UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K12g3
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported):
August 31, 2015
SIBANNAC, INC.
(Exact name of Registrant as specified in its
charter)
Nevada
(State or other jurisdiction of incorporation)
|
333-122009
(Commission File Number)
|
33-0903494
(IRS Employer Identification No.)
|
1313 E Osborn Rd, Suite 100,
Phoenix AZ 85014
(Address of principal executive
offices)
480 420 3171
(Registrant's Telephone Number,
Including Area Code)
(Former Name or Former Address, if Changed Since Last
Report)
Check the appropriate box
below if the Form 8-K filing is intended to simultaneously satisfy the filing
obligation of the registrant under any of the following provisions (see General
Instruction A.2. below):
[_] Written communications pursuant to Rule 425 under
the Securities Act (17 CFR 230.425)
[_] Soliciting material pursuant to Rule 14a-12 under
the Exchange Act (17 CFR 240.14a-12)
[_] Pre-commencement communications pursuant to Rule
14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[_] Pre-commencement communications pursuant to Rule
13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
SECTION 1 - REGISTRANT'S BUSINESS AND OPERATIONS
Item 1.01 - Entry Into a Material Definitive
Agreement.
Apollo Media Network, Inc.
On August 19, 2015, Sibannac, Inc. ("the Company") signed
an Asset Acquisition Agreement with Apollo Media Network, Inc. ("Apollo"), a
Delaware corporation, with an effective date of August 31, 2015, whereby all of
the assets of Apollo would be acquired by the Company from Apollo.
The Asset Acquisition Agreement is attached hereto in
full as Exhibit 10.1.
Apollo Media Network, Inc. is a Delaware corporation
that is a digital advertising platform oriental toward the cannabis industry currently
consisting of fourteen websites. Presently, Apollo Media monetizes the traffic
utilizing proprietary, programmatic strategies and it launched its direct sales
efforts to the marijuana industry in November 2015.
SECTION 2 - FINANCIAL INFORMATION
Item 2.01 Completion of
Acquisition or Disposition of Assets
On August 19, 2015, Sibannac, Inc. ("the Company" or
"Sibannac"), a Nevada corporation, entered into an Asset Acquisition Agreement
with Apollo Media Network, Inc. ("Apollo"), a Delaware corporation, whereby all
of the assets of Apollo would be acquired by the Company from Apollo. Pursuant
to the Asset Acquisition Agreement, the closing of the Acquisition was
effective August 31, 2015, although completed later. Apollo issued to the
Company an Assignment Agreement and Bill of Sale for the Assets, duly executed
by Apollo. Sibannac, Inc. delivered to Apollo Media Network, Inc. three million,
one hundred thousand (3,100,000) shares of the Company's Common Stock, duly
issued, fully paid and non-assessable which were distributed to its
shareholders in liquidation of Apollo pursuant to IRC Section 368c. There has
been no merger, however, the assets and intellectual property of Apollo were
transferred in liquidation to Sibannac.
After fiscal year end we acquired Protection Cost,
Inc. for two million, three hundred thousand (2,300,000) shares which intends
to provide labor and accounting management systems for the cannabis industry.
History of Sibannac, Inc.,
a Nevada corporation
Sibannac, Inc. ("Sibannac" or
"Company" or "we") was incorporated in June 1999 in the
State of Nevada as Naprodis, Inc. for the purpose to engage in any lawful activity
for which corporations may be formed. On August 25, 2014, the Company
transferred all of its assets to Naprodis, Inc., a Colorado corporation
("Colorado Naprodis"). In consideration for the transfer of these assets,
Colorado Naprodis agreed to assume a substantial amount of the Company's
liabilities. On November 25, 2014, the Company changed its name to Sibannac,
Inc.
We have short operating history in the Apollo business
(only in the startup mode in 2015) and no representation is made, nor is there
any assurance that our Company will be able to successfully raise the necessary
capital to successfully carry out its business plans.
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Proposed Business Plan of
Sibannac, Inc.
Sibannac intends to become a media and management services
company, whose purpose is to service businesses with online marketing,
advertising, sales tracking, management consulting and other informational
services. Additionally, Sibannac provides accounting and expense and labor
management systems to assist in compliance in the highly regulated industry
environment.
We intend to fully comply with all federal laws and
regulations, including those enforced by the US Drug Enforcement Administration
(DEA), United States Department of Agriculture (USDA), US Food and Drug
Administration (FDA) and US Federal Trade Commission (FTC) in our operations.
We are NOT a "marijuana" sales company attempting to operate outside of federal
"marijuana" prohibitions.
Divisions of Sibannac, Inc.
1. Sibannac Media
Our division, Sibannac Media, into which the Apollo
assets were merged is in the business of developing and promoting web content.
We currently own 15 domains that in total frequently rank high as 250 visited
websites on the web according to Quantcast analytics. We are currently generating
revenue from these sites and expect to expand into offering direct advertising
sales in the near future.
a. Overview
Sibannac Media is a media company that produces
websites, targeting specific consumer and B2B interests. It leverages these
platforms to sell advertising and to generate an average audience of over 1
million unique users each month per web site, thereby reaching niche audiences
interested in categories such as science, sports, health, parenting, news and
business. Sibannac Media is a wholly owned subsidiary of Sibannac and intends
to develop and drive the advertising and technology side of the Sibannac brands
and products.
Sibannac Media intends to leverage
technology to measure audience trend, behavior and social media to best determine
desired content and advertiser demand. Sibannac Media intends to use Real Time
Bidding (RTB) networks for media buying and selling of advertising. This is
known as programmatic advertising, which is a system similar to how stocks
trade on Wall Street where computers automate the process of buying and selling
inventory and improve results.
According to eMarketer last
year programmatic programming hit approximately $15 billion in advertising
revenue accounting for 50% of the US digital display market. However, eMarketer sees significant
growth coming from programmatic direct, which will reach $8.57 billion in
spending by 2016 to represent 42.0% of programmatic ad expenditure in the US-up
from 8.0% this year.
Sibannac Media has achieved a number of key business
objectives including the successful prototype deployment of Sibannac Media's
proprietary marketing tactics, the development of an expanding customer base,
and a clearly identifiable path to profitability, growth, and long-term
success. The vision for Sibannac Media is to develop a network of relevant lifestyle
sites to businesses and consumers. The plan for Sibannac Media is to not only
build a top shelf network but to acquire some of the best applications, sites
and online technology for this industry. The plan leverages the online
advertising space as it relates to exchanges, ad networks and RTB (Real Time
Bidding) and introduces a real value and necessary advertising service to
the business community.
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The immediate goal is to continue marketing the
completed 15 sites. Each site will generate users interested in a specific
content category, advertisers through Sibannac Media's ad network will be able
to reach these users based on their interests, behavior, geography, time of day
and various other methods. Sibannac Media has launched SibannacIndex.com,
LigaStars.com, YouScube.com, FullCourStars.com, CyclerLife.com, DynoMoves.com, LeafExaminer.com, Live2100.com,
ScienceFly.com, MobilityPress.com, Lifeisaboard.com,
SpyChatter.com, CagePound.com, ChildCompass.com and nputgaming.com.
Collectively these sites typically generate over 15 million unique users
monthly. These sites already have more eyeballs per month than the Discover.com,
msnbc.com and Weedmaps.com
(2.1 MUU) a leading site in the marijuana industry. By creating a system of
testing and innovating to increase traffic, Sibannac Media will scale by continuously
adding more sites.
Sibannac Media will pursue
three main components to drive growth:
1.
Digital Media Publishing
Company - This division owns and
operates web sites for multi-screen (desktop, mobile, TV, tablet) audiences
2.
Ad Network - As Sibannac Media scales in site development they
will build an Ad Network for advertisers to reach their highly targeted online
audience.
3. Ad Exchange / Platform - Sibannac Media will use 3rd party
platform technology allowing them access to ad exchanges for the purpose of
buying and selling ad inventory.
The core product of Sibannac
Media is the online audience generated through Sibannac Media's proprietary ad
network through marketing tactics and organic growth. This online audience
generates ad impressions as they visit Sibannac Media's network of sites. The Sibannac Media advantages are:
-
Cost - Using 3rd party technology and
outsourcing platforms Sibannac Media will pass on significant savings to the
advertiser without sacrificing quality.
-
Quality - Sibannac Media will be able to match advertiser
campaigns to a targeted audience based on behavior, location, time and content.
The Sibannac Media network will offer rich media ad units, interstitials, road
blocks, sliding home page banners and other unique ad formats to deliver high
performing metrics.
-
Exposure - Video mobile and display ads are displayed on a
vast network of web pages.
-
Reliability - Sibannac Media uses 3rd party anti-fraud
technology to provide high quality audiences to advertisers and has an internal
human auditing team to ensure traffic quality
-
Flexibility - Sibannac Media plans to allow advertisers an
automated system where they can manage their own campaigns or a Sibannac Media
account manager to successfully set up and manage their campaigns.
b. Sibannac Media
Market:
Global digital ad spend is predicted by eMarketer to
rise from $132 billion in 2014 to $194 billion in 2018 surpassing television
revenue. The US Internet publishing, broadcasting, and search portal industry
includes about 3,200 companies with combined annual revenue of about $58
billion. The most significant trend is the emergence of online ad network
companies using state-of-the-art cloud computing environments and
high-performance ad server technology to deliver superior returns and savings
for both advertisers and website publishers. Three basic methods marry
advertising demand with website publisher supply.
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1.
First
is the direct sales method. Some website publishers have a sales force that
actively sells website real estate. This method is more costly however,
generates a higher value for ad inventory.
2.
Second
is the use of Ad networks. These are systems of lower paying, lower quality
advertisements tapped by the publisher to fill remnant inventory. This ensures
more ad space is sold and generating revenue, albeit at a fairly low cost.
Today, most large online publishers (websites) sell remnant inventory of ad
space through ad networks. Typically, 10% to 60% of a large publisher's total
inventory is classified as remnant and sold through advertising networks.
Smaller publishers often sell their entire inventory through ad networks.
3.
Real
time bidding (RTB) has emerged as the third method to match the supply of
Internet publishers with advertising demand based upon specific user characteristics.
Real time bidding (RTB) is an online enabling technology for media purchases.
RTB enables media buyers to
find audiences on a massive scale at an advantaged price through much-reduced
effort. This, in turn, helps drive performance by ensuring an advertiser's ad
is seen by the audiences most likely to respond, while minimizing marketing
costs and human resource investment. Website owners are able to make their ad
inventory available to a broad array of buyers and to sell their website real
estate to the highest bidder.
The following chart shows the
projected growth of Real Time Bidding market:
c. Sibannac Media
Marketing & Sales Plan
As a business, Sibannac Media's "product" is
essentially websites; an ad network and a software solution combining 3rd
party technology with custom solutions. Sibannac Media will offer these
solutions in a 100% self-service system that enables customers to do everything
including selling and buying an ad, funding their accounts, and generating
real-time reports.
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Sibannac Media will sell industry standard ad units on
a Cost Per Thousand (CPM) basis. This is achieved through a programmatic system
of Ad Networks and Ad Exchanges using Agency Trading Desks (ATD), Supply Side
Platforms (SSP) and Demand Side Platforms (DSP). Sibannac Media's principal
customers are advertisers that generally fall into three overlapping
categories:
1. Advertising Agencies - Companies that place
ads on behalf of other companies.
2. Direct Advertisers - Companies that place
ads for their own products or services.
3. Ad Networks /
Publishers - Publishers wanting to
participate in the Sibannac Media Network and Networks wanting to participate
in the Sibannac Media Exchange.
Sibannac Media envisions and will pursue a
three-phase marketing program as follows:
1. Phase One: Sibannac Media
develops and markets responsive websites (desktop, mobile, tablet) to generate
audiences for the purpose of generating quality ad inventory, which is
monetized through programmatic advertising, direct sales and content marketing
services. Sibannac Media plans to scale from 10 million unique users in the
first quarter of operations to 30 million monthly unique users by end of 2016.
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2. Phase Two: Sibannac Media
develops additional marketing tactics, including direct sales, press releases,
content updates, article submittals, testimonials, endorsements, social media
marketing (i.e. blogs, podcasts, webinars, and videos), an affiliate program,
link campaigns, and a direct e-mail marketing program (with the help of an
e-mail marketing service) to generate greater brand awareness for The Company
and it's advertisers.
3. Phase Three is all about
Sibannac Media leveraging technology and relationships to meet the needs of
online publishers, advertisers and ad agencies. Advertisers and ad agencies are
seeking consistent and quality web sites suitable for their brand's advertising
campaigns. Online publishers are driven to maximize their site's exposure to
select audiences so they can increase their value to advertisers. Sibannac
Media will be a facilitator for both advertisers and publishers to achieve
their goals.
Additional elements of the sales plan include:
-
Development
of direct response campaigns using Sibannac Media's network and customized
landing pages to measure, optimize and maximize conversion.
-
Sibannac
Media will use new video ad units and other advanced media formats to augment
Sibannac Media sales strategy.
-
Sibannac
Media plans to develop a strong referral program to reward existing clients and
business partners that send potential members to Sibannac Media.
-
Sibannac
Media plans to explore various promotional tactics to boost Sibannac Media's
standing and generate leads including: telesales; corporate sponsorships;
social media, webinars; donations; direct mail; and participation at industry
trade shows and conferences.
-
Sibannac
Media will hire a senior sales executive to sell ad inventory and "content
marketing solutions" direct to advertisers and ad agencies.
-
Sibannac
Media will invest resources towards mobile technology and emerging markets.
d. Sibannac Media Competition
Sibannac Media competition
falls into two broad categories; competition for advertisers against other
digital advertising platforms and competition for the consumers (eyeballs)
that advertisers want to reach against other marijuana industry related
websites.
From the standpoint of other
digital advertising platforms, Google attracts 40 percent of total US digital
advertising spending, according to eMarketer. Facebook holds the second-largest
share, with about 7 percent. Other market leaders include Microsoft (6
percent), Yahoo! (6 percent), and IAC (3 percent). Highlights of other
advertising networks are presented as follows:
Google AdSense: Google's AdSense is one of the largest and perhaps
the best known display advertising network. This platform allows publishers to
monetize standard display ads, mobile and video, and search results as well.
It's free to sign up for AdSense and the program will accept the smallest of
publishers provided they meet certain quality guidelines. AdSense also
integrates into other Google products and generally pays publishers monthly for
revenue generated the previous month.
-7-
AdBlade: This network of premium publishers currently
consists of about 1,000 high profile publishers. It offers publishers an
opportunity to fill IAB standard ad units (such as the 300×250 rectangle or
728×90 leaderboard) as well as a proprietary "NewsBullet" unit designed to
increase engagement and CPMs. For smaller publishers, AdBlade isn't much use.
This network accepts only ultra-premium publishers such as Fox News, Daily
News, etc.
Advertising.com: A unit of AOL, this network has nearly 2 billion
impressions monetized daily and offers opportunities for publishers to monetize
display ads, video, mobile, and some custom implementations. It also offers
Display University, an online educational resource for publishers and
advertisers looking to learn more about display ads, the process of building a
campaign, and executing on creative.
Chitika: Chitika boasts a network of more than 300,000
publishers, making it one of the largest networks. Chitika ads can be used on
their own, or alongside ads from other networks (such as AdSense). Chitika is
also open to just about anyone, and the process for getting approval and ad
implementation is generally fast. Chitika is a popular alternative for
advertisers unable to use or frustrated with AdSense, with great results in
certain niches and less impressive earnings in others.
Clicksor: Clicksor ads can be served alongside ads from other
networks. If the minimum price of an ad is not met, the placement can be filled
with default ads to ensure a 100% fill rate. When Clicksor is able to provide
an ad that meets the specified CPM or CPC threshold, that ad will run.
Clicksor features traditional display ads, inline text links, and more custom
implementations such as pop-unders and interstitials. Publishers get paid every
15 days, can get a revenue split as high as 85%, and can participate in a
referral program.
Google became popular with advertisers in part through
the comparative accessibility and affordability of their AdWords program, which
essentially made it possible for nearly anyone to advertise online. Over time,
Google's AdWords program has become increasingly complex. Although Yahoo! and
Microsoft deliver much lower click volumes - many advertisers find their
conversion rates better than Google, and hence profitability is higher.
Several issues like these have already opened the door
to a new generation of online marketing providers. New companies (including
Sibannac Media) can offer better terms, and have better technology through
the use of open-source applications and cloud-based computing environments.
Freed from server and software maintenance and challenging capacity issues -
second-generation companies like Sibannac Media are now able to provide
substantially greater ROI for their customers at much more competitive rates.
-8-
2. Sibannac HR
We transferred the business assets of PCI (an acquired
business as described in Form 8K/A dated January 15, 2016) to our division
Sibannac HR which is dedicated to labor and accounting management systems for
the cannabis industry. Sibannac management understands the wide range of
issues that cannabis businesses encounter, and is applying the systems that it
has developed to assist the industry. Key to Sibannac HR's success is its
alignment with a banking compliance solution. Sibannac HR continues to
vigorously pursue these relationships
Sibannac's initial product offerings are PEO and
insurance services through its subsidiary, Sibannac HR. Sibannac HR is the
exclusive sales and marketing arm of National PEO in the cannabis market.
1. Human Resources management.
National PEO develops customized human resources plans
for clients to assure compliance with the latest labor laws and regulations.
Additionally, National works with clients to help develop a culture that will
allow clients to develop and retain talent. Ultimately, National helps ensure
that employees are treated fairly and that the employer has an HR foundation
that allows for growth and is protected.
-
Employee/Employer
Handbook - National develops and maintains employee handbooks as labor laws
change or as employer policies dictate in each state in which the client has
employees.
-
Conflict
Resolution - National can act as a resource, mediator or witness for employee
employer conflicts, claims or disputes regarding wages, harassment, discipline,
etc.
-
Benefits
Support - Benefits specialists are at the business's disposal. Whether it is
for the group or an individual question or concern, National will provide the
answers quickly and efficiently.
-
Compliance
- National works to ensure clients maintain proper compliance with all labor
laws including Americans with Disabilities Act, Immigration and Naturalization
Control Act of 1986, FMLA, FLSA and other important regulations.
-
Policy
and Procedure Development - National experts provide templated policies and procedures
that can be adapted to specific client need to ensure a safe, comfortable and
productive work environment.
2. Employee Benefits: Health Insurance, Supplemental
Insurance, 401k
National's proprietary plans and purchasing power
enable businesses to affordably attract and retain high quality employees:
-
Health,
Dental and Vision: National's MetLife plan allows clients to provide the finest
ancillary benefits available at a competitive price.
-
Nexus
brokers take each client's health plan to market with multiple carriers to
ensure the best possible plan design and price.
-
COBRA
compliance assistance
-
Section
125 cafeteria plan
-
Claims
management
-
Long
and Short-Term Disability Insurance
-
Term
Life Insurance
-
No
Cost 401k Retirement Plans saving $1,000's in plan administration
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3. Workers' Compensation
Workers' compensation insurance requires careful
monitoring and administration. When faced with a claim or audit, employers can
spend countless hours researching, responding and coping with the many aspects
of workers' compensation claims. National provides the following workers'
compensation services:
-
Safety
Planning
-
Policy
Administration
-
Injury
Administration
-
Annual
Audits Management
-
Certificates
of Insurance
-
Small/no
deposit plans with "pay-as-you-go" premium payments
-
Payroll
Reporting and Record Keeping
-
Claims
Management
-
Back-to-work
Programs
4. Payroll Processing
National utilizes state-of the-art, industry leading
technologies to ensure clients have maximum flexibility in their payroll
processing. National systems adapt to client needs including:
-
Pay
Frequency - weekly, bi-weekly, semimonthly or monthly.
-
Flexible
Pay Period Dates
-
Pay
Method - direct deposit, pay-cards or standard paper checks.
-
Reporting
- standard and specialized reports, such as job costing, departmental reports
or customized reports.
-
Payroll
Tax Filing
-
Wage
Garnishments
5. Workplace Safety
National maintains a robust safety team that provides
risk management, safety consulting, and government compliance. Clients have
access to a variety of resources, including independent safety consultants,
advanced safety training for multiple industries, multimedia safety materials,
and workers' compensation loss control specialists. National safety helps
ensure clients comply with state and federal workplace safety guidelines while
controlling workers' compensation costs. Services include:
-
Written
Safety Programs
-
Claims
Administration and Claims Cost Control
-
Risk
Management
-
OSHA
Compliance
-
Workplace
Safety and Site Reviews
-
Onsite
Safety Training Programs
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6. Files, Claims &
Audits
National reduces employer risk by assuming many
employer-related responsibilities. Clients can reduce risk and focus on
building business while National manages the following:
-
Employee
Record Keeping - Gathering, verifying, preparing and maintaining all employee
forms such as I-9, W-4, and W-2. Support for employee evaluations,
hiring/firing documentation, corrective action, disputes
-
Claims
- National works with clients on the evaluation, negotiation and resolution of
unemployment claims, Workers' Compensation claims, harassment or other
employee/employer related claims.
-
Audits
- National and its team of subject area experts administer all audits including
workers' compensation, EEOC, DOL and others.
-
Unemployment
Administration - As the employer of record, National NATIONAL is responsible
for the management and resolution of state unemployment claims.
7. Insurance Services: Nexus Partners Insurance
Solutions:
Nexus Partners is a full service insurance agency with
numerous affiliates and brokers around the country. Nexus currently utilizes wholesale
brokers as its key provider of business insurance to its cannabis clients.
Nexus provides many coverage options from multiple carriers allowing clients to
choose the policy and price that best meets their needs and budget. Nexus
serves commercial clients in most industries and geographic areas.
Business of Our Company
Our Commitment
To our shareholders, employees, patients, global
partners, the environment and other stakeholders, we promise to act on our
belief that integrity is the priceless ingredient of our company. We will
operate with high standards of ethical behavior, effective governance, and we
will foster a culture of transparency and dialogue with our stakeholders to
improve our understanding of their needs. We take our commitment to economic,
social and environmental sustainability seriously, and extend this expectation
to our partners..
We promote a diverse workforce and inclusive culture.
The health, safety, work-life balance, professional development, and equitable,
respectful treatment of our employees are among our highest priorities.
At the date of this filing, 23 states and the District
of Columbia have adopted medical or adult use legislations. Industry analysts
estimate 14 more states will follow suit by 2018.[1]
Competition
There are a number of other emerging companies that
are exploring similar services strategies. Sibannac believes that products that
they develop will be competitive in the marketplace with other products serving
the same market sectors. Sibannac management believes that our team's
experience bringing products to market will
[1]
ArcView Market Research. (2014). The State of
Legal Marijuana Markets, 2nd Edition.
