Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
Amendment No. 1
(Mark one)
☒ |
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2020
|
|
|
☐ |
TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________________
to________________________.
|
Commission File Number 000-55450
MEDICINE MAN TECHNOLOGIES,
INC.
(Exact name of registrant as specified in its charter)
Nevada |
|
46-5289499 |
(State or other jurisdiction of
Incorporation or organization)
|
|
(I.R.S. Employer Identification No.) |
4880 Havana Street
Suite 201
Denver, Colorado 80239
(Address of principal executive offices; Zip Code)
(303) 371-0387
(Registrant’s Telephone Number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
Trading Symbol(s) |
Name of each exchange on which
registered |
None |
None |
None |
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $0.001 per share
(Title of class)
Indicate by check mark if the registrant is a well-known seasoned
issuer, as defined in Rule 405 of the Securities Act.
Yes ☐
No ☒
Indicate by check mark if the registrant is not required to file
reports pursuant to Section 13 or Section 15(d) of the Securities
Act. Yes ☐
No ☒
Indicate by check mark whether the registrant (1) 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 ☒
No ☐
Indicate by check mark whether the registrant has submitted
electronically every Interactive Data File required to be submitted
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 ☒
No ☐
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, a
smaller reporting company, or an emerging growth company. See the
definitions of “large accelerated filer,” “accelerated filer,”
“smaller reporting company,” and “emerging growth company” in Rule
12b-2 of the Exchange Act.
Large
accelerated filer ☐ |
Accelerated
filer ☐ |
Non-accelerated filer ☒ |
Smaller reporting company ☒ |
|
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 has filed a report on
and attestation to its management’s assessment of the effectiveness
of its internal control over financial reporting under Section
404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the
registered public accounting firm that prepared or issued its audit
report. ☐
Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange
Act). Yes ☐ No ☒
The aggregate market value of the voting and non-voting common
equity (common stock) held by non-affiliates of the registrant as
of the close of business on June 30, 2020 was approximately $56.2
million based upon the closing price of the common stock on the OTC
Markets, Inc. on that date.
As of March 23, 2021, 42,160,246 shares of the registrants common
stock were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
None.
EXPLANATORY NOTE
This Amendment No. 1 on Form 10-K/A (this “Form 10-K/A”) to the
Annual Report on Form 10-K of Medicine Man Technologies, Inc. (the
“Company,” “Medicine Man,” “we,” “us” or “our”) for the year ended
December 31, 2020, filed with the Securities and Exchange
Commission on March 31, 2021 (the “Original 10-K”), is being filed
for the purposes of including the information required by Part III
(Items 10-14) of Form 10-K and to amend Item 15 to include two
exhibits that were inadvertently omitted from the Original 10-K, to
correct nine exhibits filed with the Original 10-K that contained
extraneous materials and to reflect the exhibits filed or furnished
with this Form 10-K/A. At that time the Company filed the Original
10-K, it intended to file a definitive proxy statement for its 2020
Annual Meeting of Stockholders within 120 days after the end of its
fiscal year pursuant to Regulation 14A promulgated under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”).
Because the Company will not file the definitive proxy statement
within such 120-day period, the omitted information is filed
herewith and provided below as required. The reference on the cover
of the Original 10-K to the incorporation by reference to portions
of our definitive proxy statement into Part III of the Original
10-K is hereby deleted.
As a result, Part III, Items 10-14 and Part IV, Item 15 of the
Company's Original 10-K are hereby amended and restated in their
entirety.
Except as described above, this Form 10-K/A does not modify or
update disclosure in, or exhibits to, the Original 10-K, and such
disclosure in, or exhibits to, the Original 10-K remain unchanged
and speak as of the date of the filing of the Original
10-K. In particular, this Form 10-K/A does not change
any previously reported financial results, nor does it reflect
events occurring after the date of the Original 10-K. Accordingly,
this Form 10-K/A should be read in conjunction with the Original
10-K and the Company’s other filings made with the Securities and
Exchange Commission since the filing of the Original 10-K,
including amendments to those filings, if any.
Medicine Man Technologies, Inc.
Annual Report on Form 10-K/A
Table of
Contents
PART III
ITEM 10. |
DIRECTORS, EXECUTIVE OFFICERS
AND CORPORATE GOVERNANCE |
Directors and Executive Officers
Set forth below are the Company’s Directors and Executive Officers,
together with an overview of their professional experience and
expertise.
Name |
|
Age |
|
Position(s) Held |
Justin Dye (2)(3) |
|
49 |
|
Chief Executive Officer and
Executive Chairman (director since 2019) |
Nancy Huber |
|
63 |
|
Chief Financial
Officer |
Nirup Krishnamurthy |
|
59 |
|
Chief Operating
Officer |
Daniel Pabon |
|
44 |
|
General Counsel, Chief Government
Affairs Officer and Corporate Secretary |
Brian Ruden (3) |
|
46 |
|
Director (director since
2019) |
Jeffrey A. Cozad
(1)(2)(3) |
|
57 |
|
Director (director since
2021) |
Jeff Garwood (1) (3) |
|
59 |
|
Director (director since
2020) |
Pratap Mukharji
(1)(2) |
|
61 |
|
Director (director since
2021) |
Salim Wahdan (1) |
|
41 |
|
Director (director since
2021) |
_________________________
(1) |
Currently a member of the Audit
Committee. |
(2) |
Currently a member of the
Nominating and Corporate Governance Committee. |
(3) |
Currently a member of the
Compensation Committee. |
Justin Dye was named Chief Executive Officer and
Executive Chairman of the Company in December 2019 and has served
as a director and Chairman since June 2019. Mr. Dye has 25 years of
experience in private equity, general management, operations,
strategy, corporate finance, and M&A. Prior to founding Dye
Capital & Company (“Dye Capital”), a private equity firm
investing in growth companies in disruptive industries, in 2018, he
served as an integral part of the private equity consortium that
acquired Albertsons Companies (“Albertsons”), a grocery store
chain, and led its expansion through over $40 billion in
acquisitions, divestitures, real estate and financing transactions.
During his 11-year tenure as Chief Strategy Officer, Chief
Operating Officer, and Chief Administration Officer, Albertsons
grew sales from approximately $10 billion to over $60 billion with
over 2,300 stores and 285,000 employees. Prior to Albertsons,
Justin held roles at Cerberus Capital Management, General Electric
and Arthur Andersen. Justin serves as lead director for New Seasons
Market and is a member of the DePauw University Board of Trustees.
Mr. Dye’s financial and executive experience qualifies him to serve
on our Board of Directors (the “Board”).
Nancy Huber was named Chief Financial Officer of
the Company in December 2019. She was hired in August 2019 as
Senior Vice President of Finance for the Company. Ms. Huber has
over 30 years of experience in accounting and finance. Most
recently she spent 12 years as the Chief Financial Officer for
Forward Foods, LLC, a privately held consumer-packaged goods
company, which sold products to grocery, mass, military,
convenience store, club and natural channels, both directly and
indirectly. Ms. Huber also has leadership experience in gold and
diatomaceous earth mining. She worked as the Chief Financial
Officer for Western Multiplex Corporation, taking the company
public on the Nasdaq exchange and was a founder and Chief Financial
Officer of AccelGraphics Inc. also listed on the Nasdaq. Ms. Huber
has an MBA from Kellogg School of Management, Northwestern
University and a Bachelor of Science in Chemical Engineering from
Purdue University.
Nirup Krishnamurthy was named Chief Operating
Officer of the Company in September 2020. He had previously served
as the Company’s Chief Information and Integration Officer since
June 2019; Mr. Krishnamurthy provided such service as a consultant
until March 1, 2020, at which time he began formal employment with
the Company. Mr. Krishnamurthy has over 25 years of experience in
innovation, technology, restructuring, and M&A for Fortune 500
companies. Since May 2018, Mr. Krishnamurthy has been a partner
with Dye Capital, a private equity firm investing in growth
companies in disruptive industries. In addition to his work with
Dye Capital, Mr. Krishnamurthy has acted as managing director of
EBIT+ LLC (“EBIT+”), a management consulting firm he founded in
January 2016; EBIT+ works with executive management to improve
revenues and margins while reducing operating costs. From September
2011 through December 2015, Mr. Krishnamurthy was EVP and Chief
Strategy Officer & Chief Information Officer with The Great
Atlantic and Pacific Tea Company (“A&P”), a grocery store
chain, where he was responsible for the information services,
digital commerce, supply chain & logistics, strategic sourcing
and retail space planning functions for A&P. Mr. Krishnamurthy
has also held senior management positions with companies including
Northern Trust Corporation and United Airlines, Inc. He obtained a
Ph.D. in Industrial Engineering Operations Research and a M.S. in
Industrial Engineering Operations/Production Management from the
State University of New York, and a B.S. in Mechanical Engineering
from Anna University in Chennai, India.
Daniel Pabon was named General Counsel, Chief
Government Affairs Officer and Corporate Secretary in August 2019.
Prior to joining the Company, Mr. Pabon served as Vice President of
Sewald Hanfling Public Affairs, a government affairs firm, from
2018 and 2019. Before that, he was in private law practice. In
addition, he served eight years in the State of Colorado
Legislature as a State Representative from 2011 to 2019. He held
numerous leadership positions including Deputy Whip, Assistant
Majority Leader, Speaker Pro Tempore, and Chair of the Finance
Committee. During his tenure, he assisted with the design and
development of Colorado’s cannabis legal and regulatory model. Mr.
Pabon has had extensive experience in compliance, law department
management, litigation, cannabis regulation and governance and
government affairs issues. He has consulted with and advised state
and local governments as well as private businesses all over the
world on how to implement cannabis regulations, both medical and
recreational. Mr. Pabon served as a member of the City of Denver
Marijuana Licensing Working Group (MLWG). He was a volunteer with
the Covid-19 Eviction Defense Project. He has served as an adjunct
professor of business law at the Community College of Denver. He
also served on the Obama-Biden Presidential Transition Team. Mr.
Pabon received a Bachelor of Science degree in Mechanical
Engineering from the University of Colorado at Boulder and his
juris doctor from the University of Colorado School of Law. Mr.
Pabon is also a graduate of the Harvard Kennedy School for
Executive Education.
Brian Ruden has served as director since December
2019. He is the owner of several Colorado Retail Marijuana Store
Licenses around the state of Colorado doing business as Star Buds.
Since 2010, he has owned and operated marijuana licenses in
Colorado, Washington DC, and Hawaii. In 2014, Mr. Ruden founded
Starbuds Consulting, a consulting company which provides strategic
advice to start-up marijuana operations. Before entering the
marijuana industry, Mr. Ruden was a tax attorney in Colorado. In
2005, Mr. Ruden received his law degree from the University of
Denver, Sturm College of Law. He received his Bachelor of Science
from the University of Massachusetts. Mr. Ruden’s extensive
business experience in the marijuana industry qualifies him to
serve on the Board.
Jeff Garwood has served as a director since
September 2020. Mr. Garwood is the founder and since 2010 has been
the managing member of Liberation Capital, LLC, a private equity
fund that is focused on providing modular, repeatable waste to
value project finance. He is also the co-owner of, and since 2010
has actively managed, Zysense LLC, an entity providing high
precision measurement instruments for research. Prior to founding
Liberation Capital, Garwood, held a variety of leadership positions
with General Electric Company (“GE”), including President and CEO
of GE Water and Process Technologies, President and CEO of GE
Fanuc, and President of Garrett Aviation. Prior to joining Garret
Aviation, Mr. Garwood worked for numerous years at the strategic
consulting firm McKinsey and Company. Garwood received a B.S. of
Chemical Engineering from North Carolina State University and an
M.B.A. from the Kenan-Flagler Business School at the University of
North Carolina at Chapel Hill. Mr. Garwood is a recognized
visionary business leader bringing 30 years of extensive experience
across finance and operations, and we believe his significant
experience and qualifications across multiple industries qualify
him to serve on the Board.
