabis Company, Inc. and its subsidiary Company, Hollister & Blacksmith, Inc., doing business as American Cannabis Consulting
(“American Cannabis Consulting”), (collectively “the “Company”) are based in Denver, Colorado. The
Company operates a fully-integrated business model that features end-to-end solutions for businesses operating in the regulated
cannabis industry in states and countries where cannabis is regulated and/or has been de-criminalized for medical use and/or legalized
for recreational use. The Company provides advisory and consulting services specific to this industry, designs industry-specific
products and facilities, and manages a strategic group partnership that offers both exclusive and non-exclusive customer products
commonly used in the industry. American Cannabis Company, Inc. is a publicly listed company quoted on the OTCQB under the symbol
“AMMJ”.
Note 2.
Summary of Significant Accounting Policies
Basis
of Accounting
The
financial statements are prepared in accordance with accounting principles generally accepted in the United States of America
("U.S. GAAP"). The Company has elected a fiscal year ending on December 31. Certain balance sheet reclassifications
have been made to prior period balances to reflect the current period’s presentation format; such reclassifications had
no impact on the Company’s consolidated statements of operations or consolidated statements of cash flows and had no material
impact on the Company’s consolidated balance sheets.
Use
of Estimates in Financial Reporting
The
preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect
the amount of assets and liabilities, and disclosures of contingent assets and liabilities, as of the date of the financial statements
during the periods presented. Actual results could differ from these estimates. Estimates and assumptions are reviewed periodically,
and the effects of revisions are reflected in the financial statements in the period in which they are deemed to be necessary.
Significant estimates made in the accompanying financial statements include but are not limited to following: those related to
revenue recognition, allowance for doubtful accounts and unbilled services, lives and recoverability of equipment and other long-lived
assets, contingencies and litigation. The Company is subject to uncertainties, such as the impact of future events, economic,
environmental and political factors, and changes in the business climate; therefore, actual results may differ from those estimates.
When no estimate in a given range is deemed to be better than any other when estimating contingent liabilities, the low end of
the range is accrued. Accordingly, the accounting estimates used in the preparation of the Company's financial statements will
change as new events occur, as more experience is acquired, as additional information is obtained and as the Company's operating
environment changes. Changes in estimates are made when circumstances warrant. Such changes and refinements in estimation methodologies
are reflected in reported results of operations; if material, the effects of changes in estimates are disclosed in the notes to
the financial statements.
Unaudited
Interim Financial Statements
The
accompanying unaudited financial statements have been prepared in accordance with U.S. GAAP for interim financial information
and with the instructions to Form 10-Q and Regulation S-X. Accordingly, the financial statements do not include all of the
information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion
of management, all adjustments consisting of normal recurring entries necessary for a fair statement of the periods presented
for: (a) the financial position; (b) the result of operations; and (c) cash flows, have been made in order to make the financial
statements presented not misleading. The results of operations for such interim periods are not necessarily indicative of operations
for a full year.
Stock-Based
Compensation
Restricted
shares are awarded to employees and entitle the grantee to receive shares of common stock at the end of the established vesting
period. The fair value of the grant is based on the stock price on the date of grant. The Company recognizes related compensation
costs on a straight-line basis over the requisite vesting period of the award. During the three months ended September 30, 2017,
the Company had no employee stock-based compensation expense. During the nine months ended September 30, 2017, the Company had
employee stock-based compensation expense of $401,809. Compensation expense for warrants and options is based on the fair value
of the instruments on the grant date, which is determined using the Black-Scholes valuation model. During the three months ended
September 30, 2017, there was no compensation expense for warrants or stock options.
Warrants
As
of September 30, 2017, and December 31, 2016, the Company had issued and outstanding warrants to the Company’s independent
board member, to purchase up to two hundred and fifty thousand (250,000) shares of common stock at an exercise price of sixty-three
cents ($0.63) per share. The warrants were fully-vested as of November 19, 2014, and expire on November 19, 2019.
On
August 31, 2017, the Company issued warrants to Anthony Baroud to purchase up to fifty thousand (50,000) shares of common stock
at an exercise price of ninety-three cents ($0.93) per share. The warrants were fully vested as of August 31, 2017, and expire
on March 1, 2018. The warrants were issued as consideration for a settlement agreement and mutual release of all claims between
the Registrant and Anthony Baroud on August 31, 2017 (See Part II, Item 1).
