Item 1.01 Entry into a Material Definitive Agreement.
On March 9, 2020, Agritek Holdings, Inc., a Delaware corporation ("we," "us,"
"our" or the "Company") and Full Spectrum Bioscience, Inc., a private
corporation incorporated in Colorado ("FSB"), and a related party to the Company
(collectively the Company and FSB are referred to herein as the "Parties"),
entered into a Share Exchange Agreement (the "Exchange Agreement") for the
Company to acquire 100% of the controlling interest in FSB. On March 31, 2020,
pursuant to the Exchange Agreement, the Company issued to 10,000,000 shares of
its common stock (the "Company Shares") to FSB in exchange for 1,500 shares of
FSB common stock (the "FSB Shares") which constituted all of FSB's authorized
and outstanding common stock held by a sole stockholder. At the time of the
Exchange Agreement FSB (the "Seller") was owned by the spouse of our Interim
Chief Executive Officer.
On April 23, 2021, after determining that it was in the best interest of the
Company, the Company's Board of Directors (the "Board") approved the Company's
entry into a Stock Redemption and Sale Agreement (the "Agreement") with the
Seller in order to reverse the prior acquisition of FSB.
The Board believes that it is in the best interest of the Company to become
current in its reporting obligations with the Securities and Exchange Commission
(the "SEC"), in which the Company is currently delinquent, and that maintaining
ownership of FSB would preclude the Company's ability to become current due to
accounting complexities and difficulties associated with the acquisition of FSB.
As publicly disclosed by the Company previously, the Company's intention with
regard to FSB was to consolidate all assets related to the cannabis industry in
FSB and to subsequently spin-off FSB as a separate entity from the Company.
However, we were not able to accomplish our goals as planned due to our failure
to become current in our SEC filings, which we would need to have done in order
to be able to accomplish our plans for a spin-off of FSB. Additionally, there
has been a decline in the cannabis cultivation markets, in which FSB is
involved, and moreover COVID-19 has brought additional risk to the value of the
transaction with most cannabis brand production being halted with limited access
and sales through doctors' offices and retail locations in the cannabis
industry. Given these events, the Board feels that the resources previously
targeted for this transaction are better invested in new markets, where we
believe we could have more success and has therefore approved the Company's
entry into the Agreement.
After the acquisition of FSB, the FSB bank accounts remained in the name of FSB
and were never transferred to the Company and the operations of FSB continued in
the same manner as they were prior to the Exchange Agreement and the Company
never tried to exercise control of FSB in any manner.
On April 23, 2021, the Company and the Seller entered into the Agreement.
Pursuant to the Agreement, the Seller agreed to sell the Company Shares to the
Company in exchange for $10.00, and the Company agreed to sell the FSB shares to
the Seller in exchange for $10.00. Pursuant to the Agreement the Company Shares
will be returned to the Company's authorized and unissued shares of common
stock. The Agreement contains customary representations, warranties and
covenants of the parties thereto.
The foregoing description of the Agreement does not purport to be complete and
is qualified in its entirety by reference to the complete terms and conditions
of the Agreement, a copy of which is attached to this Current Report on Form 8-K
as Exhibit 10.1 and is incorporated by reference into this Item 1.01.
Item 2.01 Completion of Acquisition or Disposition of Assets.
The disclosure set forth under Item 1.01 (Entry into a Material Definitive
Agreement) of this Current Report on Form 8-K is incorporated herein by
reference into this Item 2.01.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
10.1 Agritek Holdings Inc. Board Resolution dated April 21, 2021 and
Stock Redemption and Sale Agreement dated April 23, 2021
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