Pratap Mukharji has served as a director since
January 2021. He was a senior partner and director at Bain &
Company from 2015-2020 where he led its Supply Chain and Service
Operations practice. He retired in May 2020. Since retirement, he
has been an Executive in Residence at the Fuqua School of Business
at Duke University. With a concentration in Industrials and Retail,
Mr. Mukharji has led strategy; M&A; transformation and
turnaround; operations improvement; due diligence, omnichannel; and
e-commerce efforts across multiple industries. Prior to Bain, he
was at Kearney and Booz-Allen & Hamilton. Mr. Mukharji received
a BA in Economics from Haverford College at which he was Phi Beta
Kappa, and a MBA from the Fuqua School of Business at Duke
University at which he was a Fuqua Scholar. During his career, Mr.
Mukharji examined small and large capitalized companies and advised
them on growth opportunities. We believe his significant experience
through consulting work analyzing company financial statements and
performing due diligence qualify him to serve on the Board.
Jeffrey A Cozad has
served as a director since March 2021. From
2017-2019. Mr. Cozad was a Managing Partner at Stonerise Capital Partners
in San Francisco, CA, a firm he co-founded in 2007. Beginning in
January 2020, Mr. Cozad became Managing Partner Emeritus at
Stonerise Capital Partners. Mr. Cozad is the co-founder of CRW Cann
Holdings, LLC (“CRW”)– a special purpose vehicle created to support
Schwazze’s vision of becoming the one of the biggest vertically
integrated player in the Colorado cannabis market. He is also the
Managing Partner of his family office, Cozad Investments, LP, which
has completed more than 20 investments across a disparate set of
industries over the past 13 years. Mr. Cozad holds an MBA from The
University of Chicago Booth School of Business and received a BA in
Economics and Management from DePauw University, where he serves on
the Board of Trustees and is Chairman of the University Endowment
Fund Investment Committee. We believe his significant experience
with investments across a variety of industries qualifies him to
serve on the Board.
Salim Wahdan has served as a director since March
2021. Mr. Wahdan has close to two decades of entrepreneurial
experience owning and operating retail businesses. During the last
five years, he was a partner and operator of Star Buds in Adams,
Louisville, and Westminster, several of the Star Buds’ branded
dispensaries the Company purchased between December 2020 and March
2021. He ran the back office of the operation and was charged with
accounting, inventory, and strategic growth. Mr. Wahdan was
instrumental in the early growth of the Star Buds franchise.
Previous to his time in the cannabis industry, he owned and
operated various retail concepts in Colorado. We believe his
significant experience within the cannabis industry owning and
operating retail concepts qualifies him to serve on the Board.
Board Designation Rights
The Company has granted rights to designated directors as
follows:
|
• |
Under the Securities Purchase
Agreement, dated June 5, 2019, between the Company and Dye Capital
Cann Holdings, LLC (“Dye Cann I”), as amended by the Amendment to
Securities Purchase Agreement, dated July 15, 2019, the Amendment
to Security Purchase Agreement, dated May 20, 2020, and the
Consent, Waiver and Amendment, dated December 16, 2020 (as amended,
the “Dye Cann I SPA”), until the later of (i) two years from the
last closing under the Dye Cann I SPA, or (ii) the date Dye Cann I
no longer owns, in the aggregate, at least $10,000,000 of common
stock, as measured by a trailing 30 day volume weighted average
price of the common stock, or continues to hold at least 8,333,333
shares of common stock, the Company is required to take all actions
to ensure that two individuals designated by Dye Cann I shall be
appointed to the Board. Currently, Justin Dye and Jeffrey Garwood
serve as Dye Cann I’s designees on the Board. |
|
• |
Under the letter agreement, dated
December 16, 2020, between the Company and Dye Capital Cann
Holdings II, LLC (“Dye Cann II”), for as long as Dye Cann II owns,
in the aggregate, at least $10,000,000 of the Series A Preferred
Stock, as measured by a trailing 30 day volume weighted average
price of the common stock, on an as-converted basis, or continues
to hold at least 10,000 shares of the Company’s Series A Cumulative
Convertible Preferred Stock (“Series A Preferred Stock”), the
Company is required to take all actions to ensure that either one
individual if the Board consists of five or fewer members or two
individuals if the Board consists of more than five members
designated by Dye Cann II shall be appointed to the Board. For so
long as Dye Cann II is entitled to designate director, each
committee of the Board shall include at least one of the directors
designated by Dye Cann II as a member or, if Dye Cann II so elects,
as an observer. Currently, Pratap Mukharji serves as Dye Cann II’s
designee on the Board. |
|
• |
Under the letter agreement, dated
February 26, 2021, between the Company and CRW, for as long as CRW
owns, in the aggregate, at least $15,000,000 of Series A Preferred
Stock (calculated on an as-converted basis based on the volume
weighted average price of the Company’s common stock over a 30-day
period) or continues to hold at least 15,000 shares of Series A
Preferred Stock, the Company is required to take all actions to
ensure that one individual designated by CRW will be appointed to
the Board. For as long as CRW has the right to designate a
director, each committee of the Board shall include the CRW
designee as a member or, if CRW so elects, as an observer.
Currently, Jeffrey A. Cozad serves as CRW’s designee on the
Board. |
|
• |
Under the Omnibus Amendment No. 2
to Asset Purchase Agreements, dated December 17, 2020, among the
Corporation and the sellers party thereto (the “Star Buds
Agreement”), for as long as the Sellers (as defined in the Star
Buds Agreement) and the Members (as defined in the Star Buds
Agreement) meet a specified ownership threshold, the Company shall
recommend to its Board that Brian Ruden and Naser Joudeh jointly be
permitted to designate three directors for appointment to the Board
if the Board consists of seven or more members. Currently, Brian
Ruden and Salim Wahdan serve as Messrs. Ruden and Joudeh’s
designees on the Board. |
Board Terms
Our bylaws provide for a “staggered” or “classified” board of
directors, whereby the directors of the Board are divided into two
classes, Class A and Class B, respectively, each class consisting,
as nearly as possible, of one-half of the total number of directors
constituting the entire Board. Directors in each class are elected
to approximately two-terms expiring at the election of their
respective successors at alternating annual meetings of our
stockholders. The following table sets forth the name, class, term
and designating party of each of our current directors:
Name |
Class |
Term |
Designating Party |
Jeffrey A. Cozad |
A |
Expires 2022 annual
meeting |
CRW |
Jeffrey Garwood |
A |
Expires 2022 annual
meeting |
Cann I |
Salim Wahdan |
A |
Expires 2022 annual
meeting |
Brian Ruden and Naser
Joudeh |
Justin Dye, Chairman |
B |
Expired 2021 annual
meeting |
Cann I |
Pratap Mukharji |
B |
Expired 2021 annual
meeting |
Cann II |
Brian Ruden |
B |
Expires 2021 annual
meeting |
Brian Ruden and Naser
Joudeh |
Family Relationships
There are no family relationships among the officers and
directors.
Code of Business Conduct and Ethics
We have adopted a Code of Business Conduct and Ethics that applies
to all of our officers, employees and directors, including our
Chief Executive Officer and Chief Financial Officer. Our Code of
Business Conduct and Ethics is available on our website at
https://www.schwazze.com. We will provide a copy of our Code of
Business Conduct and Ethics to any person without charge upon
request to: Medicine Man Technologies, Inc., 4880 Havana Street,
Suite 201, Denver Colorado, 80239 Attention: Corporate
Secretary.
We intend to satisfy the disclosure requirement under Item 5.05 of
Form 8-K relating to amendments to or waivers from any provision of
the Code of Business Conduct and Ethics applicable to our Chief
Executive Officer and Chief Financial Officer by posting such
information at the investor relations site on our website
at www.schwazze.com in the near future.
Delinquent Section 16(a)
Reports
Section 16(a) of the Exchange Act requires our officers and
directors, and persons who beneficially own more than 10% of our
equity securities registered pursuant to Section 12 of the Exchange
Act, to file reports of ownership and changes in ownership with the
SEC. Based solely upon a review of the reports filed during 2020
and or written representations from the reporting persons, we
believe that, during our fiscal year ended December 31, 2020, there
were untimely filings of a Form 3, 4 and/or 5 by the Company’s
Section 16(a) filers as follows: (i) Justin Dye filed one late Form
4 on April 30, 2021 reporting fourteen transactions related to a
grant of stock options on December 5, 2019, a grant of shares of
Company common stock as compensation for Board service on October
1, 2020, the repricing of outstanding options on December 15, 2020
and the purchase of shares of Preferred Stock by affiliated
entities on December 16, 18, 22, 2020; February 3, 25, 26, 2021;
and March 2,30, 2021; (ii) Nancy Huber filed one late Form 3 on
April 30, 2021 relating to her appointment as Chief Financial
Officer on December 5, 2019, and one late Form 4 on April 30, 2021
reporting nine transactions related to grants of stock options on
December 5, 2019, March 27, 2020 and December 15, 2020 and the
repricing of outstanding options on December 15, 2020; (iii) Nirup
Krishnamurthy filed one late Form 4 on April 30, 2021 reporting
five transactions related to a grant of stock options on December
15, 2020 and the repricing of outstanding options on December 15,
2020; (iv) Dan Pabon filed one late Form 3 on April 30, 2021
relating to his appointment as General Counsel on August 12, 2019,
and one late Form 4 on April 30, 2021 reporting six transactions
related to grants of stock options on December 5, 2019 and March
27, 2020 and the repricing of outstanding options on December 15,
2020; (v) Jeffrey Garwood filed one late Form 4 on April 30, 2021
reporting two transactions related to the purchase of shares of the
Company’s common stock and a grant of shares of Company common
stock as compensation for Board service on March 25, 2021; (vi) Leo
Riera filed one late Form 4 on April 30, 2021 reporting two
transactions related to a grant of stock options on April 20, 2020
and a grant of shares of Company common stock as compensation for
Board service on October 1, 2020; (vii) and Brian Ruden filed one
late Form 4 on April 30, 2021 reporting nine transactions related
to a grant of shares of Company common stock as compensation for
Board service on October 1, 2020 and the receipt of shares of
Series A Preferred Stock and warrants to purchase shares of the
Company’s common stock in connection with the Star Buds
acquisitions on December 17, 2020 and December 18, 2020.
CORPORATE GOVERNANCE
Committees of the
Board
The Board has established various committees to assist it with the
performance of its responsibilities. These committees and their
members are listed below. The Board designates the members of these
committees and the committee chairs annually, usually, at its
organizational meeting following the annual meeting of
stockholders, based on the recommendation of the Nominating and
Corporate Governance Committee. The Board has adopted written
charters for each of these committees which can be found at the
investor relations section of the Company’s website
at www.schwazze.com. Copies are
also available in print to any stockholder upon written request to
Medicine Man Technologies, Inc., 4880 Havana Street, Suite 201,
Denver, Colorado 80239, Attention: Corporate Secretary. The chair
of each committee develops the agenda for that committee and
determines the frequency and length of committee meetings.
