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Kuala Kaimi
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I am a serial entrepreneur who followed his dreams from a very young age. My career path found me in the food and beverage industry, golf course construction, landscape construction and excavation. I now invest my own funds full time and dabble in work.
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  • Nutritional High Inc Enters Into LOI On New Mexico MMJ Opportunity

    LOI summary

    Nutritional High International Inc {NHL} has entered into a binding letter of intent ("LOI") dated April 8, 2015, to acquire a 51% equity interest in Zephyr Management Inc. , a management company being established to provide management and real estate services to Sacred Garden ("Sacred Garden") I am going to presume the other 49% is held by Sacred Garden principals Zeke and Kelly Shortes.

    news.yahoo.com/nutritional-high-announces-mexico-acquisition-110000933.html

    Sacred Garden, operating in the Medical MJ market of New Mexico since 2010, has unaudited revenues of $1.7mm and net income of $245,000 of which 70% ($171,500) is from cultivating MJ and the remaining 30% ($73,500) results from the sale of edible products.

    sacredgardennm.com/

    Cannatonic is a high CBD strain. It has almost a 3:1 ratio of CBD to THC.

    Pictures from Sacred Gardens Menu

    Luxe International, Inc. filed as a Domestic For-Profit Corporation in the State of Texas on Wednesday, July 25, 2007. This corporation is no longer active according to documents filed with Texas Secretary of State. Zeke Shortes was a principal of Luxe International, Inc.

    www.corporationwiki.com/Texas/Austin/zeke-a-shortes/37869647.aspx

    Sacred Garden is a New Mexico New Mexico Domestic Non-Profit filed on May 11, 2009. The company's filing status is listed as Ac-Active Corporation and its File Number is 4168316

    The company has 3 principals on record. The principals are Claudia Mann, Nathan Jones, and Zeke Shortes.

    www.bizapedia.com/nm/SACRED-GARDEN.html

    Prior history with Dixie products

    "I am really excited to be carrying Dixie Elixir's new high Cannabidiol (NYSE:CBD) tinctures, capsules and salves. Double blind respected studies are finding benefits for a wide range of issues our patients suffer with on a daily basis, such as anxiety, arthritis, cancer, Crohn's Disease, Multiple Sclerosis, Epilepsy, and Neurological Disorders, to name a few. These new CBD-rich options will even allow us to ship these important products anywhere without violating any federal laws," said Zeke Shortes, Director of Sacred Garden located in Santa Fe, New Mexico. circa 2012

    www.prnewswire.com/news-releases/medical-marijuana-inc-red-dice-holdings-company-announces-dixie-x-partnerships-in-new-mexico-and-oregon-167819035.html

    Background on New Mexico Medical Marijuana 02/06/2013 article excerpts

    Producers have to price marijuana by the gram. No discounts are allowed for larger quantities - a rule intended to reduce chances of it being resold illegally. The average patient is 49 years old and spends $143 a month for 11 grams - roughly the equivalent of 22 large joints. The cost is not covered by insurance. It isn't always easy to find a doctor willing to recommend medical marijuana.

    Last year, New Mexico collected more than $500,000 in sales tax from $7.5 million worth of marijuana sold, according to the quarterly reports producers are required to submit. And for the first time, the state received $500,000 in licensing fees from producers, money being used to fund full-time positions to oversee the initiative.

    Although medical marijuana is legal in New Mexico and 17 other states, the federal government still classifies it as a Schedule 1 drug, meaning it has no medical value and is likely to be abused. That long shadow of federal disapproval has caused banks and credit card processors in New Mexico to shun marijuana businesses. They have reason to worry; some state-legal dispensaries in California and Colorado have been shut down by federal officials.

    Some patients in New Mexico have applied for home-growing licenses because of concerns over access - many producers say they regularly run out of inventory - and because it is less expensive. Staff at R. Greenleaf and Sacred Garden said they are often unable to meet demand because of supply limits. New Mexico officials said that while producers have complained about running out of marijuana, they have received only occasional comments about such shortages from patients.

    The state is working to boost education and outreach for patients and doctors and to make testing marijuana for contaminants and THC, the active ingredient, a standard practice.

    There is no sign outside the Sacred Garden compassionate care center in Santa Fe, which is run out of a stucco complex alongside a hair salon, design studio, and social worker's office to avoid notice. But the pungent smell makes it clear this place is something else. Behind the counter, employees open sliding drawers to pull out buds kept in small glass containers. They hand over "cannafudge" and marijuana-infused Rice Krispie treats from a minifridge, and instruct patients on how to use a hash oil pipe.

    The floor of the back room, which is accessed by passing through three locked doors, is reinforced to support a 2,000-pound safe. It's where director Zeke Shortes uses special software to securely track patient records and sales data. Unable to get a business loan, Shortes invested $400,000 of his own money to open his center and convert a woodworking shop into a cannabis growhouse. The building, off a dirt road in a residential neighborhood, has plywood boards separating "bloom rooms" and rows of intense lights dangling from the ceiling.

