Item 1.01 Entry into a Material Definitive Agreement.
On September 30, 2020, Marijuana Company of America, Inc. (the "Company")
entered into a Share Exchange Agreement with Cannabis Global, Inc., a Nevada
corporation quoted on OTC Markets Pink ("CBGL") dated September 30, 2020, to
acquire the number of shares of CBGL's common stock, par value $0.001, equal in
value to $650,000 based on the closing price for the trading day immediately
preceding the effective date, in exchange for the number of shares of Company
common stock, par value $0.001, equal in value to $650,000 based on the closing
price for the trading day immediately preceding the effective date (the "Share
Exchange Agreement"). For both parties, the Share Exchange Agreement contains a
"true-up" provision requiring the issuance of additional common stock in the
event that a decline in the market value of either parties' common stock should
cause the aggregate value of the stock acquired pursuant to the Share Exchange
Agreement to fall below $650,000.
Complementary to the Share Exchange Agreement, the Company and CBGL entered into
a Lock-Up Agreement dated September 30, 2020 (the "Lock-Up Agreement"),
providing that the shares of common stock acquired pursuant to the Share
Exchange Agreement shall be subject to a lock-up period preventing its sale for
a period of 12 months following issuance, and limiting the subsequent sale to
aggregate maximum sale value of $20,000 per week, or $80,000 per month.
The foregoing description of the Share Exchange Agreement and the Lock-Up
Agreement is qualified in its entirety by reference to the Share Exchange
Agreement and the Lock-Up Agreement, copies of which are filed as exhibits
hereto.
Item 2.01 Completion of Acquisition or Disposition of Assets.
On September 30, 2020, the Share Exchange Agreement was consummated. The
disclosure included under Item 1.01 of this Current Report on Form 8-K is
incorporated by reference herein.
Item 3.02 Unregistered Sales of Equity Securities.
As disclosed under Item 1.01 of this Current Report on Form 8-K, pursuant to the
Share Exchange Agreement, on September 30, 2020, the Company authorized the
issuance of the number of shares of Company common stock, par value $0.001,
equal in value to $650,000 based on the closing price for the trading day
immediately preceding the effective date of the Share Exchange Agreement, in
exchange for the number of shares of CBGL common stock, par value $0.001, equal
in value to $650,000 based on the closing price for the trading day immediately
preceding the effective date of the Share Exchange Agreement, subject to the
conditions set forth in the Share Exchange Agreement.
On September 29, 2020, the closing price of the Company's common stock was
$0.001, so that the number of shares of Company common stock issuable to CBGL
under the Share Exchange Agreement is 650 million. As a result of the
transactions pursuant to the Share Exchange Agreement, the Company will have
2,563,880,887 shares of common stock outstanding, with the shares issued to CBGL
pursuant to the Share Exchange Agreement representing 25.35% of the Company's
outstanding shares.
The Company issued the above shares of its common stock pursuant to the
exemption from the registration requirements of the Securities Act of 1933, as
amended, available to the Company by Section 4(a)(2) promulgated thereunder due
to the fact that it was an isolated issuance and did not involve a public
offering of securities.
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Item 8.01 Other Events.
Related Party Transactions
One of directors of the Company is also a director of CBGL and thus a related
party to CBGL. Our director, Mr. Edward Manolos, serves as a member of the board
of directors of CBGL. In its action approving and authorizing the Share Exchange
Agreement, the board of directors of the Company considered full disclosure of
Mr. Manolos' relationship with CBGL in light of his related party status and
Utah state law governing transactions where a conflicting interest of a director
may be reasonably expected to exert an influence on the director's judgment and
requiring specific disclosures pursuant to Section 16-10a-852 of the Utah
Revised Business Corporation Act. In consideration of such disclosure, a
unanimity of the Company's qualified, uninterested directors approved the
transaction.
Item 9.01 Financial Statements and Exhibits.
(a) Financial statements of businesses acquired
The Company shall provide the financial statements required by this item no
later December 3, 2020 (71 calendar days after the date that this Form 8-K
must be filed)
(b) The Company shall provide the pro forma financial information required by
this item no later December 3, 2020 (71 calendar days after the date that
this Form 8-K must be filed).
(d) Exhibits
Exhibit Description
10.1 Share Exchange Agreement, dated September 30, 2020, by and between the
Company and Cannabis Global, Inc. *
10.2 Lock-Up Agreement, dated September 30, 2020, by and between the
Company and Cannabis Global, Inc. *
* Filed Herewith
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