Audit Committee
Our Board has established an Audit Committee, which is composed of
Mr. Mukharji, Mr. Cozad, Mr. Garwood, and Mr. Wahdan. The Audit
Committee Chairman is Mr. Mukharji. The Board has determined that
Mr. Mukharji is an audit committee financial expert due to Mr.
Mukharji’s experience. Through his consulting work, Mr. Mukharji
has analyzed both public and private company financial statements,
performed due diligence work, implemented several financial
systems, and is proficient in internal controls and processes. The
Board has determined that Mr. Mukharji is independent under the
OTCQX Rules for U.S. Companies. The Audit Committee’s primary
duties are to:
|
· |
review and discuss with management and our
independent auditor our annual and quarterly financial statements
and related disclosures, including disclosure under “Management’s
Discussion and Analysis of Financial Condition and Results of
Operations,” and the results of the independent auditor’s audit or
review, as the case may be; |
|
· |
review our financial reporting processes and
internal control over financial reporting systems and the
performance, generally, of our internal audit function; |
|
· |
oversee the audit and other services of our
independent registered public accounting firm and be directly
responsible for the appointment, independence, qualifications,
compensation and oversight of the independent registered public
accounting firm, which reports directly to the Audit
Committee; |
|
· |
provide an open means of communication among our
independent registered public accounting firm, management, our
internal auditing function and our Board; |
|
· |
review any disagreements between our management
and the independent registered public accounting firm regarding our
financial reporting; |
|
· |
prepare the Audit Committee report for inclusion
in our proxy statement for our annual stockholder meetings;
and |
|
· |
establish procedures for complaints received
regarding our accounting, internal accounting control and auditing
matters. |
Our Audit Committee charter also mandates that our Audit Committee
approve all audit and permissible non-audit services conducted by
our independent registered public accounting firm. The Audit
Committee was established in 2016.
Nominating and Corporate Governance Committee
Our Board has also established a Nominating and Corporate
Governance Committee. The Nominating Corporate Governance Committee
consists of Mr. Cozad, Mr. Dye and Mr. Mukharji. The Nominating and
Governance Committee Chair is Mr. Mukharji. The Committee’s primary
duties are to:
|
· |
recruit new directors, consider director nominees
recommended by stockholders and others and recommend nominees for
election as directors; |
|
· |
review the size and composition of our Board and
its committees; |
|
· |
oversee the evaluation of the Board; |
|
· |
recommend actions to increase the Board’s
effectiveness; and |
|
· |
develop, recommend and oversee our corporate
governance principles, including our Code of Business Conduct and
Ethics and our Nominating and Corporate Governance
Guidelines. |
The Nominating and Corporate Governance Committee was established
in 2016.
Compensation Committee
Our Board has established a Compensation Committee. Mr. Cozad, Mr.
Dye, Mr. Garwood and Mr. Ruden serve on this committee. The
Compensation Committee Chairman is Mr. Dye. The Committee’s primary
duties are to:
|
· |
approve corporate goals and objectives relevant
to executive officer compensation and evaluate executive officer
performance in light of those goals and objectives; |
|
· |
determine and approve executive officer
compensation, including base salary and incentive
awards; |
|
· |
make
recommendations to the Board regarding compensation
plans; |
|
· |
administer our stock plan; and |
|
· |
prepare a report on executive compensation for
inclusion in our proxy statement for our annual stockholder
meetings. |
Our Compensation Committee determines and approves all elements of
executive officer compensation. It also provides recommendations to
the full Board with respect to non-employee director compensation.
The Compensation Committee may not delegate its authority to any
other person, although it may delegate its authority to a
subcommittee.
The Compensation Committee was established in 2016.
ITEM 11. |
EXECUTIVE COMPENSATION |
SUMMARY COMPENSATION TABLE
Name
and principal position |
|
|
Year |
|
|
Salary ($) |
|
|
Stock Awards
($)
|
|
|
Option
Awards
($) (5)
|
|
|
Total ($) |
|
Justin Dye, |
(1) |
|
|
2020 |
|
|
$ |
311,540 |
|
|
$ |
50,000 |
|
|
|
303,978 |
|
|
$ |
665,518 |
|
Chief Executive Officer |
|
|
|
2019 |
|
|
$ |
128,077 |
|
|
$ |
– |
|
|
|
5,280,532 |
|
|
$ |
5,408,609 |
|
Nancy Huber, |
(2) |
|
|
2020 |
|
|
$ |
207,695 |
|
|
$ |
– |
|
|
|
145,526 |
|
|
$ |
353,221 |
|
Chief Financial Officer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Daniel Pabon, General Counsel and |
(3) |
|
|
2020 |
|
|
$ |
228,461 |
|
|
$ |
– |
|
|
|
145,526 |
|
|
$ |
373,987 |
|
Chief Government Affairs Officer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nirup Krishnamurthy, |
(4) |
|
|
2020 |
|
|
$ |
218,306 |
|
|
$ |
– |
|
|
|
981,109 |
|
|
$ |
1,199,415 |
|
Chief Operating Officer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
Mr. Dye was named Chief Executive Officer and
Executive Chairman in December 2019. Prior to his appointment, Mr.
Dye served as the Company’s Chairman. The amounts listed under
Salary in 2019 includes $120,000 of board compensation. |
(2) |
Ms. Huber was named Chief Financial
Officer in December 2019 |
(3) |
Mr. Pabon was named General Counsel
and Chief Government Affairs Officer in August 2019. |
(4) |
Mr. Krishnamurthy was named Chief
Operating Officer in September 2020. |
(5) |
The amounts in the Options Award
column reflect the aggregate grant date fair value of stock options
granted during 2019 and 2020, computed in accordance with FASB ASC
Topic 718. This amount does not reflect the actual economic value
realized by the named executive officer. Assumptions used in the
calculation of the aggregated grant date fair value for these
options are included in Note 12 Stockholder’s Equity to our audited
financial statements, included in Item 8 of the Original 10-K. On
December 15, 2020, the Board repriced certain outstanding stock
options issued to the Company’s employees. The repriced stock
options had original exercise prices ranging from $1.52 per share
to $3.83 per share. All of these stock options were repriced to
have an exercise price of $1.26 per share, which was the closing
price of the Company’s Common Stock on December 15, 2020. The
repriced share fair value is included in the 2020 amounts within
the Options Award. The terms of the options are described under the
Outstanding Equity Awards at Fiscal Year-End Table below. |
OUTSTANDING OPTION AWARDS AT FISCAL YEAR END
The following table discloses information regarding outstanding
option equity awards granted or accrued as of December 31, 2020 for
each of our named executive officers.
|
|
Outstanding
Awards |
|
|
|
|
|
Option Awards |
|
Name |
|
Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable |
|
|
Option
Exercise
Price ($) |
|
|
Vesting start date |
|
Option
Expiration
Date |
Justin Dye |
|
|
2,000,000 |
|
|
|
1.26 |
|
|
12/05/2019 (2) |
|
12/15/2030 |
Nancy Huber |
|
|
50,000 |
|
|
|
1.26 |
|
|
03/30/2020 (1) |
|
12/15/2030 |
|
|
|
550,000 |
|
|
|
1.26 |
|
|
12/15/2019 (2) |
|
12/15/2030 |
|
|
|
100,000 |
|
|
|
1.26 |
|
|
03/27/2020 (2) |
|
12/15/2030 |
Daniel Pabon |
|
|
550,000 |
|
|
|
1.26 |
|
|
09/02/2019 (2) |
|
12/15/2030 |
|
|
|
100,000 |
|
|
|
1.26 |
|
|
03/27/2020 (2) |
|
12/15/2030 |
Nirup Krishnamurthy |
|
|
300,000 |
|
|
|
1.26 |
|
|
06/05/2019 (3) |
|
12/15/2030 |
|
|
|
300,000 |
|
|
|
1.26 |
|
|
06/05/2019 (3) |
|
12/15/2030 |
|
|
|
400,000 |
|
|
|
1.26 |
|
|
12/15/2020 (2) |
|
12/15/2030 |
(1) Options vested immediately.
(2) Options vest in four equal annual installments on the first,
second, third, and fourth anniversary of the vesting start
date.
(3) Options vest in two equal annual installments on the first and
second anniversary of the vesting start date.
DIRECTOR COMPENSATION
Director Compensation Policy
Through September 2020, director compensation was as follows:
|
· |
Non-employee directors received a monthly cash
retainer of $6,000 |
|
· |
Non-employee directors received a monthly cash
retainer of $2,000 for service on each committee of the
Board |
|
· |
The
Chairman of the Board received an additional monthly cash retainer
of $8,000 |
Starting in October 2020, we award each of our directors an annual
grant of shares of common stock worth $50,000 during the fourth
quarter of each year.
Director Compensation Table
The following provided compensation information for the year ended
December 31, 2020 for our non-executive directors.
Name |
|
Fees
Earned
or Paid
in Cash
($) |
|
|
Stock
Awards
($) |
|
|
Option
Awards
($)
|
|
|
All Other
Compensation
($) |
|
|
Total ($) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Leonardo Riera (1) |
|
$ |
217,808 |
|
|
$ |
50,000 |
|
|
$ |
666,509 |
|
|
$ |
160,000 |
|
|
$ |
1,094,317 |
|
Brian Ruden |
|
$ |
100,000 |
|
|
$ |
50,000 |
|
|
|
|
|
|
$ |
– |
|
|
$ |
142,735 |
|
Jeff Garwood |
|
$ |
50,000 |
|
|
$ |
50,000 |
|
|
|
|
|
|
$ |
– |
|
|
$ |
92,735 |
|
(1) |
Mr. Riera
resigned as director in January 2021. All other compensation
relates to severance related costs. As of December 31, 2020, Mr.
Riera held an option to purchase 225,000 shares of common stock for
$1.71 per share, which vested immediately on grant date of March 5,
2020. He also held an option to purchase 325,000 shares of common
stock for $1.17 per share, which vested immediately on November 10,
2020. The exercise price of the options is equal to the closing
stock market price of our common stock on the date of grant and the
options expire 10 years from the date of grant. For further
information, see Note 12 Stockholder’s Equity to our audited
financial statements, included in Item 8 of the Original
10-K. |
ITEM 12. |
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS |
The following table sets forth, based on 42,387,078 shares of our
common stock outstanding as of April 28, 2021, certain information
as to the stock ownership of each person known by us to own
beneficially more than five percent or more of our outstanding
common stock, of each of the named executive officers included in
the Summary Compensation Table and our directors, and of all our
current executive officers and directors as a group. In computing
the outstanding shares of common stock, we have excluded all shares
of common stock subject to options, warrants or other securities
that are not currently exercisable or convertible or exercisable or
convertible within 60 days and are therefore not deemed to be
outstanding and beneficially owned by the person holding the
options, warrants or other securities for the purpose of computing
the number of shares beneficially owned and the percentage
ownership of that person; provided, that we have included shares of
common stock underlying such options, warrants or other securities
with respect to each person who acquired any such options, warrants
or other securities with the purpose or effect of changing or
influencing the control of the Company in accordance with Rule
13d-3 promulgated under the Exchange Act. Unless otherwise
indicated, the address of each of the following beneficial owner is
c/o Medicine Man Technologies, Inc., 4880 Havana Street, Suite 201,
Denver, CO 80239. All beneficial ownership is direct and the
beneficial owner has sole voting and investment power over the
securities beneficially owned unless otherwise noted.
