|12 Months Ended|
Dec. 31, 2018
|NOTE 23. SUBSEQUENT EVENTS||
The Company evaluated subsequent events through the date of the filing of this Annual Report on Form 10-K with the SEC, to ensure that this filing includes appropriate disclosure of events both recognized in the financial statements as of December 31, 2018, and the events which occurred subsequent to December 31, 2018 but were not recognized in the financial statements. The company has determined that there were no subsequent events which required recognition, adjustment to or disclosure in the financial statements except as below and except as discussed below.
Subsequent to the balance sheet date, the Company converted $6.25 million of convertible notes and $0.10 million of interest into 12.13 million shares of the Company’s common stock.
Subsequent to the balance sheet date, the Company issued 1,272,231 shares of common stock for $0.80 million in cash in settlement of put notices pursuant to the Investor Agreement dated November 28, 2016 with an accredited investor.
On March 12, 2019, the Company issued a 7.5% Senior Convertible Promissory Note, due September 12, 2020, in the principal amount of $5.00 million to an accredited investor pursuant to the 2018 Securities Purchase Agreement. The Note accrues interest at a rate of 7.5% per annum, payable on the Maturity Date or upon any conversion, prepayment, event of default or other acceleration of payment under the Note.
On March 6, 2019, Terra Tech Corp. (the “Company”) granted ten-year options to employees, pursuant to which the such individuals are entitled to exercise options to purchase an aggregate of up to 0.29 million shares of Common Stock. These options have an exercise price of $0.84 per share and vest immediately.
On March 4, 2019, the Company issued a Promissory Note (the “Note”) in the principal amount of $1.0 million to an accredited investor. The Note is due on the earlier of (i) April 4, 2019 or (ii) the closing of a financing with gross proceeds equal to or greater than $1.0 million (the “Maturity Date”). The Note accrues interest at a rate of 1.5% per month, payable on the Maturity Date or prepayment of the Note, with 30-days of interest guaranteed. The note was paid in full during March 2019.
On February 26, 2019, the Company issued entered into a Securities Purchase Agreement (the “SPA”) with Forever Green NV (“Forever Green”) and Forever Young Investments, L.L.C. (“Forever Young”) pursuant to which the Company purchased Forever Green’s 50% membership interest in MediFarm I LLC (“MediFarm I”), Forever Green’s 15% membership interest in MediFarm II, LLC (“MediFarm II”), and Forever Young’s 50% membership interest in MediFarm I Real Estate, LLC (“MediFarm I RE”) for aggregate consideration of $6.30 million. MediFarm I owns the Company’s Blüm dispensary located at 1085 S. Virginia St. Suite A, Reno, NV 89502, and MediFarm I RE owns the building which houses the dispensary. Closing of the SPA is subject to the approval of the Nevada Department of Taxation, which the Company expects to receive in approximately 60-90 days. Following closing, the Company will own 100% of MediFarm I, 100% of MediFarm RE and 70% of MediFarm II.
Also on February 26, 2019, the Company, MediFarm I, MediFarm II, MediFarm I RE and other parties (collectively, the “Terra Tech Parties”) entered into a Settlement Agreement and Release (the “Settlement Agreement”) with Heidi Loeb Hegerich, Forever Green and Forever Young (collectively, the “Loeb Parties”) pursuant to which the Terra Tech Parties and the Loeb Parties agreed to settle and dismiss with prejudice the lawsuit filed by the Loeb Parties against the Terra Tech Parties in the Second Judicial District of the County of Washoe, State of Nevada, Case Number CV-18-02322 on November 21, 2018 (the “Lawsuit”). Entering into the Settlement Agreement is not an admission or acknowledgement of liability or responsibility on the part of the Company in connection with the Lawsuit. The only material relationship between the Company and Ms. Hegerich, Forever Green and Forever Young, other than in respect of the SPA and the Settlement Agreement, was their membership in MediFarm I, MediFarm II and MediFarm I RE.
The entire disclosure for significant events or transactions that occurred after the balance sheet date through the date the financial statements were issued or the date the financial statements were available to be issued. Examples include: the sale of a capital stock issue, purchase of a business, settlement of litigation, catastrophic loss, significant foreign exchange rate changes, loans to insiders or affiliates, and transactions not in the ordinary course of business.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef