UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
Amendment No. 1
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 30, 2014
CANNABIS SATIVA, INC.
(Exact name of registrant as specified in its charter)
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Nevada
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000-53571
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20-1898270
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(State or other jurisdiction of incorporation)
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(Commission File Number)
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(IRS Employer Identification No.)
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1646 W. Pioneer Blvd., Suite 120, Mesquite, NV 89027
(Address of principal executive offices, including Zip Code)
Registrant’s telephone number, including area code: (702) 346-3906
___________________________________________________
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Explanatory note
On July 7, 2014, Cannabis Sativa, Inc. (the “Company”) filed a Current Report on Form 8-K (the “Initial Form 8-K”) to report the completion of the acquisition of Kush, a Nevada corporation (“Kush”). We are filing this Amendment No. 1 to amend Item 9.01 to provide certain pro forma financial information with respect to the Company and Kush as required by Item 9.01(b). No other modifications to the Initial Form 8-K are being made by this Form 8-K/A.
Item 9.01. Financial Statements and Exhibits.
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(a)
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Financial statements of businesses acquired.
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The following financial statements are included in the Initial Form 8-K, immediately following the signature page:
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Audited Financial Statements of Kush as of December 31, 2013 and for the period from January 24, 2013 (inception) through December 31, 2013.
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Unaudited interim financial statements of Kush as of March 31, 2014 and for the three months then ended.
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(b)
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Pro forma financial information.
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The following pro forma financial information giving effect to the acquisition is included in this Amendment No. 1, immediately following the signature page:
The Unaudited Pro-forma Condensed Combined Balance Sheets and the Unaudited Pro-forma Condensed Combined Statements of Operations of Cannabis Sativa, Inc. and Kush, which gives effect to the acquisition by Cannabis Sativa, Inc. of all issued and outstanding shares of capital stock of Kush as if the transaction had occurred as of March 31, 2014. The pro forma statements of operations reflecting the combined operations of the Company and Kush are for the three months ended March 31, 2014 and for the year ended December 31, 2013. The pro forma balance sheet is as of March 31, 2014.
(d) Exhibits
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Exhibit
Number
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SEC Reference Number
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Title of Document
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Location
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|||
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2.1
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2
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Agreement and Plan of Reorganization among the Registrant, CBDS Corp. and Kush dated as of June 30, 2014*
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Initial Form 8-K
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2.2
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2
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Articles of Merger among CBDS Merger Corp. and Kush dated as of June 30, 2014
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Initial Form 8-K
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2.3
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2
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Plan of Merger among the CBDS Merger Corp. and Kush dated as of June 30, 2014
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Initial Form 8-K
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3.1
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3
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Articles of Incorporation
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Incorporated by Reference(1)
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3.2
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3
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First Amendment to Articles of Incorporation
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Incorporated by Reference(2)
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3.3
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3
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Bylaws
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Initial Form 8-K
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10.1
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10
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License Agreement Between Steven Kubby and Kush dated as of June 6, 2014, regarding the NZT Strain
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Initial Form 8-K
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10.2
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10
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License Agreement Between Steven Kubby and Kush dated as of June 6, 2014, regarding MJM
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Initial Form 8-K
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10.3
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10
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License Agreement Between Steven Kubby and Kush dated as of June 6, 2014, regarding the salve/ointment.
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Initial Form 8-K
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| Exhibit Number | SEC Reference Number | Title of Document | Location | |||
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10.4
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10
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Employment Agreement with Steven Kubby dated as of June 30, 2014.
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Initial Form 8-K
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10.5
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10
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Employment Agreement with Gary Johnson dated as of June 30, 2014.
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Initial Form 8-K
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99.1
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99
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Press Release dated July 1, 2014
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Initial Form 8-K
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* The exhibits and schedules to the Agreement and Plan of Reorganization are not included in the foregoing exhibit. The Registrant undertakes to furnish supplementally to the Commission copies of any omitted items on request.
(1) Incorporated by reference to Exhibit 3.01 to the Registrant’s registration statement on Form 10-12G, filed with the SEC on January 28, 2009.
(2) Incorporated by reference to Exhibit 10.1 to the Registrant’s report on Form 10-Q with respect to the fiscal quarter ended March 31, 2014, filed with the SEC on May 19, 2014.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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CANNABIS SATIVA, INC.