The Series A Preferred Stock is not convertible at a holder’s
election within 60 days after April 28, 2021. Accordingly, we have
excluded the shares of common stock issuable upon conversion of
shares of Series A Preferred Stock in the table below other than
with respect to holders who have a right to designate one or more
directors for appointment or election to the Board. If included in
the table below, the shares of common stock issuable upon
conversion of shares of Series A Preferred Stock are calculated by
including accrued but unpaid interest as of April 28, 2021.
Name of Beneficial
Holder |
|
Number of
Shares of Beneficially Owned (A) |
|
|
Percent of Outstanding Class |
|
Officers & Directors |
|
|
|
|
|
|
|
|
Justin Dye (1) |
|
|
41,814,155 |
|
|
|
55.88% |
|
Jeffrey Garwood |
|
|
107,735 |
|
|
|
0.25% |
|
Jeffery Cozad (2) |
|
|
21,773,870 |
|
|
|
33.95% |
|
Salim Wahdan (3) |
|
|
218,439 |
|
|
|
0.51% |
|
Pratap Mukharji |
|
|
64,192 |
|
|
|
0.15% |
|
Brian Ruden (4) |
|
|
9,609,890 |
|
|
|
18.50% |
|
Nancy Huber (5) |
|
|
225,042 |
|
|
|
0.53% |
|
Nirup Krishnamurthy (6) |
|
|
150,000 |
|
|
|
0.35% |
|
Dan Pabon (6) |
|
|
162,500 |
|
|
|
0.38% |
|
All Officers and Directors as a Group
(7 Persons) |
|
|
74,125,824 |
|
|
|
69.36% |
|
5% or greater holders: |
|
|
|
|
|
|
|
|
Dye Capital and Co. (7) |
|
|
41,233,801 |
|
|
|
55.47% |
|
CRW Capital Cann Holdings LLC (8) |
|
|
21,749,360 |
|
|
|
33.91% |
|
Dye Capital Cann Holdings, LLC
(9) |
|
|
18,575,000 |
|
|
|
35.95% |
|
Dye Capital Cann Holdings II, LLC
(10) |
|
|
18,317,509 |
|
|
|
30.17% |
|
Brian Ruden (11) |
|
|
9,609,890 |
|
|
|
18.50% |
|
Naser A. Joudeh (12) |
|
|
8,657,248 |
|
|
|
16.96% |
|
James E Parco (13) |
|
|
2,699,262 |
|
|
|
6.37% |
|
Charles Haupt (14) |
|
|
2,660,000 |
|
|
|
6.28% |
|
Haupt Stock Investments, LLC (15) |
|
|
2,610,000 |
|
|
|
6.16% |
|
_________________________
(1) Represents 80,354 shares
of common stock held by Mr. Dye, 500,000 shares of common stock
underlying options that have vested held by Mr. Dye, 9,287,500
shares of common stock and 9,287,500 shares of common stock
underlying warrants held by Dye Cann I, 4,341,292 shares of common
stock issuable upon conversion of Series A Preferred Stock held by
Dye Capital, and 18,317,509 shares of common stock issuable upon
conversion of Series A Preferred Stock held by Dye Cann II . Mr.
Dye has voting and investment control over the shares of common
stock beneficially owned by Dye Capital, Dye Cann I and Dye Cann
II. Mr. Dye disclaims beneficial ownership of the shares held by
Dye Capital, Dye Cann I and Dye Cann II except to the extent of his
pecuniary interest therein.
(2) Represents 24,510 shares of common stock held by Mr. Cozad and
21,749,360 shares of common stock issuable upon conversion of
Series A Preferred Stock held by CRW Capital Cann Holdings. Mr.
Cozad has voting and investment control over the shares of common
stock beneficially owned by CRW Capital Cann Holdings. Mr. Cozad
disclaims beneficial ownership of the shares held by CRW Capital
Cann Holdings except to the extent of his pecuniary interest
therein.
(3) Represents 24,510 shares and 193,929 shares underlying shares
of common stock underlying warrants.
(4) Represents 42,735 shares of common stock, 1,715,936 shares of
common stock underlying warrants, and 7,851,219 shares of common
stock issuable upon conversion of Series A Preferred Stock held by
Mr. Ruden
(5) Represents 12,542 shares of common stock and 212,500 shares of
common stock underlying options that have vested held by Ms.
Huber.
(6) Represents shares of common stock underlying options that have
vested.
(7) Represents 4,341,292 shares of common stock issuable upon
conversion of shares of Series A Preferred Stock held by Dye
Capital, 9,287,292 shares of common stock held by Dye Cann I,
9,287,292 shares of common stock issuable upon conversion of
warrants held by Dye Cann I, and 18,317,509 shares of common stock
issuable upon conversion of shares of Series A Preferred Stock held
by Dye Cann II. Dye Capital is the manager of each of Dye Cann I
and Dye Cann II and has voting and and investment control over the
shares beneficially owned by Dye Cann I and Dye Cann II. Justin Dye
is the general partner of Dye Capital and has voting and investment
control over the shares beneficially owned by Dye Capital and,
indirectly, over the shares beneficially ownedd by Dye Cann I and
Dye Cann II. Dye Capital, Dye Cann I and Dye Cann II’s
address is 350 Camino Gardens Blvd, Suite 200, Boca Raton, FL
33432. Dye Capital disclaims beneficial ownership of the
shares beneficially owned by Dye Cann I and Dye Cann II except to
the extent of its pecuniary interest therein. Mr. Dye disclaims
beneficial ownership of the shares beneficially owned by Dye
Capital, Dye Cann I and Dye Cann II except to the extent of his
pecuniary interest therein.
(9) Represents 9,287,500 shares of common stock and 9,287,500
shares of common stock underlying warrants held by Dye Cann I. Mr.
Dye has voting and investment control over the shares of common
stock beneficially owned by Dye Cann I. Mr. Dye disclaims
beneficial ownership of the shares held by Dye Cann I except to the
extent of his pecuniary interest therein. Dye Cann I’s address is
350 Camino Gardens Blvd, Suite 200, Boca Raton, FL 33432.
(10) Represents 18,317,509 shares of common stock issuable upon
conversion of Series A Preferred Stock held by Dye Cann II . Mr.
Dye has voting and investment control over the shares of common
stock beneficially owned by Dye Cann II. Mr. Dye disclaims
beneficial ownership of the shares held by Dye Cann II except to
the extent of his pecuniary interest therein. Dye Cann II’s address
is 350 Camino Gardens Blvd, Suite 200, Boca Raton, FL 33432.
(11) Represents 42,735 shares of common stock, 1,715,936 shares of
common stock underlying warrants, and 7,851,219 shares of common
stock issuable upon conversion of Series A Preferred Stock held by
Mr. Ruden.
(12) Represents 560,662 shares of common stock underlying warrants
and 2,565,309 shares of common stock issuable upon conversion of
Series A Preferred Stock held by Mr. Joudeh and 991,795 shares of
common stock underlying warrants and 4,539,482 shares of common
stock issuable upon conversion of Series A Preferred Stock held by
his spouse in her name and a wholely owned LLC. The Company does
not know if they share voting and investment power over these
securities. The address of Mr. Joudeh and his spouse is 16836 E.
Weaver Pl., Aurora, CO 80016
(13) Includes 1,421,877 shares held by James E Parco and 1,277,375
held by his wife, Pamela S. Parco. The Company does not know if
they share voting and investment power over these securities. The
address of Mr. Parco and his spouse is P.O. Box 324, Palmer Lake,
CO 80133
(14) Represents 50,000 shares of common stock held by Charles Haupt
and 3,542,786 shares held in the name of Haupt Stock Investments
LLC, over which Mr. Haupt has voting and investment control. The
address of Mr. Haupt and Haupt Stock Investments LLC is 27652
Schoolhouse Rd., Golden, CO 80403.
(15 Represents 3,542,786 shares held in the name of Haupt Stock
Investments LLC, over which Mr. Haupt has voting and investment
control. The address of Mr. Haupt and Haupt Stock Investments LLC
is 27652
Schoolhouse Rd., Golden, CO 80403.
The following table sets forth, based on 87,266 shares of Series A
Preferred Stock outstanding as of April 28, 2021, certain
information as to the stock ownership of each person known by us to
own beneficially more than five percent of the Series A Preferred
Stock, of each of the named executive officers included in the
Summary Compensation Table and our directors, and of all our
current executive officers and directors as a group. Unless
otherwise indicated, the address of each of the following
beneficial owner is c/o Medicine Man Technologies, Inc., 4880
Havana Street, Suite 201, Denver, CO 80239. All beneficial
ownership is direct and the beneficial owner has sole voting and
investment power over the securities beneficially owned unless
otherwise noted.
Name of Beneficial Holder |
|
Number of Shares of Beneficially Owned
(A) |
|
|
Percent of Outstanding Class |
|
Officers &
Directors |
|
|
|
|
|
|
|
|
Justin Dye
(1) |
|
|
26,410 |
|
|
|
30.26% |
|
Salim Wahdan |
|
|
1,036 |
|
|
|
1.19% |
|
Jeffery Cozad (2) |
|
|
25,350 |
|
|
|
29,05% |
|
Brian Ruden |
|
|
9,151 |
|
|
|
10.49% |
|
All Officers and Directors as a
Group (7 Persons) |
|
|
61,947 |
|
|
|
70.99% |
|
5% or greater
holders: |
|
|
|
|
|
|
|
|
Dye Capital and Co.
(3) |
|
|
26,410 |
|
|
|
30.26% |
|
CRW Capital Cann Holdings LLC
(4) |
|
|
25,350 |
|
|
|
29.05% |
|
Dye Capital Cann Holdings II, LLC
(5) |
|
|
21,350 |
|
|
|
24.47% |
|
Brian Ruden |
|
|
9,151 |
|
|
|
10.49% |
|
Naser A. Joudeh (6) |
|
|
8,281 |
|
|
|
9.49% |
|
|
|
|
|
|
|
|
|
|
___________________________
(1) |
|
Represents 25,350 shares of Series A Preferred
Stock held by Dye Cann II and 5,060 shares of Series A Preferred
Stock held by Dye Capital. Mr. Dye has voting and investment
control over the shares beneficially owned by Dye Cann II and Dye
Capital. |
(2) |
|
Represents 25,350 shares held by CRW. CRW
Capital, LLC is the manager of CRW and has voting and investment
control over the shares beneficially owned by CRW. Mr. Cozad is one
of the managers of CRW Capital, LLC and therefore has shared voting
and investment control over the shares beneficially owned by CRW.
Mr. Cozad disclaims beneficial ownership of the shares held by CRW
except to the extent of his pecuniary interest therein. |
(3) |
|
Represents 5,060 shares of Series A Preferred Stock held by Dye
Capital and 21,350 shares of Series A Preferred Stock held by Dye
Cann II. Dye Capital is the manager of Dye Cann II and has voting
and investment control over the shares beneficially owned by Dye
Cann II. Justin Dye is the general partner of Dye Capital and has
voting and investment control over the shares beneficially owned by
Dye Capital and, indirectly, over the shares beneficially owned by
Dye Cann II. Mr. Dye, Dye Capital, and Dye Cann II’s address
is 350 Camino Gardens Blvd, Suite 200, Boca Raton, FL 33432.
