10-K 1 egrn_10k.htm FORM 10-K egrn_10k.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-K

 

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the fiscal year ended December 31, 2016

 

Commission file number: 000-53902

 

Evergreen-Agra, Inc.

(Exact Name of Registrant as Specified in Its Charter)

 

Nevada

98-0460379

(State or Other Jurisdiction of

Incorporation or Organization)

(I.R.S. Employer

Identification No.)

 

19800 MacArthur suite 300, Irvine CA, USA 92612

(Address of Principal Executive Offices & Zip Code)

 

604-764-7646

(Telephone Number)

 

Securities registered pursuant to Section 12(b) of the Act: None

 

Securities registered pursuant to section 12(g) of the Act: Common Stock, $0.001 par value

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ¨ Yes    x No

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. ¨ Yes    x No

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x Yes    ¨ No

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files. x Yes     ¨ No

 

Indicate by check mark if disclosure of delinquent filers in response to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

¨

Accelerated filer

¨

Non-accelerated filer

¨

Smaller reporting company

x

(do not check if a smaller reporting company)

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ¨ Yes     x No

 

The aggregate market value of the registrant’s stock held by non-affiliates of the registrant as of June 30, 2016, computed by reference to the price at which such stock was last sold on the OTC Markets ($4.10 on December 28, 2016) was approximately $33,405,623.

 

The registrant had 25,816,602 shares of common stock outstanding as of June 30, 2017.

 

 
 
 
 

Evergreen-Agra, Inc.

 

TABLE OF CONTENTS

 

Item 1.

Business

 

3

 

Item 1A.

Risk Factors

 

 

6

 

Item 1B.

Unresolved Staff Comments

 

 

6

 

Item 2.

Properties

 

 

7

 

Item 3.

Legal Proceedings

 

 

7

 

Item 4.

Mine Safety Disclosures

 

 

7

 

Item 5.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 

 

7

 

Item 6.

Selected Financial Data

 

 

8

 

Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

 

8

 

Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

 

 

 

 

Item 8.

Financial Statements

 

 

10

 

Item 9.

Changes in and Disagreements with Accountants on Financial Disclosure

 

 

20

 

Item 9A.

Controls and Procedures

 

 

20

 

Item 9B.

Other Information

 

 

21

 

Item 10.

Directors, Executive Officers and Corporate Governance

 

 

22

 

Item 11.

Executive Compensation

 

 

24

 

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 

 

26

 

Item 13.

Certain Relationships and Related Transactions, and Director Independence

 

 

27

 

Item 14.

Principal Accounting Fees and Services

 

 

27

 

Item 15.

Exhibits

 

 

29

 

 

 
2
 
 

 

FORWARD-LOOKING STATEMENTS

 

The information in this annual report contains forward-looking statements. These forward-looking statements involve risks and uncertainties, including statements regarding our capital needs, business plans and expectations. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may”, “ will”, “should”, “expect”, “plan”, “intend”, “anticipate”, “believe”, “estimate”, “predict”, “potential” or “continue”, the negative of such terms or other comparable terminology.

 

Forward-looking statements in this annual report include, but are not limited to, statements with respect to the following:

 

 

·

our need for additional financing;

 

·

the competitive environment in which we operate;

 

·

our dependence on key personnel;

 

·

conflicts of interest of our directors and officers;

 

·

our ability to fully implement our business plan;

 

·

our ability to effectively manage our growth; and

 

·

other regulatory, legislative and judicial developments.

 

These forward-looking statements reflect our current views with respect to future events and are subject to certain risks, uncertainties and assumptions, including, the risks and uncertainties outlined under the sections titled “Risk Factors”, and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”. If one or more of these risks or uncertainties materialize, or our underlying assumptions prove incorrect, our actual results may vary materially from those expressed or implied by our forward-looking statements anticipated, believed, estimated or expected.

 

We caution readers not to place undue reliance on any such forward-looking statements, which speak only to a state of affairs as of the date made. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. We qualify all the forward-looking statements contained in this annual report by the foregoing cautionary statements.

