WEED, INC.
(Formerly
United Mines, Inc.)
Notes
to Financial Statements
For the
Years Ended December 31, 2017 and 2016
Note 1 – Nature of Business and Significant Accounting
Policies
Nature of Business
WEED,
Inc. (the “Company”), (formerly United Mines, Inc.) was
incorporated under the laws of the State of Arizona on
August 20, 1999 (“Inception Date”) as Plae,
Inc. to engage in the exploration of gold and silver mining
properties. On November 26, 2014, the Company was renamed
from United Mines, Inc. to WEED, Inc. and was repurposed to pursue
a business involving the purchase of land, and building Commercial
Grade “Cultivation Centers” to consult, assist, manage
& lease to Licensed Dispensary owners and organic grow
operators on a contract basis, with a concentration on the legal
and medical marijuana sector. The Company’s plan is to become
a True “Seed-to-Sale” company providing infrastructure,
financial solutions and real estate options in this new emerging
market. The Company, under United Mines, was formerly in the
process of acquiring mineral properties or claims located in the
State of Arizona, USA. The name was previously changed on February
18, 2005 to King Mines, Inc. and then subsequently changed to
United Mines, Inc. on March 30, 2005. The Company trades
on the OTC Pink Sheets under the stock symbol: BUDZ.
On
April 20, 2017, the Company acquired Sangre AT, LLC, a Wyoming
company doing business as Sangre AgroTech. (“Sangre”).
Sangre is a plant genomic research and breeding company comprised
of top-echelon scientists with extensive expertise in genomic
sequencing, genetics-based breeding, plant tissue culture, and
plant biochemistry, utilizing the most advanced sequencing and
analytical technologies and proprietary bioinformatics data systems
available. Sangre is working on a cannabis genomic study to
complete a global genomic classification of the cannabis plant
genus.
The
accompanying financial statements have been prepared in conformity
with accounting principles generally accepted in the United States
of America. These statements reflect all adjustments, consisting of
normal recurring adjustments, which in the opinion of management
are necessary for fair presentation of the information contained
therein.
The
Company has a calendar year end for reporting
purposes.
Principles of Consolidation
The
accompanying consolidated financial statements include the accounts
of the following entities, all of which are under common control
and ownership:
|
|
State
of
|
|
|
|
Abbreviated
|
Name of
Entity
|
|
Incorporation
|
|
Relationship
(1)
|
|
Reference
|
WEED,
Inc.
|
|
Nevada
|
|
Parent
|
|
WEED
|
Sangre
AT, LLC
(2)
|
|
Wyoming
|
|
Subsidiary
|
|
Sangre
|
(1)
Sangre is a wholly-owned subsidiary of WEED,
Inc.
(2)
Sangre AT, LLC is doing business as Sangre
AgroTech.
The
consolidated financial statements herein contain the operations of
the wholly-owned subsidiary listed above. All significant
inter-company transactions have been eliminated in the preparation
of these financial statements. The parent company, WEED and
subsidiary, Sangre will be collectively referred to herein as the
“Company”, or “WEED”. The Company's
headquarters are located in Tucson, Arizona and its operations are
primarily within the United States, with minimal operations in
Australia.
These
statements reflect all adjustments, consisting of normal recurring
adjustments, which in the opinion of management are necessary for
fair presentation of the information contained
therein.
Use of Estimates
The
preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires
management to make estimates and assumptions that affect the
reported amounts of assets and liabilities, and the disclosure of
contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
Cash and Cash Equivalents
We
maintain cash balances in non-interest-bearing accounts, which do
not currently exceed federally insured limits. For the purpose of
the statements of cash flows, all highly liquid investments with an
original maturity of three months or less are considered to be cash
equivalents. There were no cash equivalents on hand for the periods
presented herein.
WEED, INC.
(Formerly
United Mines, Inc.)
Notes
to Financial Statements
For the
Years Ended December 31, 2017 and 2016
Fair
Value of Financial Instruments
Under
FASB ASC 820-10-05, the Financial Accounting Standards Board
establishes a framework for measuring fair value in generally
accepted accounting principles and expands disclosures about fair
value measurements. This Statement reaffirms that fair value is the
relevant measurement attribute. The adoption of this standard did
not have a material effect on the Company’s financial
statements as reflected herein. The carrying amounts of cash,
prepaid expenses and accrued expenses reported on the balance sheet
are estimated by management to approximate fair value primarily due
to the short term nature of the instruments.
Property and Equipment
Property
and equipment is stated at the lower of cost or estimated net
recoverable amount. The cost of property, plant and equipment is
depreciated using the straight-line method based on the lesser of
the estimated useful lives of the assets or the lease term based on
the following life expectancy:
Automobiles
|
5
years
|
Furniture
and fixtures
|
5
years
|
Office
equipment
|
5
years
|
Lab
equipment
|
5
years
|
Property
|
15
years
|
Repairs
and maintenance expenditures are charged to operations as incurred.
Major improvements and replacements, which extend the useful life
of an asset, are capitalized and depreciated over the remaining
estimated useful life of the asset. When assets are retired or
sold, the cost and related accumulated depreciation and
amortization are eliminated and any resulting gain or loss is
reflected in operations.
Impairment of Long-Lived Assets
Long-lived
assets held and used by the Company are reviewed for possible
impairment whenever events or circumstances indicate the carrying
amount of an asset may not be recoverable or is impaired.
Recoverability is assessed using undiscounted cash flows based upon
historical results and current projections of earnings before
interest and taxes. Impairment is measured using discounted cash
flows of future operating results based upon a rate that
corresponds to the cost of capital. Impairments are recognized in
operating results to the extent that carrying value exceeds
discounted cash flows of future operations.
Goodwill
The
Company evaluates the carrying value of goodwill during the fourth
quarter of each year and between annual evaluations if events occur
or circumstances change that would more likely than not reduce the
fair value of the reporting unit below its carrying amount. Such
circumstances could include, but are not limited to (1) a
significant adverse change in legal factors or in business climate,
(2) unanticipated competition, or (3) an adverse action or
assessment by a regulator. When evaluating whether goodwill is
impaired, the Company compares the fair value of the reporting unit
to which the goodwill is assigned to the reporting unit’s
carrying amount, including goodwill. The fair value of the
reporting unit is estimated using a combination of the income, or
discounted cash flows, approach and the market approach, which
utilizes comparable companies’ data. If the carrying amount
of a reporting unit exceeds its fair value, then the amount of the
impairment loss must be measured. The impairment loss would be
calculated by comparing the implied fair value of reporting unit
goodwill to its carrying amount. In calculating the implied fair
value of reporting unit goodwill, the fair value of the reporting
unit is allocated to all of the other assets and liabilities of
that unit based on their fair values. The excess of the fair value
of a reporting unit over the amount assigned to its other assets
and liabilities is the implied fair value of goodwill. An
impairment loss would be recognized when the carrying amount of
goodwill exceeds its implied fair value. The Company’s
evaluation of goodwill completed during 2017 resulted in an
impairment loss of $1,015,910.
Basic and Diluted Loss Per Share
The
basic net loss per common share is computed by dividing the net
loss by the weighted average number of common shares outstanding.
Diluted net loss per common share is computed by dividing the net
loss adjusted on an “as if converted” basis, by the
weighted average number of common shares outstanding plus potential
dilutive securities. For the periods presented, potential dilutive
securities had an anti-dilutive effect and were not included in the
calculation of diluted net loss per common share.
WEED, INC.
(Formerly
United Mines, Inc.)
Notes
to Financial Statements
For the
Years Ended December 31, 2017 and 2016
Stock-Based
Compensation
Under
FASB ASC 718-10-30-2, all share-based payments to employees,
including grants of employee stock options, to be recognized in the
income statement based on their fair values. Pro forma disclosure
is no longer an alternative. The Company’s stock based
compensation consisted of the following during the years ended
December 31, 2017 and 2016,
respectively:
|
|
|
|
|
|
|
|
|
Common stock issued
for down payment on land purchase
|
$
-
|
$
42,500
|
Common stock issued
for services, related parties
|
364,750
|
3,600,000
|
Common stock issued
for services
|
1,144,399
|
377,812
|
Total stock based
compensation
|
$
1,509,149
|
$
4,020,312
|
Revenue Recognition
Sales on fixed price contracts are recorded when services are
earned, the earnings process is complete or substantially complete,
and the revenue is measurable and collectability is reasonably
assured. Provisions for discounts and rebates to customers,
estimated returns and allowances, and other adjustments are
provided for in the same period the related sales are recorded. The
Company will defer any revenue from sales in which payment has been
received, but the earnings process has not occurred. Sales have not
yet commenced on the MMJ business. The Company also did not
recognize revenues from its previous mining operations during the
periods presented herein.