    "This is not an easy business. But we want to be convenient for patients and provide the best quality we can," said Shortes, who graduated from Boston University in 1995. "I want people to feel safe here. We have a lot of geriatric patients. We want simple, peaceful."

    massmedcard.com/new-mexico-marijuana-program-a-guide-for-massachusetts/

    Expansion Plans

    To increase growing from 150 plants to 450 plants as maximum allowable under New Mexico state law. Subsequently, replacement of the current growing facility is anticipated in favor of constructing a larger platform. Current operations are based in Sante Fe.

    Expanding via dispensary location to the city of Albuquerque.

    What NHL paid to acquire 51 % of Zephyr

    NHL shall issue to Zeke and Kelly Shortes (Sacred Garden's) 20,000,000 common shares in the capital of the Company.

    NHL will also issue a finders fee equal to 1.5% to an arms length party.

    NHL also wishes to announce the issuance of 150,000 options to a consultant to the company. Each option is exercisable into one common share of NHL at a price of $0.10 per common share for up to five years.

    Companies intent to lend to Zephyr

    NHL shall also provide loan to Zephyr a first secured loan in the amount of $500,000 for a period of 5 years, bearing an interest rate of 12% per annum.

    The proceeds of the Purchaser's Loan will be used by Zephyr for the build-out of the new dispensary and a new cultivation center in Albuquerque and general working capital.

    The Vendors shall also retain 6,000 non-voting preferred shares (the "Preferred Shares"). Each Preferred Share is redeemable by the holder at a price of $100.00 per Preferred Share and carries a preferred dividend rate of $12.00 per annum, payable quarterly.

    Employment Agreement

    Zeke Shortes, President of Sacred Garden, shall have entered into an employment agreement with Zephyr for a period of five years, on terms and conditions satisfactory to the Company and Shortes, each acting reasonably. The Employment Agreement will provide (NYSE:A) a monthly salary of US$15,000 per month ($180,000 per year)

    Closing Conditions

    Entry into a management agreement between Sacred Garden and Zephyr

    Zephyr and NHL shall enter into an intellectual property licensing agreement whereby NHL shall be paid a royalty of 10% of any gross sales to other dispensaries of any marijuana-infused products which use NHL's brands

    There is no assurance that the Transaction will be approved by the DOH, that the parties will obtain all requisite approvals for the Transaction, or that the Company will be able to complete the Transaction on terms favourable to the Company or at all

    Various Break up clauses to protect Mr. Shortes (The vendor)

    If Shortes is terminated without cause within 24 months of the Closing Date, the Vendors may repurchase from the Company 51% interest in Zephyr in exchange for 16,750,000 Consideration Shares or the equivalent amount in cash.

    If Shortes is terminated without cause and the Vendors do not exercise the option to re-purchase 51% interest in Zephyr, the Vendors may, require the Purchaser to purchase their 49% equity interest in Zephyr at fair market value, which purchase price will be paid half in cash and half in common shares of the Company

    Legislation prevailing in New Mexico market

    Only medical MJ is permitted. Recreational is illegal.

    During the 2014 elections, voters in Santa Fe and Bernalillo Counties had the opportunity to vote on advisory questions asking whether their elected officials should support decriminalization. The questions won with 73% support in Santa Fe County and 59% in Bernalillo County.

    While the results were non-binding and the law has not changed yet, lawmakers representing nearly 40% of the state's population had a clear mandate from their constituents: To replace criminal penalties for the simple possession of marijuana with a civil fine. In January, Senator Joseph Cervantes introduced legislation to do just that. SB 383 would reduce the penalty for possession of up to an ounce of marijuana to a civil penalty of $50.

    www.mpp.org/states/new-mexico/

    SUMMARY: Governor Bill Richardson signed Senate Bill 523, into law on April 2, 2007. The new law took effect on July 1, 2007. The law mandates the state Department of Health by October 1, 2007, to promulgate rules governing the use and distribution of medical cannabis to state-authorized patients. Several amendments have since been made.

    Non Profit Org

    Nonprofit corporations are different than profit-focused corporations in several ways. The most simple difference is that nonprofit corporations cannot operate for profit. Meaning, they cannot allocate corporate income to shareholders. The funds acquired by nonprofit corporations must stay within the corporate accounts to pay for reasonable salaries, expenses, and the activities of the corporation.

    www.hg.org/nonprofit-organizations.html

    Size of the Medical Marijuana Market for New Mexico

    Active Patients as of 4/3/2015 13574 (not all use dispensaries, 16 personal plants are allowed)
    Active PPL 3577
    Applied Pending Information 72
    New Patients Approved in March 2015 472
    Re-Enroll Patients Approved in March 2015 797
    Patients who status changed to inactive (expired more than 30 days) in March 2015 309

    Sante Fe County registered patients 1881
    Bernalillo County (Albuquerque) registered patients 5415

    nmhealth.org/about/mcp/svcs/

    Supply side numbers

    March 5, 2015 - Medical Cannabis Producers & Distributors - Information


    Today the New Mexico Department of Health opened the Request for Applications (NYSEMKT:RFA) period for the licensing of non-profit producers for the Medical Cannabis Program.

