Page 7 of 9 – SEC Filing Pursuant to the Purchase Agreement, the Issuer agreed to increase the size of its board of directors (the “Board”) from five to seven and to appoint two individuals requested by Merida Partners to the Board. Merida Partners expects to appoint David Goldburg, a member of Merida GP, to the Board. As of the date hereof, the second new Board member has not been selected by Merida Partners. The Reporting Persons purchased the securities of the Issuer reported herein based on their belief that such securities, when purchased, were undervalued and represented an attractive investment opportunity. Depending upon other factors including overall market conditions, other investment opportunities available to the Reporting Persons, and the availability of securities of the Issuer at prices that would make the purchase or sale of such securities desirable, the Reporting Persons may endeavor (i) to increase or decrease their respective positions in the Issuer through, among other things, the purchase or sale of securities of the Issuer on the open market or in private transactions or otherwise on such terms and at such times as the Reporting Persons may deem advisable and/or (ii) to enter into transactions that increase or hedge their economic exposure to the Shares without affecting their beneficial ownership of Shares. No Reporting Person has any present plan or proposal which would relate to or result in any of the matters set forth in subparagraphs (a) – (j) of Item 4 of Schedule 13D except as set forth herein or such as would occur upon or in connection with completion of, or following, any of the actions discussed herein. The Reporting Persons may take positions regarding or make precatory, conditional or binding proposals with respect to, or with respect to potential changes in, the Issuer’s: operations, management, certificate of incorporation and bylaws, composition of the Board of Directors or its committees, ownership, capital or corporate structure, dividend policy, potential acquisitions or sales, businesses or assets, including the sales thereof, strategy and/or plans of the Issuer as a means of enhancing stockholder value. The Reporting Persons may change their intention with respect to any and all matters referred to in Item 4. The Reporting Persons intend to review their investment in the Issuer on an ongoing basis and may from time to time in the future express their views to and/or meet with management, the Board of Directors, other stockholders or third parties, including, potential acquirers, service providers and financing sources, and/or may formulate plans or proposals regarding the Issuer, its assets or its securities. Such possible plans or proposals may include one or more plans or proposals that relate to or would result in one or more of the changes referred to herein, or any of the matters set forth in subparagraphs (a) – (j) of Item 4 of Schedule 13D. Item 5. Interest in Securities of the Issuer.
(a) The aggregate percentage of Shares reported owned by each person named herein is based upon 196,100,271 shares of Common Stock outstanding as of September 28, 2018, as reported in the Exhibit 10.1 to the Issuer’s Form 8-K filed with the Securities and Exchange Commission on October 3, 2018. As of the date hereof, Merida Partners beneficially owned 17,000,000 Shares, which excludes 34,000,000 shares of Common Stock issuable upon the exercise of the Warrant and the Bonus Warrant, constituting approximately 8.7% of the shares of Common Stock outstanding. By virtue of their respective relationships with Merida Partners discussed in further detail in Item 2, each of Merida GP, Merida Advisor and Mr. Baruchowitz may be deemed to beneficially own the Shares owned directly by Merida Partners. Each of Merida GP, Merida Advisor, and Mitchell Baruchowitz disclaim beneficial ownership of such Shares except to the extent of his or its pecuniary interest therein. Each of the Reporting Persons may be deemed to beneficially own shares of Common Stock underlying the Warrant and Bonus Warrant, which are currently exercisable as of the date hereof. The Warrant and the Bonus Warrant contain restrictions on exercise such that they may not be exercised if the number of shares of Common Stock to be issued pursuant to such exercise or conversion would result in the holder beneficially owning (as determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended, and the rules thereunder (“Section 13(d)”)) in excess of 4.90% of all of the Common Stock outstanding at such time (the “Ownership Limitation”). Merida Partners, Merida GP, Merida Advisor and Mr. Baruchowitz each disclaims beneficial ownership of any and all shares of Common Stock issuable upon the exercise of the Warrant and/or Bonus Warrant to the extent that such exercise would cause Merida Partners’, Merida GP’s, Merida Advisor’s and/or Mr. Baruchowitz’s, as applicable, aggregate beneficial ownership to exceed or remain above the Ownership Limitation. Follow Freedom Leaf Inc.