Advertising and Promotion
All
costs associated with advertising and promoting products are
expensed as incurred. These expenses were $4,139 and $-0- for the
years ended December 31, 2017 and 2016,
respectively.
Income Taxes
Deferred
tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and
their respective tax bases. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are
expected to be recovered or settled. A valuation allowance is
provided for significant deferred tax assets when it is more likely
than not, that such asset will not be recovered through future
operations.
Uncertain Tax Positions
In
accordance with ASC 740, “Income Taxes” (“ASC
740”), the Company recognizes the tax benefit from an
uncertain tax position only if it is more likely than not that the
tax position will be capable of withstanding examination by the
taxing authorities based on the technical merits of the position.
These standards prescribe a recognition threshold and measurement
attribute for the financial statement recognition and measurement
of a tax position taken or expected to be taken in a tax return.
These standards also provide guidance on de-recognition,
classification, interest and penalties, accounting in interim
periods, disclosure, and transition.
Various
taxing authorities periodically audit the Company’s income
tax returns. These audits include questions regarding the
Company’s tax filing positions, including the timing and
amount of deductions and the allocation of income to various tax
jurisdictions. In evaluating the exposures connected with these
various tax filing positions, including state and local taxes, the
Company records allowances for probable exposures. A number of
years may elapse before a particular matter, for which an allowance
has been established, is audited and fully resolved. The Company
has not yet undergone an examination by any taxing
authorities.
The
assessment of the Company’s tax position relies on the
judgment of management to estimate the exposures associated with
the Company’s various filing positions.
WEED, INC.
(Formerly
United Mines, Inc.)
Notes
to Financial Statements
For the
Years Ended December 31, 2017 and 2016
Recently
Issued Accounting Pronouncements
In May
2017, the Financial Accounting Standards Board (“FASB”)
issued Accounting Standard Update (“ASU”)
No. 2017-09
,
Compensation — Stock Compensation (Topic
718): Scope of Modification Accounting.
ASU 2017-09, which
provides guidance about which changes to the terms or conditions of
a share-based payment award require an entity to apply modification
accounting in Topic 718.
Per ASU
2017-09, a
n entity should account for the effects of a
modification unless all the following are met: (1) the fair value
(or calculated value or intrinsic value, if such an alternative
measurement method is used) of the modified award is the same as
the fair value (or calculated value or intrinsic value, if such an
alternative measurement method is used) of the original award
immediately before the original award is modified. If the
modification does not affect any of the inputs to the valuation
technique that the entity uses to value the award, the entity is
not required to estimate the value immediately before and after the
modification, (2) the vesting conditions of the modified award are
the same as the vesting conditions of the original award
immediately before the original award is modified, and (3) the
classification of the modified award as an equity instrument or a
liability instrument is the same as the classification of the
original award immediately before the original award is modified.
The current disclosure requirements in Topic 718 apply regardless
of whether an entity is required to apply modification accounting
under the amendments in ASU 2017-9.
ASU 2017-9 is effective for public business
entities for annual and interim periods in fiscal years beginning
after December 15, 2017.
Early adoption is permitted,
including adoption in any interim period, for (1) public business
entities for reporting periods for which financial statements have
not yet been issued and (2) all other entities for reporting
periods for which financial statements have not yet been made
available for issuance. The amendments in this ASU should be
applied prospectively to an award modified on or after the adoption
date. The adoption of
ASU
2017-09
is not expected to have a material impact on the
Company’s financial statements or related
disclosures.
In
March 2017, the FASB issued ASU No. 2017-07,
Compensation - Retirement Benefits (Topic
715): Improving the Presentation of Net Periodic Pension Cost and
Net Periodic Postretirement Benefit Cost
. This ASU requires
that an employer report the service cost component in the same line
item or items as other compensation costs arising from services
rendered by the pertinent employees during the period. The other
components of net benefit cost, which include interest cost and
prior service cost or credit, among others, are required to be
presented in the income statement separately from the service cost
component and outside a subtotal of income from operations, if one
is presented. This ASU is effective for the Company’s fiscal
year 2018, including interim periods. The Company is currently
evaluating the effects that the adoption of this ASU will have on
its consolidated financial statements. The adoption of
ASU 2017-07
is not expected to have a
material impact on the Company’s financial statements or
related disclosures.
In
January 2017, the FASB issued ASU 2017-04,
Intangibles – Goodwill and Other (Topic
350)
. ASU 2017-04 simplifies the subsequent measurement of
goodwill by removing the second step of the two-step impairment
test. The amendment requires an entity to perform its annual, or
interim goodwill impairment test by comparing the fair value of a
reporting unit with its carrying amount. An impairment charge
should be recognized for the amount by which the carrying amount
exceeds the reporting unit's fair value; however, the loss
recognized should not exceed the total amount of goodwill allocated
to that reporting unit. An entity still has the option to perform
the qualitative assessment for a reporting unit to determine if the
quantitative impairment test is necessary. The amendment should be
applied on a prospective basis. ASU 2017-04 is effective for fiscal
years beginning after December 15, 2019, including interim periods
within those fiscal years. Early adoption is permitted for interim
or annual goodwill impairment tests performed on testing dates
after January 1, 2017. The adoption of
ASU 2017-04
is not expected to have a
material impact on the Company’s financial statements or
related disclosures.
In
January 2017, the FASB issued ASU 2017-01,
Business Combinations (Topic 805): Clarifying
the Definition of a Business
, which clarifies the definition
of a business to assist entities with evaluating whether
transactions should be accounted for as acquisitions (or disposals)
of assets or businesses. The standard will be effective for the
Company in the first quarter of 2018. Early adoption is permitted.
The adoption of
ASU 2017-01
is not expected to have a material impact on the Company’s
financial statements or related disclosures.
In May
2014 the FASB issued ASU No. 2014-09,
Revenue from Contracts with Customers
.
Since ASU 2014-09 was issued, several additional ASUs have been
issued to clarify various elements of the guidance. These standards
provide guidance on recognizing revenue, including a five-step
model to determine when revenue recognition is appropriate. The
standard requires that an entity recognize revenue to depict the
transfer of control of promised goods or services to customers in
an amount that reflects the consideration to which the entity
expects to be entitled in exchange for those goods or services.
Adoption of the new standard is effective for reporting periods
beginning after December 15, 2017. We plan to use the modified
retrospective method of adoption and will adopt the standard as of
January 1, 2018, the beginning of our next fiscal year. We have
completed an initial evaluation of the potential impact from
adopting the new standard, including a detailed review of
performance obligations for all material revenue streams. Based on
this initial evaluation, we do not expect adoption will have a
material impact on our financial position, results of operations,
or cash flows. Related disclosures will be expanded in line with
the requirements of the standard. The adoption of
ASU 2014-09
is not expected to have a
material impact on the Company’s financial statements or
related disclosures.
WEED, INC.
(Formerly
United Mines, Inc.)
Notes
to Financial Statements
For the
Years Ended December 31, 2017 and 2016
No
other new accounting pronouncements, issued or effective during the
year ended December 31, 2017, have had or are expected to have
a significant impact on the Company’s financial
statements.
Note 2 – Going Concern
As
shown in the accompanying financial statements, the Company has no
revenues, incurred net losses from operations resulting in an
accumulated deficit of $19,081,288, and had negative working
capital of $753,951 at December 31, 2017. These factors
raise substantial doubt about the Company’s ability to
continue as a going concern. Management is actively pursuing new
products and services to begin generating revenues. In addition,
the Company is currently seeking additional sources of capital to
fund short term operations. The Company, however, is dependent upon
its ability to secure equity and/or debt financing and there are no
assurances that the Company will be successful; therefore, without
sufficient financing it would be unlikely for the Company to
continue as a going concern.