    Currently there are 23 Licensed Non-Profit Producers (LNPP) in the Program, which are located throughout the state. No new LNPPs have been added since 2010.

    nmhealth.org/news/information/2015/3/

    Medical Marijuana market in a small state competing with 23 current non profit orgs for a few thousand patients. New applicants are now being accepted as well for licenses to dispense MMJ. It seems a large amount of the patients registered will be growing their own as they are allowed 16 plants for personal consumption. Many in Canada also grow their own with two thirds of MMJ patients not adopting MMPR LP's. Similarly in New Mexico patients naturally chose the cheaper and more convenient method of home cultivation given it is entirely legal.

    Takeaways from the proposed deal

    Primary focus is to provide financing on facilities for a New Mexico medical marijuana producer and edible retailer to expand operations and collect subsequent rents.

    A secondary benefit would be a royalty agreement of 10% on any NHL edible products sold in the dispensary location.

    The price paid was at current share prices of 10 cents and 20 mm shares ~ 2 million dollars plus Canadian currency.

    The Company will also issue a finders fee equal to 1.5% to an arms length party. The Company also wishes to announce the issuance of 150,000 options to a consultant to the Company. Each option is exercisable into one common share of the Company at a price of $0.10 per common share for up to five years.

    Conclusion

    The proposed deal is more to provide capital for new buildings and management/consulting fees than it is to profit from Sacred Gardens business while also gaining access to shelf space when Nutritional High Inc has MIPs ready for retailing. Sacred Garden is a non profit organization. A new entity named Zephyr is created as part of this partnership with the Zeke and Kelly Shortes with a controlling 51% share owned by NHL in exchange for 20 million shares and some commissions and options to a consultant.

    Apr 11 1:47 PM | Link | Comment!
  • Canadian Marijuana Infused Products IPO Opens For Business In The US

    Nutritional High Inc common shares commenced trading on the Canadian Securities Exchange at the opening of market on March 23, 2015 under the trading symbol "NHL" and anticipates a US listing by April 20th but can be currently traded through select brokerages in the US. A link for investors on how to trade is found on the Nutritional High Inc website.

    www.nutritionalhigh.com/

    • Canadian IPO competing in the recreational and medical marijuana segment in the US ~ American Listing coming April 20, 2015
    • Royalty model through creation of product lines and licensing opportunities to MIP producers
    • Acquire real estate for lease to Licensed Operators and provide financing, equipment, and consulting services
    • Options on two MMPR growers applicants in Canada
    • Competing in the Medical Marijuana Dispensary business segment
    • Nutritional High Inc common shares commenced trading on the Canadian Securities Exchange at the opening of market on March 23, 2015 under the trading symbol "NHL".

    Nutritional High Inc summary per SEDAR filing MD&A April 1,2015 and Prospectus January 29,2015

    Nutritional High Inc {NHL} core strength is development of edible Marijuana-Infused Products {MIPs}

    The Company may focus on different parts of the industry value chain, or focus on acquiring assets in the industries, not directly related to Marijuana-Infused Products or Marijuana Concentrate extraction in order to ensure such compliance (e.g., acquisition of real estate,unsecured lending and consulting).

    Plans are to begin in the US market while keeping options open to develop Canadian markets as well.

    Management Team

    • CEO, President & Director David Postner
    • VP Product Development Melissa Parks
    • Director and Corporate Secretary Adam K Swerzas
    • CFO Al Quong
    • Chairman of the Board Statis Regis

    David Postner CEO

    U.S. States without Residency Requirements

    NHL is also considering seeking licensing to manufacture and distribute edible MIPs and Marijuana Concentrates in certain U.S. States where such U.S. States will provide a License without residency requirements or with residency requirements that the Company is able to comply with.

    In some states, for a licensed MIPs operator to be eligible to be granted a License, the owners of the licensed operator must be residents of such U.S. State. As such, listed companies or other widely held enterprises are ineligible to obtain a License in those states where a Licensed Operator must be a U.S. State resident.

    In the U.S. States without residency requirements, the Company may choose to apply for a License or acquire entities with a license and produce products itself, or work with other licensed operators. The Licensed Operators include growers of Marijuana, MIP manufacturers and retail dispensaries. Ancillary service providers may include medical and educational centers and marijuana paraphernalia shops.

    Products and Services and Intangible Properties

    The company intends to develop product lines for retailing opportunities in the legal Colorado recreational market and to adapt them to become suitable for medical marijuana markets.

    Nutritional High is now in its development stage of branding and product packaging and has submitted trademark applications in the United States and Canada on three initial brand names it intends to utilize, being Breaking Bud, Heisenberg Blue and Gootch.