Options
In
addition to the warrants to the Company’s independent board member, he shall be eligible to receive options for 400,000
shares of common stock under the Company’s incentive plan, as and when duly approved by the Board of Directors. No options
have been issued for the three and nine months ended September 30, 2017 and 2016.
Reclassifications
Prior
year amounts have been reclassified to conform to the current year presentation.
Note
3. Accounts Receivable, net
Accounts
receivable, net, was comprised of the following as of September 30, 2017 and December 31, 2016:
|
|
September 30, 2017
|
|
December 31, 2016
|
|
|
|
|
|
Gross accounts receivable
|
|
$
|
509,595
|
|
|
$
|
195,872
|
|
Less: allowance for doubtful accounts
|
|
|
(104,701
|
)
|
|
|
(31,421
|
)
|
Accounts receivable, net
|
|
$
|
404,894
|
|
|
$
|
164,481
|
|
The
Company had bad debt expense during the nine months ended September 30, 2017 and 2016 of $73,280 and $13,344, respectively.
Note
4.
Other Assets
Other
assets were comprised of the following as of September 30, 2017 and December 31, 2016:
|
|
September 30,
2017
|
|
December 31, 2016
|
Deposits
|
|
$
|
4,500
|
|
|
$
|
4,500
|
|
Other assets
|
|
$
|
4,500
|
|
|
$
|
4,500
|
|
Note
5. Inventory
Inventory
as of September 30, 2017 and December 31, 2016 of $30,640 and $42,500, respectively, was fully comprised of finished goods.
Note
6. Prepaid expenses and other current assets
Prepaid
expenses and other current assets was comprised of the following as of September 30, 2017 and December 31, 2016:
|
|
September 30, 2017
|
|
December 31, 2016
|
Prepaid
expenses
|
|
$
|
14,136
|
|
|
$
|
9,825
|
|
Prepaid
expenses and other current assets
|
|
$
|
14,136
|
|
|
$
|
9,825
|
|
Note
7. Property and Equipment, net
Property
and equipment as of September 30, 2017 and December 31, 2016 is summarized as follows:
|
|
September 30,
2017
|
|
December 31,
2016
|
Office equipment
|
|
$
|
9,275
|
|
|
$
|
9,275
|
|
Furniture and fixtures
|
|
|
9,490
|
|
|
|
10,175
|
|
Machinery & Equipment
|
|
|
7,336
|
|
|
|
2,337
|
|
Less accumulated depreciation
|
|
|
(13,476
|
)
|
|
|
(10,148
|
)
|
Property and equipment, net
|
|
$
|
12,625
|
|
|
$
|
11,639
|
|
|
|
|
|
|
|
|
|
|
Note
8. Related Party Transactions
During
the three months ended September 30, 2017, the Company incurred $15,000 of expense payable to Prince & Tuohey CPA, Ltd.,
a company in which J. Michael Tuohey, the Company’s Chief Financial Officer, is an owner. Amounts owed as of September 30,
2017 and December 31, 2016, were $0 and $14,325, respectively.
Note
9. Accrued and Other Current Liabilities
Accrued
and other current liabilities was comprised of the following at September 30, 2017 and December 31, 2016:
|
|
September 30, 2017
|
|
December 31, 2016
|
|
|
|
|
|
Accrued payroll liabilities
|
|
|
—
|
|
|
|
12,903
|
|
Other accruals
|
|
|
23,702
|
|
|
|
14,986
|
|
Accrued and other current liabilities
|
|
$
|
23,702
|
|
|
$
|
36,724
|
|
|
|
|
|
|
|
|
|
|
Note
10. Stock-based Compensation
Restricted
Shares
From
time to time, the Company grants certain employees restricted shares of its common stock to provide further compensation in-lieu
of wages and to align the employee’s interests with the interests of its stockholders. Because vesting is based on continued
employment, these equity-based incentives are also intended to attract, retain and motivate personnel upon whose judgment, initiative
and effort the Company’s success is largely dependent.
During
the nine months ended September 30, 2017, the Company issued 430,227common shares, with a fair value of $395,809.