 

ITEM 1. BUSINESS

 

Description of Business and History

 

Evergreen-Agra Inc. (hereinafter referred to as the “Company”) was incorporated on June 13, 2008 by filing Articles of Incorporation under the Nevada Secretary of State. The Company was incorporated under the name AMF Capital Group, Inc. In June 2009, the Company changed its name to Blackrock Resources, Inc. In January 2010, the Company changed its name to Artepharm Global Corp. Effective July 20, 2011, the Company changed its name to Sharprock Resources Inc. Effective October 23, 2013 the Company changed its name to Evergreen-Agra, Inc. During the Company’s quarter ended September 30, 2011, the Company shifted its focus from mineral exploration to organic veterinary medical products. In the quarter ended December 31, 2013, the Company shifted its focus to medical marijuana coincident with its acquisition of Evergreen Systems effective November 19, 2013.

 

In May 2017, the Company announced plans to register the company as a closed ended fund to invest in public companies within the pharmaceutical cannabis sector as a whole. 

 

 
3
 
 

 

On November 19, 2013, pursuant to a letter of intent dated September 10, 2013, the Company issued 20,000,000 post-split shares of its common stock to Rene Hamouth in exchange for 100% ownership of Evergreen Systems (“ES”). Except for conducting research on the medical marijuana industry, ES had no assets, liabilities, or business operations prior to the acquisition. At closing, the Company also issued 19,600,000 post-split shares of its common stock to Harpreet Sangha (then director and former chief executive officer of the Company from September 19, 2009 to September 1, 2013) for future services to be rendered and 1,000,000 post-split shares of its common stock to Richard Specht (secretary and director of the Company from September 1, 2013 to November 21, 2014) for services rendered. ES became a wholly owned subsidiary of the Company.

 

The acquisition resulted in a change of control of the Company on November 19, 2013. The accompanying consolidated financial statements reflect the assets, liabilities and operations of Evergreen Systems from its inception on August 15, 2013 to November 19, 2013 and are consolidated with Evergreen-Agra, Inc. thereafter.

 

Search for Business Opportunities

 

The Company’s search will be directed toward medical marijuana assets and small and medium-sized enterprises in that industry which have a desire to become reporting corporations and which are able to provide audited financial statements. While the Company is focused on the medical marijuana industry, the Company does not propose to restrict its search for investment opportunities to any particular geographical area or solely to that industry, and may, therefore, engage in essentially any business, to the extent of its limited resources. The Company’s discretion in the selection of business opportunities is unrestricted, subject to the availability of such opportunities, economic conditions, and other factors. No assurance can be given that the Company will be successful in finding or acquiring a desirable business opportunity, and no assurance can be given that any acquisition, which does occur, will be on terms that are favorable to the Company or its current stockholders. 

 

The Company may merge with a company that has retained one or more consultants or outside advisors. In that situation, the Company expects that the business opportunity will compensate the consultant or outside advisor. As of the date of this filing, there have been no discussions, agreements or understandings with any party regarding the possibility of a merger or acquisition between the Company and such other company. Consequently, the Company is unable to predict how the amount of such compensation would be calculated at this time.

 

The Company will not restrict its search to any specific kind of firm or type of assets, but may acquire a venture, which is in its preliminary or development stage, one which is already in operation, or in a more mature stage of its corporate existence, or simply acquire assets from which it will build its (desire to have its shares publicly traded, or may seek other perceived advantages which the Company may offer.

 

Evaluation of Business Opportunities

 

The analysis of business opportunities will be under the supervision of the Company’s management and directors, who are not professional business analysts. In analyzing prospective business opportunities, management will consider such matters as available technical, financial and managerial resources; working capital and other financial requirements; history of operations, if any; prospects for the future; nature of present and expected competition; the quality and experience of management services which may be available and the depth of that management; the potential for further research, development, or exploration; specific risk factors not now foreseeable, but which then may be anticipated to impact the proposed activities of the Company; the potential for growth or expansion; the potential for profit; the perceived public recognition or acceptance of products, services, or trades; name identification; and other relevant factors. In many instances, it is anticipated that the historical operations of a specific business opportunity may not necessarily be indicative of the potential for the future because of a variety of factors, including, but not limited to, the possible need to expand substantially, shift marketing approaches, change product emphasis, change or substantially augment management, raise capital and the like. To the extent possible, the Company intends to utilize written reports and personal investigation to evaluate the above factors. Prior to making a decision to participate in a business opportunity, the Company will generally request that it be provided with written materials regarding the business opportunity containing as much relevant information as possible, including, but not limited to, such items as a description of products, services and company history; management resumes; financial information; available projections, with related assumptions upon which they are based; an explanation of proprietary products and services; evidence of existing patents, trademarks, or service marks, or rights thereto; present and proposed forms of compensation to management; a description of transactions between such company and its affiliates during the relevant periods; a description of present and required facilities;, an analysis of risks and competitive conditions; a financial plan of operation and estimated capital requirements; audited financial statements, or if they are not available at that time, unaudited financial statements, together with reasonable assurance that audited financial statements would be able to be produced within a required period of time; and the like.