    In its Marijuana-Infused Products Segment, the Company is focused on developing, acquiring and designing Marijuana-Infused Products and Marijuana Concentrate products and brands for use by Licensed Operators that have entered into royalty agreements with Nutritional High.

    Medical Advisory and Retail Segment

    The Medical Advisory and Retail Segment of the Company's business is comprised of the Clinic Business, which provides medical and educational consulting services and is focused on franchising retail Medical Marijuana dispensaries in the jurisdictions in the United States without Residency Requirements, where permitted by regulation.

    On February 2, 2015, NHL was advised by the Illinois Department of Financial and Professional Regulation (the "Division") that it has been awarded authorization to register a medical marijuana dispensary under the Compassionate Use of Medical Cannabis Pilot Program Act (Illinois). This authorization permits the Company to submit a registration package to the Division , and upon their satisfaction, the Company will receive conditional approval for a Dispensary license. The Company is working to submit the Registration within the prescribed 120 day timeline.

    Business Model

    ActivitiesExpected Revenue Streams
    Acquire and develop recipes, know-how and other intellectual property for the preparation of Marijuana-Infused Products and
    Marijuana Concentrates, for use by Royalty Producers entering into royalty agreements with the Company.
    Royalty fees
    Develop recognizable brands for Marijuana-Infused Products and
    Marijuana Concentrates for use by Royalty Producers entering into royalty agreements with the Company for their use.
    Royalty fees
    Provide consulting services with respect to extraction processes,
    techniques, training and know how relating to Marijuana
    Concentrates.
    Consulting fees
    Royalty fees
    Acquire real estate for lease to Licensed Operators.Leasing fees, Rent
    Provide financing and equipment leasing to Licensed Operators and prospective Licensed Operators.Interest income
    Loan fees (renewal, origination, etc.)
    Leasing Fees
    Provide financial and strategic support to Licensed Operators in
    securing supply of Marijuana.
    Miscellaneous consulting fees

    Specialized Skill and Knowledge

    NHL has hired Melissa Parks, as the Vice President, Product Development. Ms. Parks is a Cordon Bleu trained chef with extensive experience in the manufacturing of edible MIPs and creating high end baked goods and confectionery products incorporating Marijuana Concentrates. Ms. Parks also provides know how and consulting services to the Company's clients.

    NHL has acquired 30 recipes for edible MIPs from Ms. Parks, including recipes for Chocolate Chew, Colorado Peach Pound Cake, High Altitude Hard Candy and Caramel Cashew Popcorn with Chocolate Drizzle. Ms. Parks' role with the Company includes developing additional recipes which will be proprietary to the Company and will, along with the acquired recipes, form a library of proprietary recipes for edible MIPs in regards to which, NHI will enter into royalty agreements with royalty producers.

    www.thestonerscookbook.com/chef/melissa-parks

    Product Lines

    1. The Breaking Bud product line includes solid marijuana concentrates, liquid marijuana concentrates, cartridges for vapes, and other products
    2. The Heisenberg Blue product line includes hard candy, sugar & sweeteners, tinctures and drink additives
    3. Gootch is the Company's high end line of products that includes chocolates, chews, energy bars and sauces

    (The product Images are from the Huffington Post)

    Royalty Producer partnerships

    NHL will generally only enter into royalty agreements with Royalty Producers that have the ability to produce the Marijuana-Infused Products in a commercial kitchen. NHI expects to acquire certain processing equipment and a confectionery depositor/printer,
    which the Company anticipates leasing to Royalty Producers. Management estimates that the processor is capable of processing up to 40 pounds of Retail Marijuana per four-hour cycle into Marijuana Concentrate.

    Colorado Market size estimates

    Based on quarterly reports for the first six months of the fiscal 2013-2014 year and monthly reports for the second six months of 2013-2014 fiscal year total medical marijuana and total recreational marijuana sales were US$364 million and US$117 million, respectively.

    (click to enlarge)The Cannabist

    Colorado Supply size estimates as of December 1,2014

    • 491 Medical Marijuana Stores
    • 300 Retail Marijuana Stores
    • 156 Medical Infused Product Manufacturers
    • 91 Retail Infused Product Manufacturers
    • 15 State Licensed Retail Marijuana Testing Facilities

    Since marijuana has only recently been legalized in certain jurisdictions, the NHL's management believes the industry is still in infancy stages, and business, industrial and regulatory frameworks are not fully developed. Lack of traditional sources of financing, absence of an efficient supply chain network and streamlined marketing channels, and strict regulatory requirements create market inefficiencies, which create a business opportunity for the Company.

    (click to enlarge)Boston.com

    Key Competitors offering financing, incubation and strategic services to Licensed Operators

    • Agritek Holdings Inc.
    • BreedIT Corp.
    • Cannabis Sativa Inc.
    • Cannabis Science Inc.
    • Medical Marijuana Inc.
    • Mentor Capital Inc.
    • Chuma Holdings Inc.