Warrants
As
of September 30, 2017, and December 31, 2016, the Company had issued and outstanding warrants to the Company’s independent
board member, to purchase up to two hundred and fifty thousand (250,000) shares of common stock at an exercise price of sixty-three
cents ($0.63) per share. The warrants were fully-vested as of November 19, 2014, and expire on November 19, 2019. The grant date
fair value of the warrants, as calculated based on the Black-Scholes valuation model, was $0.59 per share.
As
of September 30, 2017, as the exercise price per share is lower than the price per share of our common shares, the intrinsic value
of outstanding warrants is $35,000. As of September 30, 2017, and December 31, 2016, the warrants issued to the Company’s
independent board member had 1.5 and 2.2 years remaining until expiration.
Stock
Options
In
addition to the warrants granted to the Company’s independent board member as described above, the Company’s independent
board member shall be eligible to receive options for 400,000 shares of common stock under the Company’s incentive plan,
as and when duly approved by the Board of Directors.
Stock
Issuable in Compensation for Professional Services
From
time to time, the Company enters into agreements whereby a professional service provider will be compensated for services rendered
to the Company by shares of common stock in lieu of cash. During the nine months ended September 30, 2017, no such common stock
was issued.
Stock
Issued as Consideration for Settlement Agreements.
On
July 31, 2017, the Company entered into a settlement agreement, mutual release of all claims and waiver of bond for lost certificate,
with Private Media Group, Inc. On May 23, 2014, Private Media Group, Inc. was issued 200,000 shares of common stock as consideration
for services rendered. Private Media Group, Inc. subsequently lost the stock certificate, and demanded the Company reissue the
common stock. The Company and Private Media Group, Inc. entered into a settlement agreement provided that in exchange for a complete
release of all claims regarding any and all compensation due to Private Media Group, Inc., Private Media Group, Inc. agreed to
return 100,000 shares to treasury, and the Company agreed to waive of bond for the lost certificate, and to reissue Private Media
Group, Inc. 100,000 common shares of common stock.
On
August 31, 2017, the Company entered into a settlement agreement and mutual release of all claims with Anthony Baroud. The Company
previously disclosed its participation in a private arbitration proceeding conducted by the American Arbitration Association,
in which both claims and counterclaims were asserted by the respective parties. The settlement agreement disposed of the arbitration
proceeding and all claims and counterclaims between the parties with prejudice. As consideration for the dismissal and mutual
release of all claims, the Company agreed to a stock compensation settlement equal to $110,000 consisting of an issuance of 100,000
shares of common stock to Mr. Baroud, valued for the purposes of the settlement agreement at $0.93 per share, for a total of $93,000,
and fully vested warrants to purchase up to 50,000 shares of common stock in a cashless transaction at an exercise price determined
by the closing price of the Company’s common stock on March 1, 2018. The warrants expire on March 1, 2018. If the 50,000
shares issuable to Mr. Baroud pursuant to the Cashless Warrant Agreement does not equal $17,000 for a total of $110,000, the Company
agreed to issue Mr. Baroud restricted common stock, valued as of the closing price on March 1, 2018, to correct the difference
so that Baroud receives the equivalent of $110,000.00.
Note
11. Stockholders’ Equity
Preferred
Stock
American
Cannabis Company, Inc. is authorized to issue 5,000,000 shares of preferred stock at $0.01 par value. No shares of preferred
stock were issued and outstanding during the three months or nine months ended September 30, 2017, and 2016 respectively.
Common
Stock
American
Cannabis Company, Inc. is authorized to issue 100,000,000 common shares at $0.00001 par value per share.
The
Company issued 0 shares of common stock for the three months ended September 30, 2017.
For
the nine months ended September 30, 2017, the Company issued 430,227 shares of common stock valued at $395,809 as follows:
On
January 4, 2017, the Company issued 200,000 common shares to Terry Buffalo.
On
January 4, 2017, the Company issued Sam D. Leucshen 50,000 common shares.
On
January 4, 2017, the Company issued Steven Lico 15,000 common shares.
On
January 4, 2017, the Company issued Tyler A. Schlosser 20,000 common shares.
On
January 4, 2017, the Company issued Robert Teran 50,000 common shares.
On
January 4, 2017, the Company issued Gayle Barr 4,727 common shares.
On
January 4, 2017, the Company issued Mica Renquist 7,500 common shares.
On
January 4, 2017, the Company issued Gary Altman 33,000 common shares.
On
January 4, 2017, the Company issued Randy Fleming 50,000 common shares.