Dye Capital disclaims beneficial ownership of the shares
beneficially owned by Dye Cann II except to the extent of its
pecuniary interest therein. Mr. Dye disclaims beneficial ownership
of the shares beneficially owned by Dye Cann II except to the
extent of his pecuniary interest therein.
|
(4) |
|
CRW
Capital, LLC is the manager of CRW and has voting and investment
control over the shares beneficially owned by CRW. Jeffrey Cozad
and Marc Rubin are the managers of CRW Capital, LLC and share
voting and investment control over the shares beneficially owned by
CRW. CRW Capital, LLC and Messrs. Cozad and Rubin disclaim
beneficial ownership of the shares held by CRW except to the extent
of their respective pecuniary interest therein. The address for
CRW, CRW Capital LLC and Messrs. Cozad and Rubin is 4740 W.
Mockingbird Lane, P.O. Box 195579, Dallas, Texas 75209. |
(5) |
|
Represents 21,350 shares of
Series A Preferred Stock held by Dye Cann II. Dye Capital is the
manager of Dye Cann II and has voting and investment control over
the shares beneficially owned by Dye Cann II. Mr. Dye is the
general partner of Dye Capital and has voting and investment
control over the shares held by Dye Capital and, indirectly, over
the shares held by Dye Cann II. Dye Capital and Dye Cann II’s
address is 350 Camino Gardens Blvd, Suite 200, Boca Raton, FL
33432. Mr. Dye disclaims beneficial ownership of the
shares beneficially owned by Dye Cann II except to the extent of
his pecuniary interest therein. |
(6) |
|
Represents 2,990 shares held by Mr. Joudeh and
5,291 shares held by his spouse in her name and a wholly owned LLC.
The Company does not know if they share voting and investment power
over these securities. The address of Mr. Joudeh and his spouse is
16836 E. Weaver Pl., Aurora, CO 80016 |
|
|
|
Securities Authorized for Issuance under Equity Compensation
Plans
The following table summarizes plans under which our equity
securities are authorized for issuance as of December 31, 2020.
Plan
Category |
|
Number of
securities to
be issued
upon
exercise of
outstanding
options,
warrants
and rights |
|
|
Weighted-
average
exercise
prices of
outstanding
options,
warrants
and rights |
|
|
Number of
securities
remaining
available for
future
issuance
under the
equity
compensation
plans
(excluding
securities
reflected in
column (a)) |
|
|
|
(a) |
|
|
(b) |
|
|
|
|
Equity compensation plans
approved by security holders |
|
|
9,573,250 |
|
|
$ |
1.26 |
|
|
|
8,926,750 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
compensation plans not approved by security holders |
|
|
– |
|
|
$ |
– |
|
|
|
– |
|
Total |
|
|
– |
|
|
|
|
|
|
|
– |
|
The Medicine Man Technologies, Inc. 2017 Equity Incentive Plan, as
Amended (the “Plan”), is intended to promote the best interests of
the Company and its stockholders by assisting the Company in the
recruitment and retention of persons with ability and initiative
and providing an incentive to such persons to contribute to the
growth of the Company’s business. The Company is authorized to make
awards of up to an aggregate of 18,500,000 shares of the Company’s
common stock under the Pl The Company is authorized to make such
awards of shares of common stock, shares of restricted stock,
appreciation rights, deferred shares, performance shares, incentive
stock options, nonqualified stock options under the Plan. Eligible
persons under the Plan include employees, directors and consultants
of the Company or any affiliate of the Company. Unless earlier
terminated, the Plan will terminate in 2027.
Under two separate Securities Purchase Agreements the Company has
entered into with Dye Cann II and CRW, respectively, for as long as
Dye Cann II or CRW, as the case may be, holds any shares of Series
A Preferred Stock, the Company may not have issued and outstanding
awards under any equity incentive plan for the issuance of shares
of common stock representing more than 12% of the then-issued and
outstanding shares of common stock (calculated on an as-converted,
fully-diluted basis, excluding warrants) in the aggregate.
In addition, the Company has made the following awards outside of
the Plan: (i) the right to receive an aggregate of 1,500,000 shares
of common stock granted to two former officers (one of which also
is a former director), which will vest at such time that the
Company’s stock price appreciates to $8.00 per share with defined
minimum average daily trading volume thresholds, and (ii) options
to purchase an aggregate of 2,000,000 shares of common stock at an
exercise price of $1.49 per share granted to one former
officer.
ITEM 13. |
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
AND DIRECTOR INDEPENDENCE |
Related Party Transactions
Transactions Involving Former Directors, Executive Officers or
Their Affiliated Entities
During the year ended December 31, 2019, the Company recorded sales
to Futurevision, Inc., f/k/a Medicine Man Production Corp., d/b/a
Medicine Man Denver (“Medicine Man Denver), a customer of the
Company, totaling $402,839 and sales discounts totaling $143,473.
As of December 31, 2019, the Company had an accounts receivable
balance with Medicine Man Denver totaling $34,748. Also, during the
year ended December 31, 2019, the Company incurred expenses from
Medicine Man Denver totaling $125,897 for contract labor and other
related administrative costs. During the year ended December 31,
2020, the Company recorded sales to Medicine Man Denver, totaling
$997,262. The Company had an accounts receivable balance with
Medicine Man Denver totaling $72,109 as of December 31, 2020. The
Company’s former Chief Executive Officer, Andrew Williams,
currently owns 38% of Medicine Man Denver.
During the year ended December 31, 2019, the Company recorded sales
to MedPharm Holdings LLC (“MedPharm”), a customer of the Company,
totaling $64,378 and sales discounts totaling $7,498. As of
December 31, 2019, the Company had an accounts receivable balance
with MedPharm Holdings totaling $2,604. During the year ended
December 31, 2020, the Company recorded sales to MedPharm totaling
$73,557. The Company had a net accounts receivable balance with
MedPharm totaling $5,885 as of December 31, 2020.
During the year ended December 31, 2019, the Company made loans to
MedPharm totaling $767,695 evidenced by promissory notes with
original maturity dates ranging from September 21, 2019 through
January 19, 2020 and bearing interest between 8 and 10% per annum.
On August 1, 2020, the Company and MedPharm entered into a
Settlement Agreement and Mutual Release (the “Settlement
Agreement”) pursuant to which (i) the parties agreed that the
outstanding amount owed by MedPharm to the Company was $767,695 of
principal and $47,161 in accrued and unpaid interest, (ii) MedPharm
paid the Company $100,000 in cash, (iii) Andrew Williams returned
175,000 shares of the Company’s common stock to the Company, as
partial repayment of the outstanding balance at a value of $1.90
per share. These shares are held in treasury. The parties agreed
that MedPharm would pay the remaining balance of $181,911 by
delivering product to the Company on an agreed-upon schedule
through March 31, 2021.
During the year ended December 31, 2019, the Company recorded sales
to Baseball 18, LLC (“Baseball”) totaling $165,617. The revenue is
included under product sales - related party, net, in the Company’s
consolidated financial statements. As of December 31, 2019, the
Company had an accounts receivable balance with Baseball totaling
$169,960. During the year ended December 31, 2019, the Company
recorded sales from Farm Boy, LLC (“Farm Boy”) totaling $321,307.
The revenue is included under product sales - related party, net,
in the Company’s consolidated financial statements. As of December
31, 2019, the Company had an accounts receivable balance with Farm
Boy totaling $330,911. During the year ended December 31, 2020, the
Company recorded sales to Baseball totaling $14,605, to Farm Boy
totaling $16,125, to Emerald Fields LLC totaling $16,605, and to
Los Sueños Farms totaling $52,244. As of December 31, 2020 the
Company had net accounts payable balances with Baseball of $31,250,
and with Farm Boy of $93,944. One of the Company’s former
directors, Robert DeGabrielle, owns the Colorado retail marijuana
cultivation licenses for Baseball, Farm Boy, Emerald Fields LLC and
Los Sueños Farms.
Transactions with Entities Affiliated with Justin Dye
The Company has participated in several transaction involving Dye
Capital, Dye Cann I and Dye Cann II. Justin Dye, the Company’s
Chief Executive Officer, one of our directors, the largest
beneficial owner of the Company’s common stock and Series A
Preferred Stock, controls Dye Capital and Dye Capital controls Dye
Cann I and Dye Cann II. Dye Cann I is the largest holder of the
Company’s outstanding common stock. Dye Cann II is a significant
holder of the Series A Preferred Stock. Mr. Dye has sole voting and
dispositive power over the securities held by Dye Capital, Dye Cann
I, and Dye Cann II.
The Company entered into the Dye Cann I SPA with Dye Cann I on June
5, 2019, pursuant to which the Company agreed to sell to Dye Cann I
up to between 8,187,500 and 10,687,500 shares of the Company’s
common stock in several tranches at $2.00 per share and warrants to
purchase 100% of the number of shares of common stock sold at a
purchase price of $3.50 per share. At the initial closing on June
5, 2019, the Company sold to Dye Cann I 1,500,000 shares of common
stock and warrants to purchase 1,500,000 shares of common stock for
gross proceeds of $3,000,000, and the Company has consummated
subsequent closings for an aggregate of 9,287,500 shares of common
stock and warrants to purchase 9,287,500 shares of common stock for
aggregate gross proceeds of $18,575,000 to the Company. The terms
of the Dye Cann I SPA are disclosed in the Company’s Current Report
on Form 8-K filed on June 6, 2019. The Company and Dye Cann I
entered into a first amendment to the Dye Cann I SPA on July 15,
2019, as described in the Company’s Current Report on Form 8-K
filed on July 17, 2019, a second amendment to the Dye Cann I SPA on
May 20, 2020, as described in the Company’s Current Report on Form
8-K filed on May 22, 2020, and a Consent, Waiver and Amendment on
December 16, 2020, as described in the Company’s Current Report on
Form 8-K filed on December 23, 2020. At the time of the initial
closing under the Dye Cann I SPA, Justin Dye became a director and
the Company’s Chief Executive Officer.
The Company granted Dye Cann I certain demand and piggyback
registration rights with respect to the shares of common stock sold
under the Dye Cann II SPA and issuable upon exercise of the
warrants sold under the Dye Cann II SPA. The Company also granted
Dye Can I the right to designate one or more individuals for
election or appointment to the Board and Board observer rights as
described under Item 10. Directors, Executive Officers and
Corporate Governance – Board Designation Rights and such disclosure
is incorporated herein by reference. Further, under the Dye Cann I
SPA, until June 5, 2022, if the Company desires to pursue debt or
equity financing, the Company must first give Dye Cann I an
opportunity to provide a proposal to the Company with the terms
upon which Dye Cann I would be willing to provide or secure such
financing. If the Company does not accept Dye Cann I’s proposal,
the Company may pursue such debt or equity financing from other
sources but Dye Cann I has a right to participate in such financing
to the extent required to enable Dye Cann I to maintain the
percentage of the Company’s common stock (on a fully-diluted basis)
that it then owns, in the case of equity securities, or, in the
case of debt, a pro rata portion of such debt based on the
percentage of the Company’s common stock (on a fully-diluted basis)
that it then owns.
The Company entered into a Securities Purchase Agreement (the “Dye
Cann II SPA”) with Dye Cann II on November 16, 2020 pursuant to
which the Company agreed to sell to Dye Cann II shares of Series A
Preferred Stock in one or more tranches at a price of $1,000 per
share. The terms of the Dye Cann II SPA are disclosed in the
Company’s Current Report on Form 8-K filed on December 23, 2020.