    Competitors in the Edibles Segment

    Canadian MMPR growers interests

    NHL has also entered into options to acquire interests in two separate companies in the process of applying for Marihuana for Medical Purposes Regulations licenses ("MMPR")

    (NYSE:I) Haldimand Option

    www.haldimandcounty.on.ca/

    • The Company may exercise the option, at its sole discretion, by paying a fee of $62,500 within 10 days of the option or receiving the "ready to build" letter from Health Canada in Common Shares at a deemed price of $0.025, and (ii) within 10 days from the date option or satisfies all requirements with Health Canada to become a licensed producer pay a fee of $187,500, payable in Common Shares at a deemed price of $0.025 per share. The Company will then be responsible for 50% of the development costs required to bring the facility up to commercial production. The site includes 48 acres of vacant land zoned for agricultural use is available for the construction of further facilities to expand future production capacity, should such be required. The Haldimand Option submitted the initial application to Health Canada and additional information was provided on July 11, 2014 on Health Canada's request. On November 13, 2014, Health Canada advised the option or that the application is currently at the "Enhanced Screening Stage". Since then, to the Company's knowledge, no further communication has taken place in respect of the application.

    (II) Northumberland Option

    www.northumberlandcounty.ca/en/index.asp

    • NHL issued 150,000 Series II Warrants pursuant to this option agreement. The company may exercise the option, at its sole discretion by issuing 625,000 common shares to the option or at an effective issue price of $0.10 per share within 14 days from the date the option or notifies NHL of the receipt of a "ready to build" letter from Health Canada and paying in cash the positive difference between the current value of the shares and $62,500, and (ii) issuing 1,875,000 common shares to the option or at a deemed issue price of $0.10 per share within 14 days from the date the option or notifies NHL of the receipt of a license from Health Canada in respect of the facility and paying in cash the positive difference between the current value of the shares and $187,500. NHL will then be responsible for 100% of the development costs required to bring the facility up to commercial production. The option or of the Northumberland Option submitted the initial application to Health Canada on June 25, 2014. To the company's knowledge, no further communication has taken place in respect of the application.

    Photo courtesy ofCanada.com

    Colorado Property acquired details

    Pueblo Location Acquisition

    en.wikipedia.org/wiki/Pueblo,_Colorado

    NHL acquired the Pueblo Location on November 17, 2014. The Pueblo Location is comprised of three main buildings, several smaller storage buildings, an old boiler building and an oversized two-car garage on approximately three acres. NHC paid an aggregate purchase price of US$885,000.

    The Company financed the purchase price of the Pueblo Location through the issuance of two secured convertible debentures in an aggregate principal amount of $600,000. The remainder of the purchase price was funded by the Company through working capital.

    Closing of Senior and Subordinate Debenture financing relating to Pueblo Location Acquisition

    The Company issued to an arm's length party a senior secured convertible debenture (the "Senior Convertible Debenture") in the principal amount of $450,000. The Senior Convertible Debenture matures on November 17, 2016 (the "Maturity Date") and carries an interest rate of 12% per annum. The Senior Convertible Debenture is secured by a first ranking general security interest over all assets of the Company. The Senior Convertible Debenture is convertible into Common Shares at any time prior to the Maturity Date at a price equal $0.06 (the "Conversion Price"). In connection with an amendment to the terms

    The Company has also issued a subordinated secured convertible debenture (the "Subordinate Convertible Debenture") in the principal amount of $150,000 to a group of lenders comprised of Adam Szweras, Statis Rizas and David Posner, all of whom are directors of the Company. The Subordinate Convertible Debenture matures on the Maturity Date and carries an interest rate of 12% per annum. The Subordinate Convertible Debenture is secured by a general security interest over all assets of the Company, subordinate to the Senior Convertible Debenture. The Subordinate Convertible Debentures carries the same Conversion Price and Conversion Price Adjustment provisions as the Senior Convertible Debentures.

    (click to enlarge) RollingStone.com

    Grant of Two Marijuana Licenses to Palo Verde On October 1, 2014, Palo Verde advised the Company that it has received two marijuana licenses from the MED:

    www.colorado.gov/pacific/enforcement/business-license-applicant-criteria-medical-marijuana

    1. Retail Marijuana Product Manufacturing License ("RMIP License")
    2. Retail Marijuana Cultivation License ("RMC License")

    The Company is working with Palo Verde to finalize a brand and recipe royalty agreement.