On
January 10, 2017, pursuant to the amended and restated Investment Agreement between the Company and Tangiers Global, LLC, the
Company sold 588,841 registered common shares to Tangiers for $414,544 net of applicable financing costs received March 3, 2017.
On
February 22, 2017, pursuant to the amended and restated Investment Agreement between the Company and Tangiers Global, LLC, the
Company sold 320,549 registered common shares to Tangiers for $188,143 net of applicable financing costs received on March 3,
2017.
On
June 12, 2017, the Company issued Jesus Quintero 8,955 shares of restricted common stock, valued at a price of $0.67 per share,
value of $6,000. The shares were issued as consideration related to a severance agreement between the Company and Mr. Quintero.
On
December 28, 2016, the Company received conversion notice from a note holder to issue 237,885 shares of common stock for conversion
of note principal of $25,000 and accrued interest of $2,000. The 237,885 shares of common stock were issued in January 2017.
|
ITEM
2.
|
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
The
statements contained in this report that are not statements of historical fact, including without limitation, statements containing
the words “believes,” “expects,” “anticipates” and similar words, constitute forward-looking
statements that are subject to a number of risks and uncertainties. From time to time we may make other forward-looking statements.
Investors are cautioned that such forward-looking statements are subject to an inherent risk that actual results may materially
differ as a result of many factors, including the risks discussed from time to time in this report, including the risks described
under “Risk Factors” in any filings we have made with the SEC.
Our
discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have
been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial
statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses.
On an on-going basis, we evaluate these estimates, including those related to useful lives of real estate assets, cost reimbursement
income, bad debts, impairment, net lease intangibles, contingencies and litigation. We base our estimates on historical experience
and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis
for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. There
can be no assurance that actual results will not differ from those estimates.
Background
American
Cannabis Company, Inc. and subsidiary company, Hollister & Blacksmith, Inc., doing business as American Cannabis Consulting
(“American Cannabis Consulting”), (collectively “the “Company”, “we”, “us”,
or “our”) are based in Denver, Colorado and operate a fully-integrated business model that features end-to-end solutions
for businesses operating in the regulated cannabis industry in states and countries where cannabis is regulated and/or has been
de-criminalized for medical use and/or legalized for recreational use. The Company provides advisory and consulting services specific
to this industry, manufactures proprietary industry solutions including; the Satchel™, SoHum Living Soils™, Cultivation
Cube™ and the High Density Cultivation System.™ The Company also sells 3rd party industry-specific products and manages
a strategic group partnership that offers both exclusive and non-exclusive customer products commonly used in the industry. American
Cannabis Company, Inc. is a publicly listed company quoted on the OTCQB under the symbol “AMMJ”.
We
were incorporated in the State of Delaware on September 24, 2001 under the name Naturewell, Inc. to develop and market clinical
diagnostic products using immunology and molecular biologic technologies.
On
March 13, 2013, Naturewell, Inc. completed a merger transaction whereby it acquired 100% of the issued and outstanding share capital
of Brazil Interactive Media, Inc. (“BIMI”), which operated as a Brazilian interactive television company and television
production company through its wholly owned Brazilian subsidiary company, EsoTV Brasil Promoção Publicidade Licenciamento
e Comércio Ltda. (“EsoTV”). Naturewell’s Articles of Incorporation were amended to reflect a new name:
Brazil Interactive Media, Inc.
On
May 15, 2014, BIMI entered into a merger agreement (“the Merger Agreement”) to acquire 100% of the issued and outstanding
American Cannabis Consulting while simultaneously disposing of 100% of the issued share capital EsoTV (“the Separation Agreement”).
Both the merger with American Cannabis Consulting and disposal of EsoTV were completed on September 29, 2014. BIMI subsequently
amended its Articles of Incorporation to change its name to American Cannabis Company, Inc. On October 10, 2014, American Cannabis
Company, Inc changed its stock symbol from BIMI to AMMJ.
The
foregoing descriptions of the Merger Agreement and Separation Agreement do not purport to be complete and are qualified in their
entirety by the terms of such agreements, which are filed as exhibits to the Current Report on Form 8-K filed by the Company with
the U.S. Securities and Exchange Commission (“SEC”) on October 3, 2014.