The Company and Dye Cann II entered into an amendment to the Dye
Cann II SPA on December 16, 2020, as described in the Company’s
Current Report on Form 8-K filed on December 23, 2020, a second
amendment to the Dye Cann II SPA on February 3, 2021, as described
in the Company’s Form 8-K filed on February 9, 2021, and a third
amendment to the Dye Cann II SPA on March 30, 2021, as described
under Item 9B of this Report. The Company issued and sold to Dye
Cann II 7,700 shares of Series A Preferred Stock on December 16,
2020, 1,450 shares of Series A Preferred Stock on December 18,
2020, 1,300 shares of Series Preferred Stock on December 22, 2020,
3,100 shares of Series A Preferred Stock on February 3, 2021, 3,800
shares of Series A Preferred Stock on March 2, 2021 and 4,000
shares of Series A Preferred Stock on March 30, 2021. As a result,
the Company issued and sold an aggregate of 21,350 shares of Series
A Preferred Stock to Dye Cann II for aggregate gross proceeds of
$21,350,000.
The Company granted Dye Cann
II certain demand and
piggyback registration rights with respect to the shares of common
stock issuable upon conversion of the Series A Preferred Stock
under the Dye Cann II SPA. Further, the Company granted Dye Can II
the right to designate one or more individuals for election or
appointment to the Board and Board observer rights as described
under Item 10. Directors, Executive Officers and Corporate
Governance – Board Designation Rights and such disclosure is
incorporated herein by reference.
On December 16, 2020, the Company entered into a Secured
Convertible Note Purchase Agreement with Dye Capital and issued and
sold to Dye Capital a Convertible Note and Security Agreement in
the principal amount of $5,000,000 as described in the Company’s
Current Report on Form 8-K filed on December 23, 2020. On February
26, 2021, Dye Capital elected to convert the $5,000,000 principal
amount and the $60,250 of accrued but unpaid interest under the
Convertible Promissory Note and Security Agreement under its terms
and Dye Capital and the Company entered into a Conversion Notice
and Agreement pursuant to which the Company issued 5,060 shares of
Series A Preferred Stock to Dye Capital and also paid Dye Capital
$230.97 in cash in lieu of issuing any fractional shares of Series
Preferred Stock upon conversion, as described in the Company’s
Current Report on Form 8-K filed on March 4, 2021.
The Company previously reported the terms of the Series A Preferred
Stock in the Company’s Current Report on Form 8-K filed on December
23, 2020 and under Item 1 of this Report, which disclosure is
incorporated herein by reference.
During the year ended December 31, 2020, the Company recorded
expenses of $66,264 with Tella Digital. During the quarter ended
March 31, 2021, the Company recorded expenses of $170,119 with
Tella Digital. Tella Digital provides on-premise digital experience
solutions for our retail dispensary locations. Mr. Dye serves as
Chairman of Tella Digital and has super majority rights.
Transactions with CRW and Affiliated Entities
On February 26, 2021, the Company
entered into a Securities Purchase Agreement (the “CRW SPA”) with
CRW pursuant to which the Company issued and sold 25,350 shares of
Series A Preferred Stock to CRW at a price of $1,000 per share for
aggregate gross proceeds of $25,350,000. The transaction made CRW a
beneficial owner of more than 5% of the Company’s common stock. The
Company granted CRW certain
demand and piggyback registration rights with respect to the shares
of common stock issuable upon conversion of the Series A Preferred
Stock under the CRW SPA. On the same date, the Company entered into
a letter agreement with CRW, granting CRW the right to designate
one individual for election or appointment to the Board and Board
observer rights as described under Item 10. Directors, Executive
Officers and Corporate Governance – Board Designation Rights and
such disclosure is incorporated herein by reference. Under the
letter agreement, for as long as CRW has the right to designate a
Board member, if the Company, directly or indirectly, plans to
issue, sell or grant any securities or options to purchase any of
its securities, CRW has a right to purchase its pro rata portion of
such securities, based on the number of shares of Series A
Preferred Stock beneficially held by CRW on the applicable date on
an as-converted to common stock basis divided by the total number
of shares of common stock outstanding on such date on an
as-converted, fully-diluted basis (taking into account all
outstanding securities of the Company regardless of whether the
holders of such securities have the right to convert or exercise
such securities for common stock at the time of determination).
Further, under the letter agreement, the Company will pay CRW
Capital, LLC, the sole manager of CRW and a holder of a carried
interest in CRW, a monitoring fee equal to $150,000 in monthly
installments of $10,000. On March 14, 2021, the Board appointed
Jeffrey A. Cozad as a director to fill a vacancy on the Board. Mr.
Cozad is a manager and owns 50% of CRW Capital, LLC, and he shares
voting and disposition power over the shares of Series A Preferred
Stock held by CRW. Mr. Cozad and his family members indirectly own
membership interests in CRW. The Company previously reported the
terms of the CRW SPA and the CRW letter agreement in the Company’s
Current Report on Form 8-K filed March 4, 2021.
Transactions with Entities Affiliated with Brian Ruden
The Company has participated in several transactions involving
entities owned or affiliated with Brian Ruden, one of its directors
and a beneficial owner of more than 5% of the Company’s common
stock.
Between December 17, 2020 and March 2, 2021, the Company’s
wholly-owned subsidiary SBUD, LLC acquired the Star Buds assets on
the terms and as described in Note 11. Commitments and
Contingencies and Note 17. Subsequent Events to the Company’s
consolidated financial statements included in Item 8 of this Report
and such disclosure is incorporated by reference herein. The
Company previously reported the terms of the applicable purchase
agreements and related amendments in the Company’s Current Reports
on Form 8-K filed June 8, 2020, September 21, 2020, December 22,
2020, and March 8, 2021.
The aggregate purchase price for the Star Buds assets was
$118,000,000, paid as follows: (i) $44,250,000 in cash at the
applicable closings, (ii) $44,250,000 in deferred cash, also
referred to in this Report as “seller note(s),” (iii) 29,500 shares
of Series A Preferred Stock, of which 25,075 shares were issued at
the applicable closings and 4,425 shares are held in held in escrow
and will be released post-closing to either Star Buds or the
Company depending on post-closing adjustments to the purchase
price. In addition, the Company issued warrants to purchase an
aggregate of 5,531,250 shares of the Company’s common stock to the
sellers. As of March 31, 2021, the Company owed an aggregate
principal amount of $44,250,000 under the seller notes and accrued
but unpaid interest of $425,162. The Company has not paid any
principal and has paid an aggregate of $810,887 of interest on the
seller notes as of March 31, 2021. Mr. Ruden’s interest in the
aggregate purchase price for the Star Buds assets is as follows:
(i) $13,727,490 in cash at the applicable closings, (ii)
$13,727,490 in seller notes, (iii) 9,152 shares of Series A
Preferred Stock, of which 7,779 shares were issued at the
applicable closings and 1,373 shares are held in held in escrow and
will be released post-closing to either Mr. Ruden or the Company
depending on post-closing adjustments to the purchase price. In
addition, the Company issued warrants to purchase an aggregate of
1,715,936 shares of the Company’s common stock to Mr. Ruden and
paid Mr. Ruden an aggregate of $111,824 in interest on his seller
notes.
Mr. Ruden was a part-owner of each of the Star Buds Companies. Mr.
Ruden owned 50% of Colorado Health Consultants LLC, 50% of Starbuds
Aurora LLC, 50% of Starbuds Pueblo LLC, 50% of Starbuds Alameda
LLC, 48% of SB Arapahoe LLC, 36% of Starbuds Commerce City LLC, 30%
of Starbuds Louisville LLC, 25% of Starbuds Niwot LLC, 16.66% of
Lucky Ticket LLC, 15% of KEW LLC, and 10% of LM MJC LLC.
In connection with acquiring the Star Buds assets for our Pueblo
West and Commerce City locations, SBUD LLC entered into a lease
with each of 428 S. McCulloch LLC and 5844 Ventures LLC on
substantially the same terms.
Each of the leases is for an initial three-year term. The lease
with 428 S. McCulloch LLC is for the Company’s Pueblo West Star
Buds location and was effective on December 17, 2020. The lease
with 45844 Ventures LLC is for the Company’s Commerce City Star
Buds location and was effective on December 18, 2020. Each lease
provides for a monthly rent payment of $5,000. SBUD LLC expect to
pay each landlord an aggregate of $180,000 during the initial term
of the leases. During 2020, SBUD LLC made aggregate rent payments
of $10,000. Between January 1, 2021 and March 31, 2021, SBUD LLC
made aggregate rent payments of $30,000. In addition, SBUD LLC must
pay each landlord’s expenses and disbursements incurred in
connection with the ownership, operation, maintenance, repair and
replacement of the premises. SBUD LLC has the option to renew each
lease for two additional three-year terms. The rent increase to
$5,500 per month during the first three-year renewal period, and to
$6,050 during the second three-year renewal period. The Company has
an option to purchase the premises at fair market value at any time
during the lease term and also has a right of first refusal if the
landlords desire to sell the premises to a third party.
On December 17, 2020, SBUD, LLC entered into a Trademark License
Agreement with Star Brands LLC under which Star Brands LLC licenses
certain trademarks to SBUD, LLC effective as of the closing of the
acquisitions of all of the Star Buds assets. SBUD LLC has no
payment obligation under this agreement. Mr. Ruden is a part-owner
of Star Brands LLC.
In connection with the Star Buds acquisitions, the Company granted
Mr. Ruden and Naser Joudeh the right designate individuals for
election or appointment to the Board as described under the Item
10. Directors, Executive Officers and Corporate Governance – Board
Designation Rights and such disclosure is incorporated herein by
reference.
Procedures for Approval of Related Party
Transactions
Related party transactions are subject to the advance review and
approval of the Audit Committee and/or the full Board, with advice
from outside counsel. In its review, the Audit Committee and/or
Board is provided with full disclosure of the parties involved in
the transaction and considers the relationships amongst the parties
and members of our Board and executive officers.
Our bylaws provide that until June 5, 2021, at least four members
of the Board must vote in favor of certain specified actions,
including, among others, entering into or be a party to or making
modifications to any transaction with any director or officer of
the Company or any “associate” (as defined in Rule 12b-2
promulgated under the Exchange Act) of any such person (including
any family member thereof).
Independence Standards for Directors
Our Board is currently comprised of six members, and one seat is
open at this time. Our Board has affirmatively determined that Mr.
Cozad, Mr. Garwood and Mr. Mukharji are each independent within the
meaning of the OTCQX Rules for U.S. Companies. The Board currently
has four members on its Audit Committee, three of which are
independent, Mr. Cozad, Mr. Garwood, and Mr. Mukharji which meets
the qualification of the OTCQX Rules for U.S. Companies.
ITEM 14. |
PRINCIPAL ACCOUNTING FEES AND
SERVICES. |
The following table sets forth the aggregate fees billed by BF
Borgers, CPA P.C. (“BFB”), our independent registered accounting
firm for the fiscal years ended December 31, 2020 and December 31,
2019. These fees are categorized as audit fees, audit-related fees,
tax fees, and all other fees. The nature of the services provided
in each category is described in the table below.
|
|
2020 |
|
|
2019 |
|
Audit fees |
|
$ |
86,400 |
|
|
$ |
115,000 |
|
Audit-related fees |
|
|
– |
|
|
|
– |
|
Tax fees |
|
|
– |
|
|
|
2,500 |
|
All other
fees |
|
|
– |
|
|
|
– |
|
Total Fees |
|
$ |
86,400 |
|
|
$ |
117,500 |
|
Audit fees. Consist of fees billed for professional services
rendered for the audit of the consolidated financial statements and
review of the quarterly interim consolidated financial statements.
These fees also include the review of registration statements and
the delivery of consents in connection with registration
statements.
Tax fees. Consists of fees paid to BFB related to the filings of
federal and state returns during the years ended December 31,
2019.
The Audit Committee of our Board has established its pre-approval
policies and procedures, pursuant to which the Audit Committee
approved the foregoing audit and tax services provided by BFB in
2020 and 2019 consistent with the Audit Committee’s responsibility
for engaging our independent auditors. The Audit Committee also
considered whether the non-audit services rendered by our
independent registered public accounting firm are compatible with
an auditor maintaining independence. The Audit Committee has
determined that the rendering of such services is compatible with
BFB maintaining its independence.
PART IV
ITEM 15. |
EXHIBITS, FINANCIAL STATEMENT
SCHEDULES |
The following documents are filed or furnished as part of this
Report:
1. Financial
Statements
See listing of Consolidated Financial Statements included as part
of this Report in Item 8 of Part II.
2. Financial Statement
Schedules
All schedules have been omitted because they are not required, not
applicable, not present in amounts sufficient to require submission
of the schedule, or the required information is otherwise
included.
3. Exhibits
The following exhibits are incorporated by reference into or are
filed or furnished with this Report as indicated below:
Exhibit
No. |
|
Description |
|
|
|
2.1 |
|
Merger Agreement dated
November 23, 2019, by and among Medicine Man Technologies, Inc.,
PBS Merger Sub, LLC, Mesa Organics Ltd., James Parco, and Pamela
Parco (Incorporated by reference to Exhibit 2.1 to Medicine Man
Technologies, Inc.’s Current Report on Form 8-K filed November 29,
2019 (Commission File No. 001-55450)) |
2.2 |
|
First Amendment dated
April 16, 2020 to Merger Agreement dated November 23, 2019, by and
among Medicine Man Technologies, Inc., PBS Merger Sub, LLC, Mesa
Organics Ltd., James Parco, and Pamela Parco (Incorporated by
reference to Exhibit 2.2 to Medicine Man Technologies, Inc.’s
Current Report on Form 8-K filed April 24, 2020 (Commission File
No. 001-55450)) |
2.3 |
|
Asset Purchase Agreement
entered into by and among Medicine Man Technologies, Inc., SBUD
LLC, and Colorado Health Consultants, LLC, dated June 5, 2020
(Incorporated by reference to Exhibit 2.1 to Medicine Man
Technologies, Inc.’s Current Report on Form 8-K filed June 8, 2020
(Commission File No. 001-55450)) |
2.4 |
|
Asset Purchase Agreement
entered into by and among Medicine Man Technologies, Inc., SBUD
LLC, and CitiMed, LLC, dated June 5, 2020 (Incorporated by
reference to Exhibit 2.2 to Medicine Man Technologies, Inc.’s
Current Report on Form 8-K filed June 8, 2020 (Commission File No.
001-55450)) |
2.5 |
|
Asset Purchase Agreement
entered into by and among Medicine Man Technologies, Inc., SBUD
LLC, and Lucky Ticket LLC, dated June 5, 2020 (Incorporated by
reference to Exhibit 2.3 to Medicine Man Technologies, Inc.’s
Current Report on Form 8-K filed June 8, 2020 (Commission File No.
001-55450)) |
2.6 |
|
Asset Purchase Agreement
entered into by and among Medicine Man Technologies, Inc., SBUD
LLC, and Kew LLC, dated June 5, 2020 (Incorporated by reference to
Exhibit 2.4 to Medicine Man Technologies, Inc.’s Current Report on
Form 8-K filed June 8, 2020 (Commission File No.
001-55450)) |
2.7 |
|
Asset Purchase Agreement
entered into by and among Medicine Man Technologies, Inc., SBUD
LLC, and SB Aurora LLC, dated June 5, 2020 (Incorporated by
reference to Exhibit 2.5 to Medicine Man Technologies, Inc.’s
Current Report on Form 8-K filed June 8, 2020 (Commission File No.
001-55450)) |
2.8 |
|
Asset Purchase Agreement
entered into by and among Medicine Man Technologies, Inc., SBUD
LLC, and SB Arapahoe LLC, dated June 5, 2020 (Incorporated by
reference to Exhibit 2.6 to Medicine Man Technologies, Inc.’s
Current Report on Form 8-K filed June 8, 2020 (Commission File No.
001-55450)) |
2.9 |
|
Asset Purchase Agreement
entered into by and among Medicine Man Technologies, Inc., SBUD
LLC, and SB 44th LLC, dated June 5, 2020 (Incorporated by reference
to Exhibit 2.7 to Medicine Man Technologies, Inc.’s Current Report
on Form 8-K filed June 8, 2020 (Commission File No.
001-55450)) |
2.10 |
|
Asset Purchase Agreement
entered into by and among Medicine Man Technologies, Inc., SBUD
LLC, and Starbuds Pueblo LLC, dated June 5, 2020 (Incorporated by
reference to Exhibit 2.8 to Medicine Man Technologies, Inc.’s
Current Report on Form 8-K filed June 8, 2020 (Commission File No.
001-55450)) |
2.11 |
|
Asset Purchase Agreement
entered into by and among Medicine Man Technologies, Inc., SBUD
LLC, and Starbuds Louisville LLC, dated June 5, 2020 (Incorporated
by reference to Exhibit 2.9 to Medicine Man Technologies, Inc.’s
Current Report on Form 8-K filed June 8, 2020 (Commission File No.
001-55450)) |
2.12 |
|
Asset Purchase Agreement
entered into by and among Medicine Man Technologies, Inc., SBUD
LLC, and Starbuds Niwot LLC, dated June 5, 2020 (Incorporated by
reference to Exhibit 2.10 to Medicine Man Technologies, Inc.’s
Current Report on Form 8-K filed June 8, 2020 (Commission File No.
001-55450)) |
2.13 |
|
Asset Purchase Agreement
entered into by and among Medicine Man Technologies, Inc., SBUD
LLC, and Alameda LLC, dated June 5, 2020 (Incorporated by reference
to Exhibit 2.11 to Medicine Man Technologies, Inc.’s Current Report
on Form 8-K filed June 8, 2020 (Commission File No.
001-55450)) |
2.14 |
|
Asset Purchase Agreement
entered into by and among Medicine Man Technologies, Inc., SBUD
LLC, and Starbuds Longmont LLC, dated June 5, 2020 (Incorporated by
reference to Exhibit 2.12 to Medicine Man Technologies, Inc.’s
Current Report on Form 8-K filed June 8, 2020 (Commission File No.
001-55450)) |
2.15 |
|
Asset Purchase Agreement
entered into by and among Medicine Man Technologies, Inc., SBUD
LLC, and Starbuds Commerce City LLC, dated June 5, 2020
(Incorporated by reference to Exhibit 2.13 to Medicine Man
Technologies, Inc.’s Current Report on Form 8-K filed June 8, 2020
(Commission File No. 001-55450)) |
2.16 |
|
Omnibus Amendment No. 1
dated September 15, 2020 to Asset Purchase Agreements dated June 5,
2020 (Incorporated by reference to Exhibit 2.1 to Medicine Man
Technologies, Inc.’s Current Report on Form 8-K filed September 21,
2020 (Commission File No. 001-355450)) |
2.17 |
|
Omnibus Amendment No. 2
to Asset Purchase Agreement, dated as of December 17, 2020, by and
among SBUD LLC, Medicine Man Technologies, Inc., and each signatory
thereto designated as a seller (Incorporated by reference to
Exhibit 2.1 to Medicine Man Technologies, Inc.’s Current Report on
Form 8-K filed December 23, 2020 (Commission File No.
001-55450)) |
3.1 |
|
Articles of Incorporation filed with the
Secretary of State of Nevada on March 20, 2014 |
3.2 |
|
Certificate of Amendment to Articles of
Incorporation filed with the Secretary of State of Nevada on August
25, 2014 |
3.3 |
|
Certificate of Amendment to Articles of
Incorporation filed with the Secretary of State of Nevada on March
19, 2015 |
3.4 |
|
Articles of Exchange filed with the with the
Secretary of State of Nevada on June 7, 2017 |
3.5 |
|
Certificate of Amendment to Articles of
Incorporation filed with the Secretary of State of Nevada on
December 13, 2019 |
3.6 |
|
Certificate of Designation of Series A Cumulative
Convertible Preferred Stock filed with the Secretary of State of
Nevada on December 16, 2020 |
3.7 |
|
Certificate of Amendment to Designation of Series
A Cumulative Convertible Preferred Stock filed with the Secretary
of State of Nevada on March 1, 2021 |
3.8 |
|
Complete Articles of Incorporation together with
Certificates of Amendment, Articles of Exchane and the Certificate
of Designation of Series A Cumulative Convertible Preferred Stock,
as amended |
3.9 |
|
Amended and Restated
Bylaws of Medicine Man Technologies, Inc. (Incorporated by
reference to Exhibit 3.1 to Medicine Man Technologies, Inc.’s
Current Report on Form 8-K filed December 11, 2019 (Commission File
No. 001-55450)) |
4.1* |
|
Description of Capital Stock of
Medicine Man Technologies, Inc. |
4.2+ |
|
Medicine Man
Technologies, Inc. 2017 Equity Incentive Plan (incorporated by
reference to Exhibit 4.1 to Medicine Man Technologies, Inc.’s
Registration Statement on Form S-8 filed June 12, 2017 (Commission
File No. 333-218662)) |
4.3+ |
|
Amendment to Medicine Man Technologies, Inc.
2017 Equity Incentive Plan |
4.4+ |
|
Amendment to Medicine
Man Technologies, Inc. 2017 Equity Incentive Plan (Incorporated by
reference to Exhibit 10.1 to Medicine Man Technologies, Inc.’s
Current Report on Form 8-K filed December 16, 2019 (Commission File
No. 001-55450)) |
4.5+ |
|
Amendment to Medicine Man
Technologies, Inc. 2017 Equity Incentive Plan |
4.6 |
|
Form
of Stock Option Award Agreement |
4.7* |
|
Form of Warrant to Purchase Common
Stock of Medicine Man Technologies, Inc. issued on June 5,
2019 |
4.8* |
|
Warrant to Purchase Common Stock of
Medicine Man Technologies, Inc. |
4.9 |
|
Convertible Note and
Security Agreement, dated December 16, 2020, issued to Dye Capital
& Company, LLC (Incorporated by reference to Exhibit 4.1 to
Medicine Man Technologies, Inc.’s Current Report on Form 8-K filed
December 23, 2020 (Commission File No. 001-55450)) |
4.10 |
|
Form
of Warrant to Purchase Common Stock of Medicine Man Technologies,
Inc. issued to Star Buds Sellers and Members |
10.1 |
|
Technology License
Agreement effective as of May 1, 2014 between Medicine Man
Production Corporation and Medicine Man Technologies Inc.
(Incorporated by reference to Exhibit 10.1 to Medicine Man
Technologies, Inc.’s Registration Statement on Form S-1 filed April
14, 2015 (Commission File No. 333-203424)) |
10.2 |
|
Letter Agreement dated
February 5, 2015 between Breakwater Corporate Finance and Medicine
Man Technologies, Inc.(Incorporated by reference to Exhibit 10.2 to
Medicine Man Technologies, Inc.’s Registration Statement on Form
S-1 filed April 14, 2015 (Commission File No.