    Agreements with Palo Verde

    1. The Lease Agreement (MIP), which carries an annual rent of US$15 per square foot, subject to a 5% annual increase, and having a term of two years with an option to renew for an additional four years. The Lease Agreement (MIP) covers an area of 11,000 square feet. The rent commences on January 1, 2015, subject to a six month deferral period. The deferred rent will accrue at a rate of 12% per annum and will be paid over a period of three months commencing on the expiry of the deferral period. Under the terms of the lease agreement, Palo Verde shall not sublet the leased property or any part thereof, nor assign the leases or any interest therein, without the prior written consent of NHL.
    2. The Lease Agreement (Cultivation), which carries an annual rent of US$15 per square foot, subject to a 5% annual increase, and having a term of two years with an option to renew for an additional four years. The Lease Agreement (Cultivation) covers an aggregate area of 15,000 square feet, comprised of two buildings. The vendor of the Pueblo Location currently occupies the 10,000 building pursuant to the Pueblo PSA and pays US$2,500 per month in rent. The vendor of the Pueblo Location is expected to vacate the premises at the end of August 2015, at which time, Palo Verde will occupy the building pursuant to the Lease Agreement (Cultivation) and commence paying rent in accordance with such agreement. The rent payable on the 10,000 square feet to be occupied by Palo Verde beginning on September 1, 2015, commences on September 1, 2015, subject to a nine month deferral period. The deferred rent will accrue at a rate of 12% per annum and will be paid over a period of three months commencing on the expiry of the deferral period.

    A revolving loan agreement providing a US$150,000 unsecured debt facility to Palo Verde to draw funds for general day-to-day operating purposes, obtaining raw materials, hiring of staff and other ancillary costs related to starting and maintaining production. The loan commenced on July 23, 2014, and is effective for a period of 12 month at a rate of 12% per annum. The interest compounds on a monthly basis. Principal and accrued interest are payable at maturity of the facility. Palo Verde may extend the maturity date for up to five successive one-year terms for a total of five years, but no later than July 22, 2020. Each extension is subject to 2% origination fee.

    The Company is also finalizing a recipe and branding royalty agreement to provide its intellectual property including recipes, branding, packaging and other know-how to Palo Verde. The Company anticipates entering such agreement with Palo Verde in early 2015, conditional on approval of the Marijuana Enforcement Division, Colorado Department of Revenue (" MED").

    Financing and share structure

    On October 8, 2014, the Company completed a private placement (the "Private Placement") of 4,000,000 Common Shares and 2,000,000 Series I Warrants for aggregate proceeds of $100,000 (2.5 cents per share plus warrants) from an arm's length investor, which funds were received in trust in June 2014. In connection with the Private Placement, the Company paid a finder's fee of $8,000 and issued an aggregate of 320,000 finder's warrants (the "Finder's Warrants"). Each Finder's Warrant is exercisable into one Unit at a price of $0.025 per Unit for a period of 18 months from the Closing Date.

    Following the completion of the Private Placement, there were an aggregate of 15,500,006 Series I Warrants outstanding, each of which entitles the holder thereof to acquire one Common Share at a price of $0.05 per Common Share at any time prior to the date that is 18 months from the issuance thereof, subject to the early exercise provisions as follows:

    If the holders of Series I Warrants elect to exercise the Series I Warrants prior to October 31, 2014, in addition to receiving a Common Share, they will receive an additional warrant ("Series III Warrant") exercisable at a price of $0.10 at any time prior to October 31, 2016. An aggregate of 3,566,638 Series I Warrants at 5 cents per share were exercised prior to October 31, 2014 for aggregate proceeds of $178,332 initiating the Series III warrant activation clause activation and subsequent issuance of 3,566,638 additional Series III warrants as a sweetener for early pick up of the warrant by the holder

    On March 13, 2015, 32,900,000 units at $0.05 per unit were issued for gross proceeds of $1,645,000 upon the successful close of the IPO. Each unit consisted of one common share and one half of one share purchase warrant ("Unit Warrant"), with each warrant exercisable into one common share at a price of $0.07 per share until 24 months from the date of issuance.

    The Company has granted 400,000 incentive stock options to Michael Pesner. Each option is exercisable into one common share at an exercise price of $0.10 per share and expires on the fifth anniversary of grant. This stock option issuance is in consideration of Mr.Pesner joining the board.

    On March 18, 2015, the Company paid an extension fee of $30,000 by issuing an aggregate of 600,000 units and one half of one share purchase warrant, exercisable into one common share at a price of $0.07 per share until 24 months from the date of issuance.

    On March 18, 2015, the Company paid a going public success fee of $35,000 by issuing an aggregate of 700,000 units and one half of one share purchase warrant, exercisable into one common share at a price of $0.07 per share until 24 months from the date of issuance.

    On March 18, 2015, the Company granted 3,400,000 incentive stock options to certain officers, directors and consultants to purchase common shares of the Company at the exercise price of $0.10 exercisable until 60 months from the date of issuance.

    On March 18, 2015, the Company granted 3,550,000 incentive stock options to advisory board members and consultants to purchase common shares of the Company at the exercise price of $0.10 exercisable until 60 months from the date of issuance.

    On March 26, 2015, 400,000 warrants were exercised for gross proceeds of $28,000.

    On March 27, 2015, 400,000 warrants were exercised for gross proceeds of $28,000.

    On March 30, 2015, 12,000 compensation options under the warrant indenture were exercised for $600 for 12,000 common shares and 6,000 share purchase warrants, exercisable at a price of $0.07 per share until March 16, 2017.