Immediately
following the completion of the Merger Agreement, former shareholders of American Cannabis Consulting owned 31,710,628 shares
of American Cannabis Company, Inc.’s common stock representing 78.4% of American Cannabis Company, Inc.’s issued and
outstanding share capital. Accordingly, American Cannabis Consulting was deemed to have been the accounting acquirer in a Reverse
Merger which resulted in a recapitalization of the Company. Consequently, the Company’s consolidated financial statements
reflect the results of American Cannabis Consulting since Inception (March 5, 2013) and of American Cannabis Company, Inc. (formerly
BIMI) since September 29, 2014.
Results
of Operations
For
the three months ended September 30, 2017 compared to three months ended September 30, 2016.
The
following table presents our consolidated operating results for the three months ended September 30, 2017 compared to the three
months ended September 30, 2016:
|
|
Three Months
|
|
|
|
Three Months
|
|
|
|
|
|
|
Ended
|
|
|
|
Ended
|
|
|
|
|
|
|
September 30,
|
|
% of
|
|
September 30,
|
|
% of
|
|
|
|
|
2017
|
|
Revenues
|
|
2016
|
|
Revenues
|
|
$ Change
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consulting services
|
|
$
|
916,676
|
|
|
|
92.6
|
|
|
|
143,610
|
|
|
|
60.6
|
|
|
$
|
704,813
|
|
Products and equipment
|
|
|
73,637
|
|
|
|
7.4
|
|
|
|
93,290
|
|
|
|
39.4
|
|
|
|
(158,148
|
)
|
Total revenues
|
|
|
990,313
|
|
|
|
100.0
|
|
|
|
236,900
|
|
|
|
100.0
|
|
|
|
521,568
|
|
Costs of revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of consulting services
|
|
|
124,367
|
|
|
|
12.6
|
|
|
|
38,120
|
|
|
|
16.1
|
|
|
|
73,089
|
|
Cost of products and equipment
|
|
|
38,824
|
|
|
|
3.9
|
|
|
|
66,614
|
|
|
|
28.1
|
|
|
|
(107,024
|
)
|
Total costs of revenues
|
|
|
163,501
|
|
|
|
16.5
|
|
|
|
104,734
|
|
|
|
44.2
|
|
|
|
(33,625
|
)
|
Gross profit
|
|
|
826,812
|
|
|
|
83.5
|
|
|
|
132,166
|
|
|
|
55.8
|
|
|
|
580,290
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative
|
|
|
362,966
|
|
|
|
36.7
|
|
|
|
353,290
|
|
|
|
149.1
|
|
|
|
9,676
|
|
Investor relations
|
|
|
10,381
|
|
|
|
1.0
|
|
|
|
11,129
|
|
|
|
4.6
|
|
|
|
9,488
|
|
Selling and marketing
|
|
|
72,115
|
|
|
|
7.3
|
|
|
|
22,855
|
|
|
|
9.6
|
|
|
|
52,453
|
|
Research and development
|
|
|
6,368
|
|
|
|
0.6
|
|
|
|
520
|
|
|
|
0
|
|
|
|
4,955
|
|
Total operating expenses
|
|
|
451,830
|
|
|
|
45.6
|
|
|
|
387,796
|
|
|
|
163.3
|
|
|
|
64,034
|
|
Income (loss) from operations
|
|
|
374,982
|
|
|
|
37.9
|
|
|
|
(255,630
|
)
|
|
|
(107.9
|
)
|
|
|
630,612
|
|
Other income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
|
156
|
|
|
|
0.0
|
|
|
|
(19,605
|
)
|
|
|
8.3
|
|
|
|
156
|
|
Total other income (expense)
|
|
|
156
|
|
|
|
0.0
|
|
|
|
(14,314
|
)
|
|
|
(6.0
|
)
|
|
|
1532
|
|
Net income (loss) before income taxes
|
|
$
|
375,138
|
|
|
|
37.9
|
|
|
$
|
(269,944
|
)
|
|
|
(113.9
|
)
|
|
$
|
645,082
|
|
Income tax expense (benefit)
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0.0
|
|
|
|
0
|
|
Net income (loss)
|
|
$
|
375,138
|
|
|
|
37.9
|
|
|
$
|
(269,944
|
)
|
|
|
(113.9
|
)
|
|
$
|
645,082
|
|
Revenues
Total
revenues were $990,313 for the three months ended September 30, 2017 as compared to $236,900 for the three months ended September
30, 2016, an increase of $753,413. This increase was due to increased consulting and product sales in new markets. Consulting
service revenues increased for the three months ended September 30, 2017, to $916,676 or 92.6% of total revenues, versus $143,610
or 60.6% of total revenues for the three months ended September 30, 2016. We experienced a decrease in our product and equipment
revenues as amounts for the three months ended September 30, 2017 were $73,637 or 7.4% of total revenues, versus $93,290 or 39.4%
of total revenues for three months ended September 30, 2016. This decrease was due to the cyclical nature of the Company’s
business as product and equipment sales follow on successful consulting services.