 

 
4
 
 

 

The Company is currently subject to the reporting requirements of the Exchange Act. Under the Exchange Act, any merger or acquisition candidate will become subject to the same reporting requirements of the Exchange Act as the Company following consummation of any merger or acquisition. Thus, in the event the Company successfully completes the acquisition of or merger with an operating business entity, that business entity must provide audited financial statements for at least two most recent fiscal years or, in the event the business entity has been in business for less than two years, audited financial statements will be required from the period of inception. Acquisition candidates that do not have or are unable to obtain the required audited statements will not be considered appropriate for acquisition.

 

Management believes that various types of potential merger or acquisition candidates might find a business combination with the Company to be attractive. These include acquisition candidates desiring to create a public market for their shares in order to enhance liquidity for current stockholders, acquisition candidates which have long-term plans for raising capital through public sale of securities and believe that the possible prior existence of a public market for their securities would be beneficial, and acquisition candidates which plan to acquire additional assets through issuance of securities rather than for cash, and believe that the possibility of development of a public market for their securities will be of assistance in that process. Acquisition candidates, who have a need for an immediate cash infusion, are not likely to find a potential business combination with the Company to be an attractive alternative. Nevertheless, the Company has not conducted market research and is not aware of statistical data which would support the perceived benefits of a merger or acquisition transaction for the owners of a business opportunity. The Company is unable to predict when it may participate in a business opportunity. It expects, however, that the analysis of specific proposals and the selection of a business opportunity may take several months or more. There can also be no assurances that we are able to successfully pursue a business opportunity. In that event, there is a substantial risk to the Company that failure to complete a business combination will significantly restrict its business operation and force management to cease operations and liquidate the Company.

 

Bankruptcy or similar proceedings

 

We have not been the subject of a bankruptcy, receivership or similar proceedings.

 

Competition

 

We operate in a highly competitive industry, many of our competitors have financial resources, staff and facilities substantially greater than ours. The principal area of competition is encountered in the financial ability to cost effectively acquire prospects and then exploit such prospects. Competition for the acquisition of exploration properties is intense, with many properties available in a competitive bidding process in which we may lack technological information or expertise available to other bidders. Therefore, we may not be successful in acquiring, exploring and developing profitable properties in the face of this competition. No assurance can be given that a sufficient number of suitable exploration properties will be available for acquisition, exploration and development.

 

Employees

 

We have no significant employees other than our officers and directors. We plan to retain independent consultants on a contract basis to conduct the work to carry out our plan of operations.

 

Research and Development Expenditures

 

We have not incurred any research or development expenditures since our incorporation.

 

 
5
 
 

 

Subsidiaries

 

Our Company has one subsidiary business: Evergreen Systems.

 

Patents and Trademarks

 

We do not own, either legally or beneficially, any patent or trademark.

 

Reports to Securities Holders

 

We provide an annual report that includes audited financial information to our shareholders. We will make our financial information equally available to any interested parties or investors through compliance with the disclosure rules of Regulation S-K for a small business issuer under the Securities Exchange Act of 1934. We are subject to disclosure filing requirements including filing Form 10-K annually and Form 10-Q quarterly. In addition, we will file Form 8-K and other proxy and information statements from time to time as required. We do not intend to voluntarily file the above reports in the event that our obligation to file such reports is suspended under the Exchange Act. The public may read and copy any materials that we file with the Securities and Exchange Commission, (“SEC”), at the SEC’s Public Reference Room at 100 F Street NE, Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site (http://www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.