    Share Grand Totals

    • As of the date hereof, the Company has issued and outstanding an aggregate of 114,492,269 Common Shares, 11,933,368 Series I Warrants, 150,000 Series II Warrants, 3,566,638 Series III Warrants, 320,000 Finder's Warrants, 16,300,000 Unit Warrants, 2,398,800 Compensation Options and 10,150,000 Company stock options.

    Fully Diluted Shares =149,266,075

    Financial Situation

    • Overall Performance
    • As at January 31, 2015, the Company had assets of $1,142,548, liabilities of $1,137,331, and shareholders' equity of $5,217. During the period ended January 31, 2015, the Company incurred a loss of $752,657.
    • As at January 31, 2015, the Company had working capital deficiency of $414,386 and cash of $22,514.

    Related Party Transactions and Key Management Compensation

    NHL and FMI Capital Advisory Inc. (Formerly Foundation Opportunities Inc.) ("FMI") entered into an advisory and consulting agreement on May 1, 2014. FMI is a subsidiary of Foundation Financial Holdings Corp. ("FFHC"). FFHC is an entity in which an officer is a director of the Company. In consideration for services, NHL agreed to pay an initial advisory fee of $35,000 and a monthly fee of $8,000 commencing on May 1, 2014. An amendment to the agreement was entered into on October 27, 2014, to include a success fee of $70,000, payable upon successful completion of the IPO Offering, half of which is payable in Units. For the six month period ended January 31, 2015, NHL was charged $48,000 by FMI. At January 31, 2015, $8,000 is included in accounts payable and accrued liabilities in relation to FOI.

    For the period ended January 31, 2015, the Company incurred a finder's fee of $4,000 and issued 160,000 finder's warrants to Foundation Markets Inc., a company with a related director. This was in connection with the October 8, 2014 closing of the 4,000,000 unit private placement.

    NHL and Branson entered into a management services agreement on May 1, 2014. The management services agreement includes the provision of services of the Company's Chief Financial Officer. Branson is an entity in which FFHC is a 49.0% shareholder. In consideration for services the Company agreed to pay $3,000 per month. An amendment to the agreement was entered into on October 1, 2014 to increase the fee to $5,000 per month. A further amendment to the agreement was entered into on October 27, 2014, to include a success fee of $30,000, payable upon successful completion of the Offering. For the six month period ended January 31, 2015, the Company recorded $26,000 for management services provided by Branson. As at January 31, 2015, $5,000 is included in accounts payable and accrued liabilities in relation to Branson.

    During the six month period ended January 31, 2015, Fogler, Rubinoff LLP ("Fogler") a law firm in which an officer and director of the Company is also a partner, provided $276,771 of legal services, which are included in professional fees. As at January 31, 2015, $324,761 due to Fogler is included in accounts payable and accrued liabilities.

    photo courtesy of westword.com

    Conclusion

    The opportunity to invest at the beginning stages of Nutritional High Inc brings along that advantage of a good management team who have gained a large amount of media exposure as they begin to put the parts together of a diverse new company looking to capitalize on the expanding marijuana industry.

    The sky is literally the limit for quality companies in the new marijuana industry. Those who manage the opportunity the best stand to profit and provide a large return to investors.

    The focus is into several areas:

    Lending-Federal laws prohibit traditional financing and NHL looks to provide financing for emerging partners at a healthy rate of return to shareholders of NHL.

    Edible or MIPs are being developed and branded while the expectation will be to charge a royalty based fee to retailers of the products.

    Provide real estate leasing and consulting for industry players who are in need of assistance.

    Expansion into Canada through options on a couple small MMPR applicants and when legally possible bring the established brands being created into the Canadian market as well.

    Enter a variety of states with a diverse offering depending on each states requirements, laws and opportunities while having a superior ability to fund partners and avenues of interest in comparison to the smaller fragmented market players currently existing

    Risks

    One main risk is the fact that US federal law classifies Marijuana as a schedule 1 drug and therefore it is an illegal substance. Though individual states have passed Marijuana friendly legislation the federal government has not yet agreed on that approach.

    NHL is only beginning so much of the future business is still unknown and some ways from being profitable. An initial period is necessary to execute the business plan and find the partners and opportunities through the coming months and years.

    This company is a small cap play and carries with it that inherent risk and should be considered a speculative investment and will likely have some volatility associated with its stock price.

    Apr 11 1:02 PM | Link | Comment!
  • Analysis Of Zack's Report On Zecotek Photonics Inc

    Breakdown of Zack's Small Cap report

    scr.zacks.com/News/Press-Releases/Press-Release-Details/2015/VZMS-Resolution-of-Lawsuit-Opens-Up-Inflection-Opportunity-in-2015/default.aspx

    Mr. Marckx report begins with an admission of the obvious. It was once again, a very poor year for Zecotek and its shareholders. Many on Seeking Alpha and elsewhere claimed that Zecotek would win a sizeable amount of money in its patent case and pointed towards a Markman win as the obvious tip of the hat and also the legal team was purportedly working for a percentage of the outcome and not charging Zecotek. I am not sure how that statement can be reconciled with the large legal bill Zecotek incurred.

