UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14f-1
SCHEDULE 14f-1 INFORMATION
Information Statement Pursuant to Section 14(f)
of the Securities and Exchange Act of 1934 and
Securities and Exchange Rule 14f-1
4TH GRADE FILMS, INC.
(Name of Registrant as Specified in its Charter)
Utah 000-52825 20-8980078
---------------------------- --------------------- -----------------------------
(State or other (Commission File (I.R.S. Employer
jurisdiction Number) Identification No.)
of Incorporation)
|
1338 South Foothill Drive #163
Salt Lake City, UT 84108
(Address of principal executive offices)
Company's telephone number, including area code: (801) 649-3519
4TH GRADE FILMS, INC.
1338 South Foothill Drive #163
Salt Lake City, UT 84108
(801) 649-3519
On August 19, 2014 we acquired approximately 90% of the issued and
outstanding common stock of Strainwise, Inc. ("Strainwise") in exchange for
23,124,184 shares of our common stock. As of July 31, 2014 we had 2,345,000
shares of common stock issued and outstanding.
In connection with the acquisition:
o 1,038,000 shares of our outstanding common stock will be cancelled;
o our current officers and directors will resign; and
o new management will be appointed.
As a result of the acquisition, one former shareholder of Strainwise will
own approximately 90% of our common stock. We plan to acquire the remaining
outstanding shares of Strainwise at a later date.
Strainwise was organized in Colorado on June 8, 2012 as a limited liability
company and was converted into a Colorado corporation on January 16, 2014.
After the acquisition, we plan to offer a variety of services to operators
of medical and retail marijuana shops. These services will include: (i)
administrative; (ii) consulting; (iii) accounting; (iv) financial; (v)
compliance; (vi) procuring supplies; (vii) cultivation; and (viii) growing
system and facility management. In addition, we plan to purchase, lease and set
up buildings specifically designed for marijuana growers.
Our common stock is our only outstanding class of equity security. Each
share of our common stock entitles its holder to one vote at any meeting of our
shareholders.
Principal Shareholders
The following table lists, the shareholdings of: (i) each person who will
own beneficially 5% or more of our common stock; (ii) each officer and director;
and (iii) all officers and directors as a group, after the acquisition. Unless
otherwise indicated, each owner will have sole voting and investment powers over
their shares of common stock.
Number of Shares Percentage
Name Beneficially Owned of Class
---- ------------------ -------------
Shawn Phillips - -
Erin Phillips 23,124,184 95%
David Modica - -
All officers and directors
as a group (3 persons) 23,124,184 95%
|
2
Management
Following the acquisition, the following persons will be our officers and
directors:
Name Age Position
---- --- --------
Shawn Phillips 43 Chief Executive Officer and a Director
Erin Phillips 37 President, Chief Financial and Accounting
Officer, and a Director
David Modica 37 Manager of Quality Control and a Director
|
Shawn and Erin Phillips are husband and wife.
The following is a brief summary of the background of each officer and
director including their principal occupation during the five preceding years.
All directors will serve until their successors are elected and qualified or
until they are removed.
Shawn Phillips is one of the early pioneers in the marijuana industry in
Colorado and is one of the founders of Strainwise. Currently, Shawn owns and
holds all of the licenses issued by the State of Colorado for the eight
marijuana stores (the "Captive Stores"). In concert with his spouse, Erin
Phillips, he has been instrumental in the management of the operations of these
stores since the date they were either purchased as an existing retail store or
initially opened for medical marijuana sales beginning in 2010. In addition,
Shawn oversees the growing facilities which supply the various strains of
product to the Captive Stores and other retail operations in Colorado. Prior to
2010 Mr. Phillips was the owner/operator of RLO Realty, a residential and
commercial real estate firm (2008-2010), an account executive with Stewart Title
Company (2007-2008) and the owner/operator of Legacy Funding, a residential
mortgage company (2001-2007). Mr. Phillips holds a B.S in Accounting from
Colorado State University, and using his accounting education and experience,
his established reliable point-of-sale accounting procedures and financial
controls for these stores and the multiple production facilities. Mr. Phillips
filed a personal bankruptcy petition in September 2009 and received a discharge
in January 2010.
Erin Phillips has over 17 years of operational and management experience.