Costs
of Revenues
Costs
of revenues primarily consist of labor, travel, and other costs directly attributable to providing services or products. During
the three months ended September 30, 2017, our total costs of revenues were $163,501, or 16.5% of total revenues. This compares
to total costs of revenues for the three months ended September 30, 2016 of $104,734 or 44.2% of total revenues. The increase
in costs of revenues of $22,767 was primarily due to increased costs of consulting services. For the three months ended September
30, 2017, consulting-related costs were $124,367, or 12.6% of total revenue, as compared to costs of $38,120, or 16.1% of revenue
for the three months ended September 30, 2016. Costs associated with products and equipment were $38,824, or 3.9% of total revenue
for the three months ended September 30, 2017 as compared to $66,614, or 28.1% of total revenue for the three months ended September
30, 2016. As a percentage of revenues, the decrease was attributed to the lifecycle of client contracts with the company experiencing
spikes in product revenues during design and facility build-outs. The company was not performing any design and facility build-outs
for the three months ended September 30, 2017, while two facility build-outs were in-progress during the three months ended September
30, 2016.
Gross
Profit
Total
gross profit was $826,812 for the three months ended September 30, 2017, comprised of consulting services gross profit of $791,999
and products and equipment gross profit of $34,813. This compares to total gross profit of $132,166 for the three months ended
September 30, 2016, comprised of consulting services gross profit of $105,490 and products and equipment gross profit of $26,676.
The increase of $686,509 for consulting services gross profit was due to growth in our new consulting client base and volume of
operations. As a percentage of total revenues, gross profit was 83.5% for the three months ended September 30, 2017 as compared
to 55.8% for the three months ended September 30, 2016.
Operating
Expenses
Total
operating expenses were $451,830, or 45.6% of total revenues for the three months ended September 30, 2017, compared to $387,796,
or 163.7% of total revenues for the three months ended September 30, 2016. This decrease was primarily due to efficiencies in
operations.
Other
Income (Expense)
Other
income (expense) for the three months ended September 30, 2017 was an expense of $156 as compared with an expense of $(14,314)
for the three months ended September 30, 2016.
Net
Income (Profit)
As
a result of the factors discussed above, net income (expense) for the three months ended September 30, 2017 was a net profit of
$375,138, or 37.9% of total revenues for the period, as compared to a net loss of ($269,944), or (113.9%) of total revenues for
the three months ended September 30, 2016, due to the Company being well positioned to capitalize on the growing industry following
the November 2016 election.
Liquidity and Capital Resources
As
of September 30, 2017, our primary internal sources of liquidity were our working capital, which included cash and cash equivalents
of $1,877,249 and accounts receivable of $404,894. We also have the ability to raise additional capital as needed through external
equity financing transactions. Additionally, considering that our fixed overhead costs are low, we have the ability to issue stock
to compensate employees and management, and the level of future revenue we expect to generate from executed client contracts,
we believe our liquidity and capital resources to be adequate to fund our operational and general and administrative expenses
for at least the next 12 months without needing to raise additional debt or equity funding. There is no guarantee we will have
the ability to raise additional capital as needed through external equity financing transactions if required.
Operating
Activities
Net
cash used in by operating activities for the three months ended September 30, 2017 was a use of $528,518 consisting
of net gain of $498,964, decreases in accounts payable of $44,640 due to inventory product purchases, and decrease in
advances from clients $164,388 which related to recognition of revenues from advances received during 2017 and inventory
of $30,640 based on product purchases. Net cash used in operating activities for the three months ended September 30,
2016 was a use of $619,983, consisting of net loss of ($368,276), decreases in accounts payable of $117,206 due to inventory
product purchases, an increase in advances from clients $57,326 which related to recognition of revenues from advances
received during 2016 and inventory of $42,500 based on product purchases.