The
financial statements do not include any adjustments that might
result from the outcome of any uncertainty as to the
Company’s ability to continue as a going concern. The
financial statements also do not include any adjustments relating
to the recoverability and classification of recorded asset amounts,
or amounts and classifications of liabilities that might be
necessary should the Company be unable to continue as a going
concern.
Note 3 – Business Combination
Business Combination – Sangre AT, LLC, April 20,
2017
On
April 20, 2017, the Company closed on a Share Exchange Agreement
(“SEA”) with Sangre AT, LLC, a Wyoming company doing
business as Sangre AgroTech. Pursuant to the SEA, we purchased all
of the outstanding membership interests in consideration for an a
total of 500,000 shares of common stock to seven individuals,
valued at $1,003,850 based on the closing price of the
Company’s common stock on the date of grant.
Sangre
is a plant genomic research and breeding company comprised of
top-echelon scientists with extensive expertise in genomic
sequencing, genetics-based breeding, plant tissue culture, and
plant biochemistry, utilizing the most advanced sequencing and
analytical technologies and proprietary bioinformatics data systems
available. Sangre is working on a cannabis genomic study to
complete a global genomic classification of the cannabis plant
genus.
In
connection with the SEA, two members of Sangre and the Company
entered into Consulting Agreements, pursuant to which the members
of Sangre agreed to provide consulting services to the Company for
a period of one year following closing, with the option to extend
for a two year period in annual increments, upon mutual written
agreement by both parties. Pursuant to the agreement, the members
were each awarded 50,000 shares of common stock with the issuances
deferred until January 1, 2018.
This
acquisition was accounted for as a business combination under the
purchase method of accounting, given that substantially all of the
Company’s assets and ongoing operations were acquired. The
purchase resulted in $1,015,910 of goodwill, which was subsequently
impaired and expensed in the current period. According to the
purchase method of accounting, the Company recognized the
identifiable assets acquired and liabilities assumed as
follows:
|
|
|
|
Consideration:
|
|
Fair value of
common stock paid at closing
(1)
|
$
1,003,850
|
Short term
liabilities assumed
(2)
|
25,929
|
Fair
value of total consideration exchanged
|
$
1,029,779
|
|
|
Fair
value of identifiable assets acquired assumed:
|
|
Cash
|
$
54
|
Fixed
assets
|
13,815
|
Total fair value of
assets assumed
|
13,869
|
Consideration paid in excess of fair value
(Goodwill)
(3)
|
$
1,015,910
|
|
(1)
Consideration consisted of 500,000 shares of the
Company’s common stock valued at $1,003,850 based on the
closing price of the Company’s common stock on the date of
grant.
|
|
|
(2)
Assumed liabilities consisted of trade payables and
outstanding credit card debt.
|
|
|
(3)
The consideration paid in excess of the net fair value of
assets acquired and liabilities assumed has been recognized as
goodwill and was expensed due to economic uncertainties and the
absence of a revenue stream.
|
WEED, INC.
(Formerly
United Mines, Inc.)
Notes
to Financial Statements
For the
Years Ended December 31, 2017 and 2016
Management
believes the intangible assets acquired, consisting of the
personnel of Sangre, will enable the Company to launch their
business model and take advantage of additional growth
opportunities.
The
unaudited supplemental pro forma results of operations of the
combined entities had the dates of the acquisitions been January 1,
2017 are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue:
|
$
-
|
$
-
|
|
|
|
Expenses:
|
|
|
Operating
expenses
|
582,180
|
2,396,462
|
|
|
|
Net operating
loss
|
(582,180
)
|
(2,396,462
)
|
|
|
|
Other income
(expense)
|
(7,052
)
|
(1,097,758
)
|
|
|
|
Net
loss
|
$
(589,232
)
|
$
(3,494,220
)
|
|
|
|
Weighted average
number of common shares
|
|
|
Outstanding –
basic and fully diluted
|
100,711,076
|
101,364,930
|
|
|
|
Net loss per share
– basic and fully diluted
|
$
(0.01
)
|
$
(0.03
)
|
Note 4 – Related Party
Notes Payable
From
time to time, the Company has received short term loans from
officers and directors as disclosed in Note 10 below.
Capital Contributions
The
Company imputed interest on non-interest bearing, related party
loans, resulting in a total of $421 and $583 of contributed capital
during the years ended December 31, 2017 and 2016,
respectively.
Common Stock Issued for Bartered Assets
On
January 18, 2017, the Company exchanged 66,000 units, consisting of
66,000 shares of common stock and warrants to purchase 66,000
shares of common stock at an exercise price of $3.00 per share,
exercisable until January 18, 2018, in exchange for a
2017 Audi Q7 and a 2017 Audi A4 driven by the
Officers. The total fair value received, based on the market price
of the stock at $4.02 per share, was allocated to the $105,132
purchase price of the vehicles and the $160,188 excess value of the
common stock and warrants was expensed as stock based
compensation.
Common Stock
On
August 1, 2017, the Company granted 150,000 shares of common stock
to Mary Williams, a principal of Sangre AT, LLC, for services
performed. The fair value of the common stock was $154,500 based on
the closing price of the Company’s common stock on the date
of grant.
On
January 7, 2017, the Company granted 50,000 shares of common stock
to Pat Williams. PhD, a principal of Sangre AT, LLC, for services
performed. The total fair value of the common stock was $210,250
based on the closing price of the Company’s common stock on
the date of grant.
On
October 1, 2016, the Company granted 7,000,000 shares of common
stock to our CEO, Glenn E. Martin, as a bonus for services
performed pursuant to an amended employment agreement. The total
fair value of the common stock was $700,000 based on the closing
price of the Company’s common stock on the date of
grant.
WEED, INC.
(Formerly
United Mines, Inc.)
Notes
to Financial Statements
For the
Years Ended December 31, 2017 and 2016
In
addition, on October 1, 2016, the Company granted a total of
14,000,000 shares of common stock to Mr. Martin for services
performed pursuant to his previous employment agreement. The total
fair value of the common stock was $1,400,000 based on the closing
price of the Company’s common stock on the date of
grant.
On
October 1, 2016, the Company granted 4,000,000 shares of common
stock to a related party as a bonus for services performed pursuant
to an amended employment agreement. The total fair value of the
common stock was $400,000 based on the closing price of the
Company’s common stock on the date of grant.
In
addition, on October 1, 2016, the Company granted a total of
8,000,000 shares of common stock to a related party for services
performed pursuant to their previous employment agreement. The
total fair value of the common stock was $800,000 based on the
closing price of the Company’s common stock on the date of
grant.
On
October 1, 2016, the Company granted 1,000,000 shares of common
stock to a related party as a bonus for services performed pursuant
to an amended employment agreement. The total fair value of the
common stock was $100,000 based on the closing price of the
Company’s common stock on the date of grant.
In
addition, on October 1, 2016, the Company granted a total of
2,000,000 shares of common stock to a related party for services
performed pursuant to their previous employment agreement. The
total fair value of the common stock was $200,000 based on the
closing price of the Company’s common stock on the date of
grant.
A total
of $179,331 and $157,505 of officer compensation was unpaid and
outstanding at December 31, 2017 and 2016,
respectively.
Note 5 – Fair Value of Financial Instruments
Under
FASB ASC 820-10-5, fair value is defined as the price that would be
received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement
date (an exit price). The standard outlines a valuation framework
and creates a fair value hierarchy in order to increase the
consistency and comparability of fair value measurements and the
related disclosures. Under GAAP, certain assets and liabilities
must be measured at fair value, and FASB ASC 820-10-50 details the
disclosures that are required for items measured at fair
value.
The
Company has certain financial instruments that must be measured
under the new fair value standard. The Company’s financial
assets and liabilities are measured using inputs from the three
levels of the fair value hierarchy. The three levels are as
follows:
Level 1
- Inputs are unadjusted quoted prices in active markets for
identical assets or liabilities that the Company has the ability to
access at the measurement date.
Level 2
- Inputs include quoted prices for similar assets and liabilities
in active markets, quoted prices for identical or similar assets or
liabilities in markets that are not active, inputs other than
quoted prices that are observable for the asset or liability (e.g.,
interest rates, yield curves, etc.), and inputs that are derived
principally from or corroborated by observable market data by
correlation or other means (market corroborated
inputs).