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Pursuant to the Purchase Agreement, the Issuer agreed to increase the size of its board of directors (the “Board”) from five to seven and to appoint two individuals requested by Merida Partners to the Board. Merida Partners expects to appoint David Goldburg, a member of Merida GP, to the Board. As of the date hereof, the second new Board member has not been selected by Merida Partners.
The Reporting Persons purchased the securities of the Issuer reported herein based on their belief that such securities, when purchased, were undervalued and represented an attractive investment opportunity.
Depending upon other factors including overall market conditions, other investment opportunities available to the Reporting Persons, and the availability of securities of the Issuer at prices that would make the purchase or sale of such securities desirable, the Reporting Persons may endeavor (i) to increase or decrease their respective positions in the Issuer through, among other things, the purchase or sale of securities of the Issuer on the open market or in private transactions or otherwise on such terms and at such times as the Reporting Persons may deem advisable and/or (ii) to enter into transactions that increase or hedge their economic exposure to the Shares without affecting their beneficial ownership of Shares.
No Reporting Person has any present plan or proposal which would relate to or result in any of the matters set forth in subparagraphs (a) – (j) of Item 4 of Schedule 13D except as set forth herein or such as would occur upon or in connection with completion of, or following, any of the actions discussed herein. The Reporting Persons may take positions regarding or make precatory, conditional or binding proposals with respect to, or with respect to potential changes in, the Issuer’s: operations, management, certificate of incorporation and bylaws, composition of the Board of Directors or its committees, ownership, capital or corporate structure, dividend policy, potential acquisitions or sales, businesses or assets, including the sales thereof, strategy and/or plans of the Issuer as a means of enhancing stockholder value. The Reporting Persons may change their intention with respect to any and all matters referred to in Item 4. The Reporting Persons intend to review their investment in the Issuer on an ongoing basis and may from time to time in the future express their views to and/or meet with management, the Board of Directors, other stockholders or third parties, including, potential acquirers, service providers and financing sources, and/or may formulate plans or proposals regarding the Issuer, its assets or its securities. Such possible plans or proposals may include one or more plans or proposals that relate to or would result in one or more of the changes referred to herein, or any of the matters set forth in subparagraphs (a) – (j) of Item 4 of Schedule 13D.
| Item 5. | Interest in Securities of the Issuer. |
(a) The aggregate percentage of Shares reported owned by each person named herein is based upon 196,100,271 shares of Common Stock outstanding as of September 28, 2018, as reported in the Exhibit 10.1 to the Issuer’s Form 8-K filed with the Securities and Exchange Commission on October 3, 2018.
As of the date hereof, Merida Partners beneficially owned 17,000,000 Shares, which excludes 34,000,000 shares of Common Stock issuable upon the exercise of the Warrant and the Bonus Warrant, constituting approximately 8.7% of the shares of Common Stock outstanding. By virtue of their respective relationships with Merida Partners discussed in further detail in Item 2, each of Merida GP, Merida Advisor and Mr. Baruchowitz may be deemed to beneficially own the Shares owned directly by Merida Partners. Each of Merida GP, Merida Advisor, and Mitchell Baruchowitz disclaim beneficial ownership of such Shares except to the extent of his or its pecuniary interest therein.
Each of the Reporting Persons may be deemed to beneficially own shares of Common Stock underlying the Warrant and Bonus Warrant, which are currently exercisable as of the date hereof. The Warrant and the Bonus Warrant contain restrictions on exercise such that they may not be exercised if the number of shares of Common Stock to be issued pursuant to such exercise or conversion would result in the holder beneficially owning (as determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended, and the rules thereunder (“Section 13(d)”)) in excess of 4.90% of all of the Common Stock outstanding at such time (the “Ownership Limitation”). Merida Partners, Merida GP, Merida Advisor and Mr. Baruchowitz each disclaims beneficial ownership of any and all shares of Common Stock issuable upon the exercise of the Warrant and/or Bonus Warrant to the extent that such exercise would cause Merida Partners’, Merida GP’s, Merida Advisor’s and/or Mr. Baruchowitz’s, as applicable, aggregate beneficial ownership to exceed or remain above the Ownership Limitation.
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