Item
1.01 Entry into a Material Definitive Agreement.
On
December 4, 2019, Canbiola, Inc. (the “Company”) entered into a Stock Purchase Agreement (the “Agreement”)
with Iconic Brands, Inc., a Nevada corporation (“ICNB”) and Green Grow Farms, Inc., a New York corporation (“Green
Grow” and, collectively with ICNB and the Company, the “Parties”).
Pursuant
to the terms of the Agreement, at closing, the Company will receive 51% equity interest in Green Grow (the “GG Shares”)
in exchange for an aggregate of 37,500,000 shares of the Company’s common stock (the “Purchase Shares”). On
June 30, 2020 (the “Valuation Date”), a valuation of the Purchase Shares shall be performed for the purpose of determining
whether the Market Price Per Purchase Share (as defined in the Agreement) on the Valuation Date is less than $1,000,000. In the
event that the aggregate Market Price Per Purchase Share on the Valuation Date is less than $1,000,000, the Company shall issue
to the ICNB such a number of additional shares (“Additional Purchase Shares”) so that the aggregate value of aggregate
shares issued to ICNB for the purchase of the GG Shares (taking into account the Purchase Shares and the Additional Purchase Shares)
equals $1,000,000. For purposes of the valuation, Market Price Per Purchase Share shall be determined based upon the 10-day average
VWAP for the 10-day period ending on June 30, 2020.
In
the event that ICNB determines to make a distribution of the Purchase Shares to its shareholders, whether by way of dividend or
otherwise, the Company agreed to cooperate in the filing of a registration statement (the “Registration Statement”)
with the United States Securities and Exchange Commission covering the Purchase Shares, if requested by ICNB. ICNB shall be responsible
for directly paying all expenses relating to such Registration Statement, including, but not limited to, filing fees, the Company’s
counsel legal fees, blue sky filing fees and audit fees.
Pursuant
to the Agreement, the Company has agreed to indemnify and hold ICNB harmless from and against any and all liabilities, obligations
or claims arising out of or resulting from GGFI’s operation of its Business or its assets after the closing of the Agreement
and the Company’s breach of any covenants, warranties or agreements set forth therein, provided the amount of any indemnification
shall not exceed an amount equal to the value of the GG Shares as of the closing. The Agreement otherwise contains customary representations
and warranties, termination rights, and certain covenants of the Parties.
The
closing of the Agreement is subject to the satisfaction of various closing conditions, including the completion of audited financial
statements of Green Grow and due diligence by the Company. In addition, in the event the Agreement has not been closed by December
31, 2019, any of the Parties may terminate the Agreement by providing written notice to the other Parties.
The
foregoing description of the Agreement is qualified in its entirety by the terms of the full text of the Agreement, attached hereto
as Exhibit 10.1.