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prevail and the Company will be
unaffected at this stage by other developmental companies. Sibannac will strive
to be the first to bring medicines to market in this therapeutic area in order
to gain a competitive advantage.
PLAN OF OPERATIONS
Our Budget for operations in next fiscal year, 2016,
is as follows:
APPLICATION OF FUNDS (1)
|
|
|
|
Working Capital
|
|
|
$250,000
|
General &
Administrative
|
|
|
$250,000
|
Marketing & PR
|
|
|
$500,000
|
Total
|
|
|
$1,000,000
|
(1) These items are variable
and no commitment has been obtained from any source.
We may change any or all of the budget categories in the execution of its
business model. None of the line items are to be considered fixed or
unchangeable. We may need substantial additional capital to support its budget.
We have recognized minimal revenues from our existing
operational activities.
We may need to raise additional funds to support not
only our expected budget, but our continued operations. We cannot make any
assurances that we will be able to raise such funds or whether we would be able
to raise such funds with terms that are favorable to us. We may seek to borrow
monies from lenders at commercial rates, but such lenders will probably be at
higher than bank rates, which higher rates could, depending on the amount
borrowed, make the net operating income insufficient to cover the interest.
If we are unable to begin to generate
enough revenue to cover our operational costs, we will need to seek additional
sources of funds. Currently, we have no committed source for any funds as of
date hereof. No representation is made that any funds will be available when
needed. In the event funds cannot be raised if and when needed, we may not be
able to carry out our business plan and could fail in business as a result of
these uncertainties.
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COMPETITION, MARKETS, REGULATION AND TAXATION
Competitive Conditions
There are competitors in the business services
industry with far greater resources, financial and marketing sources, which
might compete with our Company. Such resources could overwhelm our Company's
efforts and cause failure of our Company. (See "Risk Factors")
Title to Property
None. We have no patents at
this time.
Government Contracts
None.
Company Sponsored Research
and Development
None at this time.
Number of Persons Employed
As of August 31, 2015, our
Company has two full-time employees. Our officers dedicate 30-40 hours per week to our
Company. We have six part-time employees.
RISK FACTORS
An investment in our Company's securities involves a
high degree of risk. You should carefully consider the following risk factors
and all the other information contained in this document before you decide to
buy our Company's shares. If any of the following risks related to our
Company's business actually occurs, its business, financial condition and
operating results would be adversely affected.
RISKS RELATED TO OUR COMPANY AND THE BUSINESS
We depend upon our key personnel and our ability to
attract and retain employees.
Our future growth and success depend on our ability to
recruit, retain, manage and motivate our employees. The loss of the services of
any member of our senior management or the inability to hire or retain
experienced management personnel could adversely affect our ability to execute
our business plan and harm our operating results.
We expect to face intense competition, often from
companies with greater resources and experience than we have.
The
cannabis industry is in turmoil and subject to rapid change. The industry
continues to expand and evolve as an increasing number of competitors and
potential competitors enter the market. Many of these competitors and potential
competitors have substantially greater financial, technological, and experience
than we have. Some of these competitors and potential competitors have more
experience than we have in the development of our business. In addition, our
services, if
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successfully developed, will compete with, service offerings from large and
well-established companies that have greater marketing and sales experience and
capabilities than we or our collaboration partners have. If we are unable to
compete successfully, we may be unable to grow and sustain our revenue.
We have limited history of operations and we may incur
losses.
As a company with no operating history, we are subject
to all of the risks associated with a new business enterprise. Our prospects
must be considered in light of the risks, expenses and difficulties frequently
encountered by companies in their early stages of development, especially in
challenging and competitive industries. We are unable to give you any assurance
that we will generate material revenues or that any revenues generated will be
sufficient for us to continue operations or achieve profitability.
We have limited assets.
As of the August 31, 2015, we have limited assets and
net worth of approximately $50,000. Our success will initially depend upon
continuing our business and growing our business by raising the necessary funds
to expand operations.
For future additional capital requirements, we may
raise capital by issuing equity or convertible debt securities, and when we do,
the percentage ownership of our existing stockholders may be diluted.
We are an "emerging growth company" under
the Jumpstart Our Business Startups Act. We cannot be certain if the reduced
reporting requirements applicable to emerging growth companies will make our
shares of common stock less attractive to investors.
We are and will remain an "emerging growth
company" until the earliest to occur of (a) the last day of the fiscal
year during which its total annual revenues equal or exceed $1 billion (subject
to adjustment for inflation), (b) the last day of the fiscal year following the
fifth anniversary of its initial public offering, (c) the date on which we,
during the previous three-year period, issued more than $1 billion in
non-convertible debt securities, or (d) the date on which we are deemed a
"large accelerated filer" (with at least $700 million in public
float) under the Exchange Act.
For so long as we remain an "emerging growth
company" as defined in the JOBS Act, we may take advantage of certain
exemptions from various reporting requirements that are applicable to other
public companies that are not "emerging growth companies" as
described in further detail in the risk factors below. We cannot predict if
investors will find its shares of common stock less attractive because we will
rely on some or all of these exemptions. If potential investors find our shares
of common stock less attractive as a result, there may be a less active trading
market for its shares of common stock and its stock price may be more volatile.
Notwithstanding the above, we are also currently a
"smaller reporting company", meaning that we are not an investment
company, an asset-backed issuer, or a majority-owned subsidiary of a parent
company that is not a smaller reporting company and have a public float of less
than $75 million and annual revenues of less than $50 million during the most
recently completed fiscal year.
If we avail ourselves of certain exemptions from
various reporting requirements, the reduced disclosure may make it more
difficult for investors and securities analysts to evaluate our Company and may
result in less investor confidence.
-14-
We may require substantial additional financing in the
future, but we are uncertain whether such financing will be available to us.
We will require significant additional capital to
expand our operations. We need approximately $500,000 in working capital
requirements through 2015 into 2016. We give no assurance that revenues from
operations will generate cash flow sufficient to finance our operations and
growth. We can give you no assurance that we will be able to obtain additional
financing or capital on terms we consider to be reasonable.
Additional financing will be sought from a number of
sources, including but not limited to additional sales of equity or debt
securities, or loans from banks, other financial institutions or affiliates of
our Company. If additional funds are raised by the issuance of our securities,
such as through the issuance of additional shares, convertible securities, then
the ownership interest of our existing shareholders (including investors in
this Offering) may be diluted. If additional funds are raised by the issuance
of debt or other equity instruments, we may become subject to certain
operational limitations (i.e., negative operating covenants), and such debt
holders may have rights senior to those of the holders of equity.
If adequate funds are not available on acceptable
terms, we may be unable to fund the expansion of our business.
We depend on our executive management to operate our
Company and the loss of certain members of management would materially and
negatively affect us.
Our success materially depends upon the efforts of our
management and other key personnel. If we lose the services of Messrs. Heineck
or Kimerer or any other executive officers or significant employees, our
business would likely be materially and adversely affected.
Our future success also depends, in part, upon our
ability to attract and retain qualified management personnel and other
employees. Any difficulties in obtaining, retaining and training qualified
employees could have a material adverse effect on us. Any difficulties in
obtaining and retaining qualified officers and employees could have a material
adverse effect on us.
We may not realize a profit on our business
acquisitions in a timely manner, which could materially and adversely affect
us.
We may not realize a significant cash return if debt
service exceeds net operating income on our business acquisitions. Therefore,
if any of our business activities are subject to delays or operating losses,
our growth may be hindered and our results of operations and cash flows may be
adversely affected. In addition, new acquisition activities, regardless of
whether or not they are ultimately successful, typically require substantial
time and attention from management. Furthermore, maintaining our management
capabilities involves significant expense, including compensation expense for
our personnel and related overhead. Therefore, if we do not realize a positive
cash flow return on our business activities in order to offset these costs and
expenses, we could be materially and adversely affected.
Conflicts of Interest
Certain conflicts of interest may exist between our Company and our officers and
directors. They have other business interests to which they devote their
attention, and may be expected to continue to do so although management time
should be devoted to the business of our Company. As a result, conflicts of
interest may arise
-15-
that
can be resolved only through exercise of such judgment as is consistent with
fiduciary duties to our Company.
Need for Additional Financing
Limited Revenue History.
Our Company must be regarded as a new or development
venture with all of the unforeseen costs, expenses, problems, risks and
difficulties to which such ventures are subject.
No Assurance of Success or Profitability.
There is no assurance that our Company will ever
operate profitably. There is no assurance that we will generate profits, or
that the value of our Company's shares will be increased thereby.
Lack of Diversification.
Because of the limited financial resources that we
have, it is unlikely that we will be able to diversify our operations. Our
probable inability to diversify our activities into more than one area will
subject us to economic fluctuations within our business or industry and
therefore increase the risks associated with our operations.
Dependence upon Management. Limited Participation of Management.
Our Company will be heavily dependent upon our
management skills, talents, and abilities, as well as our consultants, to
implement our business plan, and may, from time to time, find that our
inability to devote full time attention to the business of our Company results
in a delay in progress toward implementing our business plan.
Dependence upon Outside
Advisors.
To supplement the business experience of our officers
and directors, we may be required to employ accountants, technical experts,
appraisers, attorneys, or other consultants or advisors. Our Company's Management,
without any input from stockholders, will make the selection of any such
advisors. Furthermore, it is anticipated that such persons may be engaged on an
"as needed" basis without a continuing fiduciary or other obligation
to our Company. In the event our Company considers it necessary to hire outside
advisors, they may elect to hire persons who are affiliates, if they are able
to provide the required services.
-16-
Based on our current cash reserves, we will have
relatively small operational budget for the operations which we cannot expand
without additional raising capital.
If we are unable to begin to generate
enough revenue to cover our operational costs, we will need to seek additional
sources of funds. Currently, we have no committed source for any funds
as of date hereof. No representation is made that any funds will be available
when needed. In the event funds cannot be raised if and when needed, we may not
be able to carry out our business plan and could fail in business as a result
of these uncertainties.
RISK FACTORS RELATED TO OUR STOCK
We may, in the future, issue more shares which could
cause a loss of control by our present management and current stockholders.
We may issue further shares as consideration for the
cash or assets or services out of our authorized but unissued common stock that
would, upon issuance, represent a majority of the voting power and equity of
our Company. The result of such an issuance would be those new stockholders and
management would control our Company, and persons unknown could replace our
management at this time. Such an occurrence would result in a greatly reduced
percentage of ownership of our Company by our current shareholders, which could
present significant risks to investors.
We have not paid dividends but may in the future.
We have not paid dividends on our common stock. While
we intend to pay dividends in future after allocating adequate reserves, we do not
guarantee, commit and undertake that dividends will be paid in the foreseeable
future.
A limited public market exists for our common stock at
this time, and there is no assurance of a future market.
There is a limited public market for our common stock,
and no assurance can be given that a market will continue or that a shareholder
ever will be able to liquidate his investment without considerable delay, if at
all. If a market should develop, the price may be highly volatile. Factors such
as those discussed in the "Risk Factors" section may have a
significant impact upon the market price of the shares offered hereby. Due to
the low price of our securities, many brokerage firms may not be willing to
effect transactions in our securities. Even if a purchaser finds a broker
willing to effect a transaction in our shares, the combination of brokerage
commissions, state transfer taxes, if any, and any other selling costs may
exceed the selling price. Further, many lending institutions will not permit
the use of our shares as collateral for any loans.
The regulation of penny stocks by SEC and FINRA may
discourage the tradability of our securities.
We
are a "penny stock" company. None of our securities currently trade in any
market and, if ever available for trading, will be subject to a Securities and
Exchange Commission rule that imposes special sales practice requirements upon
broker-dealers who sell such securities to persons other than established
customers or Accredited Investors. For purposes of the rule, the phrase
"Accredited Investors" means, in general terms, institutions with assets in
excess of $5,000,000, or individuals having a net worth in excess of $1,000,000
or having an annual income that exceeds $200,000 (or that, when combined with a
spouse's income, exceeds
-17-
$300,000). For transactions covered by the rule, the broker-dealer must make a
special suitability determination for the purchaser and receive the purchaser's
written agreement to the transaction prior to the sale. Effectively, this
discourages broker-dealers from executing trades in penny stocks. Consequently,
the rule will affect the ability of purchasers in this offering to sell their
securities in any market that might develop therefore because it imposes
additional regulatory burdens on penny stock transactions.
In addition, the Securities and Exchange Commission
has adopted a number of rules to regulate "penny stocks". Such rules
include Rules 3a51-1, 15g-1, 15g-2, 15g-3, 15g-4, 15g-5, 15g-6, 15g-7, and
15g-9 under the Securities and Exchange Act of 1934, as amended. Because our
securities constitute "penny stocks" within the meaning of the rules,
the rules would apply to us and to our securities. The rules will further
affect the ability of owners of shares to sell our securities in any market
that might develop for them because it imposes additional regulatory burdens on
penny stock transactions.
Shareholders should be aware that, according to
Securities and Exchange Commission, the market for penny stocks has suffered in
recent years from patterns of fraud and abuse. Such patterns include (i)
control of the market for the security by one or a few broker-dealers that are
often related to the promoter or issuer; (ii) manipulation of prices through
prearranged matching of purchases and sales and false and misleading press
releases; (iii) "boiler room" practices involving high-pressure sales
tactics and unrealistic price projections by inexperienced sales persons; (iv)
excessive and undisclosed bid-ask differentials and markups by selling
broker-dealers; and (v) the wholesale dumping of the same securities by
promoters and broker-dealers after prices have been manipulated to a desired
consequent investor losses. Our management is aware of the abuses that have
occurred historically in the penny stock market. Although we do not expect to
be in a position to dictate the behavior of the market or of broker-dealers who
participate in the market, management will strive within the confines of
practical limitations to prevent the described patterns from being established
with respect to our securities.
Rule 144 sales in the future may have a depressive
effect on our stock price.
Our shareholders may be able to use Rule 144 as an
exemption for resale, but resales under Rule 144 could have a depressive effect
on the market trading price, if any. Investors will have no effective way to combat
this.
Rule 144 Sales
All of the outstanding Shares will be "restricted
securities" within the meaning of Rule 144 under the Securities Act of
1933, as amended. As restricted Shares, these Shares may be resold only
pursuant to an effective registration statement or under the requirements of
Rule 144 or other applicable exemptions from registration under the Act and as
required under applicable state securities laws.
Our stock will in all likelihood continue to be thinly
traded and as a result you may be unable to sell at or near ask prices or at
all if you need to liquidate your shares.
The shares of our common stock may continue to be
thinly-traded on the OTC Pink or OTCQB under the symbol SNNC, meaning that the
number of persons interested in purchasing our common shares at or near ask
prices at any given time may be relatively small or non-existent. This situation
is attributable to a number of factors, including the fact that we are a small
company which is relatively unknown to stock analysts, stock brokers,
institutional investors and others in the investment community that generate or
influence sales volume, and that even if we came to the attention of such
persons, they tend to be risk-averse and would be reluctant to follow an
unproven, early stage company such as ours or purchase or recommend the purchase
of any of our Securities until such time as we became
-18-
more
seasoned and viable. As a consequence, there may be periods of several days or
more when trading activity in our Securities is minimal or non-existent, as
compared to a seasoned issuer which has a large and steady volume of trading
activity that will generally support continuous sales without an adverse effect
on Securities price. We cannot give you any assurance that an active public
trading market for our common Securities will ever develop or be sustained, or
that any trading levels will be sustained. Due to these conditions, we can give
investors no assurance that they will be able to sell their shares at or any
prices or at all if they need money or otherwise desire to liquidate their
securities of our Company.
Our common stock market prices may be volatile, which
substantially increases the risk that you may not be able to sell your
Securities at or above the price that you may pay for the security.
Because of the limited trading market for our common
stock and because of the possible price volatility, you may not be able to sell
your shares of common stock when you desire to do so. The inability to sell
your Securities in a rapidly declining market may substantially increase your
risk of loss because of such illiquidity and because the price for our
Securities may suffer greater declines because of our price volatility.
The price of our common stock that will prevail in the
market after this offering may be higher or lower than the price you may pay.
Certain factors, some of which are beyond our control, that may cause our share
price to fluctuate significantly include, but are not limited to the following:
-
Variations in our quarterly
operating results;
-
Loss of a key relationship or
failure to complete significant transactions;
-
Additions or departures of key
personnel; and
-
Fluctuations in stock market price
and volume.
Additionally, in recent years the stock market in
general, and the personal care markets in particular, have experienced extreme
price and volume fluctuations. In some cases, these fluctuations are unrelated
or disproportionate to the operating performance of the underlying company.
These market and industry factors may materially and adversely affect our stock
price, regardless of our operating performance. In the past, class action
litigation often has been brought against companies following periods of
volatility in the market price of those companies common stock. If we become
involved in this type of litigation in the future, it could result in
substantial costs and diversion of management attention and resources, which
could have a further negative effect on your investment in our stock.
Our business is highly speculative and the investment
is therefore highly risky.
Due to the speculative nature of our business, it is
probable that the investment in shares offered hereby will result in a total
loss to the investor. Investors should be able to financially bear the loss of
their entire investment. Investment should, therefore, be limited to that
portion of discretionary funds not needed for normal living purposes or for
reserves for disability and retirement.
Any economic downturn and uncertainty in the financial
markets and other adverse changes in general economic or political conditions
may adversely affect our industry, business and results of operations.
The
global credit and financial markets have continued to experience disruptions,
including diminished liquidity and credit availability, declines in consumer
confidence, declines in economic growth, increases in unemployment rates, and
uncertainty about economic stability. There can be no assurance that there will
not
-19-
be
future deterioration in credit and financial markets and confidence in economic
conditions. These economic uncertainties affect businesses such as ours in a
number of ways, making it difficult to accurately forecast and plan our future
business activities. We are unable to predict the likely duration and severity
of any disruptions in the credit and financial markets and adverse global
economic conditions, and if any uncertain economic conditions continue or
further deteriorate, our business and results of operations could be materially
and adversely affected.
Potential changes in accounting practices and/or
taxation may adversely affect our financial results.
We cannot predict the impact that future changes in
accounting standards or practices may have on our financial results. New accounting
standards could be issued that change the way we record revenues, expenses,
assets and liabilities. These changes in accounting standards could adversely
affect our reported earnings. Increases in direct and indirect income tax rates
could affect after tax income. Equally, increases in indirect taxes could
affect our products affordability and reduce our sales.
We will rely on third parties for services in
conducting our business and any disruption of these relationships could
adversely affect our business.
We will have contracts with third parties. If these
relationships are disrupted for any reason our results of operation and
financial condition could be adversely affected.
There is a risk that shareholders will never receive
dividends.
We do not guarantee, commit or undertake to
issue a dividend to shareholders for the next several years even if cash were
available to do so as we would re-invest those available funds back into the
operations of our Company. We cannot assure shareholders that we will achieve
results or maintain a tax status that allow any specified level of cash
distribution or year-to-year increases in cash distribution.
Highly Speculative Nature of Investment.
Due to the highly speculative nature of our business,
it is likely that the investment in the shares offered hereby will result in a
total loss to the investor. Investors should be able to financially bear the
loss of their entire investment. Investment should, therefore, be limited to
that portion of discretionary funds not needed for normal living purposes or
for reserves for disability and retirement.
Reporting Information.
Our Company
is not subject to the full reporting requirements under the Securities and
Exchange Act of 1934, only reporting under Section 15(d). As a result,
shareholders will not have access to the all of the information required to be
reported by publicly held Section 12g registered companies under the Securities
and Exchange Act and the regulations thereunder. Our Company intends to provide
our shareholders with annual reports containing financial information prepared
in accordance with Generally Accepted Accounting Principles as required by Sec.
13 of the Securities Exchange Act of 1934.
Long Term
Nature of Investment
Investors should be aware of the long-term nature of an investment in our
Company. Each investor will be required to represent that the securities
purchased are for their own account, for investment purposes only and not with a
view towards resale or distribution. The securities offered hereby may not be
negotiated, assigned,
-20-
or
transferred without an opinion of counsel acceptable to our Company that
transfer may be made without registration under the securities laws of the
United States and applicable state laws. The securities offered hereby are
restricted securities under the applicable securities laws of the United States
or of the various states unless an exemption from registration is available.
Therefore, the securities offered hereby may have to be held for an indefinite
period of time. Investors who do not wish or who are not financially able to
remain as investors for a substantial and indefinite period of time are advised
against investment in the shares offered hereby.
Limited Financing - Lack of Loan Availability
There is no assurance that additional monies or
financing will be available in the future or, if available, will be at terms
favorable to our Company.
Our Company may borrow money to finance its operations
on terms to be determined. Any such borrowing will increase the risk of loss to
the investor in the event our Company is unsuccessful in repaying such loans.
Capital Resources
The only capital resources of our Company are our
shares.
Description of
Properties/Patents
(a) |
Real Estate |
None |
(b) |
Oil and Gas |
None |
(c) |
Patents |
None |
BOARD OF DIRECTORS AND
EXECUTIVE OFFICERS
Name
|
|
Age
|
|
Position
|
|
|
|
|
|
Daniel
Allen
|
|
63
|
|
President,
Chief Executive Officer and Director
|
Paul
Dickman (1)
|
|
35
|
|
Chief
Financial Officer
|
Chase
Zeman
|
|
29
|
|
Secretary,
Treasurer and Director
|
Travis
Hair (2)
|
|
67
|
|
Director
|
Richard
Heineck (1)
|
|
47
|
|
Director
and President of Sibannac HR
|
Kirk
Kimerer (1)(3)
|
|
49
|
|
President
of Sibannac Media
|
(1) Appointed March 4, 2015
(2) Appointed April 7, 2015
(3) Resigned as a Director August 31, 2015
-21-
Daniel Allen, age 63, President, Chief Executive
Officer and Director
Mr. Allen was appointed as an officer and director of
our Company on August 25, 2014. Mr. Allen has been a consultant in the areas
of banking and financing for Blue Line Protection Group, Inc. since May 2014.
Between April 2014 and March 2014, Mr. Allen served as the Regional Vice
President of Sunflower Bank in Longmont, Colorado. Between June 2001 and April
2013, Mr. Allen was the Chairman and Chief Executive Officer of Mile High Banks
in Longmont, Colorado. Mr. Allen holds a Bachelor of Science in management and
Finance from the University of Utah.