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Date: September 17, 2014
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By: Katherine Carroll
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Name: Katherine Carroll
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Title: Chief Financial Officer
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CANNABIS SATIVA, INC,
AND KUSH
The following unaudited proforma condensed combined balance sheet aggregates the balance sheet of CANNABIS SATIVA, INC (“PARENT”) as of March 31, 2014 and the balance sheet of KUSH as of March 31, 2014 (“SUBSIDIARY”), accounting for the transaction as a reorganization with the issuance of shares of the PARENT for 100% of the stock of the SUBSIDIARY, and using the assumptions described in the following notes, giving effect to the transaction, as if the transaction had occurred as of March 31, 2014. The transaction was completed June 30, 2014.
The following unaudited proforma condensed combined statements of operations reflects the results of operations of CANNABIS SATIVA, INC for three months ended March 31, 2014 and the twelve month period ended December 31, 2013, the results of operations of KUSH for the period from inception on January 24, 2013 through March 31, 2014 and as if the transaction had occurred as of March 31, 2014.
The proforma condensed combined financial statements should be read in conjunction with the separate financial statements and related notes thereto of CANNABIS SATIVA, INC and the consolidated financial statements of its Subsidiary, KUSH. These proforma condensed combined financial statements are not necessarily indicative of the combined financial position, had the acquisition occurred on the date indicated above, or the combined results of operations which might have existed for the periods indicated or the results of operations as they may be in the future.
F-1
CANNABIS SATIVA, INC,
AND KUSH
UNAUDITED PROFORMA CONDENSED COMBINED BALANCE SHEET
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Cannabis Sativa
Inc
As of March 31,
2014
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Kush
As of March 31,
2014
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Proforma
Increase
(Decrease)
2014
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Proforma
Combined
As of March 31,
2014
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CURRENT ASSETS:
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Cash
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$ | 52,939 | $ | 456 | $ | - | $ | 53,395 | ||||||||
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Receivables and Advances
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1,380 | - | - | 1,380 | ||||||||||||
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Due from Related Party
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2,000 | 3,631 | - | 5,631 | ||||||||||||
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Inventories
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17,352 | - | - | 17,352 | ||||||||||||
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Available-for-sale securities
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- | 1,025,000 | - | 1,025,000 | ||||||||||||
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Prepaid Expenses
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- | 187 | - | 187 | ||||||||||||
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Total Current Assets
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73,671 | 1,029,274 | - | 1,102,945 | ||||||||||||
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PROPERTY AND EQUIPMENT,
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net accumulated depreciation
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3,461 | 2,192 | - | 5,653 | ||||||||||||
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OTHER ASSETS:
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Intangibles
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3,776 | 8,938 | 12,714 | |||||||||||||
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Deposits
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1,031 | - | - | 1,031 | ||||||||||||
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Total Other Assets
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4,807 | 8,938 | - | 13,745 | ||||||||||||
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Total Assets
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$ | 81,939 | $ | 1,040,404 | $ | - | $ | 1,122,343 | ||||||||
See Notes To Unaudited Proforma Condensed Combined Financial Statements.
F-2
CANNABIS SATIVA, INC,
AND KUSH
UNAUDITED PROFORMA CONDENSED COMBINED BALANCE SHEET
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Cannabis Sativa
Inc
As of March 31,
2014
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Kush
As of March 31,
2014
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Proforma
Increase
(Decrease)
2014
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Proforma
Combined
As of March 31,
2014
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CURRENT LIABILITIES:
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Accounts Payable & Accrued Expenses
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$ | 22,335 | $ | 389,615 | $ | - | $ | 411,950 | |||||||||
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Related-Party Note Payable - Current
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289,359 | 85,076 | - | 374,435 | |||||||||||||
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Accrued Interest
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5,667 | - | 5,667 | ||||||||||||||
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Dividends Payable
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- | 284,500 | - | 284,500 | |||||||||||||
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Total Current Liabilities
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317,361 | 759,191 | - | 1,076,552 | |||||||||||||
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Total Liabilities
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317,361 | 759,191 | - | 1,076,552 | |||||||||||||
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STOCKHOLDERS’ EQUITY:
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Common Stock
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11,714 | 1,442 | [A | ] | 1,859 | 15,015 | |||||||||||
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Additional Paid-in Capital
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32,372,341 | 725,879 | [A | ] | (1,859 | ) | 32,649,359 | ||||||||||
| [B | ] | (467,502 | ) | ||||||||||||||
| [B | ] | 20,500 | |||||||||||||||
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Retained Earnings (Deficit)
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(32,619,477 | ) | (467,502 | ) | [B | ] | 467,502 | (32,619,477 | ) | ||||||||
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Other Comprehensive Income
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- | 20,500 | [B | ] | (20,500 | ) | - | ||||||||||
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Non-controlling Interest
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- | 894 | - | 894 | |||||||||||||
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Total Stockholders’ Equity
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(235,422 | ) | 281,213 | - | 45,791 | ||||||||||||
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Total Liabilities and Stockholders’ Equity
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$ | 81,939 | $ | 1,040,404 | $ | - | $ | 1,122,343 | |||||||||
See Notes To Unaudited Proforma Condensed Combined Financial Statements.