    By several measures 2014 was a disappointing year for Zecotek (ZMS.V) (OTCPK:ZMSPF). This was particularly true from an income statement standpoint which suffered from delays in recognizing order revenue, product introductions being pushed back and elevated legal expenses.

    The Zack's report goes on to use wishful language in a number of statements it makes about the details of the undisclosed end of the patent suit. Phrases such as:

    And while terms were not disclosed

    may have been part of the settlement

    We think it is a reasonable assumption

    Using that logic, it is also not unreasonable to assume that it is possible (probable?)

    Importantly the paragraph starts out with this undeniable statement that leaves no room for wishful thinking.

    What, if anything, was awarded to Zecotek from settlement of the lawsuit we do not know.

    Bob McWhirthers (President of Selective Asset Management Inc) once calculated the value of Zecotek's lawsuit on the back of a napkin to shareholders, while describing ZMS stock as go up or BLOW UP depending on a win or loss, but Zack's insists the lawsuit being closed without a settlement amount of $ for a company hemorrhaging capital is a win. How do you see it? I know its difficult to know when the details remain private except for the legal bills which are public.

    Zecotek was the one suing St.Gobain for possible patent infringement and their rights to the product were never being questioned. Somehow, Mr. Marckx postulates that "would be" customers were reluctant to order Zecotek crystals because of the lawsuit. I fail to understand the logic.

    We think another issue that may have been created while the lawsuit was ongoing was potential hesitance from other would-be customers to purchase the LFS crystals from Zecotek given the ambiguity over the related patent. So now with lawsuit settled, we think order flow and order fulfillment will increase and improve overall.

    Just past its first decade of existence Zecotek sales for 2014 were near $200,000 but this lack of progress is contradicted by the glowing terms of the Zack's report. Dr.Ferrouk's salary alone is more than double total revenue for the fiscal year, subsequently millions of dollars of losses resulted again.

    And we continue to view Zecotek's crystals as ultra-competitive in the PET scanner space. The company has indicated that they are seeing demand from both the human PET scanner industry as well as pharmaceutical research.

    Fortunately the report does acknowledge that CERN has not placed a significant order. Many bullish investors imply that CERN is certain to choose Zecotek for their supplier and this is simply not true. The past indicator is that CERN has not chosen Zecotek and they are only in the running for possible sales orders.

    And while Zecotek has had an ongoing relationship with CERN, which has been validating the crystals for potential use in the rebuild of the Large Hadron Collider, the organization has yet to place a significant order.

    An order may come, but past history of Zecotek is concerning and casts doubts on all statements suggesting an order is imminent.

    In the past shareholders have contributed towards development of 3D TV without glasses technology development. There were several announced inquiries about the patented technology but none of the announcements resulted in a license agreement or sales. Consequently the company has stated that investment by shareholders is wasted.

    While the company had initially focused their 3D technology on the consumer TV space, Zecotek now believes there are greater opportunities elsewhere.

    Not to be deterred by a balance sheet hemorrhaging red ink and down to its last few dollars before issuing more shares again last fall, Zecotek continues to spend money on the next big thing. 3D printing. They are partnering up with an Armenian company not known to have been in the additive manufacturing industry previously and are asking shareholders to fund that venture too. Shareholder money is funneled to the Armenian developers and shareholders should ask why Zecotek feels it is justified to spend on this sector when that is not its field of expertise. Any number of other 3D printing investments would likely attract investors over this daliance.

    When all is said and done what remains important is the financial viability of any success. The outstanding share, options and warrants increase dramatically over the ten years and any success at this point is becoming extremely diluted with no end in sight to the financial losses numbering in the millions each year. Someone classified Zecotek as a science fair and that is not far from reality at this point.

    Even with Zack's rose colored view of the company and (past excessive stock price targets) they are forecasting another losing year financially for the troubled company and could result in yet another PP deal to pay the increase R&D expenses and bloated salaries and perks of the management.

    While we think R&D may remain elevated with ongoing development of various products, we look for improvement in operating loss

    Finally it is concerning when reading the report and detecting bullish suggestions that are not borne out by factual reasons. In other words conjecture. For example one sentence begins and ends with opposing logic.

    And while it's still too early to speculate on specific quantities that CERN may order from Zecotek,

    And to finish the sentence, the report goes on to do just that, speculate about large untold riches on the horizon.

    we think that it's reasonable that it could eventually be in the several million dollars to potentially tens of millions of dollars worth of product.

    A bullish report in every aspect and in my view overly optimistic. These are my views and I would love to hear your considered opinions on this report.

    Tags: ZMSPF, technology
    Feb 11 12:12 AM | Link | 1 Comment
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