Paul Dickman, age 35, Chief Financial Officer
Mr. Dickman was appointed as an officer of our Company
on March 4, 2015. Mr. Dickman has served as the chief financial officer for
companies in a variety of industries, both domestically and abroad. He has
successfully taken numerous companies through multiple fund raising
transactions including private placements of debt and equity and initial public
offerings. In addition to his work with the Company, Mr. Dickman, since 2009,
has been the principal of Breakwater Corporate Finance, a consulting firm that
offers services to early stage startups, small public companies and the
brokerage community. Prior to establishing Breakwater Finance, he worked as an
auditor with two large regional accounting firms, with an emphasis in auditing
small, publicly-traded companies from 2002 to 2007. Between 2007 and 2009, Mr.
Dickman was employed with a private equity investment firm in various
capacities. Mr. Dickman received a bachelor's of science degree in finance and
accounting and has been a licensed CPA since 2005.
Chase Zeman, age 29, Secretary, Treasurer and Director
Mr. Zeman was appointed an officer and director of our
Company on August 25, 2014. Mr. Zeman has been a Field Improvement Specialist
at RGIS, LLC since October 2013. Prior to that time, Mr. Zeman was a District
Manager at RGIS, LLC (December 2012 through October 2013) and an Area Manager/District
Manager for RGIS (October 2009 through December 2012). RGIS, LLC provides
management and inventory control for large retail stores and grocery chains.
Between March 2008 and October 2009, Mr. Zeman was a Store Manager at Game
Crazy, a video game retailer. Mr. Zeman holds a Bachelors' degree in
Philosophy from the University of Boulder, Colorado.
Travis Hair, age 67, Director
Mr. Hair was appointed a Director of our Company on
April 7, 2015. Mr. Hair was employed by Unigard Insurance Group between 1970
and 1979. While with Unigard, his duties included insurance underwriting, sales
management and operational management responsibilities. In 1979, Mr. Hair
joined Schaefer-Smith-Ankeney Insurance Agency as a stockholder and officer.
His duties at SSA included operational management, oversight of an extensive
agency reorganization and personal insurance sales. In 2002, Mr. Hair, as the
senior partner of SSA, led the sale of SSA to Compass Bank. He supervised 130
employees as city president for SSA from 2002 until 2007. Between 2007 and 2012
Mr. Hair was the President of Rimrock Insurance Consulting, Inc. where he
worked closely with banks, insurance agencies and various professional
employers organizations seeking to build their insurance practice. Since 2012,
Mr. Hair has been an associate with Crest Insurance Group. Mr. Hair graduated
from North Texas State University in 1970.
-22-
Richard Heineck, age 47, Director and President of
Sibannac HR, a division of our Company
Mr. Heineck was appointed a Director of our Company
and President of Sibannac HR, a division of our Company, on March 4, 2015. Mr.
Heineck began his career in publishing and advertising. Between 1991 and 1998,
he managed sales, production and editorial content for 17 magazine titles. In
1998, he started his own publishing company which he sold after two years.
Between 2001 and 2004, he operated a communications and custom publishing firm
that specialized in the resort and golf real estate markets. Between 2004 and
2008, Mr. Heineck operated a boutique finance company that aided affluent
individuals and small businesses with their residential and commercial finance
need. Between 2008 and 2012, Mr. Heineck was an independent consultant in the areas
of sales, marketing and financing. In 2012, Mr. Heineck was asked to consult
with National PEO on their sales, marketing and operations. Having successfully
impacted the firm in those areas, he became Vice President of Sales &
Marketing for National PEO, a position he has held between 2013 and March 2015.
Mr. Heineck's initiatives to revise the company's sales tactics to more
effectively sell-through all of the products services resulted in significantly
higher revenue per client as well as greater retention. In 2014, he had
positioned National PEO of Arizona to take advantage of the burgeoning legal
marijuana industry through being a part of the overall compliance solution that
allows legal marijuana businesses to bank. Mr. Heineck received his BA in
English from the University of California, Santa Barbara in 1990.
Kirk Kimerer, age 49, President of Sibannac Media, a division
of our Company and Former Director
Mr. Kimerer was appointed President of our Sibannac
Media, a division of our Company, on March 4, 2015. Mr. Kimerer was a Director
of our Company from March 4, 2015 through August 31, 2015. Mr. Kimerer has over
20 years of experience in overseeing digital media operations. Mr. Kimerer was
President of Apollo Media Network, a firm involved with digital media
publishing, marketing and advertising, between 2013 and 2015. During 2012 and
2013 Mr. Kimerer oversaw Las Vegas Review Journal's digital media division, a
property owned by Stephens Media, LLC. Between 2009 and 2012 Mr. Kimerer worked
at LIN TV (NYSE: TVL) as Director of Digital Media sales. In 2008 Mr. Kimerer
was Director of Digital Media with Maverick Media, owner and operator of radio
stations in small-to-medium sized US markets. During 2007 and 2008, Mr. Kimerer
was with E.W. Scripps (NYSE: SSP) as an Internet Sales Manager. Mr. Kimerer was
with Belo Interactive (NYSE: BLC) from 2003 to 2007 and Gannett (NYSE: GCI)
from 1999 to 2003 as a digital media executive. Between 1992 and 1997, Mr.
Kimerer spearheaded the launch of Axon Television Network. Mr. Kimerer was the
inventor of Codependency, The Game. Mr. Kimerer attended the Walter Cronkite
School of Journalism, received a degree in Political Science from Arizona State
University with a Special Emphasis in Latin American Studies, a Film
Certification from the University of Southern California and a Spanish Proficiency
Certificate of Completion from Salamanca, Spain.
-23-
COMPENSATION
Executive and Directors
Compensation
The following table sets
forth certain information concerning compensation paid by the Company to its
sole officer for the fiscal years ended August 31, 2015, 2014 and 2013 (the
"Named Executive Officers"):
SUMMARY COMPENSATION TABLE
Name & Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock awards
($)
|
Option awards
($)
|
Non-equity incentive plan compensation
($)
|
Non-qualified deferred compensation earnings
($)
|
All other compensation
($)
|
Total
($)
|
|
|
|
|
|
|
|
|
|
|
Daniel Allen, President and
CEO (1)
|
2015
|
$-0-
|
$-0-
|
$ -0-
|
$ -0-
|
$ -0-
|
$-0-
|
$-0-
|
$-0-
|
2014
|
$-0-
|
$-0-
|
$ -0-
|
$ -0-
|
$ -0-
|
$-0-
|
$-0-
|
$-0-
|
|
|
|
|
|
|
|
|
|
|
Paul Dickman, CFO (2)
|
2015
|
$24,300
|
$-0-
|
$ -0-
|
$ -0-
|
$ -0-
|
$-0-
|
$-0-
|
$24,300
|
|
|
|
|
|
|
|
|
|
|
Chase Zeman, Secretary
& Treasurer (1)
|
2015
|
$-0-
|
$-0-
|
$ -0-
|
$ -0-
|
$ -0-
|
$-0-
|
$-0-
|
$-0-
|
2014
|
$-0-
|
$-0-
|
$ -0-
|
$ -0-
|
$ -0-
|
$-0-
|
$-0-
|
$-0-
|
|
|
|
|
|
|
|
|
|
|
Richard Heineck, President
of Sibannac HR Division
|
2015
|
$-0-
|
$-0-
|
$ -0-
|
$ -0-
|
$ -0-
|
$-0-
|
$-0-
|
$-0-
|
-24-
Name & Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock awards
($)
|
Option awards
($)
|
Non-equity incentive plan compensation
($)
|
Non-qualified deferred compensation earnings
($)
|
All other compensation
($)
|
Total
($)
|
Kirk Kimerer, President of
Sibannac Media Division (2)(3)(5)
|
2015
|
$-0-
|
$-0-
|
$ -0-
|
$ -0-
|
$ -0-
|
$-0-
|
$-0-
|
$-0-
|
2014
|
$-0-
|
$-0-
|
$ -0-
|
$ -0-
|
$ -0-
|
$-0-
|
$-0-
|
$-0-
|
|
|
|
|
|
|
|
|
|
|
Paul Petit, Former
President & CEO (4)
|
2014
|
$-0-
|
$-0-
|
$-0-
|
$-0-
|
$-0-
|
$-0-
|
$-0-
|
$-0-
|
2013
|
$-0-
|
$-0-
|
$-0-
|
$-0-
|
$-0-
|
$-0-
|
$-0-
|
$-0-
|
|
|
|
|
|
|
|
|
|
|
(1) Mr. Allen and Mr. Zeman were appointed officers of the
Company on August 25, 2014.
(2) Appointed March 4, 2015.
(3) Kirk Kimerer has an employment agreement as President
of Sibannac Media Division effective as of August 31, 2015.
(4) Resigned as Officer on August 25, 2014.
(5) Resigned as Director on August 31, 2015.
-25-
DIRECTOR COMPENSATION
The following table sets
forth certain information concerning compensation paid to the Company's
directors during the years ended August 31, 2015 and 2014:
Name
|
Year
|
Fees earned or paid in cash
($)
|
Stock awards ($)
|
Option awards ($)
|
Non-equity incentive plan compensation ($)
|
Nonqualified deferred compensation earnings
($)
|
All other compensation ($)
|
Total
($)
|
|
|
|
|
|
|
|
|
|
Daniel Allen
|
2015
|
$ -0-
|
$ -0-
|
$ -0-
|
$ -0-
|
$ -0-
|
$ -0-
|
$ -0-
|
|
2014
|
$ -0-
|
$ -0-
|
$ -0-
|
$ -0-
|
$ -0-
|
$ -0-
|
$ -0-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chase Zeman
|
2015
|
$ -0-
|
$ -0-
|
$ -0-
|
$ -0-
|
$ -0-
|
$ -0-
|
$ -0-
|
|
2014
|
$ -0-
|
$ -0-
|
$ -0-
|
$ -0-
|
$ -0-
|
$ -0-
|
$ -0-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Travis Hair
|
2015
|
$ -0-
|
$ -0-
|
$ -0-
|
$ -0-
|
$ -0-
|
$ -0-
|
$ -0-
|
|
2014
|
$ -0-
|
$ -0-
|
$ -0-
|
$ -0-
|
$ -0-
|
$ -0-
|
$ -0-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Richard Heineck
|
2015
|
$ -0-
|
$ -0-
|
$ -0-
|
$ -0-
|
$ -0-
|
$ -0-
|
$ -0-
|
|
2014
|
$ -0-
|
$ -0-
|
$ -0-
|
$ -0-
|
$ -0-
|
$ -0-
|
$ -0-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kirk Kimerer (1)
|
2015
|
$ -0-
|
$ -0-
|
$ -0-
|
$ -0-
|
$ -0-
|
$ -0-
|
$ -0-
|
|
2014
|
$ -0-
|
$ -0-
|
$ -0-
|
$ -0-
|
$ -0-
|
$ -0-
|
$ -0-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Paul F. Petit (2)
|
2014
|
$ -0-
|
$ -0-
|
$ -0-
|
$ -0-
|
$ -0-
|
$ -0-
|
$ -0-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alain S. Petit (2)
|
2014
|
$ -0-
|
$ -0-
|
$ -0-
|
$ -0-
|
$ -0-
|
$ -0-
|
$ -0-
|
|
|
|
|
|
|
|
|
|
______________________________
(1) Resigned as Director on
August 31, 2015
|
(2) Resigned as Director on
August 25, 2014
|
The term of office for each Director is one (1) year,
or until his/her successor is elected at our Company's annual meeting and
qualified. The term of office for each Officer of our Company is at the
pleasure of the Board of Directors.
-26-
The Board of Directors has no nominating, auditing
committee or a compensation committee. Therefore, the selection of person or
election to the Board of Directors was neither independently made nor
negotiated at arm's length.
Employment Agreements
EMPLOYMENT AND CONSULTING AGREEMENTS
There
are employment contracts and/or consulting agreements with our directors or
officers during the fiscal year ended August 31, 2015 as follows:
Name
|
|
Compensation
|
|
Effective Date
|
|
|
|
|
|
Kirk
Kimerer (1)
|
|
$8,333.33/monthly
|
|
August
31, 2015
|
|
|
|
|
|
(1)
Resigned as Director as of August 31, 2015. Remains President of Sibannac
Media Division
|
|
|
|
|
|
|
|
|
|
The Employment Agreement is attached
hereto as Exhibits 10.8.
Identification of Certain Significant Employees
There are no employees of our Company other than the
executive officers and consultants disclosed above who make, or are expected to
make, significant contributions to our business, the disclosure of which would
be material.
Conflicts of Interest
All of our Company's Officers and Directors have been
in the past and may continue to be active in other business with other
companies and on their own behalf. All Officers and Directors have retained the
right to conduct their own independent business interests. These activities
could give rise to potential conflicts with the interests of our Company. Pursuant
to a resolution of the Board of Directors of our Company, the Officers and
Directors have agreed that if a business opportunity in the cannabinoid
services industry comes to the attention of its Officers and such opportunity
is located within an area of interest as defined by resolution of the Board of
Directors it will be made available to our Company and our Company shall have a
right of first refusal with regard to such opportunity. If a business
opportunity comes to the attention of a Director or Officer and such
opportunity is located within an area of interest as defined by resolution of
the Board of Directors or if an opportunity is presented to an Officer or
Director in his capacity as such, it must be disclosed to our Company and made
available to it. Officers and Directors may have an interest in prospects
presented to our Company, so long as it is disclosed in writing and the
transaction then approved by disinterested Directors. Any future designated
areas of interest will be determined by our Company's Board of Directors after
appropriate discussion and deliberation. If an Officer or Director owes a
fiduciary duty to another entity similar to the duty owed to our Company, it is
possible that the conflict may be impossible to resolve in a manner that is
equitable to both entities.
-27-
A majority of disinterested Directors may reject a
corporate opportunity for various reasons, including geologic, geographic and
economic considerations, among others. If we reject such opportunity, or if it
rejects an area of interest and later an opportunity is presented to a Director
or Officer within such area of interest, then any Director or Officer may avail
himself or themselves of such opportunity. In addition, if a prospect or other
opportunity is presented to our Company, and one or more of our Officers or
Directors has an outside interest in the opportunity, the opportunity will be
reviewed at a meeting of the Board of Directors and the interested Director(s)
will not vote on issues relating to such opportunity.
To the best their ability and in the best judgment of
the Officers and Directors of our Company, any conflicts of interest between
our Company and the personal interests of the Officers and Directors of our
Company will be resolved in a fair manner which will protect the interests of
our Company.
SECTION 3 - SECURITIES AND TRADING MARKETS
Item 3.02 Unregistered
Sales of Equity Securities
Per the Asset Acquisition Agreement reported in Item
1.01 above, the Company approved the issuance of 3,100,000 shares of the
Company's restricted common stock to Apollo Media Network, Inc. The Company
relied on the exemption from registration provided under Section 4(a)2 as a transaction not involving any public
offering of securities, therefore exempt from Registration under the Securities
Act of 1933.
On November 11, 2015, the Company completed an Asset
Acquisition Agreement with Protection Cost, Inc. whereby the Company approved
the issuance of 2,300,000 shares of the Company's restricted common stock. The
Company relied on the exemption from registration provided under Section 4(a)2 as a transaction not involving any public
offering of securities, therefore exempt from Registration under the Securities
Act of 1933.
SECTION 5 - CORPORATE GOVERNANCE AND MANAGEMENT
Item 5.01 Changes in
Control of Registrant
As a result of the Asset
Acquisition Agreement with Apollo Media Network, Inc. discussed in Item 2.01,
there was a resulting change in the ownership structure of the Company.
PRINCIPAL STOCKHOLDERS
The following table sets forth
information with respect to the beneficial ownership of our outstanding common
stock as of August 31, 2015 by:
-
each
person who is known by us to be the beneficial owner of five percent (5%) or
more of our Company's common stock;
-
our
executive officers, and each director as identified in the "Management -
Executive Compensation" section; and
-
all
of our Company's directors and executive officers as a group.
-28-
Beneficial
ownership is determined in accordance with the rules of the Securities and
Exchange Commission and generally includes voting or investment power with
respect to securities. Shares of common stock and options, warrants and
convertible securities that are currently exercisable or convertible within 60
days of the date of this document into shares of our common stock are deemed to
be outstanding and to be beneficially owned by the person holding the options,
warrants or convertible securities for the purpose of computing the percentage
ownership of the person, but are not treated as outstanding for the purpose of
computing the percentage ownership of any other person.
The information below is based on the number of shares
of our Company's common stock that we believe was beneficially owned by each
person owning more than 5% of our common or preferred stock as of date hereof.
NAME
AND ADDRESS OF BENEFICIAL OWNER (1)
|
NUMBER
OF
SHARES
|
PERCENT
OF
OUTSTANDING(2)
|
|
|
|
|
|
|
Daniel Allen, President, CEO and
Director
|
2,506,500
|
14.3%
|
|
|
|
|
|
|
Paul Dickman, CFO
|
600,000
|
3.4%
|
|
|
|
|
|
|
Chase Zeman, Secretary, Treasurer
and Director
|
2,630,594
|
15.0%
|
|
|
|
|
|
|
Travis Hair, Director
|
1,542,100
|
8.8%
|
|
|
|
|
|
|
Richard Heineck, Director and
President of Sibannac HR
|
1,700,000
|
9.7%
|
|
|
|
|
|
|
Kirk Kimerer, President of Sibannac
Media and former Director
|
3,100,000
|
17.7%
|
|
|
|
|
|
|
All executive officers and directors
as a group, 5 people.
|
12,079,194
|
68.9%
|
(1) The above officers and directors' address is c/o
Sibannac, Inc., 9235 Bell Flower Way, Highlands Ranch, Colorado 80126
(2) Based on 17,527,194 shares of the Company's common
stock issued and outstanding at August 31, 2015.
Rule 13d-3
under the Securities Exchange Act of 1934 governs the determination of
beneficial ownership of securities. That rule provides that a beneficial owner
of a security includes any person who directly or indirectly has or shares
voting power and/or investment power with respect to such security. Rule 13d-3
also provides that a beneficial owner of a security includes any person who has
the right to acquire beneficial ownership of such security within sixty days,
including through the exercise of any option, warrant or conversion of a
security. Any securities not outstanding which are subject to such options,
warrants or conversion privileges are deemed to be outstanding for the purpose
of computing the percentage of outstanding securities of the class owned by
such person. Those securities are not deemed to be outstanding for the purpose
of computing the percentage of the class owned by any other person. Included in
this table are only those derivative securities with exercise prices that the
Company believes have a reasonable likelihood of being "in the money"
within the next sixty days.
-29-
DESCRIPTION OF SECURITIES
Common
Stock
Our Company is presently authorized to issue sixty
million (60,000,000) shares of common stock. A total of 17,527,194 common
shares are deemed issued and outstanding as of date hereof.
All shares, when issued, will be fully paid and
non-assessable. All shares are equal to each other with respect to voting,
liquidation, and dividend rights. Special Stockholders' meetings may be called
by the Officers or Directors, or upon the request of holders of at least
one-tenth (1/10th) of the outstanding shares. Holders of shares are entitled to
one vote at any Stockholders' meeting for each share they own as of the record
date set by the Board of Directors. There is no quorum requirement for
Stockholders' meetings. Therefore, a vote of the majority of the shares
represented at a meeting will govern even if this is substantially less than a
majority of the shares outstanding. Holders of shares are entitled to receive
such dividends as may be declared by the Board of Directors out of funds
legally available therefore, and upon liquidation are entitled to participate
pro rata in a distribution of assets available for such a distribution to
Stockholders. There is no conversion, pre-emptive or other subscription rights
or privileges with respect to any shares. Reference is made to our Articles of
Incorporation and its By-Laws as well as to the applicable statutes of the
State of Colorado for a more complete description of the rights and liabilities
of holders of shares. It should be noted that the Board of Directors without
notice to the Stockholders may amend the By-Laws. The shares of our Company do
not have cumulative voting rights, which means that the holders of more than
fifty percent (50%) of the shares voting for election of Directors may elect
all the Directors if they choose to do so. In such event, the holders of the
remaining shares aggregating less than fifty percent (50%) of the shares voting
for election of Directors may not be able to elect any Director.
Preferred Stock
We are presently authorized
to issue ten million (10,000,000) preferred shares of preferred stock. No shares
of Preferred Stock are issued and outstanding as of date hereof.
Stockholders
Each Stockholder has sole investment power and sole
voting power over the shares owned by such Stockholder. No Stockholder has
entered into or delivered any lock up agreement or letter agreement regarding
shares or options thereon. Under Nevada laws, no lock up agreement is required
regarding our shares as it might relate to an acquisition.
Transfer Agent
Transhare Corporation is our
transfer agent. Their address is 4626 South Broadway, Englewood, CO 80113.
Their telephone number is (303) 662-1112.
Item 5.02 Departure of Directors or Certain Officers;
Election of Directors; Appointment of Certain Officer; Compensatory
Arrangements of Certain Officers.
There were no changes to the Company's officers or
Board of Directors as a result of this transaction.