Level 3
- Unobservable inputs that reflect our assumptions about the
assumptions that market participants would use in pricing the asset
or liability.
WEED, INC.
(Formerly
United Mines, Inc.)
Notes
to Financial Statements
For the
Years Ended December 31, 2017 and 2016
The
following schedule summarizes the valuation of financial
instruments at fair value on a recurring basis in the balance
sheets as of December 31, 2017 and 2016, respectively:
|
Fair
Value Measurements at December 31, 2017
|
|
|
|
|
Assets
|
|
|
|
Cash
|
$
161,178
|
$
-
|
$
-
|
Total
assets
|
161,178
|
-
|
-
|
Liabilities
|
|
|
|
Notes payable,
related parties
|
-
|
49,000
|
-
|
Notes
payable
|
-
|
475,000
|
-
|
Total
liabilities
|
-
|
524,000
|
-
|
|
$
161,178
|
$
(524,000
)
|
$
-
|
|
Fair
Value Measurements at December 31, 2016
|
|
|
|
|
Assets
|
|
|
|
Cash
|
$
231
|
$
-
|
$
-
|
Total
assets
|
231
|
-
|
-
|
Liabilities
|
|
|
|
Convertible notes
payable
|
-
|
35,000
|
-
|
Notes payable,
related parties
|
-
|
16,300
|
-
|
Total
liabilities
|
-
|
51,300
|
-
|
|
$
231
|
$
(51,300
)
|
$
-
|
The
fair values of our related party debts are deemed to approximate
book value, and are considered Level 2 inputs as defined by
ASC Topic 820-10-35.
There
were no transfers of financial assets or liabilities between Level
1, Level 2 and Level 3 inputs for the years ended
December 31, 2017 or the year ended December 31,
2016.
Note 6 – Prepaid Expenses
Prepaid
expenses consisted of the following as of December 31, 2017 and
2016, respectively:
|
|
|
|
|
|
Annual license
fees
|
$
2,733
|
$
3,400
|
Prepaid
professional services
|
21,766
|
-
|
Prepaid
insurance
|
3,848
|
-
|
Annual mining claim
fees
|
1,653
|
1,653
|
Down payment on
purchase of property
|
3,000
|
-
|
|
$
32,999
|
$
5,053
|
WEED, INC.
(Formerly
United Mines, Inc.)
Notes
to Financial Statements
For the
Years Ended December 31, 2017 and 2016
Note 7 – Investment in Land and Property
On July
26, 2017, the Company closed on the purchase of property,
consisting of a home, recreational facility and RV park located at
5535 State Highway 12 in La Veta, Colorado to be developed into a
bioscience center. The home has 4 Bedrooms and 2 Baths, and the
recreational facility has showers, laundry, and reception area with
an additional equipment barn attached, in addition to another
facility with 9,500 square feet. The RV Park has 24 sites with full
hook-ups including water, sewer, and electric, which the Company
plans to convert into a series of small research pods.
Under the terms of the purchase agreement, the Company paid
$525,000 down, including 25,000 shares of our common stock, and
Sangre took immediate possession of the property. Under the terms
of the original purchase agreement, the Company was obligated to
pay an additional $400,000 in cash and issue an additional 75,000
shares of our common stock over the next two years in order to pay
the entire purchase price. On January 12, 2018, the Company entered
into an Amendment No. 1 to the $475,000 principal amount promissory
note issued by the Company to the seller of the property, under
which both parties agreed to amend the purchase and the promissory
note to allow the Company to payoff the note in full if it paid
$100,000 in cash on or before January 15, 2018 and issued the
seller 125,000 shares of common stock, restricted in accordance
with Rule 144, on before January 20, 2018. Through an escrow
process, the Company paid the seller $100,000 in cash and issued
him 125,000 shares of common stock in accordance with the Amendment
No. 1, in exchange for a full release of the deed of trust that was
securing the promissory note, on January 17, 2018. As a result, the
$475,000 principal promissory note issued to the seller was deemed
paid-in-full and fully satisfied and the Company owned the property
without encumbrances as of that date. T
he total purchase
price was as follows:
|
|
|
|
Consideration:
|
|
Common stock
payment of 25,000 shares
(1)
|
$
30,000
|
Cash payment of
down payment
|
50,000
|
Cash paid at
closing
|
444,640
|
Short term
liabilities assumed and paid at closing
(2)
|
5,360
|
Note
payable
(3)
|
475,000
|
Total
purchase price
|
$
1,005,000
|
|
(1)
Consideration consisted of an advance payment of 25,000
shares of the Company’s common stock valued at $30,000 based
on the closing price of the Company’s common stock on the
July 18, 2017 date of grant.
|
|
|
(2)
Purchaser’s shares of closing costs, including the
seller’s prepaid property taxes.
|
|
|
(3)
As disclosed in Note 11, the seller financed $475,000
with a promissory note bearing interest at 5%, payable in four
consecutive semi-annual installments in the amount of $118,750 plus
accrued interest commencing on January 26, 2018 and continuing on
the 26th day of July and the 26th day of January each year until
the debt is repaid on July 26, 2019. The note carries a late fee of
$5,937.50 in the event any installment payment is more than 30 days
late, and upon default the interest rate shall increase to 12% per
annum.
|
Note 8 – Property and Equipment
Property
and equipment consist of the following at December 31, 2017 and
2016, respectively:
|
|
|
|
|
|
Property
improvements
|
$
28,934
|
$
-
|
Automobiles
|
105,132
|
-
|
Office
equipment
|
4,934
|
650
|
Lab
equipment
|
15,202
|
-
|
Property
|
891,250
|
-
|
|
1,045,452
|
650
|
Less accumulated
depreciation
|
(45,040
)
|
(386
)
|
|
$
1,000,412
|
$
264
|
Non-depreciable
land with an appraised value of $113,750 was acquired with the La
Veta property on July 26, 2017.
Depreciation
and amortization expense totaled $44,654 and $130 for the years
ended December 31, 2017 and 2016, respectively.
WEED, INC.
(Formerly
United Mines, Inc.)
Notes
to Financial Statements
For the
Years Ended December 31, 2017 and 2016
Note
9 – Convertible Notes Payable
Convertible
notes payable consist of the following at December 31, 2017 and
2016, respectively:
|
|
|
|
|
|
|
|
|
On December 7,
2007, the Company issued a 10% note payable to the Lebrecht Group,
PC (“Lebrecht Note”) for services rendered related to
the registration of certain securities of the Company. The note and
accrued interest were due December 7, 2008 and at the option of the
holder payable in full on the maturity date or in 12 monthly
payments beginning on the maturity date. The note and accrued
interest are convertible to common shares at any time at the option
of the holder at 75% of the average closing bid price on the five
trading days immediately preceding the conversion. Management
estimates, at this time, that 1,650,000 shares may be issued if
this conversion feature is exercised. In accordance with generally
accepted accounting principles, the 25% discount to market related
to the beneficial conversion feature has been reported as a
component of additional paid in capital. Additionally, since this
represents a prepayment for services related to a future public
offering, management had elected to offset the cost to future
capital raised as a result of the offering, if any. Furthermore,
the Company confirmed and agreed with Lebrecht Law Group, PC that
they would not force the Company to settle in shares of common
stock in the event there are not enough authorized shares at time
of conversion.
|
$
-
|
$
35,000
|
The
Company recognized interest expense of $1,759 and $3,500 related to
the convertible debts for the years ended
December 31, 2017 and 2016, respectively.
On June
16, 2017, the note was assigned to another party and the debt,
consisting of $35,000 of principal and $33,250 of interest, was
exchanged for 70,000 shares of common stock and warrants to acquire
70,000 more shares at $3 per share over the following twelve
months. The securities exchanged were valued at $136,233 based on
the closing price of the Company’s common stock on the date
of exchange, resulting in a loss on extinguishment of
$67,983.
WEED, INC.
(Formerly
United Mines, Inc.)