F-3
CANNABIS SATIVA, INC,
AND KUSH
UNAUDITED PROFORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
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Cannabis Sativa
Inc
For the Period
Ended March 31, 2014
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Kush
For the Period
From Inception
on January 24, 2013
to March 31, 2014
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Proforma
Increase
(Decrease)
For the Period
Ended
March 31, 2014
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Proforma
Combined
For the
Period
Ended
March 31, 2014
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NET SALES
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$ | 1,445 | $ | - | $ | - | $ | 1,445 | ||||||
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COST OF GOODS SOLD
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716 | - | - | 716 | ||||||||||
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GROSS PROFIT
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729 | - | 729 | |||||||||||
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OPERATING EXPENSES:
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General and Administrative Expenses
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65,272 | 467,502 | - | 532,774 | ||||||||||
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Total Operating Expense
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65,272 | 467,502 | - | 532,774 | ||||||||||
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LOSS FROM OPERATIONS
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(64,543 | ) | (467,502 | ) | - | (532,045 | ) | |||||||
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OTHER INCOME (EXPENSE)
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Interest (Expense)
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(9,562 | ) | - | - | (9,562 | ) | ||||||||
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Total Other Income (Expense)
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(9,562 | ) | - | - | (9,562 | ) | ||||||||
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LOSS BEFORE INCOME TAXES
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(74,105 | ) | (467,502 | ) | - | (541,607 | ) | |||||||
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INCOME TAX EXPENSE
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- | - | - | - | ||||||||||
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NET INCOME (LOSS)
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$ | (74,105 | ) | $ | (467,502 | ) | - | $ | (541,607 | ) | ||||
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NET LOSS PER COMMON SHARE, BASIC AND DILUTED
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$ | (0.01 | ) | $ | (0.14 | - | $ | (0.05 | ) | |||||
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PROFORMA COMMON SHARES OUTSTANDING
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8,299,651 | 3,300,667 | - | 11,600,318 | ||||||||||
See Notes To Unaudited Proforma Condensed Combined Financial Statements.
F-4
CANNABIS SATIVA, INC,
AND KUSH
UNAUDITED PROFORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
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Proforma
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Proforma
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|||||||||||
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Cannabis Sativa
Inc
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Increase (Decrease)
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Combined
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For the Year
Ended
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For the Year
Ended
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For the Year
Ended
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December 31,
2013
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December 31,
2013
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December 31,
2013
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NET SALES
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$ | 813 | $ | - | $ | 813 | ||||||
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COST OF GOODS SOLD
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869 | - | 869 | |||||||||
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GROSS PROFIT
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(56 | ) | - | (56 | ) | |||||||
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OPERATING EXPENSES:
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General and Administrative Expenses
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185,218 | - | 185,218 | |||||||||
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Total Operating Expense
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185,218 | - | 185,218 | |||||||||
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LOSS FROM OPERATIONS
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(185,274 | ) | - | (185,274 | ) | |||||||
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OTHER INCOME (EXPENSE)
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Interest (Expense)
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(18,815 | ) | - | (18,815 | ) | |||||||
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Loss in change of fair value of derivative instrument
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(32,309,105 | ) | - | (32,309,105 | ) | |||||||
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Total Other Income (Expense)
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(32,327,920 | ) | - | (32,327,920 | ) | |||||||
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LOSS FROM CONTINUING OPERATIONS BEFORE DISCONTINUED OPERATIONS
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(32,513,194 | ) | - | (32,513,194 | ) | |||||||
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LOSS FROM DISCONTINUED OPERATIONS, NET OF TAX EFFECT
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(32,178 | ) | - | (32,178 | ) | |||||||
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LOSS BEFORE INCOME TAXES
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(32,545,372 | ) | - | (32,545,372 | ) | |||||||
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INCOME TAX EXPENSE
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$ | - | $ | - | $ | - | ||||||
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NET INCOME (LOSS)
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$ | (32,545,372 | ) | $ | - | $ | (32,545,372 | ) | ||||
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LOSS PER COMMON SHARE FROM DISCONTINUED OPERATIONS, BASIC AND DILUTED
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$ | 0.00 | - | $ | 0.00 | |||||||
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LOSS PER COMMON SHARE
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$ | (4.16 | ) | - | $ | (2.93 | ) | |||||
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PROFORMA COMMON SHARES OUTSTANDING
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7,825,000 | 3,300,667 | 11,125,667 | |||||||||
See Notes To Unaudited Proforma Condensed Combined Financial Statements.