-30-
SECTION 9 - FINANCIAL STATEMENTS AND EXHIBITS
Item 9.01 Financial
Statements and Exhibits
(a) Financial Statements
Unaudited Pro Forma
Consolidated Balance Sheet, Statement of Operations and Notes
(d) Exhibits
Exhibit No.
|
Description
|
10.1
|
Asset Acquisition Agreement -
Apollo Media Network, Inc. and Sibannac, Inc.
|
10.2
|
Agreement and Consent with
Representations - Apollo Media Network, Inc. and Sibannac, Inc.
|
10.3
|
Assignment, Assumption and
Release Agreement - Apollo Media Network, Inc., Kirk Kimerer, Jayson Lang,
Travis Hair, Ray Bills and Margaret Kerr
|
10.4
|
Joint Written Consent in Lieu
of Meeting of the Board of Directors and Shareholders of Apollo Media
Network, Inc. regarding Acquisition Agreement
|
10.5
|
Assumption and Release
Agreement - Apollo Media Network, Inc. and Sibannac, Inc.
|
10.6
|
Bill of Sale, Assignment and
Quit Claim Deed from Kirk Kimerer to Apollo Media Network, Inc.
|
10.7
|
Board Observer Rights Letter
to Kirk Kimerer
|
10.8
|
Employment Agreement - Kirk
Kimerer and Sibannac, Inc.
|
10.9
|
Irrevocable Proxy - Kirk
Kimerer
|
10.10
|
Joint Written Consent in Lieu
of Meeting of the Board of Directors and Shareholders of Apollo Media
Network, Inc. regarding Assignment and Assumption Agreement
|
10.11
|
Ability to Pay Statement -
Kirk Kimerer
|
10.12
|
Subscription and Investment
Letter from Kirk Kimerer for 3,099,900 shares of Apollo Media Network, Inc.
|
10.13
|
Lock Up and Metering Agreement
- Kirk Kimerer and Sibannac, Inc.
|
10.14
|
Note Conversion Agreement -
Sibannac, Inc. and Jayson Lang, Travis Hair, Ray Bills and Margaret Kerr and
Apollo Media Network, Inc.
|
10.15
|
Pledge and Security Agreement
- Kirk Kimerer and Sibannac, Inc.
|
10.16
|
Put Option Agreement -
Sibannac, Inc. and Kirk Kimerer
|
10.17
|
Repurchase Agreement and Right
of First Refusal - Sibannac, Inc.
|
-31-
SIBANNAC, INC. AND ACQUIRED ENTITY |
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET AS OF AUGUST 31, 2015 |
|
|
|
|
|
|
|
|
|
|
|
Historical |
|
|
|
|
|
|
|
Sibannac, Inc. |
|
Aquired entity |
|
Pro Forma Adjustments |
|
Notes |
|
Pro Forma Combined |
|
|
|
|
|
|
|
|
|
|
ASSETS |
Current Assets |
|
|
|
|
|
|
|
|
|
Cash [note 2] |
$ 272,543 |
|
$ 1,265 |
|
$ - |
|
|
|
$ 273,808 |
Accounts receivable [note 2] |
- |
|
1,000 |
|
- |
|
|
|
1,000 |
Total Current Assets |
272,543 |
|
1,265 |
|
- |
|
|
|
274,808 |
|
|
|
|
|
|
|
|
|
|
Non current assets |
|
|
|
|
|
|
|
|
|
Intangible assets, net |
- |
|
40,053 |
|
- |
|
|
|
40,053 |
Note receivable from Apollo |
138,500.00 |
|
|
|
(138,500.00) |
|
1 |
|
0 |
Note receivable [note 2] |
- |
|
- |
|
250,000 |
|
2 |
|
250,000 |
Total Current Assets |
- |
|
40,053 |
|
111,500 |
|
|
|
290,053 |
|
|
|
|
|
|
|
|
|
|
TOTAL ASSETS |
$ 272,543 |
|
$ 41,318 |
|
$ 111,500 |
|
|
|
$ 564,861 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) |
Commitments and Contingencies |
|
|
|
|
|
|
|
|
|
Current Liabilities |
|
|
|
|
|
|
|
|
|
Accrued payroll and payroll taxes |
2,476 |
|
- |
|
- |
|
|
|
$ 2,476 |
Notes payable |
- |
|
254,195 |
|
- |
|
|
|
$ 254,195 |
Notes payable due to Sibannac, Inc. |
|
|
138,500 |
|
(138,500) |
|
2 |
|
$ - |
Total Current Liabilities |
2,476 |
|
392,695 |
|
(138,500.00) |
|
|
|
256,671 |
|
|
|
|
|
|
|
|
|
|
Non-current liabilities |
|
|
|
|
|
|
|
|
|
Put payable [note 2] |
- |
|
- |
|
250,000 |
|
1 |
|
$ 250,000 |
Total Current liabilities |
- |
|
- |
|
250,000 |
|
|
|
250,000 |
|
|
|
|
|
|
|
|
|
|
Total Liabilities |
2,476 |
|
392,695 |
|
111,500 |
|
|
|
506,671 |
|
|
|
|
|
|
|
|
|
|
Stockholders' Equity after reorganization August 31, 2015 |
|
|
|
|
|
|
|
|
|
Common Stock, $0.001 par value, 60,000,000 shares authorized; 17,527,194 and
2,027,000 shares issued and outstanding at August 31, 2015 and 2014
[note 4] |
12,028 |
|
- |
|
5,500 |
|
3 |
|
17,528 |
Additional paid-in capital, net of quasi-reorganization |
258,039 |
|
- |
|
1,884,600 |
|
4 |
|
40,662 |
Retained deficit, net (August 31, 2015 total reflects the balance after a
deficit of 3,478,477 was elimiated through a quasi-reorganization
[note 2] |
- |
|
(351,377) |
|
(1,890,100) |
|
5 |
|
- |
|
|
|
|
|
|
|
|
|
|
Total Stockholders' Equity (Deficit) |
270,067 |
|
(351,377) |
|
- |
|
|
|
58,190 |
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) |
$ 272,543 |
|
$ 41,318 |
|
$ 111,500 |
|
|
|
$ 564,861 |
|
|
|
|
|
|
|
|
|
|
|
$ -
|
|
$ -
|
|
$ -
|
|
|
|
$ -
|
-32-
SIBANNAC, INC. AND ACQUIRED ENTITIES |
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the year ended August 31, |
|
|
|
Sibannac |
|
Aquired Entity |
|
Pro Forma Adjustments |
|
Notes |
|
Pro Forma Combined |
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
$ - |
|
$ - |
|
$ - |
|
|
|
$ - |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of Goods Sold (exclusive of depreciation, included in general &
administrative expenses) |
|
|
- |
|
- |
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
|
- |
|
- |
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
Selling expenses |
|
|
- |
|
- |
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative expenses |
|
|
|
|
|
|
|
|
|
|
|
Occupancy costs |
|
|
- |
|
- |
|
- |
|
|
|
- |
Salaries and wages |
|
|
- |
|
- |
|
- |
|
|
|
- |
Other general and administrative expenses |
|
|
133,052 |
|
- |
|
- |
|
|
|
133,052 |
|
|
|
|
|
|
|
|
|
|
|
|
Total general and administrative expenses |
|
|
133,052 |
|
- |
|
- |
|
|
|
133,052 |
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill impairment expense |
|
|
- |
|
- |
|
(2,241,462) |
|
5 |
|
(2,241,462) |
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss before other income and expenses |
|
|
(133,052) |
|
- |
|
(2,241,462) |
|
|
|
(2,374,514) |
|
|
|
|
|
|
|
|
|
|
|
|
Loss on discontinued operations |
|
|
- |
|
- |
|
- |
|
|
|
- |
Interest income |
|
|
28 |
|
- |
|
- |
|
|
|
28 |
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss |
|
|
$ (133,024) |
|
$ - |
|
$ (2,241,462) |
|
|
|
$ (2,374,486) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss per share - basic and diluted |
|
|
$ (0.01) |
|
$ - |
|
$ (22,415) |
|
|
|
$ (22,414.63) |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding - basic and diluted |
|
|
12,127,944 |
|
100 |
|
100 |
|
|
|
12,127,944 |
-33-
UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED BALANCE SHEET
Sibannac, Inc, a public
reporting company with limited business or operating activities and Apollo,
Inc, a private operating company, enter into an acquisition agreement whereby
Sibannac, Inc. acquired 100% of the outstanding stock of Apollo Media Networks,
Inc. in return for 3,100,000 shares of Sibannac, Inc. Common stock as well as
the assumption of $138,500 in related debt of Apollo's ownership related to the
Company operations and the issuance of a Put to purchase stock from the
ownership of Apollo Media Networks, Inc. Therefore, the unaudited pro forma
condensed combined financial statements as of and for the year ended August 31,
2015 have been prepared based on certain pro forma adjustments to (i) The
historical unaudited consolidated financial statement of Sibannac, Inc. as of
and for the year ended August 31, 2015; and (ii) the historical unaudited
financial statements of Apollo Media Networks, Inc. as of and for the year
ended August 31, 2015. The unaudited pro froma condensed combined financial
statements should be read in conjunction with the accompanying notes and with
the historical financial statements and adjustments related thereto.
The unaudited pro forma
condensed combined balance sheet and statement of operations has been prepared
as if the acquisition had occurred as of September 1, 2014.
The unaudited pro forma
condensed combined financial statements are presented for illustrative purposes
only and are not necessarily indicative of the financial condition or results
of operations of future periods or the financial condition or results of
operations that actually would have been realized had the transaction been
completed during the period presented.
Note 1
This pro forma adjustment
reflects $138,500 in Notes Receivable that were due from the owner of Apollo
Media Networks, Inc. that were forgiven on the date of acquisition as part of
the purchase price of Apollo Media Networks, Inc.
Note 2
This pro forma adjustment
reflect the recognition of a $250,000 note receivable due August 31, 2024 from
the owner of Apollo Media Networks, Inc due to SiIbannac, Inc. and the issuance
of a Put Payable to purchase 1,400,000 shares of stock for $250,000 to repay
that note when it becomes due.
Note 3
This pro forma adjustment
reflects the common stock of Sibannac, Inc. issued to owners of the acquired
entities. A total of 5,500,000 in the companies $0.001 par value common stock
was issued to acquire Apollo Media Networks and Protection Costs, Inc.
Note 4
This pro forma adjustment
presents the effect on the Additional Paid in Capital account related to the
5,500,000 shares of common stock issued at the date of the acquisitions to
acquire the entities. The market price of the stock on the date of acquisition
was $0.35 per share. In compliance with Accounting Standards Codification
805-30 related to business combinations the company recognized a total purchase
price based upon the number of shares issued times the market price at the date
of the acquisition. Therefore the total stock based portion of the acquisition
was $1,925,000 with $1,919,500 allocated to Additional Paid in Capital.
-34-
Note 5
This pro forma adjustment
presents the effect of impairment of long-lived assets under Accounting
Standards Codifications 360. This impairment testing is the results of the
acquisition of Apollo Media Networks, Inc. and Protection Costs, Inc. as of
August 31, 2015 and the allocation of net assets. The acquisition resulted in
an allocation of the purchase price to goodwill in the amount of $2,241,462.
In testing the carrying amount of goodwill, indicators are present that
indicate the carrying amount of goodwill is not recoverable. As a result, an
impairment for the full balance of $2,241,462 has been recorded.
-35-
SIGNATURES
Pursuant to the requirements
of the Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned hereunto duly authorized.
SIBANNAC,
INC.
By: /s/ Paul Dickman
____________________________________
Title: Paul Dickman, Chief
Financial Officer
Date: January 29, 2016
-36-
EXHIBIT 10.1
ADDENDUM TO ASSET ACQUISITION AGREEMENT
BY AND AMONG
SIBANNAC, INC., A
NEVADA CORPORATION
AND
APOLLO MEDIA
NETWORK, INC., A DELAWARE CORPORATION
The Effective Date of the transaction shall be deemed to be
August 31, 2015, for all purposes hereunder.
The state of incorporation of Sibannac, Inc. is amended from
Colorado to Nevada.
Date: January 26, 2016
Sibannac, Inc.
By:/s/
Daniel L. Allen
Name:
Daniel L. Allen
Title:
Chief Executive Officer
Date: January 26,
2016
Apollo Media Network, Inc.
By:/s/ Kirk Kimerer
Name: Kirk Kimerer
Title: Chief Executive Officer
EXHIBIT 10.2
ADDENDUM TO
AGREEMENT AND CONSENT WITH REPRESENTATIONS
APOLLO MEDIA NETWORK, INC.
AND
SIBANNAC, INC.
The Effective Date of the transaction shall be deemed to be
August 31, 2015, for all purposes hereunder.
The state of incorporation of Sibannac, Inc. is amended from
Colorado to Nevada.
Date: January 26, 2016
Kirk Kimerer
By:/s/ Kirk Kimerer
Name: Kirk Kimerer
AGREEMENT AND CONSENT WITH REPRESENTATIONS
Gentlemen:
The Subscriber ("Subscriber") herein, as Owner of 3,100,000 shares of outstanding
common stock of Apollo Media Network, Inc. (Apollo) is offering to accept in liquidation of
Apollo 3,100,000 shares of the common stock of Sibannac, Inc. ("Company" or "SI"), a Colorado
corporation, as contemplated under that certain Asset Acquisition Agreement dated August 19,
2015, by and between SI and Apollo (the "Acquisition Agreement").
Subscriber hereby approves the Acquisition Agreement and the transactions contemplated
thereunder, and offers to accept the shares as set forth above, and agrees to become a shareholder
of the Company (SI). In order to induce the Company (SI) to accept my offer, I advise you as
follows and acknowledge:
1. Corporate Documents. Receipt of copies of Articles, By-Laws, and audited financial
statements of the Company and such other documents as I have requested: I hereby acknowledge
that I have received the documents (as may be supplemented from time to time) relating to the
Company and that I have carefully read the information and that I understand all of the material
contained therein.
2. Availability of Information. I hereby acknowledge that the Company has made available
to me the opportunity to ask questions of, and receive answers from the Company and any other
person or entity acting on its behalf, concerning the terms and conditions of the business, the
financial statements and related information of the Company and the 2014 10K, 1OQ for Dec. 31,
2014 of the Company and the information contained in the corporate documents, and to obtain
any additional information, to the extent the Company possesses such information or can acquire
it without unreasonable effort or expense, necessary to verify the accuracy of the information
provided by the Company and any other person or entity acting on its behalf.
3. Representations and Warranties. Subscriber represents and warrants to the Company (SI)
(and understands that SI is relying upon the accuracy and completeness of such representations
and warranties in connection with the availability of an exemption for the offer and acquisition of
the shares from the registration requirements of applicable federal and state securities laws) that:
(a) RESTRICTED SECURITIES.
(I) I understand that the Shares have not been registered under the Securities Act of 1933, as amended (the "Act"), or any state securities laws.
(II) I understand that if this acquisition agreement is accepted and the Shares are issued to me,
I cannot sell or otherwise dispose of the Shares unless the Shares are registered under the Act or
applicable state securities laws or exemptions therefrom are available (and consequently, that I
must bear the economic risk of the investment for an indefinite period of time):
(III) I understand that the Company (SI) has no obligation now or at any time to register the
Shares under the Act or the state securities laws or obtain exemptions therefrom.
(IV) I understand that the Company (SI) will restrict the transfer of the Shares in accordance
with the foregoing representations.
(V) There is a limited public market for the common stock of the Company and there is no
certainty that a more liquid market will ever develop or be maintained. There can be no assurance
that I will be able to sell or dispose of the Shares. Moreover, no assignment, sale, transfer,
acquisition or other disposition of the Shares can be made other than in accordance with all
applicable securities laws. It is understood that a transferee may at a minimum be required to fulfill
the investor suitability requirements established by the Company, or registration may be required.
(b) LEGEND.
I agree that any certificate representing the Shares will contain and be endorsed with the following,
or a substantially equivalent, LEGEND:
"This share certificate has been acquired pursuant to an investment representation by the holder
and shall not be sold, pledged, hypothecated or donated or otherwise transferred except upon the
issuance of a favorable opinion by its counsel and the submission to the Company of other evidence
satisfactory to and as required by counsel to the Company, that any such transfer will not violate
the Securities Act of 1933, as amended, and applicable state securities laws. These shares are not
and have not been registered in any jurisdiction."
(c) OWN ACCOUNT.
I am the only party in interest with respect to this acquisition offer, and I am acquiring the Shares
for my own account for long-term investment only, and not with an intent to resell, fractionalize,
divide, or redistribute all or any part of my interest to any other person, except in liquidation of the
company.
(d) AGE: CITIZENSHIP.
I am at least twenty-one years old and a citizen of the United States.
(e) ACCURACY OF INFORMATION.
All information which I have provided to the Company (SI) concerning my knowledge of financial
and business matters is correct and complete as of the date set forth at the end hereof, and if there
should be any material change in such information prior to acceptance of this acquisition offer by
the Company, I will immediately provide the Company with such information.
4. Acquisition Procedure. I understand that this acquisition is subject to each of the following
terms and conditions:
2
Kimerer Agreement and Consent - Final
(a) The Company may reject this acquisition for legal reasons, and this acquisition shall
become binding upon the Company only when accepted, in writing, by the Company.
(b) This offer may not be withdrawn by me.
(c) The share certificates to be issued and delivered pursuant to this acquisition will be issued
in the name of and delivered to me.
5. Suitability. I hereby warrant and represent:
(a) That I can afford a complete loss of the investment and can afford to hold the securities
being received hereunder for an indefinite period of time.
(b) That I consider this investment a suitable investment, and
(c) That I am sophisticated and knowledgeable and have had prior experience in financial
matters and investments.
6. Acknowledgement of Risks. I have been furnished and have carefully read the information
relating to the Company, including this form of Acquisition Agreement. I am aware that:
(a) There are substantial risks incident to the ownership of Shares from the Company, and such
investment is speculative and involves a high degree of risk of loss by me of my entire investment
in the Company.
(b) No federal or state agency has passed upon the Shares or made any finding or determination
concerning the fairness of this investment.
(c) The books and records of the Company will be reasonably available for inspection by me and/or
my investment advisors, if any, at the Company's place of business.
(d) All assumptions and projections set forth in any documents provided by the Company have
been included therein for purposes of illustration only, and no assurance is given that actual results
will correspond with the results contemplated by the various assumptions set forth therein.
(e) SI has had unsuccessful operating history. The proposed operations are subject to all of the
risks inherent in the establishment of a new business enterprise, including a limited operating
history. The unlikelihood of the success of the Company must be considered in light of the
problems, expenses, difficulties, complications and delays frequently encountered in connection
with the formation and operation of a new business and the competitive environment in which the
Company will operate.
7. Receipt of Advice. I acknowledge that I have been advised to consult my own attorney and
investment advisor concerning the investment.
3
Kimerer Agreement and Consent - Final
8. Restrictions on Transfer. I acknowledge that the investment in the Company is an illiquid
investment. In particular, I recognize that:
(a) Due to restrictions described below, the lack of any market existing or to exist for these Shares,
in the event I should attempt to sell my Shares in the Company, my investment will be highly
illiquid and, probably must be held indefinitely.
(b) I must bear the economic risk of investment in the Shares for an indefinite period of time, since
the Shares have not been registered under the Securities Act of 1933, as amended, and issuance is
made in reliance upon Section 4 of said Act and/or Rule 506 of Regulation D under the Act, as
may be applicable. Therefore, the Shares cannot be offered, sold, transferred, pledged, or
hypothecated to any person unless either they are subsequently registered under said Act or an
exemption from such registration is available and the favorable opinion of counsel for the
Company to that effect is obtained, which is not anticipated. Further, unless said Shares are
registered with the securities commission of the state in which offered and sold, I may not resell,
hypothecate, transfer, assign or make other disposition of said Shares except in a transaction
exempt or exempted from the registration requirement of the securities act of such state, and that
the specific approval of such sales by the securities regulatory body of the state is required in some
states.
(c) My right to transfer my Shares will also be restricted by the legend endorsed on the certificates.
9. Access to Information. I represent and warrant to the Company that:
(a) I have carefully reviewed and understand the risks of, and other considerations relating to, the
acquisition of the Shares, including the risks of total loss in the event the Company's business is
unsuccessful.
(b) I and my investment advisors, if any, have been furnished all materials relating to the Company
and its proposed activities and anything which they have requested and have been afforded the
opportunity to obtain any additional information necessary to verify the accuracy of any
representations about the Company.
(c) The Company has answered all inquiries that I and my investment advisors, if any, have put to
it concerning the Company and its proposed activities and acquisition of the Shares.
(d) Neither I nor my investment advisors, if any, have been furnished any offering literature other
than the documents attached as exhibits thereto and I and my investment advisors, if any, have
relied only on the information contained in such exhibits and the information, as described in
subparagraphs (b) and (c) above, furnished or made available to them by the Company.
(e) I am acquiring the Shares for my own account, as principal, for investment purposes only and
NOT with a view to the resale or distribution of all or any part of such Shares, and that I have no
present intention, agreement or arrangement to divide my participation with others or to resell,
transfer or otherwise dispose of all or any part of the Shares subscribed for unless and until I
4
Kimerer Agreement and Consent - Final
determine, at some future date, that changed circumstances, not in contemplation at the time of
this acquisition, makes such disposition advisable;
(f) I, the undersigned, if on behalf of a corporation, partnership, trust, or other form of business
entity, affirm that: it is authorized and otherwise duly qualified to purchase and hold Shares in the
Company; recognize that the information under the caption as set forth in (a) above related to
investments by an individual and does not address the federal income tax consequences of an
investment by any of the aforementioned entities and have obtained such additional tax advice that
I have deemed necessary; such entity has its principal place of business as set forth below; and
such entity has not been formed for the specific purpose of acquiring Shares in the Company.
(g) I have adequate means of providing for my current needs and personal contingencies and have
no need for liquidity in this investment; and
(h) The information provided by the Company is confidential and non-public and I agree that
all such information shall be kept in confidence by it and neither used by it to its personal benefit
(other than in connection with its acquisition for the Shares) nor disclosed to any third party for
any reason; provided, however, that this obligation shall not apply to any such information which
(i) is part of the public knowledge or literature and readily accessible at the date hereof; (ii)
becomes part of the public knowledge or literature and readily accessible by publication (except
as a result of a breach of these provisions); or (iii) is received from third parties (except those
parties who disclose such information in violation of any confidentiality agreements including,
without limitation, any Acquisition Agreement they may have with the Company).
10. Binding Agreement. I hereby adopt, accept, and agree to be bound by all the terms and
conditions of the Share Acquisition Agreement by and between SI and Apollo, executed
concurrently herewith, and by all of the terms and conditions of the Articles of Incorporation, and
amendments thereto, and By-Laws of the Company. Upon acceptance of this Acquisition
Agreement by the Company, I shall become a Shareholder for all purposes.
11.Agreement to Be Bound. The Acquisition Agreement, upon acceptance by the Company, shall
be binding upon my heirs, executors, administrators, successors, and assigns.
12.Indemnification. I further represent and warrant:
(a) I hereby indemnify the Company and hold the Company harmless from and against any and all
liability, damage, cost, or expense incurred on account of or arising out of:
(I) Any inaccuracy in my declarations, representations, and warranties hereinabove set forth;
(II) The disposition of any of the Shares which I will receive, contrary to my foregoing
declarations, representations, and warranties; and
(III) Any action, suit or proceeding seeking damages or redress from Company based upon (1) the
inaccuracy of said declarations, representations, or warranties; or (2) the disposition of any of the
Shares or any part thereof contrary to the foregoing declarations, representations, and warranties.
5
Kimerer Agreement and Consent - Final
13. Governing Law. This Agreement shall be construed in accordance with and governed by the
laws of the State of Colorado, except as to the manner in which the Subscriber elects to take title
to the Shares in the Company that shall be construed in accordance with the state of his principal
residence.