 

ITEM 1A. RISK FACTORS

 

Not applicable.

 

ITEM 1B. UNRESOLVED STAFF COMMENTS

 

Not applicable.

 

 
6
 
 

 

ITEM 2. PROPERTIES

 

We currently do not own any physical property or own any real property. Our principal executive office is located at 19800 MACARTHUR SUITE 300 IRVINE CA 92612.

 

ITEM 3. LEGAL PROCEEDINGS

 

We are not currently involved in any legal proceedings and we are not aware of any pending or potential legal actions.

 

ITEM 4. MINE SAFETY DISCLOSURES

 

Not applicable.

 

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

 

Market Information

 

Shares of our common stock have been quoted on the OTC Markets since December 26, 2008. From December 26, 2008 to June 17, 2009 shares of our common stock were quoted under the symbol “AFCP”, from June 18, 2009 to January 13, 2010 under the symbol “BCKR”, from January 14, 2010 to July 19, 2011 under the symbol “ARGC”, from July 20, 2011 to October 23, 2013 under the symbol “SHRK” and currently, the Company’s shares are quoted under the symbol “EGRN”. The range of high and low closing trading price information for each quarter in the past two years is set forth below. These quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions. 

 

2016 (A)

 

High

 

 

Low

 

 

 

 

 

 

 

 

4th Quarter

 

$ 4.10

 

 

$ 5.00

 

3rd Quarter

 

$ -

 

 

$ -

 

2nd Quarter

 

$ -

 

 

$ -

 

1st Quarter

 

$ -

 

 

$ -

 

 

 

 

 

 

 

 

 

 

2015

 

 

 

 

 

 

 

 

4th Quarter

 

$ -

 

 

$ -

 

3rd Quarter

 

$ -

 

 

$ -

 

2nd Quarter

 

$ -

 

 

$ -

 

1st Quarter

 

$ -

 

 

$ -

 

___________ 

(A)  

The last reported transaction was 100 shares on June 28, 2017 at $3.00 per share

 

 
7
 
 

 

Shareholders

 

As of May 30, 2017, we had 169 shareholders.

 

Dividends

 

We have not, since the date of our incorporation, declared or paid any dividends on our common shares. We anticipate that we will retain future earnings and other cash resources for the operation and development of our business for the foreseeable future. The payment of dividends in the future will depend on our earnings, if any, and our financial condition and such other factors as our board of directors considers appropriate.

 

Equity Compensation Plans

 

We do not currently have any equity compensation plans in place at this time. We have no outstanding options.

 

Recent Sales of Unregistered Securities

 

On September 1, 2016, the Company sold 55,000 shares of its common stock at a price of $0.60 per share to an investor in a private placement. The $33,000 proceeds were paid to Rene Hamouth and recorded as a reduction in the Company’s liability to Mr. Hamouth.

 

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

 

We did not purchase any of our shares of common stock or other securities during the year ended December 31, 2016.

 

ITEM 6. SELECTED FINANCIAL DATA

 

Not applicable.

 

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

The following discussion should be read in conjunction with our most recent audited financial statements which are included in this annual report, and the related notes to such financial statements. This section of this report includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like: believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements, which apply only as of the date of our report. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or our predictions. We have yet to generate revenues to achieve profitability.

 

 
8
 
 

 

Plan of Operations

 

Evergreen-Agra Inc. (hereinafter referred to as the “Company”) was incorporated on June 13, 2008 by filing Articles of Incorporation under the Nevada Secretary of State. The Company was incorporated under the name AMF Capital Group, Inc. In June 2009, the Company changed its name to Blackrock Resources, Inc. In January 2010 the Company changed its name to Artepharm Global Corp. Effective July 20, 2011, the Company changed its name to Sharprock Resources Inc. Effective October 23, 2013 the Company changed its name to Evergreen-Agra, Inc. During the Company’s quarter ended September 30, 2011, the Company shifted its focus from mineral exploration to organic veterinary medical products. In the quarter ended December 31, 2013, the Company shifted its focus to medical marijuana coincident with its acquisition of Evergreen Systems effective November 19, 2013.