F-5
CANNABIS SATIVA, INC,
AND KUSH
NOTES TO UNAUDITED PROFORMA CONDENSED COMBINED FINANCIAL STATEMENTS
NOTE 1 – CANNABIS SATIVA, INC
CANNABIS SATIVA, INC, (formerly “ULTRA SUN INC”) was incorporated under the laws of the State of Nevada on November 5, 2004. The Company’s previous operations were in operating a tanning salon business. The Company sold its tanning salon business in 2013 and now operates as a development stage herbal skin care products formulation and marketing company through its wholly owned subsidiary Wild Earth Naturals Inc. (“Wild Earth Sub”), which was incorporated under the laws of the State of Nevada on April 9, 2013.
Kush, (“Kush Sub”), a wholly owned development stage subsidiary of CANNABIS SATIVA, INC, was incorporated under the laws of the State of Nevada on January 24, 2013 for the purpose of licensing products to the hemp and medical marijuana industry.
NOTE 2 – PROFORMA ADJUSTMENTS
On June 30, 2014, CANNABIS SATIVA, INC, a Nevada corporation (the “Company” or the “Registrant”), CBDS Merger Corp., a Nevada corporation (“Merger Corp.”) and KUSH, a Nevada corporation (“Kush”) entered into an Agreement and Plan of Reorganization dated as of June 30, 2014 (the “ Reorganization Agreement”) pursuant to which the Company formed Merger Corp. as a new, wholly-owned subsidiary of the Company, Merger Corp. was merged into Kush with Kush continuing as the surviving corporation, and the issued and outstanding shares of capital stock of Kush were converted into 3,300,667 shares of the Company’s common stock (the “Reorganization”). Upon the completion of the Reorganization, Kush became a wholly owned subsidiary of the Company and the Company had a total of 15,014,738 shares of common stock outstanding of which 3,300,667 or 22.0% had been issued to the Kush stockholders. As a result, the Reorganization did not result in a change in control of the Company.
Proforma adjustments on the attached financial statements include the following:
[A] To record the acquisition of a 100% interest in the SUBSIDIARY by the PARENT through the issuance and conversion of 3,300,667 shares of the Company’s common stock by shareholders in exchange for the 144,188,849 shares of KUSH. common stock, representing all the common stock of KUSH. and thus increasing the Company’s common shares outstanding to 15,014,738.
[B] To record the elimination of the accumulated deficit and Other Comprehensive Income of SUBSIDIARY prior to the date of the acquisition. The ownership interests of the ongoing shareholders of PARENT in the combined enterprise will be greater than the former owners of SUBSIDIARY and, accordingly, the management of PARENT will assume operating control of the combined enterprise.
F-6
CANNABIS SATIVA, INC,
AND KUSH
NOTES TO UNAUDITED PROFORMA CONDENSED COMBINED FINANCIAL STATEMENTS
NOTE 3 – PROFORMA EARNINGS (LOSS) PER SHARE
The proforma earnings (loss) per share is computed based on the weighted average number of common shares outstanding during the period plus the estimated shares issued in the acquisition had the acquisition occurred at the beginning of the periods presented (not in thousands).
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For the Period
Ended
March 31,
2014
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For the Year Ended
December 31,
2013
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Weighted average number of Common Shares outstanding
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8,299,651 | 7,825,000 | ||||||
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Shares issued in acquisition
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3,300,667 | 3,300,667 | ||||||
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Proforma weighted average number of common shares outstanding during the period used in income per share after acquisition (denominator)
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11,600,318 | 11,125,667 | ||||||
F-7