Investing
Activities
For
the months ended September 30, 2017 and 2016, investing activities were a use of cash of ($5,000) and 0 respectively.
Financing
Activities
For
the months ended September 30, 2017 and 2016, the net cash from financing activities was $0 and $139,065 respectively.
Off
Balance Sheet Arrangements
As
of September 30, 2017, and December 31, 2016, we did not have any off-balance sheet arrangements that have or are reasonably likely
to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of
operations, liquidity, capital expenditures or capital resources.
Non-GAAP
Financial Measures
We
use Adjusted EBITA, a non-GAAP metric, to monitor our overall business performance. We define Adjusted EBITA as net income (loss)
before interest expense, net, provision for (benefit from) income taxes, stock-based compensation and certain non-recurring expenses.
We believe that such adjustments to arrive at Adjusted EBITA provides us with a more comparable measure for managing our business.
We also believe that it is a useful measure for securities analysts, investors, and other interested parties in the evaluation
of our Company.
A
reconciliation of net income (loss) to Adjusted EBITA is provided below.
|
|
Three Months Ended
|
|
Three Months Ended
|
|
|
September 30, 2017
|
|
September 30, 2016
|
|
|
(Unaudited)
|
|
(Unaudited)
|
Adjusted EBITA reconciliation:
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
|
375,138
|
|
|
|
(269,944
|
)
|
Stock-based compensation expense
|
|
|
0
|
|
|
|
12,991
|
|
Interest expense, net
|
|
|
156
|
|
|
|
19,605
|
|
Tax expense (benefit)
|
|
|
0
|
|
|
|
0
|
|
Adjusted EBITA
|
|
$
|
375,294
|
|
|
$
|
(250,339
|
)
|
ITEM
3. QUANTITATIVE & QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We
are a smaller reporting Company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required
under this item.
|
ITEM
4.
|
CONTROLS
AND PROCEDURES
|
Management
of the Company is responsible for maintaining disclosure controls and procedures that are designed to ensure that financial information
required to be disclosed in the reports that the Company files or submits under the Securities Exchange Act of 1934 (the “Exchange
Act”) is recorded, processed, summarized and reported within the timeframes specified in the Securities and Exchange Commission’s
rules and forms, consistent with Items 307 and 308 of Regulation S-K.
In
addition, the disclosure controls and procedures must ensure that such financial information is accumulated and communicated to
the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely
decisions regarding required financial and other required disclosures.
As
of September 30, 2017, an evaluation of the effectiveness of the Company’s disclosure controls and procedures (as defined
in Rules 13(a)-15(e) and 15(d)-15(e) of the Securities Exchange Act of 1934 (the “Exchange Act”) was carried out under
the supervision and with the participation of our Chief Executive Officer, Chief Financial Officer, and other persons carrying
out similar functions for the Company. Based on the evaluation of the Company’s disclosure controls and procedures, the
Company concluded that during the period covered by this report, such disclosure controls and procedures were not effective.
The
Company continues to employ and refine a structure in which critical accounting policies, issues and estimates are identified,
and together with other complex areas, are subject to multiple reviews by accounting personnel. In addition, the Company evaluates
and assesses its internal controls and procedures regarding its financial reporting, utilizing standards incorporating applicable
portions of the Public Company Accounting Oversight Board’s 2009 Guidance for Smaller Public Companies in Auditing Internal
Controls Over Financial Reporting as necessary and on an on-going basis.
Because
of its inherent limitations, internal control over financial reporting cannot provide absolute assurance of the prevention or
detection of misstatements. In addition, projections of any evaluation of effectiveness to future periods are subject to risk
that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures
may deteriorate.
Changes
in Internal Control over Financial Reporting
The
Company had no reportable changes to its internal controls over financial reporting for the period covered by this report.
The
Company will continually enhance and test its internal controls over financial reporting on a continuing basis. Additionally,
the Company’s management, under the control of its Chief Executive Officer and Chief Financial Officer, will increase its
review of its disclosure controls and procedures on an ongoing basis. Finally, the Company plans to designate, in conjunction
with its Chief Financial Officer, individuals responsible for identifying reportable developments and the process for resolving
compliance issues related to them. The Company believes these actions will focus necessary attention and resources in its internal
accounting functions.