Notes
to Financial Statements
For the
Years Ended December 31, 2017 and 2016
Note 10 – Notes Payable, Related Parties
Notes
payable, related parties consist of the following at
December 31, 2017 and 2016,
respectively:
|
|
|
|
|
|
|
|
|
On various dates, the
Company received advances from the Company’s CEO, Glenn
Martin. Mr. Martin owns approximately 56% of our common stock. The
unsecured non-interest bearing loans were due on demand. A detailed
list of advances and repayments follows:
|
|
|
|
|
|
|
|
|
March 14,
2016
|
$
10,000
|
March 15,
2016
|
$
(6,000
)
|
|
|
April 18,
2016
|
1,800
|
October 20,
2016
|
(3,000
)
|
|
|
June 16,
2016
|
1,100
|
October 27,
2016
|
(3,000
)
|
|
|
February 13,
2017
|
8,000
|
November 3,
2016
|
(900
)
|
|
|
March 10,
2017
|
1,000
|
March 23,
2017
|
(3,813
)
|
|
|
|
|
March 27,
2017
|
(360
)
|
|
|
|
|
July 3,
2017
|
(4,826
)
|
|
|
|
$
21,900
|
|
$
(21,900
)
|
$
-
|
$
-
|
|
|
|
On
December 29, 2017, the Company received an unsecured loan, bearing
interest at 2% in the amount of $37,000, due on demand from Dr. Pat
Williams, PhD. The largest aggregate amount outstanding was $37,000
during the periods ended December 31, 2017 and December 31, 2016.
Mr. Williams is a founding member and principal of our wholly-owned
subsidiary, Sangre AT, LLC
|
37,000
|
-
|
|
|
|
On
August 23, 2016, the Company received an unsecured, non-interest
bearing loan in the amount of $3,000, due on demand from Wendy
Seabre, bearing interest at 10% per annum. Repaid on June 15, 2017.
The largest aggregate amount outstanding was $3,000 during the
periods ended September 30, 2017 and December 31, 2016. Mrs. Seabre
is the wife of Mr. Roger Seabre, who owns approximately 2% of our
common stock and has been a significant investor
recently.
|
-
|
3,000
|
|
|
|
On
January 21, 2015, the Company received an unsecured loan in the
amount of $1,300, due on demand from Wendy Seabre, bearing interest
at 10% per annum. Repaid on June 15, 2017. The largest aggregate
amount outstanding was $1,300 during the periods ended September
30, 2017 and December 31, 2016. Mrs. Seabre is the wife of Mr.
Roger Seabre, who owns approximately 2% of our common stock and has
been a significant investor recently.
|
-
|
1,300
|
|
|
|
On
April 12, 2010, the Company received an unsecured, non-interest
bearing loan in the amount of $2,000, due on demand from Robert
Leitzman. Interest is being imputed at the Company’s
estimated borrowing rate, or 10% per annum. The largest aggregate
amount outstanding was $2,000 during the periods ended September
30, 2017 and December 31, 2016. Mr. Leitzman owns less than 1% of
the Company’s common stock, however, the Mr. Leitzman is
deemed to be a related party given the non-interest bearing nature
of the loan and the materiality of the debt at the time of
origination.
|
2,000
|
2,000
|
|
|
|
Over
various dates in 2011 and 2012, the Company received unsecured
loans in the aggregate amount of $10,000, due on demand, bearing
interest at 10%, from Sandra Orman. The largest aggregate amount
outstanding was $10,000 during the periods ended September 30, 2017
and December 31, 2016. Mrs. Orman owns less than 1% of the
Company’s common stock, however, Mrs. Orman is deemed to be a
related party given the nature of the loan and the materiality of
the debt at the time of origination.
|
10,000
|
10,000
|
|
|
|
Notes
payable, related parties
|
$
49,000
|
$
16,300
|
WEED, INC.
(Formerly
United Mines, Inc.)
Notes
to Financial Statements
For the
Years Ended December 31, 2017 and 2016
The
Company recorded interest expense in the amount of $1,059 and
$1,821 for the years ended December 31, 2017 and 2016,
respectively, including imputed interest expense in the amount of
$421 and $583 for the years ended December 31, 2017 and
2016, respectively related to notes payable, related
parties.
Note 11 – Note Payable
Note
payable consist of the following at December 31, 2017 and 2016,
respectively:
|
|
|
|
|
|
|
|
|
On July 26, 2017,
the Company issued a $475,000 note payable, bearing interest at 5%
per annum, to A.R. Miller (“Miller Note”) pursuant to
the purchase of land and property in La Veta, Colorado. The note is
to be paid in four consecutive semi-annual installments in the
amount of $118,750 plus accrued interest commencing on January 26,
2018 and continuing on the 26th day of July and the 26th day of
January each year until the debt is repaid on July 26, 2019. The
note carries a late fee of $5,937.50 in the event any installment
payment is more than 30 days late, and upon default the interest
rate shall increase to 12% per annum.
|
$
475,000
|
$
-
|
The
Company recognized interest expense of $10,281 and $-0- related to
the note payable for the years ended December 31, 2017
and 2016, respectively.
Note 12 – Commitments and Contingencies
On
November 8, 2016, the Company entered into an agreement with
Gregory DiPaolo’s Pro Am Golf, LLC to acquire improved
property located in Westfield, New York. The total purchase price
of $1,600,000 is to be paid with a deposit of 50,000 shares of
common stock, followed by cash of $1,250,000 and 300,000 shares of
the Company’s common stock to be delivered at closing. The
deposit of 50,000 shares issued as a deposit was $42,500 based on
the closing price of the Company’s common stock on the date
of grant. Subsequently, we entered into an amended Purchase and
Sale Agreement on October 24, 2017, under which we amended the
total purchase price to Eight Hundred Thousand Dollars ($800,000)
and forfeited our previous deposit of stock. Under the terms of the
amended agreement, we paid an additional Ten Thousand Dollar
($10,000) deposit on October 26, 2017, with the remaining purchase
price to be paid on or before the date closing date, which is
scheduled for February 1, 2018. The property is approximately 43
acres and has unlimited water extraction rights from the State of
New York. We plan to use this property as our inroads to the New
York hemp and infused beverage markets in the future. There are no
current plans or budget to proceed with operations in New York, and
there will not be until proper funding is secured after acquiring
this property.
Note 13 – Stockholders’ Equity
Preferred Stock
On
December 5, 2014, the Company amended the Articles of
Incorporation, pursuant to which 20,000,000 shares of “blank
check” preferred stock with a par value of $0.001 were
authorized. No series of preferred stock has been designated to
date.
Common Stock
On
December 5, 2014, the Company amended the Articles of
Incorporation, and increased the authorized shares to 200,000,000
shares of $0.001 par value common stock.
Common Stock Sales (2017)
On November 10, 2017, the Company sold 125,000 units at $1.00 per
unit, consisting of 125,000 shares of common stock and warrants to
purchase 125,000 shares of common stock at an exercise price of
$3.00 per share, exercisable until November 10, 2019, in exchange
for total proceeds of $125,000.
The proceeds received were allocated between the
common stock and warrants on a relative fair value
basis.
On October 24, 2017, the Company sold 13,333 units at $0.75 per
unit, consisting of 13,333 shares of common stock and warrants to
purchase 13,333 shares of common stock at an exercise price of
$3.00 per share, exercisable until October 24, 2019, in exchange
for total proceeds of $10,000.
The proceeds received were
allocated between the common stock and warrants on a relative fair
value basis.
WEED, INC.
(Formerly
United Mines, Inc.)
Notes
to Financial Statements
For the
Years Ended December 31, 2017 and 2016
On
September 29, 2017, the Company sold 300,000 units at $0.50 per
unit, consisting of 300,000 shares of common stock and warrants to
purchase 300,000 shares of common stock at an exercise price of
$3.00 per share, exercisable until September 29, 2019, in exchange
for total proceeds of $150,000. The proceeds received were
allocated between the common stock and warrants on a relative fair
value basis.
On
September 24, 2017, the Company sold 133,000 units at $0.7519 per
unit, consisting of 133,000 shares of common stock and warrants to
purchase 133,000 shares of common stock at an exercise price of
$3.00 per share, exercisable until September 24, 2019, in exchange
for total proceeds of $100,000. The proceeds received were
allocated between the common stock and warrants on a relative fair
value basis.
On
September 5, 2017, the Company sold 40,000 units at $0.50 per unit,
consisting of 40,000 shares of common stock and warrants to
purchase 40,000 shares of common stock at an exercise price of
$3.00 per share, exercisable until September 5, 2019, in exchange
for total proceeds of $20,000. The proceeds received were allocated
between the common stock and warrants on a relative fair value
basis.