333-203424)) |
10.3 |
|
Form of Medicine Man
Technologies License Agreement by and between Medicine Man
Technologies, Inc. and the Licensees identified therein
(Incorporated by reference to Exhibit 10.3 to Medicine Man
Technologies, Inc.’s Amendment to Registration Statement on Form
S-1/A filed September 11. 2015 (Commission File No.
333-203424)) |
10.4 |
|
Share Exchange Agreement
as of February 27, 2017 among Medicine Man Technologies, Inc.,
Success Nutrients, Inc. and the shareholders of Success Nutrients,
Inc. (Incorporated by reference to Exhibit 10.4 to Medicine Man
Technologies, Inc.’s Annual Report on Form 10-K filed April 17,
2017 (Commission File No. 000-55450)) |
10.5 |
|
Agreement and Plan of
Merger as of February 27, 2017 among Medicine Man Technologies,
Inc., Medicine Man Consulting, Inc. and Pono Publications Ltd.
(Agreement between the Company and Pono Publications, Inc.
(Incorporated by reference to Exhibit 10.5 to Medicine Man
Technologies, Inc.’s Annual Report on Form 10-K filed April 17,
2017 (Commission File No. 000-55450)) |
10.6 |
|
Office Building Lease as
of January 31, 2017 by and between Havana Gold LLC and Medicine Man
Technologies, Inc. (Incorporated by reference to Exhibit 10.6 to
Medicine Man Technologies, Inc.’s Annual Report on Form 10-K filed
April 17, 2017 (Commission File No.
000-55450)) |
10.7 |
|
Share Exchange Agreement
as of July 21, 2017 by and among Medicine Man Technologies, Inc.,
Denver Consulting Group LLC and the members of Denver Consulting
Group, LLC (Incorporated by reference to Exhibit 10.7 of Medicine
Man Technologies, Inc.’s current report on Form 8-K filed July 26,
2017 (Commission File No. 000-55450)) |
10.8 |
|
Securities Purchase
Agreement, dated June 5, 2019, by and between Medicine Man
Technologies, Inc. and Dye Capital Cann Holdings, LLC (Incorporated
by reference to Exhibit 10.1 of Medicine Man Technologies, Inc.’s
Current Report on Form 8-K filed June 6, 2019 (Commission File No.
001-55450)) |
10.9 |
|
Amendment to Securities
Purchase Agreement, dated July 15, 2019, by and between Medicine
Man Technologies, Inc. and Dye Capital Cann Holdings, LLC
(Incorporated by reference to Exhibit 10.1 of Medicine Man
Technologies, Inc.’ s Current Report on Form 8-K filed July 17,
2019 (Commission File No. 001-55450)) |
10.10 |
|
Amendment to Securities
Purchase Agreement, dated May 20, 2020, by and between Medicine Man
Technologies, Inc. and Dye Capital Cann Holdings, LLC (Incorporated
by reference to Exhibit 10.1 of Medicine Man Technologies, Inc.’ s
Current Report on Form 8-K filed May 22, 2020 (Commission File No.
001-55450)) |
10.11 |
|
Binding Term Sheet,
dated August 6, 2019, between Medicine Man Technologies, Inc. and
Cold Baked, LLC/Golden Works, LLC (Incorporated by reference to
Exhibit 10.1 of Medicine Man Technologies, Inc.’s Current Report on
Form 8-K filed August 12, 2019 (Commission File No.
001-55450)) |
10.12+ |
|
Employment Agreement
dated December 5, 2019 by and between Justin Dye and Medicine Man
Technologies, Inc. (Incorporated by reference to Exhibit 10.10 of
Medicine Man Technologies, Inc.’s Annual Report on Form 10-K filed
March 30, 2020 (Commission File No. 001-55450)) |
10.13+ |
|
Employment Agreement
dated December 5, 2019 by and between Nancy Huber and Medicine Man
Technologies, Inc. (Incorporated by reference to Exhibit 10.11 of
Medicine Man Technologies, Inc.’s Annual Report on Form 10-K filed
March 30, 2020 (Commission File No. 001-55450)) |
10.14+ |
|
Amendment to Employment
Agreement dated February 6, 2020 by and between Nancy Huber and
Medicine Man Technologies, Inc. (Incorporated by reference to
Exhibit 10.12 of Medicine Man Technologies, Inc.’s Annual Report on
Form 10-K filed March 30, 2020 (Commission File No.
001-55450)) |
10.15+ |
|
Employment Agreement as
of December 5, 2020 by and between Bob DeGabrielle and Medicine Man
Technologies, Inc.(Incorporated by reference to Exhibit 10.13 of
Medicine Man Technologies, Inc.’s Annual Report on Form 10-K filed
March 30, 2020 (Commission File No. 001-55450)) |
10.16+ |
|
Employment Agreement
dated August 12, 2019 by and between Daniel R. Pabon and Medicine
Man Technologies, Inc. (Incorporated by reference to Exhibit 10.14
of Medicine Man Technologies, Inc.’s Annual Report on Form 10-K
filed March 30, 2020 (Commission File No.
001-55450)) |
10.17+ |
|
Employment Agreement
dated March 1, 2020 by and between Nirup Krishnamurthy and Medicine
Man Technologies, Inc. (Incorporated by reference to Exhibit 10.1
of Medicine Man Technologies, Inc.’s Current Report on Form 8-K
filed September 15, 2020 (Commission File No.
001-55450)) |
10.18+ |
|
Severance Agreement and
Release, dated February 25, 2020 by and between the Andrew Johns
Williams and Medicine Man Technologies, Inc. (Incorporated by
reference to Exhibit 10.1 to Medicine Man Technologies, Inc.’s
Current Report on Form 8-K filed March 3, 2020 (Commission File No.
001-55450)) |
10.19 |
|
Securities Purchase
Agreement, dated November 16, 2020, by and between Medicine Man
Technologies, Inc. and Dye Capital Cann Holdings II, LLC
(Incorporated by reference to Exhibit 10.1 to Medicine Man
Technologies, Inc.’s Quarterly Report on Form 10-Q filed November
16, 2020 (Commission File No. 000-55450)) |
10.20 |
|
Amendment to Securities
Purchase Agreement, dated December 16, 2020, by and between
Medicine Man Technologies, Inc. and Dye Capital Cann Holdings II,
LLC (Incorporated by reference to Exhibit 10.2 to Medicine Man
Technologies, Inc.’s Current Report on Form 8-K filed December 23,
2020 (Commission File No. 000-55450)) |
10.21* |
|
Letter
Agreement, dated December 16, 2020, by and between Medicine Man
Technologies, Inc. and Dye Capital Cann Holdings II,
LLC |
10.22 |
|
Note Purchase Agreement,
dated December 16, 2020, by and between Medicine Man Technologies,
Inc. and Dye Capital & Company, LLC (Incorporated by reference
to Exhibit 10.4 to Medicine Man Technologies, Inc.’s Current Report
on Form 8-K filed December 23, 2020 (Commission File No.
000-55450)) |
10.23 |
|
Consent, Waiver and
Amendment, dated December 16, 2020, by and between Medicine Man
Technologies, Inc. and Dye Capital Cann Holdings, LLC (Incorporated
by reference to Exhibit 10.5 to Medicine Man Technologies, Inc.’s
Current Report on Form 8-K filed December 23, 2020 (Commission File
No. 000-55450)) |
10.24* |
|
Paul
Dickman Restricted Stock Unit Agreement |
10.25* |
|
Third
Amendment to Securities Purchase Agreement, dated March 30, 2021,
between Medicine Man Technologies, Inc. and Dye Capital Cann
Holdings II, LLC |
10.26 |
|
Trademark License
Agreement |
14.1 |
|
Code of Business Conduct
and Ethics (Incorporated by reference to Exhibit 14.1 to Medicine
Man Technologies, Inc.’s Annual Report on Form 10-K filed April 14,
2016 (Commission File No. 000-55450)) |
21.1* |
|
List of
Subsidiaries |
23.1* |
|
Consent
of BF Borgers CPA PC |
31.1* |
|
Certification of Chief Executive Officer Pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002 |
31.2* |
|
Certification of Chief Financial Officer Pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002 |
31.3 |
|
Certification of Chief Executive Officer Pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002 |
31.4 |
|
Certification of Chief Financial Officer Pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002 |
32.1** |
|
Certification of Chief Executive Officer and
Chief Financial Officer Pursuant to 18 U.S.C. Section
1350 |
101.INS* |
|
XBRL
Instance Document. |
101.SCH* |
|
XBRL
Taxonomy Extension Schema. |
101.CAL* |
|
XBRL
Taxonomy Extension Calculation Linkbase. |
101.DEF* |
|
XBRL
Taxonomy Extension Definition Linkbase. |
101.LAB* |
|
XBRL
Taxonomy Extension Label Linkbase. |
101.PRE* |
|
XBRL
Taxonomy Extension Presentation Linkbase. |
104* |
|
Cover
Page Interactive Date File (formatted in iXBRL in Exhibit
101) |
+ Indicates management contract or compensatory plan or
arrangement.
* Previously filed with the Original 10-K.
** Previously furnished with the Original 10-K.
*** Furnished herewith.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this Annual Report to be signed on its behalf by the undersigned
thereunder duly authorized.
Dated: April 30, 2021 |
MEDICINE
MAN TECHNOLOGIES, INC. |
|
|
|
By: /s/ Justin
Dye |
|
Justin Dye |
|
Chief Executive
Officer |
|
(Principal Executive
Officer) |
|
|
|
By: /s/ Nancy
Huber |
|
Nancy Huber |
|
Chief Financial
Officer |
|
(Principal Financial and
Accounting Officer) |
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the registrant and in the capacities and on the dates
indicated.
Signature |
|
Title |
|
Date |
|
|
|
|
|
/s/ Justin Dye |
|
Chief Executive Officer and
Executive Chairman |
|
April 30, 2021 |
Justin Dye |
|
(Principal Executive
Officer) |
|
|
|
|
|
|
|
/s/ Nancy Huber |
|
Chief Financial
Officer |
|
April 30, 2021 |
Nancy Huber |
|
(Principal Financial
Officer) |
|
|
|
|
|
|
|
/s/ Daniel Pabon |
|
General Counsel and Chief
Government Affairs Officer |
|
April 30, 2021 |
Daniel Pabon |
|
|
|
|
|
|
|
|
|
/s/ Nirup Krishnamurthy |
|
Chief Operating
Officer |
|
April 30, 2021 |
Nirup Krishnamurthy |
|
|
|
|
|
|
|
|
|
/s/ Jeffrey A. Cozad |
|
Director |
|
April 30, 2021 |
Jeffrey A. Cozad |
|
|
|
|
|
|
|
|
|
/s/ Salim Wahdan |
|
Director |
|
April 30, 2021 |
Salim Wahdan |
|
|
|
|
|
|
|
|
|
/s/ Brian Ruden |
|
Director |
|
April 30, 2021 |
Brian Ruden |
|
|
|
|
|
|
|
|
|
/s/ Jeff Garwood |
|
Director |
|
April 30, 2021 |
Jeff
Garwood |
|
|
|
|
|
|
|
|
|
/s/ Pratap Mukharji |
|
Director |
|
April 30, 2021 |
Pratap Mukharji |
|
|
|
|
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