14. Financial Statement. Upon request of the Company, I shall provide a sworn and signed copy
of my current financial statement.
15. Title: I will hold title to my interest as follows:
{ } Community Property { } Joint Tenants with Right Survivorship { } Tenants in Common { X} Individually { } Other: (Corporation, Trust, Etc., please indicate)
(Note: Subscribers should seek the advice of their attorneys in deciding in which of the above forms they should take ownership of the Shares, since different forms of ownership can have varying gift tax and other consequences, depending on the state of the investor's domicile and their particular personal circumstances. For example, in community property states, if community property assets are used to purchase shares held in individual ownership, this might have adverse gift tax consequences. If OWNERSHIP IS BEING TAKEN IN JOINT NAME WITH A SPOUSE OR ANY OTHER PERSON, THEN ALL SUBSCRIPTION DOCUMENTS MUST BE EXECUTED BY ALL SUCH PERSONS.)
17. No Assignability. This acquisition is personal to the person/entity whose name and address
appear below. I may not assign any of its rights or obligations under this Acquisition Agreement
to any other person or entity.
18. Conditions. This Acquisition Agreement shall become binding upon the Company only when
accepted, in writing, by the Company.
19. Effective Date. The acquisition for Shares evidenced by this Agreement shall, if accepted by
the Company, be effective as soon as all state laws have been complied with to effectuate the
transaction, and the conveyances of the assets of Apollo has been consummated.
20. Conveyance. I hereby agree to waive any claim to my shares in Apollo, as shown on the stock
records of Apollo in exchange for the liquidation distribution of restricted shares of the common
stock of the Company (SI).
6
Kimerer Agreement and Consent - Final
21. Further Acts. I hereby agree to execute any other documents and take any further actions that
are reasonably necessary or appropriate in order to implement the transaction contemplated by this
Acquisition Agreement.
Subscriber
Dated: August 31, 2015
/s/ Kirk Kimerer
Name: Kirk Kimerer
Address: 1313 E. Osborn Road, Suite 100
Phoenix, Arizona 85014
Social Security Number: (on file)
7
Kimerer Agreement and Consent - Final
EXHIBIT 10.3
ADDENDUM TO ASSIGNMENT, ASSUMPTION AND RELEASE AGREEMENT
BY AND AMONG
APOLLO MEDIA
NETWORK, INC.
KIRK KIMERER
JAYSON LANG
TRAVIS HAIR
RAY BILLS
AND
MARGARET KERR
The Effective Date of the transaction shall be deemed to be
August 31, 2015, for all purposes hereunder.
Date: January 27,
2016
Apollo Media Network, Inc., a Delaware Corporation
By:/s/ Kirk Kimerer
Name: Kirk Kimerer
Title: Chief Executive Officer
Date: January 27,
2016
By:/s/ Kirk Kimerer
Name: Kirk Kimerer
ASSIGNMENT,
ASSUMPTION AND RELEASE AGREEMENT
This Assignment, Assumption and Release Agreement (this
"Agreement") is entered into as of the 30th day of June, 2015, by and among APOLLO MEDIA
NETWORK, INC., a
Delaware corporation ("Apollo"); KIRK KIMERER
("Kimerer"); and those of JAYSON LANG ("Lang");
TRAVIS HAIR ("Hair"); RAY BILLS ("Bills");
and MARGARET KERR ("Kerr") who execute this Agreement. (Lang,
Hair, Bills and Kerr are referred to herein as "Noteholders";
and Apollo, Kimerer and the Noteholders who execute this Agreement are referred
to herein as the "Parties".)
Recitals:
A. Kimerer is the sole stockholder of Apollo,
owning 100 shares of the Common Stock of Apollo.
B. The Noteholders have made various loans to Kimerer,
with current outstanding balances as follows:
Jayson Lang - $106,791 (the
"Lang Loan"), represented by one or more outstanding promissory notes
from Kimerer to Lang (the "ig Notes")
Travis Hair - $53,534 (the
"Hair Loan"), represented by one or more outstanding promissory notes
from Kimerer to Hair (the "Hair Notes")
Ray Bills - $49,840 (the
"Bills Loan"), represented by one or more outstanding promissory
notes from Kimerer to Bills (the "Bills Notes")
Margaret Kerr - $44,029 (the
"Kerr Loan"), represented by one or more outstanding promissory notes
from Kimerer to Kerr (the Notes")
The Lang Loan, the Hair Loan, the Bills Loan and
the Kerr Loan are collectively referred to as the "Loans"; and the
Lang Notes, the Hair Notes, the Bills Notes and the Kerr Notes are collectively
referred to as the "Investor Notes".)
C. Kimerer and Apollo have agreed to enter into
a transaction whereby Kimerer will transfer certain websites to Apollo and
deliver a promissory note from Kimerer to Apollo, in exchange for the issuance
to Kimerer of additional shares of Common Stock and the assumption by Apollo of
the Loans and the Investor Notes.
D. The Noteholders who execute this Agreement
consent to the assumption of the Loans and Investor Notes by Apollo, and have
agreed to release Kimerer from all further liabilities or obligations with
respect thereto.
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which is acknowledged by each of the Parties, the
Parties agree as follows:
1
Apollo Assignment, Assumption and Release Agreement - Final
Agreements:
1. Recitals. The Recitals set forth above
and the Exhibits hereto are incorporated herein.
2. Transfer of Assets and Issuance of Note
from Kimerer to Apollo. Kimerer hereby agrees to (i) transfer and sell to
Apollo those websites described in the Bill of Sale, Assignment and Quit Claim
Deed attached hereto as Exhibit A (the "Bill of Sale"); and (ii)
deliver to Apollo his promissory note in the form attached hereto as Exhibit B.
3. Issuance of Stock to Kimerer and
Assumption of Loans. Apollo (i) hereby agrees to issue to Kimerer 3,099,900
additional shares of Apollo Common Stock; and (ii) hereby assumes all of Kimerer's
liabilities and obligations under all of the Loans and Investor Notes, and
agrees to fully release and indemnify Kimerer from any further liability or
obligation under any of the Loans and Investor Notes, including all principal,
interest and other amounts due thereunder, whether arising or accruing before
or after the date of this Agreement. In connection with the issuance of the
additional shares of Apollo Common Stock to Kimerer, Kimerer shall execute and
deliver to Apollo a Subscription Agreement in the form attached hereto as
Exhibit C.
4. Consent and Release by Noteholders.
Each Noteholder hereby fully, unconditionally and irrevocably releases Kimerer
and holds him harmless from all further liabilities or obligations under any of
the Loans or Investor Notes, and from this date forward agrees to look solely
to Apollo for repayment of the Loans or Investor Notes. Each Noteholder hereby
acknowledges and agrees that the amount set forth next to such Noteholder's
name in Recital B above represents all outstanding indebtedness from Kimerer to
such Noteholder, and hereby releases and holds Kimerer harmless from all other
monetary claims or other liabilities or obligations from Kimerer to any of the Noteholders
as of the date of this Agreement.
5. Capitalization of Apollo. The Parties
acknowledge and agree that following the consummation of the transactions set
forth in this Agreement, the capitalization of Apollo will be as follows:
Stockholder Name
|
Number of Shares
|
|
|
Kirk Kimerer
|
3,100,000
|
|
|
Total Shares Outstanding
|
3,100,000
|
Miscellaneous Provisions.
(a) Prior Agreements. This Agreement and the
other documents delivered pursuant hereto constitute the entire contract
between the Parties with respect to the subject matter hereof. This Agreement
supersedes all prior agreements and understanding between the Parties with
respect to its subject matter. Any revision, modification or termination of
this Agreement shall be effective only if in writing and signed by all of the
Parties hereto.
2
Apollo Assignment, Assumption and Release Agreement - Final
(b) Waiver. Failure to enforce any provision of
this Agreement by a Party shall not bar subsequent enforcement of such
provision or any other provision of this Agreement by such Party.
(c) Governing Law. This Agreement and all other
agreements contemplated hereunder shall be governed by and construed under the
laws of the State of Delaware. Any claim or charge made hereunder shall be
brought in state or federal court in Maricopa County, Arizona. The parties
hereto irrevocably consent to the jurisdiction and venue of such court and waive
any present or future objection to venue or jurisdiction in such court.
(d) Counterparts. This Agreement may be executed
in two or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
(e) Headings. The headings in this Agreement are
for convenience only, are not part of the agreement of the parties and shall
not be deemed parts hereof or in any way affect the meaning or interpretation
of this Agreement. Wherever the word "including" is used herein, it
shall be deemed to be following with the words "but not limited to"
or similar words to that effect.
(f) Successors and Assigns; Beneficiaries. The
terms and conditions of this Agreement shall inure to the benefit of and be
binding upon each Party and its, heirs, successors and assigns. This Agreement
is not intended to confer any benefit upon, and may not be enforces by, anyone
other than a Party hereto (or such Party's heirs, successors or assigns.
(g) Attorneys' Fees and Costs. If any Party
determines that it is necessary to seek enforcement of any of the terms and
provisions hereunder by a court of law, the prevailing Party, in addition to
any relief granted by the court of law, shall be entitled to recover all costs and
expenses thereof including reasonable attorneys' fees and costs.
(h) Expenses. Except as provided herein, each of
the Parties shall be solely responsible for all of their own costs and
expenses, including accounting and legal expenses, incurred in connection with
this Agreement and the transactions contemplated herein.
[signature page
follows]
3
Apollo Assignment, Assumption and Release Agreement - Final
IN WITNESS WHEREOF, the parties have executed
this Assignment, Assumption and Release Agreement to be effective on the day
and year first written above.
APOLLO MEDIA NETWORK, INC., a
Delaware corporation
By: /s/ Kirk Kimerer
Its: CEO
/s/ Kirk Kimerer
KIRK KIMERER
____________________
JAYSON LANG
____________________
TRAVIS HAIR
____________________
RAY BILLS
____________________
MARGARET KERR
4
Apollo Assignment, Assumption and Release Agreement - Final
Exhibit A
BILL OF SALE
(see attached)
Apollo Assignment, Assumption and Release Agreement - Final
Exhibit B
PROMISSORY NOTE
(see attached)
Apollo Assignment, Assumption and Release Agreement - Final
Exhibit C
KIMERER
SUBSCRIPTION AGREEMENT
(see attached)
Apollo Assignment, Assumption and Release Agreement - Final
EXHIBIT 10.4
ADDENDUM TO
JOINT WRITTEN CONSENT IN LIEU OF MEETING
OF THE BOARD OF DIRECTORS AND SHAREHOLDERS OF
APOLLO MEDIA NETWORK, INC.
REGARDING ASSET ACQUISITION AGREEMENT
The Effective Date of the transaction shall be deemed to be
August 31, 2015, for all purposes hereunder.
The state of incorporation of Sibannac, Inc. is amended from
Colorado to Nevada.
Date: January 28, 2016
Kirk Kimerer
By:/s/ Kirk Kimerer
Name: Kirk Kimerer, Board of Directors
Date: January 28,
2016
Kirk Kimerer
By:/s/ Kirk Kimerer
Name: Kirk Kimerer, Shareholder
JOINT WRITTEN CONSENT
IN LIEU OF MEETING
OF THE BOARD OF
DIRECTORS AND SHAREHOLDERS OF
APOLLO MEDIA NETWORK,
INC.
As of June 30, 2015
The undersigned, constituting all of the members of the
Board of Directors (the "Board") of Apollo Media Network, Inc., a
Delaware corporation, (the "Corporation"), and all of the holders of
the Corporation's issued and outstanding Common Stock (the
"Shareholders"), hereby give their written consent and authorization,
in accordance with the provisions of Sections 141(0 and 228(a) of the General
Corporation Law of the State of Delaware, to the adoption of the following
resolutions, and the same are hereby adopted as of the date set forth above:
1. Asset Acquisition Agreement
WHEREAS, the Board and the Shareholders have each
reviewed and considered the proposed Asset Acquisition Agreement by and between
the Corporation and Sibannac, Inc. attached hereto as Exhibit A (including all
exhibits attached thereto, the "Acquisition Agreement"), and the
Assumption and Release Agreement between the Corporation and Sibannac, Inc.
related thereto (the "Assumption Agreement"; and together with the
Acquisition Agreement, the "Agreements"); and
WHEREAS, the Board and the Shareholders have
each determined that it is in the best interests of the Corporation to adopt
and consummate the Agreements; it is hereby
RESOLVED, that
the form, terms and provisions of the Agreements are hereby authorized and
approved by the Board and by the Shareholders in all respects, effective as of
the date hereof;
RESOLVED FURTHER,
that the President/Chief Executive Officer, Secretary and Treasurer of the
Corporation shall each be authorized, directed and empowered, for and on behalf
of the Corporation, to perform such acts as he or she deems necessary or appropriate
to execute and deliver the Agreements and consummate all of the transactions
contemplated thereby, and to do all things as may be deemed appropriate or
necessary to carry out the purpose of the foregoing resolutions and to carry
out the provisions of the Agreements.
2. General Implementation
RESOLVED that the
President/Chief Executive Officer, Secretary and any other officer of the
Corporation, acting alone or with any other officer of the
1
Apollo Joint Consent - Final
Corporation, be, and they hereby
are, authorized and directed, for and on behalf of the Corporation, to execute,
acknowledge and deliver such other agreements, documents, certificates, and
other instruments, and to take or cause to be taken such action, as they, or
any of them, may deem necessary or appropriate to carry out the transactions
contemplated by these resolutions and otherwise accomplish the purposes and
intent of these resolutions;
The Secretary of the Corporation is hereby
directed to file this instrument with the minutes of the proceedings of the
directors and shareholders of the Corporation. The actions taken hereby shall
be of the same force and effect as if taken at a meeting of the directors and shareholders
of the Corporation, duly called and constituted pursuant to the laws of the
State of Delaware.
This instrument may be executed in any number of
counterparts and by facsimile; all such counterparts shall be deemed to
constitute one and the same instrument, and each of said counterparts shall be
deemed an original hereof.
IN WITNESS WHEREOF, the undersigned have
executed this Consent as of the date first written above.
Board of Directors:
/s/ Kirk Kimerer
Kirk Kimerer
Shareholders:
/s/ Kirk Kimerer
Kirk Kimerer
Exhibit:
A - Asset Acquisition Agreement
2
Apollo Joint Consent - Final
EXHIBIT A
ASSET ACQUISITION AGREEMENT
Apollo Joint Consent - Final
EXHIBIT 10.5
ADDENDUM TO ASSUMPTION AND RELEASE AGREEMENT
BY AND AMONG
SIBANNAC, INC., A
NEVADA CORPORATION
AND
APOLLO MEDIA
NETWORK, INC.
The Effective Date of the transaction shall be deemed to be
August 31, 2015, for all purposes hereunder.
The state of incorporation of Sibannac, Inc. is amended from
Colorado to Nevada.
Date: January 26, 2016
Sibannac, Inc.
By:/s/
Daniel L. Allen
Name:
Daniel L. Allen
Title:
Chief Executive Officer
Date: January 26,
2016
Apollo Media Network, Inc.
By:/s/ Kirk Kimerer
Name: Kirk Kimerer, CEO
ASSUMPTION AND
RELEASE AGREEMENT
This Assumption and Release Agreement (this
"Agreement") is entered into on August 31, 2015, to be effective as
of the 30th day of June, 2015, by and among APOLLO MEDIA NETWORK, INC., a
Delaware corporation ("Apollo"), and SIBANNAC, INC., a Colorado corporation
("SI"). (Apollo and SI are referred to herein as the
"Parties".)
Recitals:
A. Pursuant to an Assignment, Assumption and
Release Agreement dated as of June 30, 2015, by and among Apollo, Kirk Kimerer
("Kimerer"), and certain other parties named therein, Apollo assumed
all of Kimerer's obligations and liabilities under the following loans and
related notes:
Loan(s) from Jayson
Lang ("Lang") in the amount of approximately $106,791 (the "Lang
Loan"), represented by one or more outstanding promissory notes from Kimerer
to Lang (the "Lang Notes")
Loan(s) from
Travis Hair ("Hair") in the amount of approximately $53,534 (the "Hair
Loan"), represented by one or more outstanding promissory notes from Kimerer
to Hair (the "Hair Notes")
Loan(s) from Ray
Bills ("Bills") in the amount of approximately $49,840 (the "Bills
Loan"), represented by one or more outstanding promissory notes from Kimerer
to Bills (the "Bills Notes")
Loan(s) from
Margaret Kerr ("Kerr") in the amount of approximately $44,029 (the
"Kerr Loan"), represented by one or more outstanding promissory notes
from Kimerer to Kerr (the "Kerr Notes")
The Lang Loan, the Hair Loan, the
Bills Loan and the Kerr Loan are collectively referred to as the
"Loans"; and the Lang Notes, the Hair Notes, the Bills Notes and the
Kerr Notes are collectively referred to as the "Investor Notes".)
B. Apollo and SI have agreed to enter into a transaction
whereby, as partial consideration for the assets of Apollo to be acquired by SI
in such transaction, SI has agreed to assume the debts of Apollo, including the Loans
and the Investor Notes.
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which is acknowledged by each of the Parties, the
Parties agree as follows:
Agreements:
1. Recitals. The Recitals set forth above
and the Exhibits hereto are incorporated herein.
1
SI/Apollo Assumption and Release Agreement -- Final
2. Assumption of Loans. SI hereby fully,
unconditionally and irrevocably assumes all of Apollo's and Kimerer's
liabilities and obligations under all of the Loans and Investor Notes, and
agrees to fully release and indemnify Apollo and Kimerer from any and all
further liabilities or obligations under or with respect to any of the Loans
and Investor Notes, including all principal, interest and other amounts due thereunder,
whether arising or accruing before or after the date of this Agreement.
3. Miscellaneous Provisions.
(a) Prior Agreements. This
Agreement and the other documents delivered pursuant hereto constitute the
entire contract between the Parties with respect to the subject matter hereof.
This Agreement supersedes all prior agreements and understanding between the Parties
with respect to its subject matter. Any revision, modification or termination
of this Agreement shall be effective only if in writing and signed by all of
the Parties hereto.
(b) Waiver. Failure to enforce any
provision of this Agreement by a Party shall not bar subsequent enforcement of
such provision or any other provision of this Agreement by such Party.
(c) Governing Law. This Agreement
and all other agreements contemplated hereunder shall be governed by and
construed under the laws of the State of Delaware. Any claim or charge made
hereunder shall be brought in state or federal court in Maricopa County, Arizona.
The parties hereto irrevocably consent to the jurisdiction and venue of such
court and waive any present or future objection to venue or jurisdiction in
such court.
(d) Counterparts. This Agreement
may be executed in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
(e) Headings. The headings in this
Agreement are for convenience only, are not part of the agreement of the
parties and shall not be deemed parts hereof or in any way affect the meaning
or interpretation of this Agreement. Wherever the word "including" is
used herein, it shall be deemed to be following with the words "but not
limited to" or similar words to that effect.
(f) Successors and Assigns:
Beneficiaries. The terms and conditions of this Agreement shall inure to the
benefit of and be binding upon each Party and its, heirs, successors and
assigns. This Agreement is not intended to confer any benefit upon, and may not
be enforces by, anyone other than Kimerer or a Party hereto (or his or such
Party's heirs, successors or assigns.
(g) Attorneys' Fees and Costs. If
any Party (or Kimerer) determines that it is necessary to seek enforcement of
any of the terms and provisions hereunder by a court of law, the prevailing
Party, in addition to any relief granted by the court of law, shall be entitled
to recover all costs and expenses thereof including reasonable attorneys' fees
and costs.
2
SI/Apollo Assumption and Release Agreement -- Final
(h) Expenses. Except as provided
herein, each of the Parties shall be solely responsible for all of their own
costs and expenses, including accounting and legal expenses, incurred in
connection with this Agreement and the transactions contemplated herein.
IN WITNESS WHEREOF, the parties have executed
this Assignment, Assumption and Release Agreement on the day and year first
written above.
SIBANNAC, INC. a Colo corporation
By: /s/ Daniel Allen
Its: CEO
APOLLO MEDIA NETWORK, INC., a
Delaware corporation
By: /s/ Kirk Kimerer
Its: Clief Executive Officer
3
SI/Apollo Assumption and Release Agreement -- Final
EXHIBIT 10.6
ADDENDUM TO
BILL OF SALE,
ASSIGNMENT
AND
QUIT CLAIM DEED
The Effective Date of the transaction shall be deemed to be
August 31, 2015, for all purposes hereunder.
Date: January 26,
2016
Kirk Kimerer
By:/s/ Kirk Kimerer
Name: Kirk Kimerer
BILL OF SALE,
ASSIGNMENT
AND
QUIT CLAIM DEED
For valuable consideration, I hereby Sell, Assign, and Quit
Claim all title and interest in and to the assets listed on Exhibit A to Apollo
Media Network, Inc. to be effective as of June 30, 2015, and I agree to execute
all other documents necessary to transfer such assets.
Dated as of June 30, 2015
/s/ Kirk Kimerer
Kirk Kimerer
Kimerer to Apollo Bill of Sale - Final
EXHIBIT A
Websites
Domain Owner
1.www.lifecisaboard.com Kirk Kimerer
2. www.childcompass.com Kirk Kimerer
3. www.youscube.com Kirk Kimerer
4.www.live2100.com Kirk Kimerer
5.www.sciencefly.com Kirk Kimerer
6.www.dynomove.com Kirk Kimerer
7.www.cyc1erlife.com Kirk Kimerer
8. www.fullcourtstars.com Kirk Kimerer
9.www.1ieastars.com Kirk Kimerer
10.www.nputgaming.com Kirk Kimerer
11. www.spychatter.com Kirk Kimerer
12. www.mobilitypress.com Kirk Kimerer
13.www.1eafexaminer.com Kirk Kimerer
14.www.cagepound.com Kirk Kimerer
Kimerer to Apollo Bill of Sale - Final
EXHIBIT 10.7
ADDENDUM TO BOARD OBSERVER RIGHTS LETTER
TO KIRK KIMERER
BY AND AMONG
SIBANNAC, INC., A
NEVADA CORPORATION
The Effective Date of the transaction shall be deemed to be
August 31, 2015, for all purposes hereunder.
The state of incorporation of Sibannac, Inc. is amended from
Colorado to Nevada.
Date: January 28, 2016
Sibannac, Inc.