On
August 2, 2017, the Company sold 100,000 units at $0.50 per unit,
consisting of 100,000 shares of common stock and warrants to
purchase 100,000 shares of common stock at an exercise price of
$3.00 per share, exercisable until August 2, 2019, in exchange for
total proceeds of $50,000. The proceeds received were allocated
between the common stock and warrants on a relative fair value
basis.
On July
7, 2017, the Company sold 200,000 units at $0.50 per unit,
consisting of 200,000 shares of common stock and warrants to
purchase 200,000 shares of common stock at an exercise price of
$3.00 per share, exercisable until July 7, 2019, in exchange for
total proceeds of $100,000. The proceeds received were allocated
between the common stock and warrants on a relative fair value
basis.
On May
31, 2017, the Company sold 20,000 units at $0.50 per unit,
consisting of 20,000 shares of common stock and warrants to
purchase 20,000 shares of common stock at an exercise price of
$3.00 per share, exercisable until May 31, 2019, in exchange for
total proceeds of $10,000. The proceeds received were allocated
between the common stock and warrants on a relative fair value
basis.
On May
31, 2017, the Company sold 300,000 units at $0.50 per unit,
consisting of 300,000 shares of common stock and warrants to
purchase 150,000 shares of common stock at an exercise price of
$3.00 per share, exercisable until May 31, 2019, in exchange for
total proceeds of $150,000. The proceeds received were allocated
between the common stock and warrants on a relative fair value
basis.
On May
25, 2017, the Company sold 20,000 units at $0.50 per unit,
consisting of 20,000 shares of common stock and warrants to
purchase 20,000 shares of common stock at an exercise price of
$3.00 per share, exercisable until May 25, 2019, in exchange for
total proceeds of $10,000. The proceeds received were allocated
between the common stock and warrants on a relative fair value
basis.
On May
25, 2017, the Company sold 20,000 units at $0.50 per unit,
consisting of 100,000 shares of common stock and warrants to
purchase 100,000 shares of common stock at an exercise price of
$3.00 per share, exercisable until May 25, 2019, in exchange for
total proceeds of $50,000. The proceeds received were allocated
between the common stock and warrants on a relative fair value
basis.
On
April 20, 2017, the Company sold 500,000 units at $1.00 per unit,
consisting of 500,000 shares of common stock and warrants to
purchase 500,000 shares of common stock at an exercise price of
$3.00 per share, exercisable until April 20, 2018, in exchange for
total proceeds of $500,000. The proceeds received were allocated
between the common stock and warrants on a relative fair value
basis.
On
January 23, 2017, the Company sold 2,000 units at $2.00 per unit,
consisting of 2,000 shares of common stock and warrants to purchase
2,000 shares of common stock at an exercise price of $3.00 per
share, exercisable until January 23, 2018, in exchange for total
proceeds of $4,000. The proceeds received were allocated between
the common stock and warrants on a relative fair value
basis.
On
January 9, 2017, the Company sold 50,000 units at $1.00 per unit,
consisting of 50,000 shares of common stock and warrants to
purchase 50,000 shares of common stock at an exercise price of
$3.00 per share, exercisable until January 9, 2018, in exchange for
total proceeds of $50,000. The proceeds received were allocated
between the common stock and warrants on a relative fair value
basis.
WEED, INC.
(Formerly
United Mines, Inc.)
Notes
to Financial Statements
For the
Years Ended December 31, 2017 and 2016
Warrants Exercised (2017)
On
January 7, 2017, a warrant holder exercised warrants to purchase
2,666 shares of common stock at a strike price of $1.50 in exchange
for proceeds of $3,999.
Common Stock Sales (2016)
On
October 31, 2016, the Company sold 50,000 units at $0.10 per unit,
consisting of 50,000 shares of common stock and warrants to
purchase 50,000 shares of common stock at an exercise price of
$1.50 per share over a one (1) year period from the date of
purchase in exchange for total proceeds of $5,000. The proceeds
received were allocated between the common stock and warrants on a
relative fair value basis.
On
October 25, 2016, the Company sold 150,000 units at $0.3333 per
unit, consisting of 150,000 shares of common stock and warrants to
purchase 150,000 shares of common stock at an exercise price of
$1.50 per share over a one (1) year period from the date of
purchase in exchange for total proceeds of $50,000. The proceeds
received were allocated between the common stock and warrants on a
relative fair value basis.
On
October 19, 2016, the Company sold 25,000 units at $0.20 per unit,
consisting of 25,000 shares of common stock and warrants to
purchase 25,000 shares of common stock at an exercise price of
$1.50 per share over a one (1) year period from the date of
purchase in exchange for total proceeds of $5,000. The proceeds
received were allocated between the common stock and warrants on a
relative fair value basis.
On
October 19, 2016, the Company sold 100,000 units at $0.10 per unit,
consisting of 100,000 shares of common stock and warrants to
purchase 100,000 shares of common stock at an exercise price of
$1.50 per share over a one (1) year period from the date of
purchase in exchange for total proceeds of $10,000. The proceeds
received were allocated between the common stock and warrants on a
relative fair value basis.
Common Stock in Satisfaction of Subscriptions Payable
(2016)
On
October 27, 2016, the Company issued a total of 1,770,000 shares of
common stock in satisfaction of common stock granted during the
year ended December 31, 2015, in the aggregate value of
$114,990.
Common Stock Issued for Acquisitions and Property Purchases
(2017)
On July
18, 2017, the Company issued 25,000 shares of common stock as a
good faith deposit toward the purchase of land and property located
in La Veta, CO that closed on July 26, 2017, which were valued at
$30,000 based on the closing price of the Company’s common
stock on the date of grant.
On
April 20, 2017, the Company issued a total of 500,000 shares of
common to seven individuals pursuant to the closing of an
acquisition of Sangre AT, LLC, a Wyoming limited liability company
(“Sangre”) in exchange for 100% of the interests in
Sangre. The total fair value of the common stock was $1,003,850
based on the closing price of the Company’s common stock on
the date of grant.
Common Stock Issued for Bartered Assets (2017)
On
January 18, 2017, the Company exchanged 66,000 units, consisting of
66,000 shares of common stock and warrants to purchase 66,000
shares of common stock at an exercise price of $3.00 per share,
exercisable until January 18, 2018, in exchange for a
2017 Audi Q7 and a 2017 Audi A4. The total fair
value received, based on the market price of the stock at $4.02 per
share, was allocated to the $105,132 purchase price of the vehicles
and the $160,188 excess value of the common stock and warrants was
expensed as stock based compensation.
Common Stock and Warrants Issued for Settlement of Convertible Debt
(2017)
On June
16, 2017, a convertible note, consisting of $35,000 of principal
and $33,250 of unpaid interest, was assigned to a third party and
the debt was exchanged for a unit offering, consisting of 70,000
shares of common stock and warrants to purchase 70,000 shares of
common stock at an exercise price of $3.00 per share, exercisable
until June 16, 2018. The stock was valued at $86,800 based on the
closing price of the Company’s common stock on the date of
exchange and the warrants were valued at $49,433 using the
Black-Scholes option-pricing model was $49,433, or $0.70618 per
share, based on a volatility rate of 211%, a risk-free interest
rate of 1.21% and an expected term of 1.0 year, resulting in a loss
on extinguishment of $67,983.
WEED, INC.
(Formerly
United Mines, Inc.)
Notes
to Financial Statements
For the
Years Ended December 31, 2017 and 2016
Common
Stock Issued as Down Payment for Land Purchase (2016)
On
November 8, 2016, the Company granted 50,000 shares of common stock
as a good faith deposit on a potential land purchase agreement that
has not yet closed, as the Company does not currently have
sufficient resources. The total fair value of the common stock was
$42,500 based on the closing price of the Company’s common
stock on the date of grant.
Common Stock Issued for Services, Related Parties
(2017)
On
August 1, 2017, the Company granted 150,000 shares of common stock
to Mary Williams, a principal of Sangre AT, LLC, for services
performed. The fair value of the common stock was $154,500 based on
the closing price of the Company’s common stock on the date
of grant.
On
January 7, 2017, the Company granted 50,000 shares of common stock
to Pat Williams. PhD, a principal of Sangre AT, LLC, for services
performed. The total fair value of the common stock was $210,250
based on the closing price of the Company’s common stock on
the date of grant.