Erin is one of the early pioneers in the marijuana industry in Colorado and is
one of the founders of Strainwise. In concert with her spouse, Shawn Phillips,
she has been instrumental in the management of the operations of the eight
Captive Stores since the date they were either purchased as an existing retail
store, or initially opened for medical marijuana sales beginning in 2010. Erin
is responsible for managing the marketing, advertising and promotions at the
Captive Stores, and is responsible for establishing and expanding the brand
recognition of the Strainwise name and logo throughout the Company's target
markets. Prior to establishing Strainwise, Erin spent 13 years in the mortgage
industry as a business owner, audit and funding supervisor, title company
closer, mortgage loan processer, and loan originator. Ms. Phillips filed a
personal bankruptcy petition in May 2009 and received a discharge in August
2009.
3
David Modica has been the Quality Control Manager for Strainwise since
2013. In this capacity, he works with the managers of the cultivation and grow
facilities owned by Shawn Phillips to maintain the quality of the proprietary
strains and marijuana products grown in these facilities. Upon initially joining
Strainwise, he was tasked with converting the point-of-sale systems used by the
Captive Stores to a more advanced system which can better track all categories
of inventory. Prior to joining Strainwise, he was the owner and operator of a
residential rental company (2005 to 2013), a web developer for Design Factory
International (2003 to 2005), and a web developer/designer for Eastridge
Technology (2001 to 2003). Mr. Modica obtained his B.A. from the University of
North Carolina at Chapel Hill in 2000, with a degree in Journalism and Mass
Communications.
Shawn Phillips, Erin Phillips, and David Modica will not be independent
directors as that term is defined in Section 803 of the NYSE MKT Company Guide.
Our Board of Directors does not have standing audit, nominating or
compensation committees, committees performing similar functions, or charters
for such committees. Instead, the functions that might be delegated to such
committees are carried out by our Board of Directors, to the extent required.
Our Board of Directors believes that the cost of associated with such
committees, has not been justified under our current circumstances.
Given our lack of operations to date, our Board of Directors believes that
its current members have sufficient knowledge and experience to fulfill the
duties and obligations of an audit committee. None of the current Board members
is an "audit committee financial expert" within the meaning of the rules and
regulations of the SEC. The Board has determined that each of its members is
able to read and understand fundamental financial statements and has substantial
business experience that results in that member's financial sophistication.
Our Board of Directors does not currently have a policy for the
qualification, identification, evaluation, or consideration of board candidates
and does not think that such a policy is necessary at this time, because it
believes that, given the limited scope of our operations, a specific nominating
policy would be premature and of little assistance until our operations are at a
more advanced level. Currently the entire Board decides on nominees.
Our Board of Directors does not have any defined policy or procedural
requirements for shareholders to submit recommendations or nominations for
directors. We do not have any restrictions on shareholder nominations under its
articles of incorporation or bylaws. The only restrictions are those applicable
generally under Nevada law and the federal proxy rules. The Board will consider
suggestions from individual shareholders, subject to an evaluation of the
person's merits. Shareholders may communicate nominee suggestions directly to
the Board, accompanied by biographical details and a statement of support for
the nominees. The suggested nominee must also provide a statement of consent to
being considered for nomination. There are no formal criteria for nominees.
Our Board of Directors does not have a "leadership structure" since each
board member is free to introduce any resolution at any meeting of our directors
and is entitled to one vote at any meeting.
4
Holders of our common stock may send written communications to our entire
board of directors, or to one or more board members, by addressing the
communication to "the Board of Directors" or to one or more directors,
specifying the director or directors by name, and sending the communication to
our offices in Lakewood, Colorado. Communications addressed to the Board of
Directors as whole will be delivered to each board member. Communications
addressed to a specific director (or directors) will be delivered to the
director (or directors) specified.
Security holder communications not sent to the board of directors as a
whole or to specified board members will be relayed to board members.
Executive Compensation
During the period from inception (June 8, 2012) through April 30, 2014
Strainwise paid the following compensation to its officers:
Name Amount
---- ------
Shawn Phillip s --
|
Erin Phillips $22,500
David Modica $ 9,000
We did not have employment agreements with our officers. We do not have any
type of equity incentive plans, retirement plans or similar plans or
arrangements for our current officers. We have not entered into any contracts or
arrangements with our officers or directors that would provide them with forms
of compensation resulting from their resignation, retirement, or any other
termination of their employment with us or from a change-in-control of us or a
change of their responsibilities following a change-in-control.
The following shows the amounts we expect to pay to our new officers during
the twelve months ending June 30, 2015 and the amount of time these persons
expect to devote to our business.
% of time
Projected to be devoted to
Name Compensation Company's business
---- ------------ ------------------
Shawn Phillips $160,000 85%
Erin Phillips $180,000 90%
David Modica $ 72,000 95%
|
None of our directors received any compensation for service as a director
during our fiscal year ended June 30, 2014.