By:/s/
Daniel L. Allen
Name:
Daniel L. Allen
Title:
Chief Executive Officer
As of June 30, 2015
Mr. Kirk Kimerer
1313 E. Osborn Road, Suite 100
Phoenix, Arizona 85014
Re: Board Observer Rights
Dear Kirk:
This letter will confirm our agreement that in connection
with the acquisition of shares of the Common Stock of Sibannac, Inc. (the
"Company") by Kirk Kimerer (the "Investor" pursuant to that
Asset Acquisition Agreement dated August 19, 2015, by and between the Company
and Apollo Media Network, Inc. (the "Agreement"), Investor will be
entitled to the following contractual management rights, in addition to any and
all other contractual rights Investor may have, and rights to nonpublic
financial information, inspection rights, and other rights provided to other
investors in the Company:
1. Investor shall be entitled to
consult with and advise management of the Company on significant business
issues regarding Sibannac's media operations, including management's proposed
annual operating plans with respect thereto;
2. Investor may examine the books
and records of the Company and inspect its facilities and may request
information at reasonable times and intervals concerning the Company's media
operations and general status of the Company's financial condition and operations;
and
3. Investor will not be a member of
the Company's Board of Directors; however, the Company shall invite Investor to
attend all meetings of its Board of Directors in a nonvoting observer capacity
and, in this respect, shall concurrently give Investor copies of all notices, minutes,
consents, and other material that it provides to its directors. Investor may
participate in discussions of all matters brought to the Board of Directors,
but Investor shall not vote on any matters, and the Company's Board of
Directors is under no obligation to vote in accordance with Investor's
recommendations or input.
The rights described herein shall terminate and be of no
further force or effect on the date the Investor no longer holds any shares of
capital stock of the Company. The Company acknowledges and agrees that the
rights described herein are an important component of Apollo's willingness to
enter into the Agreement and to consummate the transactions described therein,
and that this letter and the rights described herein may not be terminated or
revoked except in accordance with the preceding sentence.
Very truly yours,
Sibannac, Inc.
By: /s/ Dan Allen
Its: CEO
Observer Rights Letter - Final
EXHIBIT 10.8
ADDENDUM TO EMPLOYMENT AGREEMENT
BY AND AMONG
SIBANNAC, INC., A
NEVADA CORPORATION
AND
KIRK KIMERER
The Effective Date of the transaction shall be deemed to be
August 31, 2015, for all purposes hereunder.
The state of incorporation of Sibannac, Inc. is amended from
Colorado to Nevada.
Date: January 26, 2016
Sibannac, Inc.
By:/s/
Daniel L. Allen
Name:
Daniel L. Allen
Title:
Chief Executive Officer
Date: January 26,
2016
Kirk Kimerer
By:/s/ Kirk Kimerer
Name: Kirk Kimerer
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") made and
entered to be effective as of the 30th day of June, 2015 (the "Effective
Date"), by and between Sibannac, a Colorado corporation (the
"Company") and Kirk Kimerer (the "Executive").
WITNESSETH:
WHEREAS, the Company wishes to secure the services of the
Executive subject to the contractual terms and conditions set forth herein; and
WHEREAS, the Executive is willing to enter into this
Agreement upon the terms and conditions, set forth herein.
NOW, THEREFORE, in consideration of the mutual promises,
material inducements and agreements set forth herein, the parties hereto agree
as follows:
1. Employment. The Company hereby agrees to employ the
Executive, and the Executive hereby agrees to accept such employment with the
Company, all upon the terms and conditions set forth herein.
2. Term of Employment. Subject to the terms and conditions
of this Agreement, the Executive shall be employed for a term commencing on the
Effective Date and ending on the 12th month from the Effective Date
(the "Initial Term") unless sooner terminated as provided for herein.
The Initial Term shall renew automatically for additional one (1) year periods
(each a "Renewal Term" and together with the Initial Term, the
"Term"), unless either party gives written notice of non-renewal (a
"Non-Renewal Notice") at least sixty (60) days prior to the end of
the then current Term, in which case this Agreement shall expire at the end of
such Term ("Expiration"). As used herein, an Expiration due to the
Company's issuance of a Non-Renewal Notice is referred to as a "Company
Non-Renewal" and an Expiration due to the Executive's issuance of a
Non-Renewal Notice is referred to as an "Executive Non-Renewal."
3. Duties and Responsibilities.
A. Capacity. During the Term, the Executive shall serve in
the capacity of President of Sibannac Media subject to the supervision of the
Board of Directors of the Company (the "Board") under the job
description attached hereto as Schedule 3A.
B. Full-Time Duties. During the Term, and excluding any
periods of disability, vacation or sick leave to which the Executive is
entitled, the Executive shall devote a significant portion of his/her business
time, attention and energies to the business of the Company. During the Term,
it shall not be a violation of this Agreement for the Executive to (i) serve on
corporate, civic or charitable boards or committees; (ii) deliver lectures or
fulfill speaking engagements; (iii) manage personal investments, and (iv)
perform other consulting services or engage in other independent outside
activities, so long as such activities do not materially interfere with the performance
of the Executive's responsibilities as an employee of the Company in accordance
with
this Agreement. If the Company ever determines that any
outside activity of the Executive interferes or conflicts with his performance
under this Agreement, the Company shall provide at least thirty (30) days
written notice of such determination and a reasonable time to cure or resolve such
perceived conflicts. With regard to any outside consulting or independent
activities by the Executive, the Company hereby waives and releases, and agrees
not to assert, any right, title or interest in or to any work product of the
Executive or of others involved in such outside activities.
C. Standard of Performance. The Executive will perform his
duties under this Agreement with efficiency, fidelity and loyalty, to the best
of his or her ability, experience and talent and in a manner consistent with
his duties and responsibilities.
4. Compensation
A. Base Salary. During the first twelve months of the Term,
the Company shall pay the Executive a salary (the "Base Salary") of
$8,333.33 per month, pro-rated for any partial months of employment. The Base
Salary shall be payable in accordance with the general payroll practices of the
Company in effect from time to time. Notwithstanding the foregoing, upon the
earlier of (i) the Company's closing of additional financing in the aggregate
amount of at least $5,000,000, whether debt or equity or any combination
thereof, or (ii) in any event not later than the second renewal date, the Board
of Directors shall increase the Executive's Base Salary to $10;000 per month.
During the Term, the Base Salary shall be reviewed at least annually by the Board
after consultation with the Executive and may from time to time be increased
(but not decreased) as solely determined by the Board. Effective as of the date
of any such increase, the Base Salary as so increased shall be considered the
new Base Salary for all purposes of the Agreement and may not thereafter be
reduced. Any increase in Base Salary shall not limit or reduce any other
obligation of the Company to the Executive under this Agreement.
B. Annual Performance Bonus. The Executive shall be eligible
for annual discretionary bonus awards payable in cash and/or fully-vested
options for common stock of the Company ("Bonus Options"), as so
determined solely by the Board, based on performance objectives determined
annually or at other times by the Board or pursuant to any Incentive Stock and
Option Award Plan. Since the Bonus Options will have been fully earned by the
performance of services for which they were granted, the exercise price of such
Options shall be as low as possible consistent with the non-taxability of
options.
C. Long Term Incentives. The Executive shall be eligible for
participation in the Employee Stock Option Plan, restricted stock and/or other
long-term incentives in the discretion of the Board on the same basis as other
similarly situated senior executives of the Company. In addition, in the event
the Company pursues additional rounds of equity financing during the Term, the
Executive shall be offered the option to purchase, at the price offered in such
financing, a sufficient additional equity interest such that if the Executive
exercises this purchase option, the Executive will maintain his proportionate
ownership interest in the Company.
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Kimerer Employment Agreement - Final
D. Benefits.
(1) If and to the extent that the Company maintains employee
benefit plans (including, but not limited to, pension, profit-sharing,
disability, accident, medical, life insurance, and hospitalization plans) (it
being understood that the Company may but shall not be obligated to do so), the
Executive shall be entitled to participate therein in accordance with the Company's
regular practices with respect to similarly situated senior executives. The
Company will have the right to amend or terminate any such benefit plans it may
choose to establish.
(2) The Executive shall be entitled to such vacation,
holidays and other paid or unpaid leaves of absence as are consistent with the
Company's normal policies available to other senior executives of the Company
or as are otherwise approved by the Board.
E. The Company shall reimburse Executive for all
pre-approved and reasonable and necessary expenses incurred by him in carrying
out his duties under this Agreement. Executive shall submit related receipts
and documentation with his request for reimbursement, within 30 days of
incurrence.
5. Termination of Employment.
Notwithstanding the provisions of Section 2 hereof, the
Executive's employment hereunder shall terminate under any of the following conditions:
A. Death. The Executive's employment under this Agreement
shall terminate automatically upon his death.
B. Total Disability. The Company shall have the right to
terminate this Agreement if the Executive becomes Totally Disabled. For
purposes of this Agreement, "Totally Disabled" means that the
Executive is not working and is currently unable to perform the substantial and
material duties of his position hereunder as a result of sickness, accident or
bodily injury for a continuous period of three consecutive months. Prior to a
determination that Executive is Totally Disabled, but after Executive has
exhausted all sick leave and vacation benefits provided by the Company,
Executive shall continue to receive his Base Salary, offset by any disability benefits
she may be eligible to receive.
C. Termination by Company for Cause. The Executive's
employment hereunder may be terminated for Cause upon written notice by the
Company. For purposes of this Agreement, "Cause" shall mean:
(1) conviction of the Executive by a court of competent jurisdiction
of any felony or a crime involving moral turpitude;
(2) the Executive's willful and intentional failure or
willful and intentional refusal to follow reasonable and lawful instructions of
the Board;
3
Kimerer Employment Agreement - Final
(3) the Executive's material breach or default in the performance
of her obligations under this Agreement; or
(4) the Executive's act of misappropriation, embezzlement, intentional
fraud or similar conduct involving the Company. Executive may not be terminated
for Cause pursuant to subsections (2) and (3) above unless Executive is given
prior written notice of the circumstances constituting "Cause" and a
reasonable period to cure such circumstances, if curable, which period shall be
not less than thirty (30) days, and the Executive fails to remedy the failure
during such notice period.
D. Termination by the Executive for Cause or for Good
Reason. The Executive's employment hereunder may be terminated by the Executive
for Company Cause or by the Executive for Good Reason on written notice by
Executive to the Company. For purposes of this Agreement, (i) "Company
Cause" means a material failure by the Company to perform its obligations
under this Agreement or under any stock option or award agreement or other
written agreement between the Company and Executive or a breach by the Company
of any law or regulation that poses material damage to its viability or
operations; and (ii) "Good Reason" means the occurrence of any of the
following circumstances without the Executive's express written consent:
(1) a material reduction in the Executive's salary or
benefits, excluding the substitution of substantially equivalent compensation
and benefits, or any failure by the Company to make any Base Salary or Bonus
payment when due; or
(2) a material diminution of the Executive's title,
position, duties, authority or responsibilities as in effect immediately prior
to such diminution without the Executive's express written consent;
E. Termination Without Cause or Non-Renewal by the Company
or a Termination Without Company Cause or Non-Renewal by the Executive. The
Executive's employment hereunder may be terminated by the Company without Cause
or by a Company Non- Renewal of the Term hereof. The Executive's employment may
be terminated by the Executive without Company Cause (including voluntary
resignation or retirement by the Executive) or by an Executive Non-Renewal of
the Term hereof. Any such termination shall be subject to and shall comply with
any applicable notice period herein.
6. Payments Upon Termination.
A. Upon Termination of Executive's employment hereunder for
any reason as so provided for in Section 5 hereof, the Company shall be
obligated to pay and the Executive shall be entitled to receive, within thirty
(30) days of termination, any and all Base Salary and Bonus Options or other
bonuses or compensation which has accrued for services performed to the date of
termination and which has not yet been paid. In addition, the Executive shall
be entitled to any benefits to which Executive is entitled under the terms of
any applicable Executive benefit plan or program restricted stock plan and
stock option plan of the Company, and, to the extent applicable,
4
Kimerer Employment Agreement - Final
short-term or long-term disability plan or program with
respect to any disability, or any life insurance policies and the benefits
provided by such plan, program, or policies, or applicable law.
B. Upon termination of Executive's employment by the Company
without Cause, by a Company Non-Renewal or by the Executive for Company Cause
or for Good Reason, the Company shall be obligated to pay and the Executive
shall be entitled to receive:
(1) all of the amounts and benefits described in Section
6.A. hereof;
(2) a lump sum payment, subject to Section 18 hereof, within
thirty (30) days of termination, equal to two (2) months of the Executive's
Base Salary;
(3) continued participation in all Executive welfare benefit
programs of the Company for the remainder of the Term or, if longer, until the
first anniversary of the Executive's termination of employment, as if there had
been no termination of employment; provided that, to the extent that welfare
benefit programs do not permit such continuations, the Company shall provide
substantially equivalent benefits during such period; and
(4) any and all outstanding stock options or other unvested
equity grants held by the Executive shall accelerate and fully vest. Payments
under Section 6.B., with the exception of amounts due pursuant to Section 6. B(1),
are continued on the execution by the Executive of a release of all
employment-related claims; provided, however, that such release shall be
contingent upon the Company's satisfaction of all terms and conditions of this
Section 6.
C. Upon termination of the Executive's employment upon the
death of Executive pursuant to Section 5.A., the Company shall be obligated to
pay, and the Executive shall be entitled to receive:
(1) all of the amounts and vested benefits described in
Section 6.A.;
(2) any death benefit payable under a plan or policy
provided by the Company; and
(3) continued participation by the Executive's dependents in
the welfare benefit programs of the Company for the remainder of the Term, or
if longer, until the first anniversary of the Executive's termination of
employment, as if there had been no termination of employment; provided that,
to the extent that welfare benefit programs do not permit such continuations,
the Company shall provide substantially equivalent benefits during such period.
D. Upon termination of the Executive's employment upon the
Disability of the Executive pursuant to Section 5.B., the Company shall be
obligated to pay, and the Executive shall be entitled to receive:
5
Kimerer Employment Agreement - Final
(1) all of the amounts and vested benefits described in
Section 6.A.;
(2) the Base Salary, at the rate in effect immediately prior
to the date of his termination of employment due to Disability, for the
remainder of the Annual Term, offset by any payments the Executive receives
under the Company's longterm disability plan and any supplements thereto during
such period, whether funded or unfunded which is adopted by the Company for the
Executive's benefit and not attributable to the Executive's own contributions;
provided that, the Executive may receive any additional payments for which the
Executive is eligible under such disability plan and any supplements; and
(3) continued participation by the Executive and his dependents
in the welfare benefit programs of the Company for the remainder of the Term
or, if longer, until the first anniversary of the Executive's termination of
employment as if there had been no termination of the employment; provided
that, to the extent that welfare benefit programs do not permit such
continuations, the Company shall provide substantially equivalent benefits
during such period. Payments under Section 6.D., with the exception of amounts
due pursuant to Section 6.1)( 1), are conditioned on the execution by the
Executive or the Executive's representative of a release of all
employment-related claims; provided, however, that such release shall be
contingent upon the Company's satisfaction of all terms and conditions of this
Section 6.
E. Upon (i) voluntary termination of employment by the
Executive during the Term for any reason (other than Termination by the
Executive for Company Cause or for Good Reason as described in Section 6.B.),
(ii) an Executive Non-Renewal of the Term, or (iii) termination by the Company
for Cause, the Company shall have no further liability under or in connection
with this Agreement, except to provide the amounts set forth in Section 6.A.
F. Upon voluntary or involuntary termination of employment
of the Executive for any reason, subject only to timely payment by the Company
of any and all post-termination amounts and delivery of all other benefits due
hereunder, the Executive shall continue to be subject to the provisions of
Section 7 hereof (it being understood and agreed that such provisions shall survive
any termination or expiration of the Executive's employment hereunder for any
reason whatsoever); provided that in the case of any Company Cause or if the
Company shall default in the timely payment of all post-termination amounts or
delivery of any other benefits, the provisions of Section 7.A., 7.B., 7.C., 7.E
and 7.17 shall survive but the non-compete provisions of 7.13 shall forthwith
terminate without prejudice to any and all rights and remedies of Executive
hereunder.
6
Kimerer Employment Agreement - Final
7. Confidentiality, Return of Property, and Covenant Not to
Compete.
A. Confidential Information.
(1) Company Information. The Company agrees that it will
provide the Executive with Confidential Information, as defined below, that
will enable the Executive to optimize the performance of the Executive's duties
to the company. In exchange, the Executive agrees to use such Confidential
Information solely for the Company's benefit. The Company and the Executive agree
and acknowledge that its provision of such Confidential Information is not
contingent on the Executive's continued employment with the company.
Notwithstanding the preceding sentence, upon the termination of the Executive's
employment for any reason, the Company shall have no obligation to provide the
Executive with its Confidential Information. "Confidential
Information" means any Company proprietary information, technical data,
trade secrets or know-how, including, but not limited to, research, product
plans, products services, customer lists and customers (including, but not
limited to, customers of the Company on whom the
Executive called or with whom the Executive became
acquainted during the term of the Executive's employment), markets, software,
developments, inventions, processes, formulas, technology, designs, drawings,
engineering, hardware configuration information, marketing, finances or other
business information disclosed to the Executive by the Company either directly
or indirectly in writing, orally or by drawings or observation of parts or
equipment. Confidential Information does not include any of the foregoing items
which has become publicly known and made generally available through no
wrongful act of the Executive or of others who were under confidentiality
obligations as to the item or items involved or improvements or new versions.
The Executive agrees at all times during the Term and
thereafter, to hold in strictest confidence, and not to use, except for the
exclusive benefit of the Company, or to disclose to any person or entity
without written authorization of the Board of Directors of the Company, any
Confidential Information of the Company.
(2) Former Employer Information. The Executive agrees that
he will not, during her employment with the Company, improperly use or disclose
any proprietary information or trade secrets of any former employer or other
person or entity and that the Executive will not bring onto the premises of the
Company any unpublished document or proprietary information belonging to any
such employer, person or entity unless consented to in writing by such
employer, person or entity.
(3) Third Party Information. The Executive recognizes that
the Company has received and in the future will receive from third parties
their confidential or proprietary information subject to a duty on the
Company's party to maintain the confidentiality of such information and to use
it only for certain limited purposes. The Executive shall hold all such
confidential or proprietary information in the strictest confidence and not
disclose it to any person or entity or use it except as necessary in
7
Kimerer Employment Agreement - Final
carrying, out the Executive's work for the Company
consistent with the Company's agreement with such third party.
B. Returning Company documents. At the time of leaving the
employ of the Company, the Executive will deliver to the Company (and will not
keep in the Executive's possession) source code, architecture, web designs,
specifications, drawings, blueprints, business plans, sketches, materials,
equipment, other documents or property, or reproductions of any aforementioned
items developed by the Executive pursuant to the Executive's employment with the
Company or otherwise belonging to the Company, its successors or assigns.
C. Solicitation of Employees. The Executive agrees that for a
period of twentyfour (24) months immediately following the termination of the
Executive's relationship with the Company for any reason, the Executive shall
not either directly or indirectly solicit, induce or recruit any of the
Company's employees to leave their employment, or take away such employees, or
attempt to solicit, induce, recruit, encourage or take away employees of the
Company, either for himself or for any other person or entity.
D. Covenant Not to Compete.
(1) The Executive agrees that during the course of his or
her employment and for twelve (12) months following the termination of the
Executive's relationship with the Company for any reason (subject only to the
provisions of Section 6.F), the Executive will not compete, without the prior
written consent of the Company, as a partner, employee, consultant, officer,
director, manager, agent, associate, investor, or otherwise directly or
indirectly, own, purchase, organize or take preparatory steps for the
organization of, build, design, finance, acquire, lease, operate, manage,
invest in, work or consult for or otherwise affiliate with any business, in
competition with the Company's Business (as defined herein). The foregoing
covenant shall cover the Executive's activities in the United States of
America. As used herein, the term "Company's Business" shall mean the
development of cannabis-industry web services and marketing of associated
services to cannabis industry and service companies.
(2) The Executive acknowledges that he or she will derive
significant value from the Company's agreement in Section 7.A(1) to provide the
Executive with that Confidential Information to enable the Executive to
optimize the performance of the Executive's duties to the Company. The
Executive further acknowledges that his or her fulfillment of the obligations
contained in this Agreement, including, but not limited to, the Executive's
obligation neither to disclose nor to use the Company's Confidential
Information other than for the Company's exclusive benefit is necessary to
protect the Company's Confidential Information and, consequently, to preserve
the value and goodwill of the Company. The Executive further acknowledges the
time, geographic and scope limitations of the Executive's obligations under
subsection (1) above are reasonable, especially in light of the Company's
desire to protect its Confidential Information, and that Executive will not be
precluded from gainful employment if the Executive is obligated not to compete
with the Company during the period and within the Territory as described above.
8
Kimerer Employment Agreement. Final
(3) If, in any judicial proceeding, a court refuses to
enforce any of the provisions of subsection D(1) (or any part thereof), then
such unenforceable covenant (or such part) shall be eliminated from this
Agreement to the extent necessary permit the remaining provisions hereof (or
proportions thereof) to be enforced. In the event the provisions of subsection
D(1) above are deemed to exceed the time, geographic or scope limitations
permitted by Colorado law, then such provisions shall be reformed to the
maximum time, geographic or scope limitations such as the case may be, then permitted
by such law.
E. Representations. The Executive agrees to execute any
proper oath or verify any proper document required to carry out the terms of
this Agreement. The Executive represents that his or her performance of all the
terms of this Agreement will not breach any agreement to keep in confidence
proprietary information acquired by the Executive in confidence or in trust prior
to the Executive's employment by the Company. The Executive has not entered
into, and the Executive agrees that he will not enter into, any oral or written
agreement in conflict herewith.
F. Mutual Non-Disparagement. The Company and the Executive
each agree and covenant not to publicly make, publish or communicate, at any
time, any defamatory or disparaging remarks, comments or statements concerning
the Company or its business, or any of its employees, officers, customers,
suppliers and/or investors. This Section 7 does not, in any way, restrict or
impede the Executive from exercising protected rights or from complying with
any applicable law or regulation or a valid order of a court of competent
jurisdiction or an authorized government agency, provided that such compliance
does not exceed that required by the law, regulation or order.
G. First Right of Refusal: At any time, within 18 months
after the inception of this agreement, SI shall have the first right to
purchase any of Kimerer's shares which he determines to sell, on thirty days
written notice from Kimerer of any proposed sale, at the same price and terms
as any funded bona fide offer from a third party, subject to and on the terms
and conditions set forth in a separate Repurchase Agreement and Right of First
Refusal of even date herewith.