PART
II—OTHER INFORMATION
|
ITEM
1.
|
LEGAL
PROCEEDINGS
|
On
July 31, 2017, the Company entered into a settlement agreement, mutual release of all claims and waiver of bond for lost certificate,
with Private Media Group, Inc. On May 23, 2014, Private Media Group, Inc. was issued 200,000 shares of common stock as consideration
for services rendered. Private Media Group, Inc. subsequently lost the stock certificate, and demanded the Company reissue the
common stock. The Company and Private Media Group, Inc. entered into a settlement agreement provided that in exchange for a complete
release of all claims regarding any and all compensation due to Private Media Group, Inc., Private Media Group, Inc. agreed to
return 100,000 shares to treasury, and the Company agreed to waive of bond for the lost certificate, and to reissue Private Media
Group, Inc. 100,000 common shares of common stock.
On
August 31, 2017, the Company entered into a settlement agreement and mutual release of all claims with Anthony Baroud. The Company
previously disclosed its participation in a private arbitration proceeding conducted by the American Arbitration Association,
in which both claims and counterclaims were asserted by the respective parties. The settlement agreement disposed of the arbitration
proceeding and all claims and counterclaims between the parties with prejudice. As consideration for the dismissal and mutual
release of all claims, the Company agreed to a stock compensation settlement equal to $110,000 consisting of an issuance of 100,000
shares of common stock to Mr. Baroud, valued for the purposes of the settlement agreement at $0.93 per share, for a total of $93,000,
and fully vested warrants to purchase up to fifty thousand (50,000) shares of common stock in a cashless transaction at an exercise
price determined by the closing price of the Company’s common stock on March 1, 2018. The warrants expire on March 1, 2018.
If the 50,000 shares issuable to Mr. Baroud pursuant to the Cashless Warrant Agreement does not equal $17,000 for a total of $110,000,
the Company agreed to issue Mr. Baroud restricted common stock, valued as of the closing price on March 1, 2018, to correct the
difference so that Baroud receives the equivalent of $110,000.00.
We
are a smaller reporting Company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required
under this item.
|
ITEM
2.
|
UNREGISTERED
SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
No
transactions meeting the reporting requirements of this item occurred during the periods covered by this report.
|
ITEM
3.
|
DEFAULTS
UPON SENIOR SECURITIES
|
No
senior securities were issued and outstanding during the three and nine months ended September 30, 2017 or 2016.
|
ITEM
5.
|
OTHER
INFORMATION
|
None.
This
list is intended to constitute the exhibit index.
|
10.1
|
Amended
and Restated Investment Agreement dated August 4, 2016 between the Company and Tangiers
Global, LLC.
|
|
10.2
|
Amended
and Restated Registration Rights Agreement dated August 4, 2016 between the Company and
Tangiers Global, LLC.
|
|
31.1
|
Certification
of Principal Executive Officer as required by Rule 13a-14 or 15d-14 of the Exchange Act,
as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
31.2
|
Certification
of Principal Financial Officer as required by Rule 13a-14 or 15d-14 of the Exchange Act,
as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
32.1
|
Certification
of Principal Executive Officer Pursuant to 18 U.S.C. 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.
|
|
32.2
|
Certification
of Principal Financial Officer Pursuant to 18 U.S.C. 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.
|
|
101.INS
|
XBRL
Instance Document*
|
|
101.SCH
|
XBRL
Taxonomy Extension Schema Document*
|
|
101.CAL
|
XBRL
Taxonomy Extension Calculation Linkbase Document*
|
|
101.DEF
|
XBRL
Taxonomy Extension Definition Linkbase Document*
|
|
101.LAB
|
XBRL
Taxonomy Extension Label Linkbase Document*
|
|
101.PRE
|
XBRL
Taxonomy Extension Presentation Linkbase Document*
|
*Pursuant
to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus
for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities and Exchange Act of 1934,
and otherwise are not subject to liability under those sections.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
American
Cannabis Company, Inc.
Date:
November 20, 2017
By:
/s/
Terry
Buffalo, Chief Executive Officer
(Principal
Executive Officer)
Date:
November 20, 2017
By:
/s/
J.
Michael Tuohey, Chief Financial Officer
(Principal
Financial Officer)
American Cannabis (QB) (USOTC:AMMJ)
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