5
Operating Leases
On March 7, 2014, Strainwise leased a grow facility containing
approximately 26,700 square feet ("Custer Lease") for a term of five years
commencing on April 1, 2014. Lease payments are scheduled to be $29,200 per
month for the first 12 months of the lease, and then are scheduled to be $27,500
per month for the subsequent 12 months, $28,325 per month for the subsequent 12
months, $29,170 per month for the subsequent 12 months and $30,035 per month for
the final 12 months of the lease. Under the terms of the Custer Lease,
Strainwise paid a security deposit of $29,200. The lessor will provide all of
the tenant improvements that will enable the continuous cultivation of marijuana
plants under 459 grow lights.
On April 1, 2014, Strainwise leased a grow facility containing
approximately 65,000 square feet ("51st Ave. Lease") for a term of five years
and nine months. The terms of the 51st Ave. Lease stipulate the payment of
$15,000 per month, prorated if necessary, until such time that the lessor is
able to deliver a Certificate of Occupancy, which is scheduled to occur on
August 1, 2014. Thereafter, lease payments are scheduled to be $176,456 per
month for the first six months of the lease, and then will be $221,833 per month
for the subsequent 24 months, $231,917 per month for the next 12 months,
$242,000 per month for the next 12 months and $247,041 per month for the final
12 months of the lease. Under the terms of the 51st Ave. Lease, Strainwise is
obligated to pay a security deposit of $150,000, one-third of which was paid
upon the execution of the 51st Ave. Lease, the second third of which is due and
payable after the first harvest or by October 1, 2014, and the final third of
which is due and payable after the second harvest or by December 1, 2014. The
lessor will provide all of the tenant improvements that will enable the
continuous cultivation of marijuana plants under 1,680 grow lights.
On April 22, 2014, Strainwise leased a grow facility containing
approximately 38,000 square feet ("Nome Lease") for a term of seven years. The
lease payments are scheduled to be $44,570 per month for the first 12 months of
the lease, and then are scheduled to be $46,151 per month for the subsequent 12
months, $47,743 per month for the subsequent 12 months, $49,334 per month for
the subsequent 12 months, $50,925 per month for the subsequent 12 months,
$52,517 per month for the subsequent 12 months and $54,108 for the final 12
months of the lease. Under the terms of the Nome lease, Strainwise paid a
security deposit of $133,679. The lessor will provide all of the tenant
improvements that will enable the continuous cultivation of marijuana plants
under 800 grow lights.
On June 10, 2014, we leased a grow facility containing approximately
113,000 square feet ("32nd Ave. Lease") for a term of five years and nine months
which will not become effective until the proper licenses are awarded, which are
expected to be awarded September 1, 2014. The terms of the 32nd Ave. Lease
stipulate the payment of $25,000 per month, prorated if necessary, until such
time that the lessor is able to deliver a Certificate of Occupancy, which is due
to occur on September 1, 2014. Thereafter, lease payments are scheduled to be
$282,500 per month for the first 16 months of the lease, and then are scheduled
to be $301,333 per month for the subsequent 12 months, $320,167 per month for
the subsequent 12 months and $329,583 per month for the final 12 months of the
lease. Under the terms of the 32nd Ave. Lease, Strainwise is obligated to pay a
security deposit of $250,000, $150,000 of which was paid upon the execution of
the lease, and $100,000 of which will be due upon obtaining the Certificate of
Occupancy. The lessor will provide all of the tenant improvements that will
enable the continuous cultivation of marijuana plants under 1,936 grow lights.
6
Strainwise has the option to renew the leases described above at the end of
their terms at mutually agreed upon rates. There are no options to purchase the
properties underlying these leases.
Strainwise has subleased the grow facilities described above to a growing
facility owned by Shawn Phillips for its grow operations.
Master Service Agreements
Strainwise provides branding and fulfillment services to eight retail
marijuana stores and one cultivation and growing facility owned by Mr. Phillips.
Pursuant to the terms of these agreements, the marijuana stores and grow
facility collectively pay Strainwise $81,500 each month for branding, marketing,
administration, accounting and compliance services. Strainwise also supplys
nutrients to the one grow facility at a 90% mark-up to Strainwise's cost for the
nutrients.
Strainwise's agreements with the marijuana outlets and grow facility expire
on December 31, 2023.
7
Grafico Azioni STWC (CE) (USOTC:STWC)
Storico
Da Mag 2024 a Giu 2024
Grafico Azioni STWC (CE) (USOTC:STWC)
Storico
Da Giu 2023 a Giu 2024