H. Restrictive Legend: Kimerer's shares shall be
appropriately legended to reflect these agreements as well as the standard Rule
144 restriction form. Such Agreement shall provide that Kimerer understands and
agrees that the shares shall be subject to the affiliate provisions of Rule
144, and Rule 144, and reporting under Section 16 and the Section 16
"Short Swing" rules, and that SI cannot waive those rules for so long
as Kimerer is an officer or director.
8. Arbitration. Any dispute or controversy arising under or
in connection with this Agreement (other than any dispute or controversy
arising from a violation or alleged violation by the Executive of the
provisions of Section 7) shall be settled exclusively by final and binding arbitration
in Denver, Colorado, in accordance with the Employment Arbitration Rules of the
American Arbitration Association ("AAA"). The arbitrator shall be
selected by mutual agreement of the parties, if possible. If the parties fail
to reach agreement upon appointment of an arbitrator within thirty (30) days
following receipt by one party of the other party's notice of desire to arbitrate,
the arbitrator shall be selected from a panel or panels of persons submitted by
the AAA. The selection process shall be that which is set forth in the AAA
Employment Arbitration Rules
9
Kimerer Employment Agreement - Final
then prevailing, except that, if the parties fail to select
an arbitrator from one or more panels, AAA shall not have the power to make an
appointment but shall continue to submit additional panels until an arbitrator
has been selected. This agreement to arbitrate shall not preclude the parties
from engaging in voluntary, non-binding settlement efforts including mediation.
9. Notices. All notices and other communications hereunder
shall be in writing and shall be given (and shall be deemed to have duly given
upon receipt) by delivery in person, by registered or certified mail (return
receipt requested and with postage prepaid thereon) or by facsimile
transmission to the respective parties at the following address (or at such
other address as either party shall have previously furnished to the other in
accordance with the terms of this Section):
If to the Company: Sibannac, Inc.
1313 E. Osborn Road, Suite 100
Phoenix, Arizona 85014
Attention: Chief Executive Officer
If to the Executive: Kirk Kimerer
1313 E. Osborn Road, Suite 100
Phoenix, Arizona 85014
10. Amendment: Waiver. The terms and provisions of this
Agreement may be modified or amended only by a written instrument executed by
each of the parties hereto, and compliance with the terms and provisions hereof
may be waived only by a written instrument executed by each party entitled to
the benefits thereof. No failure or delay on the part of any party in
exercising any right, power or privilege granted hereunder shall constitute a
waiver thereof, nor shall any single or partial exercise of any such right,
power or privilege preclude any other or further exercise thereof or the
exercise of any other right, power or privilege granted hereunder.
11. Entire Agreement. This Agreement and all Exhibits
attached hereto (as well as the Stock Option Agreement to be issued to
Executive hereunder) constitute the entire agreement between the parties with
respect to the subject matter hereof and supersede all prior written or oral agreements
or understandings between the parties relating thereto.
12. Severability. In the event that any term or provision of
this Agreement is found to be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining terms and provisions hereof shall
not be in any way affected or impaired thereby, and this Agreement shall be
construed as if such invalid, illegal or unenforceable provision had never been
contained therein.
13. Binding Effect, Assignment, Etc.
A. This Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors and assigns (it being
understood and agreed that, except as
10
Kimerer Employment Agreement - Final
expressly provided herein, nothing contained in this
Agreement is intended to confer upon any other person or entity any rights,
benefits or remedies of any kind or character whatsoever). The Executive may
assign this Agreement with the prior written consent of the Company. Except as otherwise
provided in this Agreement, the Company may assign this Agreement only to any
of its affiliates or to any successor (whether by operation of law or
otherwise) to all or substantially all of its business and assets without the
consent of the Executive. For purposes of this Agreement, "affiliate"
means any entity in which the Company owns shares or other measure of ownership
representing at least 40% of the voting power or equivalent measure of control
of such entity.
B. The compensation rights hereunder shall be assignable by
the Employee, subject to the terms hereof, by written document, to any legal
entity in which the Employee is at least a 51% owner. Any tax consequences
thereof shall be solely the responsibility of the Employee, and Employee shall
hereby agree to hold the Company harmless from any tax liability resulting from
the assignment of compensation hereunder.
14. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Colorado (except that no
effect shall be given to any conflicts of law principles thereof that would
require the application of the laws of another jurisdiction).
15. Headings. The headings of the sections contained in this
Agreement are for the convenience only and shall not be deemed to control or
affect the meaning or construction of any provision of this Agreement.
16. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
17. Acknowledgment of Full Understanding. THE EXECUTIVE
ACKNOWLEDGES AND AGREES THAT HE/SHE HAS FULLY READ, UNDERSTANDS AND VOLUNTARILY
ENTERS INTO THIS AGREEMENT. THE EXECUTIVE ACKNOWLEDGES AND AGREES THAT LEGAL
COUNSEL TO THE COMPANY IS NOT REPRESENTING, OR ACTING AS AN ADVOCATE FOR ANY
EMPLOYEE IN CONNECTION WITH THIS AGREEMENT, AND THAT HE/SHE HAS HAD AN
OPPORTUNITY TO ASK QUESTIONS AND CONSULT WITH AN ATTORNEY OF HIS/HER CHOICE
BEFORE SIGNING THIS AGREEMENT.
[SIGNATURE PAGE FOLLOWS]
11
Kimerer Employment Agreement - Final
IN WITNESS THEREOF, the Company has caused this Agreement to
be executed by its duly authorized officer and the Executive has signed this
Agreement as of the Effective Date.
SIBANNAC, INC.
By: /s/ Daniel L. Allen
Name: Daniel L. Allen
Title: CEO
EXECUTIVE
KIRK KIMERER
/s/ Kirk Kimerer
12
Kimerer Employment Agreement - Final
Schedule 3A
JOB DESCRIPTION
President of Sibannac Media Division. The duties and
responsibilities include the following but are not limited to:
1. Oversee Sibannac Media division P&L and help Sibannac
Media reach budget projections illustrated in the business plan.
2. Manage the vision, development, growth of existing Sibannac
Media websites and additional web sites targeted to the cannabis industry per
business plan and company objectives
3. Develop and manage a sales strategy for Sibannac Media
designed to deliver consistent revenue growth and enhance value of ad
inventory.
4.Responsible for staffing solutions for Sibannac Media in
concert with the business plan and Sibannac Inc. management
5. Develop and manage a strategy to preserve and secure all
media properties, web sites and intellectual development of Sibannac Media that
are confidential in nature
6.Provide progress and intellectual updates to Sibannac Inc.
management on a scheduled basis.
7. Work collaboratively with peers and business partners
(Finance, Human resources and the board of directors of Sibannac Inc.)
13
Kimerer Employment Agreement - Final
EXHIBIT 10.9
ADDENDUM TO
IRREVOCABLE PROXY
The Effective Date of the transaction shall be deemed to be
August 31, 2015, for all purposes hereunder.
The state of incorporation of Sibannac, Inc. is amended from
Colorado to Nevada.
Date: January 26,
2016
Kirk Kimerer
By:/s/ Kirk Kimerer
Name: Kirk Kimerer, Shareholder
IRREVOCABLE PROXY
(Coupled with an
Interest)
WHEREAS: The undersigned as a shareholder
of Sibannac, Inc. has granted this Proxy coupled with an interest, being pledge
of shares of Sibannac, Inc. pursuant to that certain Pledge and Security
Agreement dated as of June 30, 2015, given by the undersigned to Sibannac, Inc.
(the "Pledge Agreement")
NOW THEREFORE: The undersigned hereby
appoints the current Chief Executive Officer of the Company, proxy, with full
power of substitution, for and in the name or names of the undersigned, to vote
those 1.4 million shares of Common Stock of Sibannac, Inc., held of record by
the undersigned and pledged as collateral to Sibannac, Inc. pursuant to the
Pledge Agreement, which shares are represented by stock certificate(s)
_____________ ,by Written Consent or at any Meeting of Stockholders and at any
adjournment thereof, or upon any matters presented for a Written Consent after Board
of Directors approval, described in any Notice of Special or Annual Meeting,
and upon any other business that may properly come before a meeting, and
matters incident to the conduct of, the meeting or any adjournment thereof.
Said person is directed to vote on the matters described in the Written Consent
or Notice of any Meeting and Proxy Statement, in their discretion upon such
other business as may properly come before, and matters incident to the conduct
of, the meeting and any adjournment thereof.
Date: This Proxy is irrevocable for the term of the
pledge, and will automatically expire upon payment in full of the Note (as
defined in the Pledge Agreement).
1,400,000
|
|
/s/ Kirk Kimerer
|
Number of Shares subject hereto
|
|
Signature of Stockholder
|
Dated: As of June 30, 2015
Final Kimerer Proxy
EXHIBIT 10.10
ADDENDUM TO
JOINT WRITTEN
CONSENT IN LIEU OF MEETING
OF THE BOARD OF
DIRECTORS AND SHAREHOLDERS OF
APOLLO MEDIA
NETWORK, INC.
The Effective Date of the transaction shall be deemed to be
August 31, 2015, for all purposes hereunder.
Date: January 26,
2016
Kirk Kimerer
By:/s/ Kirk Kimerer
Name: Kirk Kimerer, Board of Directors
Date: January 26,
2016
Kirk Kimerer
By:/s/ Kirk Kimerer
Name: Kirk Kimerer, Shareholder
JOINT WRITTEN
CONSENT IN LIEU OF MEETING
OF THE BOARD OF
DIRECTORS AND SHAREHOLDERS OF
APOLLO MEDIA
NETWORK, INC.
As of June 30,
2015
The undersigned, constituting all of the members of the
Board of Directors (the "Board") of Apollo Media Network, Inc., a
Delaware corporation, (the "Corporation"), and all of the holders of
the Corporation's issued and outstanding Common Stock (the "Shareholders"),
hereby give their written consent and authorization, in accordance with the
provisions of Sections 141(f) and 228(a) of the General Corporation Law of the
State of Delaware, to the adoption of the following resolutions, and the same
are hereby adopted as of the date set forth above:
1. Issuance of Stock to Kirk Kimerer
WHEREAS, the Board and the Shareholders have
each reviewed and considered the proposed Assignment, Assumption and Release
Agreement attached hereto as Exhibit A (including all exhibits attached
thereto, the "Assignment and Assumption Agreement"); and
WHEREAS, the Board and the Shareholders have
each determined that it is in the best interests of the Corporation to adopt
and consummate the Assignment and Assumption Agreement; it is hereby
RESOLVED, that the
form, terms and provisions of the Assignment and Assumption Agreement are
hereby authorized and approved by the Board and by the Shareholders in all
respects, effective as of the date hereof;
RESOLVED FURTHER, that
the President/Chief Executive Officer, Secretary and Treasurer of the
Corporation shall each be authorized, directed and empowered, for and on behalf
of the Corporation, to perform such acts as he or she deems necessary or
appropriate to execute and deliver the Assignment and Assumption Agreement and
consummate all of the transactions contemplated thereby, and to do all things
as may be deemed appropriate or necessary to carry out the purpose of the
foregoing resolutions and to carry out the provisions of the Assignment and
Assumption Agreement;
RESOLVED FURTHER, that
without limiting the generality of the foregoing, upon receipt from Kirk Kimerer
of a Subscription Agreement in the form attached to the Assignment and
Assumption Agreement, the Corporation is authorized to accept such Subscription
Agreement and to issue shares of Common Stock pursuant thereto as contemplated
by the Assignment and Assumption Agreement, along with a certificate representing such
shares.
Apollo Joint Consent - Final
2. General Implementation
RESOLVED that the
President/Chief Executive Officer, Secretary and any other officer of the
Corporation, acting alone or with any other officer of the Corporation, be, and
they hereby are, authorized and directed, for and on behalf of the Corporation,
to execute and deliver certificates representing the shares of Common Stock
described above, and to execute, acknowledge and deliver such other
agreements, documents, certificates, and other instruments, and to take or cause
to be taken such action, as they, or any of them, may deem necessary or appropriate
to carry out the transactions contemplated by these resolutions and otherwise
accomplish the purposes and intent of these resolutions;
The Secretary of the Corporation is hereby
directed to file this instrument with the minutes of the proceedings of the
directors and shareholders of the Corporation. The actions taken hereby shall
be of the same force and effect as if taken at a meeting of the directors and shareholders
of the Corporation, duly called and constituted pursuant to the laws of the
State of Delaware.
This instrument may be executed in any number of
counterparts and by facsimile; all such counterparts shall be deemed to
constitute one and the same instrument, and each of said counterparts shall be
deemed an original hereof.
IN WITNESS WHEREOF, the undersigned have
executed this Consent as of the date first written above.
Board of Directors
/s/Kirk Kimerer
Shareholder
/s/ Kirk Kimerer
Exhibit:
A - Assignment and Assumption Agreement
2
Apollo Joint Consent. Final
EXHIBIT A
ASSIGNMENT AND
ASSUMPTION AGREEMENT
Apollo Joint Consent - Final
EXHIBIT 10.11
I, Kirk Kimerer, do hereby attest that I have the means necessary to
satisfy the Note Payable for $250,000 due to Sibannac, Inc. as of August 31,
2015.
/s/ Kirk Kimerer
Kirk Kimerer
12/15/2015
EXHIBIT 10.12
ADDENDUM TO
SUBSCRIPTION AND INVESTMENT LETTER
FROM KIRK KIMERER
AND
APOLLO MEDIA NETWORK, INC.
The Effective Date of the transaction shall be deemed to be
August 31, 2015, for all purposes hereunder.
Date: January 26, 2016
Kirk Kimerer
By:/s/ Kirk Kimerer
Name: Kirk Kimerer
Date: January 26,
2016
Apollo Media Network, Inc.
By:/s/ Kirk Kimerer
Name: Kirk Kimerer, CEO
SUBSCRIPTION AND INVESTMENT LETTER
TO: The Board of Directors of
Apollo Media Network, Inc.
The undersigned, Kirk Kimerer,
hereby subscribes for Three Million Ninety- Nine Thousand Nine Hundred
(3,099,900) shares (the "Shares") of the common stock of Apollo Media
Network, Inc., a Delaware corporation ("Apollo" or the
"Corporation"), in consideration of the assets transferred and
assigned to the Corporation pursuant to that certain Assignment, Assumption and
Release Agreement effective as of June 30, 2015 to which the Corporation and
the undersigned are parties.
As an inducement to the
Corporation to accept this subscription offer, I hereby represent, warrant,
covenant and acknowledge to Apollo that:
a.
Tax Consequences. I understand and acknowledge that the income tax consequences
of this subscription for the Shares are uncertain and complex, and that I have
been urged to consult with and rely on my own tax advisor with respect to the
federal, state and foreign tax consequences arising from this subscription. I
have not received any tax advice from Apollo or its attorneys or accountants.
b.
Purchase Entirely for Own Account. The acceptance of this subscription by
Apollo and its issuance of the Shares subscribed for hereby are being done in
reliance upon my representation to Apollo, and I hereby represent, that the
Shares are being acquired for my own account, not as a nominee or agent, and
not with a view to the resale or distribution of any part of the Shares, and
that I have no present intention of selling, granting any participation in, or
otherwise distributing the Shares. Further, I do not have any contract,
undertaking, agreement, or arrangement with any person to sell, transfer, or
grant participations to such person with respect to the Shares.
c. Disclosure
of Information. I have received and carefully reviewed all information that I
consider necessary or appropriate for deciding whether to acquire the Shares. I
have had an opportunity to ask questions of and receive answers from Apollo
regarding Apollo and its business.
d.
Investment Experience. I am an experienced investor in securities of privately
held companies and am able to fend for myself, can bear the economic risk of an
investment in the Shares, and have such knowledge and experience in financial
or business matters that I am capable of evaluating the merits and risks of an
investment in the Shares. I have adequate means of providing for my current
needs and anticipated contingencies and have no need for liquidity of this
investment. My commitment to illiquid investments is reasonable in relation to
my net worth.
e.
High Degree of Risk. I acknowledge and agree that an investment in the Shares
is speculative and subject to substantial risks, and there can be no guarantee
of
1
Kimerer to Apollo
Subscription Agreement - Final
any return of capital or the
amount or type of profit or loss to be realized, if any, as a result of an
investment in the Shares.
f.
Subscriber's Advisors. I have been encouraged and have had the opportunity to
consult with qualified legal, accounting, financial, tax and other advisors,
and have consulted with such advisors or have waived my right to do so, and I
understand the financial, income tax and other aspects of subscribing for the
Shares. I acknowledge that neither Apollo nor anyone on behalf of Apollo has
made any representations to me regarding the tax or financial consequences of
subscribing for the Shares.
g.
Accredited Investor. I warrants that I am an "accredited investor" within
the meaning of Rule 501 of Regulation D, as presently in effect, as promulgated
by the Securities and Exchange Commission (the "$") under the
Securities Act of 1933, as amended (the ""), for the following
reasons:
PLEASE INITIAL APPLICABLE
STATEMENTS:
______
(Natural person only). My individual net worth excluding
the
value of my primary residence, or joint net worth together with my
spouse
excluding the value of my primary residence (if any), is in excess
of
$1,000,000, with net worth calculated as (1) total assets (less any
positive
equity in my primary residence), less (2) total liabilities
(including
all mortgage debt on my primary residence).
______
(Natural person only). My individual income was in excess
of
$200,000 in each of the past two years (excluding my spouse's income)
and
I expect to have an income (excluding my spouse's income) in excess
of
that amount in the current year or my individual income for each of
such
years together with my spouse's is in excess of $300,000 each.
___X__
Other. (Please describe basis for accredited status.) Chief
Executive
Officer and director of the Corporation
h.
Reliance by Apollo. I understand that the Shares will be issued in reliance on
specific exemptions from the registration requirements of federal, state, and foreign
laws and that Apollo is relying upon the truth and accuracy of the
representations, warranties, agreements, acknowledgements, and understandings
set forth herein.
i.
Indemnification. I hereby indemnify and hold harmless Apollo and its
affiliates, and each of their respective officers, directors, shareholders,
members, managers, partners, employees, agents and advisors, from and against
any loss, damage, or liability arising out of or relating to a breach of any of
my representations, warranties, covenants, or other agreements contained in
this Subscription Offer.
j.
Governing Law; Jurisdiction. I acknowledge and agree that except as otherwise
required by law, all questions relating to the validity, interpretation,
2
Kimerer to Apollo
Subscription Agreement - Final
performance, and enforcement
hereof will be governed by and construed in accordance with the laws of the
State of Delaware, notwithstanding any conflict-of-interest provisions to the
contrary. Jurisdiction of and venue for any legal action between me and Apollo
will be in the state and federal courts located in Maricopa County, Arizona,
and I hereby consent to such jurisdiction and venue.
IN
WITNESS WHEREOF, I have executed this Subscription Offer and Investment Letter as
of June 30, 2015.
/s/
Kirk Kimerer
Kirk
Kimerer
Social
Security or
Taxpayer
ID No.: (on file)
Address:
1313 E. Osborn Road, Suite 100
Phoenix,
AZ 85014
AGREED AND ACCEPTED BY:
APOLLO MEDIA NETWORK, INC.
By: /s/ Kirk Kimerer
Its: Chief Executive Officer
Date: As of June 30, 2015
3
Kimerer to Apollo
Subscription Agreement - Final
EXHIBIT 10.13
ADDENDUM TO LOCK UP AND METERING AGREEMENT
BY AND AMONG
SIBANNAC, INC., A
NEVADA CORPORATION
AND
KIRK KIMERER
The Effective Date of the transaction shall be deemed to be
August 31, 2015, for all purposes hereunder.
The state of incorporation of Sibannac, Inc. is amended from
Colorado to Nevada.
Date: January 26, 2016
Sibannac, Inc.
By:/s/
Daniel L. Allen
Name:
Daniel L. Allen
Title:
Chief Executive Officer
Date: January 26,
2016
Kirk Kimerer
By:/s/ Kirk Kimerer
Name: Kirk Kimerer
EXHIBIT 10.14
ADDENDUM TO NOTE CONVERSION AGREEMENT
BY AND AMONG
SIBANNAC, INC., A
NEVADA CORPORATION
AND
JAYSON LANG
TRAVIS HAIR
RAY BILLS
MARGARET KERR
AND
APOLLO MEDIA
NETWORK, INC.
The Effective Date of the transaction shall be deemed to be
August 31, 2015, for all purposes hereunder.
The state of incorporation of Sibannac, Inc. is amended from
Colorado to Nevada.
Date: January 28, 2016
Sibannac, Inc.
By:/s/
Daniel L. Allen
Name:
Daniel L. Allen
Title:
Chief Executive Officer
Date: January 28,
2016
Apollo Media Network, Inc., a Delaware Corporation
By:/s/ Kirk Kimerer
Name: Kirk Kimerer
Title: Chief Executive Officer
EXHIBIT 10.15
ADDENDUM TO PLEDGE AND SECURITY AGREEMENT
BY AND AMONG
SIBANNAC, INC., A
NEVADA CORPORATION
AND
KIRK KIMERER
The Effective Date of the transaction shall be deemed to be
August 31, 2015, for all purposes hereunder.
The state of incorporation of Sibannac, Inc. is amended from
Colorado to Nevada.
Date: January 26, 2016
Sibannac, Inc.
By:/s/
Daniel L. Allen
Name:
Daniel L. Allen
Title:
Chief Executive Officer
Date: January 26,
2016
Kirk Kimerer
By:/s/ Kirk Kimerer
Name: Kirk Kimerer
To be effective as of June 30, 2015
PLEDGE AND SECURITY AGREEMENT
PLEDGE
AGREEMENT, dated as of June 30, 2015, made by Kirk Kimerer ("Pledgor"),
to Sibannac, Inc. ("Lender").
PRELIMINARY
STATEMENTS:
Lender
is the holder of a Promissory Note dated as of June 30, 2015, made by Pledgor
in favor of Apollo Media Network, Inc. (the "Note"), and subsequently
transferred to Lender. It is a condition precedent to the acceptance of the
Note by Lender that Pledgor shall have made the pledge contemplated by this Agreement.
