ITEM 1.01 Entry into a Material Definitive Agreement.
On March 8, 2021, Mountain High Acquisitions Corp, ("MYHI"), on the one hand,and
David Aquino and Gwen Aquino (collectively,the"Shareholders"), on the other
hand, entered into an Exchange Agreement (the "Exchange Agreement") pursuant to
which MYHI agreed to purchase from the Shareholders all of the capital stock of
Kafkaford Holdings, Inc., a California corporation ,dba Certain Supply ("CS") in
exchange (the "Exchange") for 48,076,923 restricted shares of MYHI (the "MYHI
Shares"). A portion of the MYHI Shares are subject to forfeiture in the event
that the Employment Agreement referenced below is terminated by David Aquino
without good reason or by MYHI for cause.
In connection with the Exchange, MYHI entered into an Employment Agreement with
David Aquino (the "Employment Agreement") pursuant to which MYHI agreed to
employ Mr. Aquino as its Chief Operating Officer and President of CS. The term
of employment is for two years from March 8, 2021 provided that the term will be
extended for successive one-year terms unless either party provides written
notice at least sixty days prior to the end of the applicable period of
employment. Mr. Aquino is to receive (a) a base salary of $180,000 per annum
(the Base Salary") which Base Salary will be subject to an increase to $360,000
at the first instance the average of the closing prices of MYHI shares over a
consecutive seven trading day period exceeds $0.25; (b) a signing bonus of
$100,000 within 45 days from the closing; (c) an annual bonus on the first
anniversary of closing of $180,000 to be paid in restricted shares of MYHI
common stock, and on the second and subsequent anniversaries, $360,000 in
restricted shares of MYHI Common Stock if the average of the closing prices for
the consecutive seven trading days immediately prior to the end of such twelve
month period exceeds $0.25; and (d) an annual performance bonus of 4,000,000
restricted shares if (x)on the first anniversary of the closing, the average of
the closing prices for the consecutive seven tradings immediately preceeding
such date is at least $0.25, and (y) on the second and subsequent anniversaries,
the average of the closing prices for the consecutive seven trading days
immediately preceeding the applicable anniversary date exceeds $0.35.
The above summary of the Exchange Agreement and Employment Agreement does not
purport to be complete and is qualified in its entirety by the terms and
conditions set forth in those documents attached as Exhibit 10.1 and 10.2 which
are incorporated herein by reference.
ITEM 2.01 Completion of Acquisition or Disposition of Assets
Reference is made to the disclosure in Item 1.01. On March 8, 2021 the Exchange
was consummated.
Description of CS
Certain Supply is an Irvine California based company founded in early 2020 in
response to the COVID-19 pandemic.The Company is engaged in the manufacturing
and distribution of Personal Protective Equipment (PPE). CS offers high-quality,
certified and tested products globally to healthcare workers, businesses and
individuals. Management of CS has extensive experience in supply chain
operations and sourcing. In its first year of operations, CS has sold millions
of PPE products.
ITEM 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off Balance Sheet Arrangement of a Registrant
In connection with the closing of the Exchange, CS issued a three year
promissory note in favor of David Aquino in the principal amount of $1,275,000.
ITEM 3.02 Unregistered Sales of Equity Securities
Reference is made to Items 1.01 and 2.01. On March 8,2021, the Exchange was
consummated. In connection therewith, MYHI issued the MYHI Shares. All such
shares were issued in reliance on Section 4(a)(2) of the Securities Act of 1933,
as amended. Such reliance was based on the fact that the issuance of such shares
did not involve a public offering.
ITEM 5.02 Departure of Directors or Certain Officers;Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
Reference is made to the disclosure in Item 1.01 with respect to the Employment
Agreement between MYHI and David Aquino. Pursuant to the Exchange Agreement and
the Employment Agreement, David Aquino was appointed to the Board of Directors
of MYHI, its Chief Operating Officer and as President of CS.
Mr. Aquino founded CS in April 2020 and has served as its Chief executive
Officer from that date. From August 2012 to May 2018, Mr. Aquino was Chief
Operating Officer and Chief Information Officer of Barco Uniforms, an apparel
and uniform company focused on healthcare and corporate identity programs. From
June 2018 to November 2019, he was Executive Vice President, Global Operations
and IT for SharkNinja, a global home appliance manufacturer and distributor.
From June 2020 to November 2020, he was Chief Operating Officer of Caresimatic,
a manufacturer of healthcare apparel and footwear, school apparel and skincare.
ITEM 9.01 Financial Statements And Exhibits
(a) Financial Statements of Business Acquired
Audited financial statements of CS consisting of a balance sheet as of December
31, 2020 and the related statements of operations, stockholders equity and cash
flows for the year then ended together with proforma financial statements
consisting of a proforma unaudited combined balance sheet as of December 31,
2020 will be filed pursuant to an amendment to this Current Report on Form 8-K.
(d)
Exhibits: Document Description:
4.1 Promissory Note issued by Certain Supply
10.01 Exchange Agreement dated as of March 8, 2021 between MYHI and the
Shareholders
10.02 Employment Agreement dated as March 8, 2021 between MYHI and David
Aquino
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