 

In May 2017, the Company announced plans to register the company as a closed ended fund to invest in public companies within the pharmaceutical cannabis sector as a whole. 

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. At December 31, 2016, the Company had negative working capital of $1,047,303. Further, the Company has had no revenues from inception on August 15, 2013. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from this uncertainty.

 

The future of the Company is dependent upon its ability to obtain financing and upon future profitable operations. Management has plans to seek additional capital through a private placement of its common stock. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence.

 

Year Ended December 31, 2016 Compared to Year Ended December 31, 2015

 

For the years ended December 31, 2016 and 2015, we had no revenues. Total operating expenses increased $1,011,038 from negative expenses of $56,956 in 2015 to $954,082 in 2016. Stock-based compensation increased $822,994 from $44,000 in 2015 to $866,994 in 2016 as a result of the issuance of 17,339,889 shares of Company common stock to Matthew Rhoden on February 25, 2016 pursuant to an Executive Agreement dated January 4, 2016. Professional fees and other general and administrative expenses increased $55,772 from $11,991 in 2015 to $67,763 in 2016 due to higher professional fees in 2016 as a result of our filing delinquent 2013, 2014 and 2015 periodic reports with the SEC in 2016. Foreign exchange loss increased $132,422 from a gain of $113,747 in 2015 (resulting from a decrease in the Canadian Dollar exchange rate used to translate our liabilities denominated in Canadian Dollars to United States Dollars) to a loss of $18,675 in 2016 (resulting from an increase in the Canadian Dollar exchange rate).

 

Net loss increased $1,011,038 from net income of $56,956 in 2015 to a net loss of $954,082 in 2016. The increase was due to the $822,994 increase in stock-based compensation, the $55,772 increase in professional fees and other general and administrative expenses, and the $132,422 increase in foreign exchange loss explained above.

 

Liquidity and Capital Resources

 

We had a working capital deficit of $1,047,303 at December 31, 2016. At both December 31, 2016 and 2015, we had no cash or cash equivalents. General and administrative expenses paid in 2016 and 2015 were paid directly by or on behalf of our Chairman of the Board of Directors.

 

On September 1, 2016, the Company sold 55,000 shares of its common stock at a price of $0.60 per share to an investor in a private placement. The $33,000 proceeds were paid to Rene Hamouth and recorded as a reduction in the Company’s liability to Mr. Hamouth.

 

 
9
 
 

 

ITEM 8. FINANCIAL STATEMENTS

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Board of Directors and Stockholders of 

Evergreen-Agra, Inc.

 

I have audited the accompanying consolidated balance sheets of Evergreen-Agra, Inc. (the “Company”) as of December 31, 2016 and 2015 and the related consolidated statements of operations, stockholders’ equity, and cash flows for the years ended December 31, 2016 and 2015. These financial statements are the responsibility of the Company’s management. My responsibility is to express an opinion on these financial statements based on my audits.

 

I conducted my audits in accordance with the standards of the Public Company’s Accounting Oversight Board (United States). Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audits provide a reasonable basis for my opinion.

 

In my opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Evergreen-Agra, Inc. as of December 31, 2016 and 2015 and the results of its operations and cash flows for the years ended December 31, 2016 and 2015 in conformity with accounting principles generally accepted in the United States.

 

The accompanying financial statements referred to above have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company’s present financial situation raises substantial doubt about its ability to continue as a going concern. Management’s plans in regard to this matter are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

/s/ Michael T. Studer CPA P.C.                                    

Michael T. Studer CPA P.C.

Freeport, New York

June 13, 2017

 

 
10
 
 

 

Evergreen-Agra, Inc.

(Formerly Sharprock Resources Inc.)