NOW,
THEREFORE, in consideration of the premises and in order to induce Lender to accept
the Note, Pledgor hereby agrees as follows:
SECTION
1. Pledge. Pledgor hereby pledges, transfers and assigns to Lender and
any assigns and grants to Lender a security interest in, the following (the
"Pledged Collateral"):
1,400,000
Common Shares (the "Pledged Shares") owned by Pledgor in Sibannac,
Inc. and certificate number representing the Pledged Shares, and all dividends,
distributions, cash, instruments and other property, proceeds or benefits from
time to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of the Pledged Shares.
SECTION
2. Security for Obligations. This Agreement secures the payment of all obligations
present or future, direct or indirect, absolute or contingent, matured or not,
of Kirk Kimerer to Lender under the Note, whether for principal, interest,
fees, expenses or otherwise, and all obligations present or future, direct or
indirect, absolute or contingent, matured or not of Pledgor to Lender under
this Agreement or the Note (all such obligations of Pledgor being the "Obligations").
SECTION
3. Delivery of Pledged Collateral.
(a)
All certificates or instruments representing or evidencing any Pledged
Collateral (including without limitation the Pledged Shares upon the issuance
thereof to Pledgor) shall be delivered to and held by or on behalf of Lender
pursuant hereto and shall be in suitable form for transfer by delivery, or
shall be accompanied by duly executed instruments of transfer or assignment in
blank, all in form and substance satisfactory to Lender. Lender shall have the
right at any time to exchange certificates or instruments representing or
evidencing Pledged Collateral
Pledge Agreement - Final
for Certificates or
instruments of smaller or larger denominations.
(b) Pledgor
shall upon the request of Lender deliver, or cause to be delivered to Lender
any or all of the Pledged Collateral not referred to in Section 3(a) if Lender determines
in its sole discretion that such delivery will enhance, protect, maintain,
create or otherwise aid Lender in the perfection or maintenance of the security
interests created hereby.
(c) Pledgor
shall deliver herewith an Irrevocable Proxy (coupled with interest) in the form
attached as Exhibit A hereto.
SECTION
4. Perfecting Security Interest.
(a) Pledgor
shall permit a UCC-1 to be filed with the Secretaries of State of Colorado evidencing
the pledge of the 1,400,000 shares of Pledgor's common shares in Sibannic, Inc.
and Pledgor shall cause any other filings to be made and assist Lender in
giving any notice as may be required to perfect or maintain Lender's security
interest in the Pledged Shares.
SECTION
5. [Intentionally omitted.]
SECTION
6. Further Assurances. Pledgor agrees that at any time and from time to time,
at the expense of Lender, Pledgor will promptly execute and deliver all further
instruments and documents, and take all further action, that may be necessary
or desirable, or that Lender may request, in order to perfect and protect any
security interest granted or purported to be granted hereby or to enable Lender
to exercise and enforce its rights and remedies hereunder with respect to any
Pledged Collateral, including without limitation filing one or more UCC-ls to
protect Lender's security interest in the Pledged Collateral and making any
filing statement or appearance before or with any other regulatory authority. Pledgor
authorizes Lender to file, in jurisdictions where this authorization will be
given effect, a financing statement signed only by Lender covering the Pledged
Collateral. Pledgor will join Lender at its request in executing all financial
statements in form satisfactory to Lender and Lender will pay the cost of filing
or recording any such financial statement or of this Agreement if it is deemed
by Lender to be necessary or desirable.
SECTION
7. Voting Rights, Etc. Lender shall execute and deliver (or cause to be executed
and delivered) to Pledgor all such proxies and other instruments as Pledgor may
reasonably request for the purpose of enabling Pledgor to exercise the voting
and other rights which it is entitled to exercise pursuant hereto.
SECTION
8. Transfers and Other Liens; Additional Shares.
(a) Pledgor
agree that he will not, except as otherwise provided in that certain Put Option
dated as of June 30, 2015 by and between Pledgor and Lender (the
"Put") or by other written agreement between Pledgor and Lender (i)
sell or otherwise dispose of, or grant any option with respect to, any of the
Pledged Collateral, (ii) create or permit to exist any lien, security interest
or other charge or encumbrance upon or with respect to any of the Pledged Collateral,
except for the security interest under this Agreement.
2
Pledge Agreement - Final
SECTION
9. Lender Appointed Attorney-in-Fact. Pledgor hereby appoints Lender as Pledgor's
attorney-in-fact, with full authority in the place and stead of Pledgor and in
the name of Pledgor or otherwise, from time to time in Lender's discretion to
take any action and to execute any instrument which Lender may deem necessary
or advisable to accomplish the purposes of this Agreement, including, without
limitation, to receive, endorse and collect all instrument made payable to Pledgor
representing any dividend or other distribution in respect of the Pledged Collateral
or any part thereof and to give full discharge for the same.
SECTION
10. Lender May Perform. If Pledgor fails to perform any agreement contained herein,
Lender may itself perform, or cause performance of, such agreement, and the
expenses of Lender incurred in connection therewith shall be payable by Pledgor
under Section 13.
SECTION
11. Reasonable Care. Lender shall exercise reasonable care in the custody of the
Pledged Collateral in its possession or control hereunder at any time. Lender
shall be deemed to have exercised reasonable care in the custody and
preservation of the Pledged Collateral in its possession if the Pledged
Collateral is accorded treatment substantially equal to that which Lender
accords its own property, but no less than reasonable care, it being understood
that Lender shall not have any responsibility for (i) ascertaining or taking
action with respect to calls, conversions, exchanges, maturities, tenders or
other matters relative to any Pledged Collateral, whether or not Lender has or
is deemed to have knowledge of such matters, or (ii) taking any necessary steps
to preserve rights against any parties with respect to any Pledged Collateral.
SECTION
12. Remedies upon Default. If any Default (as defined in the Note) shall have occurred
and be continuing:
(a)
Lender may exercise in respect of the Pledged Collateral, in addition to other rights
and remedies provided for herein or otherwise available to it, all the rights
and remedies of a secured party on default under the Uniform Commercial Code
(the "Code") in effect in the State of Colorado, except as required
by mandatory provisions of law and except to the extent that the validity or
perfection of the security interest hereunder, or remedies hereunder, in
respect of any particular Pledged Collateral are governed by the laws of a
jurisdiction other than the State of Colorado, at that time, and Lender may
also, without notice except as specified below, exercise any voting or other
consensual rights with respect to the Pledged Collateral, sell the Pledged
Collateral or any part thereof in one or more parcels at public or private
sale, at any exchange, broker's board or at any of Lender's offices or
elsewhere, for cash, on credit or for future delivery, and upon such other
terms as Lender may deem commercially reasonable. Pledgor agrees that, to the
extent notice of sale shall be required by law, at least ten days' notice to Pledgor
of the time and place of any public sale or the time after which any private
sale is to be made shall constitute reasonable notification. Lender shall not
be obligated to make any sale of Pledged Collateral regardless of notice of
sale having been given. Lender may adjourn any public or private sale from time
to time by announcement at the time and place fixed therefore, and such sale
may, without further notice, be made at the time and place to which it was so
3
Pledge Agreement - Final
adjourned.
(b)
Any cash held by Lender as Pledged Collateral and all cash proceeds received by
Lender in respect of any sale of, collection from or other realization upon all
or any part of the Pledged Collateral may, in the discretion of Lender, be held
by Lender as collateral for, and then or at any time thereafter applied (after
payment of any amounts payable to Lender pursuant to Section 13) in whole or in
part by Lender against, all or any part of the Obligations in such order as
Lender shall elect. Any surplus of such cash or cash proceeds and interest
accrued thereon, if any, held by Lender and remaining after payment in full of
all the Obligations shall be paid over to Pledgor or to whomsoever may be
lawfully entitled to receive such surplus, provided that Lender shall have no
obligation to invest or otherwise pay interest on any amounts held by it in connection
with or pursuant to this Agreement.
(c)
All rights and remedies of Lender expressed herein are in addition to all other
rights and remedies possessed by Lender in the Note, all third party guaranties
and any other agreement or instrument relating to the Obligations.
(d)
Notwithstanding anything to the contrary in the Note, this Agreement or the
Code, Lender agrees that in the event Lender sells or takes possession of the
Pledged Collateral, the Note and the Obligations shall be deemed fully
satisfied and paid in full, and Lender shall not be entitled to seek a
deficiency or take any other action against Pledgor with respect to the Note.
SECTION
13. Expenses. Pledgor will upon demand pay to Lender the amount of any and all
reasonable expenses, including the reasonable fees and expenses of its counsel
and of any experts and agents, which Lender may incur in connection with (i)
the exercise or enforcement of any of the rights of Lender hereunder of (ii)
the failure by Pledgor to perform or observe any of the provisions hereof.
SECTION
14. Security Interest Absolute. All rights of Lender and security interests hereunder,
and all obligations of Pledgor hereunder, shall be absolute and unconditional irrespective
of:
(i)
any lack of validity or enforceability of the Note, or any other agreement or
instrument relating thereto;
(ii)
any change in the time, manner, place or terms of payment of, or in any other
term of, all or any of the Obligations, or any other amendment or waiver of or
any consent to any departure from the Note;
(iii)
any sale, exchange, release, surrender or nonperfection of any other collateral,
or any release or amendment or waiver of or consent to departure from any
guaranty, for all or any of the Obligations or any setoff against all or any of
the Obligations; or
(iv)
any other circumstance which might otherwise constitute a defense available to,
or a discharge of, the Borrower.
4
Pledge Agreement - Final
SECTION
15. Amendments, etc. No amendment or waiver of any provision of this Agreement,
nor consent to any departure by Pledgor herefrom, shall in any event be
effective unless the same shall be in writing and signed by Lender, and then
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given.
SECTION
16. Addresses for Notices. All notices and other communications provided for
hereunder shall be in writing (including telegraphic communication), mailed or
telegraphed or delivered to it, addressed to it at such party's address
specified herein; or as to either party at such other address as shall be
designated by such party in a written notice to each other party complying as
to delivery with the terms of this Section. All such notices and other communications
shall, when mailed or telegraphed, respectively, be effective when deposited in
the mails or delivered to the telegraph company, respectively, addressed as
aforesaid.
SECTION
17. Continuing Security Interest; Transfer of Note. This Agreement shall create
a continuing security interest in the Pledged Collateral and shall (i) remain
in full force and effect until payment in full of the Obligations, (ii) be
binding upon Pledgor, its successors and assigns and (iii) inure to the benefit
of Lender and its successors, transferees and assigns. Notwithstanding the
foregoing clause (iii), Lender may assign or otherwise transfer the Note or its
interests under this Agreement to any other person or entity, without Pledgor's
consent. Upon the payment in full of the Obligations, Pledgor shall be entitled
to the return, upon its request and at its expense, of such of the Pledged
Collateral as shall not have been sold or otherwise applied pursuant to the
terms hereof.
SECTION
18. Governing Law; Terms. This Agreement shall be governed by and construed in
accordance with the laws of the State of Colorado, except as required by
mandatory provisions of law and except to the extent that the validity or
perfection of the security interest hereunder, or remedies hereunder, in
respect of any particular Pledged Collateral are governed by the laws of a
jurisdiction other than the State of Colorado. Unless otherwise defined herein
or in the Note, terms defined in Article 9 of the Uniform Commercial Code in
the State of Colorado are used herein as therein defined.
[signature page follows]
5
Pledge Agreement. Final
IN
WITNESS WHEREOF, Pledgor and Lender have caused this Agreement to be duly executed
and delivered by its officer thereunto duly authorized as of the date first
above written.
Pledgor:
Kirk
Kimerer
/s/
Kirk Kimerer
1313
E. Osborn Road, Suite 100
Phoenix,
AZ 85014
Lender:
Sibannac,
Inc.
by:
/s/ Daniel Allen
its:
CEO
1313
E. Osborn Road, Suite 100
Phoenix,
AZ 85014
Attention:
Chief Executive Officer
6
Pledge Agreement - Final
EXHIBIT 10.16
ADDENDUM TO PUT OPTION AGREEMENT
BY AND AMONG
SIBANNAC, INC., A
NEVADA CORPORATION
AND
KIRK KIMERER
The Effective Date of the transaction shall be deemed to be
August 31, 2015, for all purposes hereunder.
The state of incorporation of Sibannac, Inc. is amended from
Colorado to Nevada.
Date: January 26, 2016
Sibannac, Inc.
By:/s/
Daniel L. Allen
Name:
Daniel L. Allen
Title:
Chief Executive Officer
Date: January 26,
2016
Kirk Kimerer
By:/s/ Kirk Kimerer
Name: Kirk Kimerer
SIBANNAC, INC.
Repurchase Agreement and Right of First Refusal
AGREEMENT (this
"Agreement") made as of June 30, 2015, among Kirk Kimerer (hereafter
called the "Shareholder"), and, Sibannac, Inc., a Colorado
corporation (hereinafter called the "Company"). Whereas the
Shareholder is the owner of certain outstanding shares of the Company as
follows:
Shareholder Shares
Kirk Kimerer 3,100,000
Whereas, in the event of a
proposed sale of the shares owned by Shareholder, the Company desires to guard
against the introduction into the central ownership of the Company of other
persons who may be either unwilling or unable to contribute to the success of
the Company, by restricting the transferability of shares in the Company, among
the named parties, except under the terms hereof.
Therefore in consideration of
mutual promises and other valuable considerations, the Shareholder and the
Company agree as follows:
1.
Definitions. For all purposes of this Agreement:
(a)
The term "transfer," "dispose," or any similar term means
any proposed sale, or a sale, exchange, gift, bequest, pledge, security
interest, or other alienation or disposition whatsoever of any shares of the
Company or any interest therein, including any distribution by an executor,
administrator, or trustee.
(b)
The term "involuntary transfer" means any transfer or disposition of
shares under judicial order, legal process, execution, attachment, or
enforcement of a pledge, trust, divorce decree, separation agreement, QDRO or
other security interest.
(c)The
term "involuntary transferee" means anyone who acquires an interest
in or title to the shares by virtue of an involuntary transfer.
(d)
The term "shares" means common shares of the Company owned by
Shareholder, and includes the shares presently outstanding and all common
shares which may hereafter be issued by the Company, to him.
2.
Restriction on shares and transfer. Shareholder or his voluntary or involuntary
transferee shall not dispose of or transfer any shares in a private transaction
within 18 months after the inception of this Agreement, without the prior
written consent of the Company, unless all, or any, of such shares are first
offered for sale to the Company, in the manner herein provided, or otherwise
authorized under this Agreement. Any purported transfer or disposition of
shares in violation of the terms of this
Agreement
shall he void, and the Company shall not recognize or give any effect to such
transaction.
3.
First Right of Refusal. At any time, within 18 months after the inception of
this Agreement, the Company shall have the first right to purchase any of
Shareholder's shares which he determines to sell in a private transaction (the
"offer"), on ten (10) business days written notice from Shareholder
of any
Right of First Refusal
Agreement Final
proposed
sale, at the same price and terms as any funded bona fide offer from a third
party; provided, however that Shareholder shall have the right, subject to
applicable Federal Securities laws and the Lockup and Metering Agreement of
even date herewith between Shareholder and the Company, to sell shares into a
trading market without any obligation to first offer such shares to the
Company.
4.
Requirement of offer to company.
(a)
The offer required to be made pursuant to Section 3 above shall be made not less
than ten (10) business days prior to any proposed private transfer or
disposition of shares. In case of the death of any involuntary transferee, or
of Shareholder while then holding shares, his executor or administrator shall
make an offer not less than 30 days prior to any distribution, transfer, or
disposition of shares, but, in any event within one year after the date of
death;
(b)
In addition to any other offer required to be made hereunder by or on behalf of
any involuntary transferee, in the case of any involuntary transfer, the
involuntary transferee shall offer (within 30 days after such involuntary
transfer) to sell all of his shares to the Company.
5.
Notice of offer and acceptance. An offer required to be made pursuant to
Section 3 above shall be made by a written notice to the Company, which shall
state that the shares of the offeror are offered for sale, specifying the price
and terms of the proposed sale, and (a) the name and address of the proposed
purchaser to whom the offeror otherwise desires to transfer the offered shares,
or (b) if the offeror is an involuntary transferee making an offer pursuant to
paragraph 3(b), the name and address of each offeror and the price and the
terms which he proposes to pay for such shares. An offer shall remain open for
10 business days after the day on which notice of the offer is received by the
Company from Shareholder, and 30 days after the day on which notice of the
offer is received by the Company from an involuntary transferee. Notice of
acceptance shall be sufficiently given if, before midnight of the 10th business
day (in the case of an offer from Shareholder) or the 30th day (in the case of
an offer by an involuntary transferee), it is, delivered in person to the offeror
or mailed to the address of the offeror stated in the notice.
6.
Payment ofpurchase price. Unless other terms shall apply, the purchase price of
shares sold under this Agreement, shall be paid in the same form as the
proposed sale from the offeror at the time of closing the sale.
7.
Offer requires full acceptance. An offer shall he deemed to be rejected in its
entirety unless all shares owned and offered by the offeror are purchased.
8.
Place and time of closing. If an offer is accepted, the sale shall be closed at
the office of the Company at a time (during its ordinary business hours) fixed
by the seller, not less than 10 nor more than 45 days after the date on which
the notice of acceptance given.
9.
Delivery of shares and documents. Upon the closing of any sale, the seller
shall deliver to the buyer in exchange for payment by the buyer (in cash or in
cash and note, as the case may be) the certificates of the shares being sold,
endorsed for transfer, and each assignments, certificates of authority, tax release,
consents to transfer instruments, and evidence of the title of seller and of
his compliance with this Agreement as may be required by counsel for the
Company. In the case of any
note
in payment of shares, the seller shall be granted a security interest in such
shares until the note is paid in full.
10.
Release of shares from agreement. If an Offer is not accepted, the offeror may
retain his shares
2
Right of First Refusal
Agreement --Final
or may, within 120 days after
the date on which he gave notice of his offer, transfer or dispose of his shares,
at the price and on the terms stated in his notice, but he may not sell or
dispose of such shares at a price less than that stated in his notice or on
terms more favorable to the buyer than those stated in his notice.
11.
Failure to make required offer. Upon the occurrence an event by reason of which
an offer is required to be made under this Agreement, any of the Shareholders
then holding shares may notify the record owner of the shares in question, or
the person to whom the shares are about to or have passed or been disposed of,
or both, that he elects to buy the shares, and shall give copies of the notice
to the other Shareholders then holding shares. Such a notice shall he deemed a
sufficient acceptance of an offer and the sale shall be closed as if an offer
had been made and accepted, at the price and on the terms which should have
been stated in an offer. In such a case other Shareholders then holding shares,
who give like notices and copies within 20 days after the day on which that
notice is given, may share in the purchase, in proportion to their
shareholdings unless they agree otherwise.
12.
Specific performance. If any person so required under this Agreement fails to
give a notice, make an offer, sell shares or close a sale; or if any
involuntary transferee fails to disclose the price at which he acquired the
shares pursuant to the involuntary transfer; or if any person who proposes to transfer
or dispose of shares for price less than the price under paragraph 5 or upon
terms more favorable to a buyer than those stated in paragraph 6, or both, or
fail to disclose to the Company then holding shares the name of anyone to whom
and the price and terms on which he proposes to transfer or dispose of the
shares, then, in any such event, if the failure continues for 30 days after
notice to the one in default, any of such party may institute and maintain a
proceeding to compel the specific performance of this Agreement by the one in
default.
13.
Endorsement on certificates. Each certificate for shares now held or hereafter
issued shall be endorsed as follows:
"Notice"
"Any
transfer or disposition of the shares evidenced by this certificate is subject
to the restrictions and purchase options stated in, and such shares are
transferable only upon compliance with, the provisions of an agreement dated as
of June 30, 2015 between the corporation and one or more of its shareholders. A
copy of such agreement is on file at the office of the corporation and the provisions
thereof are incorporated herein by reference.
14.Notices.
All notices, offers, acceptances, waivers, and other communications under this Agreement
shall be in writing and shall be sufficiently given if delivered to the
addressees in person or if mailed, postage prepaid, as follows:
If to Sibannac, Inc.: Sibannac
Inc.
1313 E. Osborn Road, Suite
100
Phoenix, Arizona 85014
Attention: Chief Executive
Officer
If to Shareholder: Kirk Kimerer
1313 E. Osborn Road, Suite
100
Phoenix, Arizona 85014
or to such other address as
any of them by notice to the others, may designate from time to time.
3
Right of First Refusal
Agreement --Final
Except
as otherwise provided in this Agreement, time shall be counted to or from the
date of delivery or of mailing, as the case may be.
15.
Agreements by corporation. In consideration of the premises the Company agrees
for itself and for its successors and assigns: (a) insofar as is proper or
required, it consents to this Agreement; (b) it will not transfer or reissue any
of its shares in violation of this Agreement or without requiring proof of
compliance with this Agreement (c) all share certificates issued by the Company
during the, life of this Agreement shall be endorsed as stated above (d) and,
upon written request given to the Company's Secretary by anyone required by
this Agreement to make an offer, the Secretary shall certify to him the
purchase price computed per share under 5 (a) above.
16.
Term of agreement. This Agreement shall remain in force for eighteen (18)
months from the date of inception of this Agreement, unless the company and
Shareholder agree otherwise. This Agreement shall terminate in its entirety and
shall thereafter be of no force or effect, and neither Shareholder nor any of
the shares shall thereafter be bound or restricted hereby, on the date that is
eighteen (18) months following the inception of this Agreement. Upon the
termination of this Agreement as provided above, the Company shall cause all
applicable restrictive legends to be removed from any certificates evidencing
the shares. In addition, this Agreement shall automatically terminate and be of
no further force or effect upon the occurrence of any Change in Control of the
Company. As used herein, the term "Change in Control" means (i) any
person or entity, or affiliated persons or entities, whether or not currently a
shareholder of the Company, owning fifty percent (50%) or more of the
outstanding Common Shares of the Company on a fully diluted basis, or otherwise
having the power to direct the management or affairs of the Company; (ii) any
merger, reorganization or recapitalization of the Company; or (iii) any sale of
all or any substantial portion of the Company's assets.
17.Benefit.
This Agreement shall be binding upon the parties and their legatees, distributees,
legal representatives, successors, and assigns.
18.Counterparts.
This Agreement is executed in counterparts each of which shall be considered an
original. One is delivered to each of the Shareholder and one to the Company.
In
witness whereof the Shareholder has signed this Agreement and the Company has
caused its corporate name and seal to be hereunto signed, affixed, and attested
by its proper officers.
Shareholder:
/s/Kirk Kimerer,
Sibannac, Inc.
/s/ Daniel Allen
President/CEO
4
Right of First Refusal
Agreement -- Final
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