Common Stock Issued for Services, Related Parties
(2016)
On
October 1, 2016, the Company granted 7,000,000 shares of common
stock to our CEO, Glenn E. Martin, as a bonus for services
performed pursuant to an amended employment agreement. The total
fair value of the common stock was $700,000 based on the closing
price of the Company’s common stock on the date of
grant.
In
addition, on October 1, 2016, the Company granted a total of
14,000,000 shares of common stock to Mr. Martin for services
performed pursuant to his previous employment agreement. The total
fair value of the common stock was $1,400,000 based on the closing
price of the Company’s common stock on the date of
grant.
On
October 1, 2016, the Company granted 4,000,000 shares of common
stock to a related party as a bonus for services performed pursuant
to an amended employment agreement. The total fair value of the
common stock was $400,000 based on the closing price of the
Company’s common stock on the date of grant.
In
addition, on October 1, 2016, the Company granted a total of
8,000,000 shares of common stock to a related party for services
performed pursuant to their previous employment agreement. The
total fair value of the common stock was $800,000 based on the
closing price of the Company’s common stock on the date of
grant.
On
October 1, 2016, the Company granted 1,000,000 shares of common
stock to a related party as a bonus for services performed pursuant
to an amended employment agreement. The total fair value of the
common stock was $100,000 based on the closing price of the
Company’s common stock on the date of grant.
In
addition, on October 1, 2016, the Company granted a total of
2,000,000 shares of common stock to a related party for services
performed pursuant to their previous employment agreement. The
total fair value of the common stock was $200,000 based on the
closing price of the Company’s common stock on the date of
grant.
Common Stock Issued for Services (2017)
On December 27, 2017, the Company granted an aggregate of 24,882
shares of common stock to an individual as repayment for travel and
hotel expenses incurred by the individual during a trip to India on
company business.
The total fair value of the common stock
was $89,078 based on the closing price of the Company’s
common stock on the date of grant.
On November 7, 2017, the Company granted 60,000 shares of common
stock to a consultant for services performed.
The total fair
value of the common stock was $79,800 based on the closing price of
the Company’s common stock on the date of grant.
On
August 1, 2017, the Company granted an aggregate of 199,000 shares
of common stock to seven consultants for services performed. The
aggregate fair value of the common stock was $204,970 based on the
closing price of the Company’s common stock on the date of
grant.
On
April 20, 2017, the Company granted an aggregate of 116,000 shares
of common stock to eleven consultants for services performed. The
aggregate fair value of the common stock was $232,893 based on the
closing price of the Company’s common stock on the date of
grant.
On
March 2, 2017, the Company granted 50,000 shares of common stock to
a consultant for services performed. The total fair value of the
common stock was $142,500 based on the closing price of the
Company’s common stock on the date of grant.
WEED, INC.
(Formerly
United Mines, Inc.)
Notes
to Financial Statements
For the
Years Ended December 31, 2017 and 2016
On
March 2, 2017, the Company granted 12,000 shares of common stock to
a consultant for services performed. The total fair value of the
common stock was $34,200 based on the closing price of the
Company’s common stock on the date of grant.
Common Stock Issued for Services (2016)
On
October 19, 2016, the Company granted 10,000 shares of common stock
to a consultant for services performed. The total fair value of the
common stock was $8,500 based on the closing price of the
Company’s common stock on the date of grant.
On
September 28, 2016, the Company granted 600,000 shares of common
stock to a consultant for services performed. The total fair value
of the common stock was $60,000 based on the closing price of the
Company’s common stock on the date of grant.
On
September 28, 2016, the Company granted 600,000 shares of common
stock to another consultant for services performed. The total fair
value of the common stock was $60,000 based on the closing price of
the Company’s common stock on the date of grant.
On
September 28, 2016, the Company granted 600,000 shares of common
stock to a third consultant for services performed. The total fair
value of the common stock was $60,000 based on the closing price of
the Company’s common stock on the date of grant.
On July
1, 2016, the Company granted 500,000 shares of common stock to a
consultant for services performed. The total fair value of the
common stock was $35,000 based on the closing price of the
Company’s common stock on the date of grant.
On July
1, 2016, the Company granted 500,000 shares of common stock to
another consultant for services performed. The total fair value of
the common stock was $35,000 based on the closing price of the
Company’s common stock on the date of grant.
On
March 18, 2016, the Company granted 60,000 shares of common stock
to a consultant for services performed. The total fair value of the
common stock was $5,820 based on the closing price of the
Company’s common stock on the date of grant.
On
March 18, 2016, the Company granted 500,000 shares of common stock
to a consultant for services performed. The total fair value of the
common stock was $48,500 based on the closing price of the
Company’s common stock on the date of grant.
On
March 18, 2016, the Company granted 120,000 shares of common stock
to a consultant for services performed. The total fair value of the
common stock was $11,640 based on the closing price of the
Company’s common stock on the date of grant.
On
February 12, 2016, the Company granted 120,000 shares of common
stock to a consultant for services performed. The total fair value
of the common stock was $5,832 based on the closing price of the
Company’s common stock on the date of grant.
On
February 1, 2016, the Company granted 500,000 shares of common
stock to a consultant for services performed. The total fair value
of the common stock was $22,000 based on the closing price of the
Company’s common stock on the date of grant.
On
February 1, 2016, the Company granted 500,000 shares of common
stock to another consultant for services performed. The total fair
value of the common stock was $22,000 based on the closing price of
the Company’s common stock on the date of grant.
On
February 1, 2016, the Company granted 20,000 shares of common stock
to a consultant for services performed. The total fair value of the
common stock was $880 based on the closing price of the
Company’s common stock on the date of grant.
On
February 1, 2016, the Company granted 60,000 shares of common stock
to a consultant for services performed. The total fair value of the
common stock was $2,640 based on the closing price of the
Company’s common stock on the date of grant.
Capital Contributions
The
Company imputed interest on non-interest bearing, related party
loans, resulting in a total of $421 and $583 of contributed capital
during the years ended December 31, 2017 and 2016,
respectively.
WEED, INC.
(Formerly
United Mines, Inc.)
Notes
to Financial Statements
For the
Years Ended December 31, 2017 and 2016
Note
14 – Common Stock Warrants
Common Stock Warrants Granted (2017)
On
November 10, 2017, the Company sold warrants to purchase 125,000
shares of common stock at $3.00 per share over a two (2) year
period from the date of sale, in exchange for total proceeds of
$125,000 in conjunction with the sale of 125,000 shares of common
stock. The relative fair value of the 125,000 common stock warrants
using the Black-Scholes option-pricing model was $172,403, or
$1.37922 per share, based on a volatility rate of 206%, a risk-free
interest rate of 1.67% and an expected term of 2.0 years. The
proceeds received were allocated between the common stock and
warrants on a relative fair value basis.
On
October 24, 2017, the Company sold warrants to purchase 13,333
shares of common stock at $3.00 per share over a two (2) year
period from the date of sale, in exchange for total proceeds of
$10,000 in conjunction with the sale of 13,333 shares of common
stock. The relative fair value of the 13,333 common stock warrants
using the Black-Scholes option-pricing model was $13,089, or
$0.98167 per share, based on a volatility rate of 206%, a risk-free
interest rate of 1.60% and an expected term of 2.0 years. The
proceeds received were allocated between the common stock and
warrants on a relative fair value basis.
On
September 29, 2017, the Company sold warrants to purchase 300,000
shares of common stock at $3.00 per share over a two (2) year
period from the date of sale, in exchange for total proceeds of
$150,000 in conjunction with the sale of 300,000 shares of common
stock. The relative fair value of the 300,000 common stock warrants
using the Black-Scholes option-pricing model was $303,242, or
$1.01081 per share, based on a volatility rate of 206%, a risk-free
interest rate of 1.47% and an expected term of 2.0 years. The
proceeds received were allocated between the common stock and
warrants on a relative fair value basis.
On
September 24, 2017, the Company sold warrants to purchase 133,000
shares of common stock at $3.00 per share over a two (2) year
period from the date of sale, in exchange for total proceeds of
$100,000 in conjunction with the sale of 133,000 shares of common
stock. The relative fair value of the 133,000 common stock warrants
using the Black-Scholes option-pricing model was $152,795, or
$1.14884 per share, based on a volatility rate of 206%, a risk-free
interest rate of 1.46% and an expected term of 2.0 years. The
proceeds received were allocated between the common stock and
warrants on a relative fair value basis.
On
September 5, 2017, the Company sold warrants to purchase 40,000
shares of common stock at $3.00 per share over a two (2) year
period from the date of sale, in exchange for total proceeds of
$20,000 in conjunction with the sale of 40,000 shares of common
stock. The relative fair value of the 40,000 common stock warrants
using the Black-Scholes option-pricing model was $27,215, or
$0.68039 per share, based on a volatility rate of 207%, a risk-free
interest rate of 1.30% and an expected term of 2.0 years. The
proceeds received were allocated between the common stock and
warrants on a relative fair value basis.
On
August 2, 2017, the Company sold warrants to purchase 100,000
shares of common stock at $3.00 per share over a two (2) year
period from the date of sale, in exchange for total proceeds of
$50,000 in conjunction with the sale of 100,000 shares of common
stock. The relative fair value of the 100,000 common stock warrants
using the Black-Scholes option-pricing model was $80,872, or
$0.80872 per share, based on a volatility rate of 210%, a risk-free
interest rate of 1.36% and an expected term of 2.0 years.. The
proceeds received were allocated between the common stock and
warrants on a relative fair value basis.
On July
7, 2017, the Company sold warrants to purchase 200,000 shares of
common stock at $3.00 per share over a two (2) year period from the
date of sale, in exchange for total proceeds of $100,000 in
conjunction with the sale of 200,000 shares of common stock. The
relative fair value of the 200,000 common stock warrants using the
Black-Scholes option-pricing model was $156,339, or $0.78169 per
share, based on a volatility rate of 209%, a risk-free interest
rate of 1.40% and an expected term of 2.0 years. The proceeds
received were allocated between the common stock and warrants on a
relative fair value basis.
On June
16, 2017, the Company issued warrants to purchase 70,000 shares of
common stock at $3.00 per share over a one (1) year period from the
date of exchange in conjunction with the issuance of 70,000 shares
of common stock in exchange for the settlement of a convertible
note, consisting of $35,000 of principal and $33,250 of interest.
The relative fair value of the 70,000 common stock warrants using
the Black-Scholes option-pricing model was $49,433, or $0.70618 per
share, based on a volatility rate of 211%, a risk-free interest
rate of 1.21% and an expected term of 1.0 year. The proceeds
received were allocated between the common stock and warrants on a
relative fair value basis.
On May
31, 2017, the Company sold warrants to purchase 20,000 shares of
common stock at $3.00 per share over a two (2) year period from the
date of sale, in exchange for total proceeds of $10,000 in
conjunction with the sale of 20,000 shares of common stock. The
relative fair value of the 20,000 common stock warrants using the
Black-Scholes option-pricing model was $8,946, or $0.44730 per
share, based on a volatility rate of 209%, a risk-free interest
rate of 1.28% and an expected term of 2.0 years. The proceeds
received were allocated between the common stock and warrants on a
relative fair value basis.
WEED, INC.
(Formerly
United Mines, Inc.)
Notes
to Financial Statements
For the
Years Ended December 31, 2017 and 2016
On May
31, 2017, the Company sold warrants to purchase 300,000 shares of
common stock at $3.00 per share over a two (2) year period from the
date of sale, in exchange for total proceeds of $150,000 in
conjunction with the sale of 300,000 shares of common stock. The
relative fair value of the 300,000 common stock warrants using the
Black-Scholes option-pricing model was $134,190, or $0.44730 per
share, based on a volatility rate of 209%, a risk-free interest
rate of 1.28% and an expected term of 2.0 years. The proceeds
received were allocated between the common stock and warrants on a
relative fair value basis.
On May
25, 2017, the Company sold warrants to purchase 20,000 shares of
common stock at $3.00 per share over a two (2) year period from the
date of sale, in exchange for total proceeds of $10,000 in
conjunction with the sale of 20,000 shares of common stock. The
relative fair value of the 20,000 common stock warrants using the
Black-Scholes option-pricing model was $5,887, or $0.29434 per
share, based on a volatility rate of 205%, a risk-free interest
rate of 1.30% and an expected term of 2.0 years. The proceeds
received were allocated between the common stock and warrants on a
relative fair value basis.
On May
25, 2017, the Company sold warrants to purchase 100,000 shares of
common stock at $3.00 per share over a two (2) year period from the
date of sale, in exchange for total proceeds of $50,000 in
conjunction with the sale of 100,000 shares of common stock. The
relative fair value of the 100,000 common stock warrants using the
Black-Scholes option-pricing model was $29,434, or $0.29434 per
share, based on a volatility rate of 205%, a risk-free interest
rate of 1.30% and an expected term of 2.0 years. The proceeds
received were allocated between the common stock and warrants on a
relative fair value basis.
On
April 20, 2017, the Company sold warrants to purchase 500,000
shares of common stock at $3.00 per share over a one (1) year
period from the date of sale, in exchange for total proceeds of
$500,000 in conjunction with the sale of 500,000 shares of common
stock. The relative fair value of the 500,000 common stock warrants
using the Black-Scholes option-pricing model was $626,641, or
$1.25328 per share, based on a volatility rate of 202%, a risk-free
interest rate of 1.01% and an expected term of 1.0 year. The
proceeds received were allocated between the common stock and
warrants on a relative fair value basis.
On
January 23, 2017, the Company sold warrants to purchase 2,000
shares of common stock at $3.00 per share over a one (1) year
period from the date of sale, in exchange for total proceeds of
$4,000 in conjunction with the sale of 2,000 shares of common
stock. The relative fair value of the 2,000 common stock warrants
using the Black-Scholes option-pricing model was $5,106, or
$2.55281 per share, based on a volatility rate of 211%, a risk-free
interest rate of 0.79% and an expected term of 1.0 year. The
proceeds received were allocated between the common stock and
warrants on a relative fair value basis.
On
January 9, 2017, the Company sold warrants to purchase 50,000
shares of common stock at $3.00 per share over a one (1) year
period from the date of sale, in exchange for total proceeds of
$50,000 in conjunction with the sale of 50,000 shares of common
stock. The relative fair value of the 50,000 common stock warrants
using the Black-Scholes option-pricing model was $108,228, or
$2.16456 per share, based on a volatility rate of 210%, a risk-free
interest rate of 0.82% and an expected term of 1.0 year. The
proceeds received were allocated between the common stock and
warrants on a relative fair value basis.
Common Stock Warrants Granted (2016)
On
October 31, 2016, the Company sold warrants to purchase 50,000
shares of common stock at $1.50 per share over a one (1) year
period from the date of sale, in exchange for total proceeds of
$5,000 in conjunction with the sale of 50,000 shares of common
stock. The relative fair value of the 50,000 common stock warrants
using the Black-Scholes option-pricing model was $914, or $0.01828
per share, based on a volatility rate of 217%, a risk-free interest
rate of 0.66% and an expected term of 1.0 year. The proceeds
received were allocated between the common stock and warrants on a
relative fair value basis.
On
October 25, 2016, the Company sold warrants to purchase 150,000
shares of common stock at $1.50 per share over a one (1) year
period from the date of sale, in exchange for total proceeds of
$50,000 in conjunction with the sale of 150,000 shares of common
stock. The relative fair value of the 150,000 common stock warrants
using the Black-Scholes option-pricing model was $2,725, or
$0.01817 per share, based on a volatility rate of 217%, a risk-free
interest rate of 0.66% and an expected term of 1.0 year. The
proceeds received were allocated between the common stock and
warrants on a relative fair value basis.
On
October 19, 2016, the Company sold warrants to purchase 25,000
shares of common stock at $1.50 per share over a one (1) year
period from the date of sale, in exchange for total proceeds of
$5,000 in conjunction with the sale of 25,000 shares of common
stock. The relative fair value of the 25,000 common stock warrants
using the Black-Scholes option-pricing model was $608, or $0.02432
per share, based on a volatility rate of 216%, a risk-free interest
rate of 0.65% and an expected term of 1.0 year. The proceeds
received were allocated between the common stock and warrants on a
relative fair value basis.