Consolidated Balance Sheets

 

 

 

December 31,
2016

 

 

December 31,
2015

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$ -

 

 

$ -

 

Prepaid expense

 

 

82

 

 

 

82

 

Total current assets

 

 

82

 

 

 

82

 

 

 

 

 

 

 

 

 

 

Equipment, less accumulated depreciation of $4,500 and $3,850, respectively

 

 

-

 

 

 

650

 

 

 

 

 

 

 

 

 

 

Total Assets

 

$ 82

 

 

$ 732

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Deficit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$ 574,742

 

 

$ 547,838

 

Accounts payable - related parties

 

 

472,643

 

 

 

446,109

 

Total current liabilities and total liabilities

 

 

1,047,385

 

 

 

993,947

 

 

 

 

 

 

 

 

 

 

Stockholders’ Equity (Deficit):

 

 

 

 

 

 

 

 

Common Stock, $0.001 par value: 100,000,000 Common Shares Authorized; 42,881,491 and 25,486,602 Shares Issued and Outstanding, respectively

 

 

42,882

 

 

 

25,487

 

Additional paid-in capital

 

 

2,337,464

 

 

 

1,454,865

 

Accumulated deficit

 

 

(3,427,649 )

 

 

(2,473,567 )

Total stockholders’ deficit

 

 

(1,047,303 )

 

 

(993,215 )

 

 

 

 

 

 

 

 

 

Total liabilities and stockholders’ deficit

 

$ 82

 

 

$ 732

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 
11
 
 

 

Evergreen-Agra, Inc.

(Formerly Sharprock Resources Inc.)

Consolidated Statements of Operations

For the Years Ended December 31,

 

 

 

2016

 

 

2015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$ -

 

 

$ -

 

 

 

 

 

 

 

 

 

 

Operating Expenses:

 

 

 

 

 

 

 

 

Officer compensation (stock-based)

 

 

866,994

 

 

 

-

 

Consulting fees (stock-based)

 

 

-

 

 

 

44,000

 

Professional fees

 

 

59,129

 

 

 

7,500

 

Other general and administrative

 

 

8,634

 

 

 

4,491

 

Depreciation of equipment

 

 

650

 

 

 

800

 

Foreign exchange loss (gain)

 

 

18,675

 

 

 

(113,747 )

Total Operating Expenses

 

 

954,082

 

 

 

(56,956 )

 

 

 

 

 

 

 

 

 

Income (Loss) from Operations

 

 

(954,082 )

 

 

56,956

 

 

 

 

 

 

 

 

 

 

Net Income (Loss)

 

$ (954,082 )

 

$ 56,956

 

 

 

 

 

 

 

 

 

 

Net Income (Loss) per Common Share - Basic and Diluted

 

$ (0.02 )

 

$ 0.00

 

 

 

 

 

 

 

 

 

 

Weighted Average Number of Common Shares

 

 

 

 

 

 

 

 

Outstanding - basic and diluted

 

 

42,702,355

 

 

 

36,924,408

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 
12
 
 

 

Evergreen-Agra, Inc.

(Formerly Sharprock Resources Inc.)

Consolidated Statements of Stockholders' Equity

For the Years Ended December 31, 2015 and 2016

 

 

 

Common Stock

 

 

 

 

 

 

 

 

Total

 

 

 

Number
of Shares

 

 

Amount

 

 

Additional

Paid in Capital

 

 

Accumulated

Deficit

 

 

Stockholders'
Equity

 

Balance - December 31, 2014

 

 

44,986,602

 

 

$ 44,987

 

 

$ 1,380,040

 

 

$ (2,530,523 )

 

$ (1,105,496 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares issued to Bram Solloway for services

 

 

100,000

 

 

 

100

 

 

 

43,900

 

 

 

-

 

 

 

44,000

 

Shares reduction relating to resignation of Harpreet Sangha

 

 

(19,600,000 )

 

 

(19,600 )

 

 

19,600

 

 

 

-

 

 

 

-

 

Forgiveness of accounts payable to Rene Hamouth

 

 

-

 

 

 

-

 

 

 

11,325

 

 

 

-

 

 

 

11,325

 

Net income for the year ended December 31, 2015

 

 

-

 

 

 

-

 

 

 

-

 

 

 

56,956

 

 

 

56,956

 

Balance - December 31, 2015

 

 

25,486,602

 

 

 

25,487

 

 

 

1,454,865

 

 

 

(2,473,567 )

 

 

(993,215 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares issued to Matthew Rhoden pursuant to Executive Agreement dated January 4, 2016

 

 

17,339,889

 

 

 

17,340

 

 

 

849,654

 

 

 

-

 

 

 

866,994

 

Private placement on September 1, 2016

 

 

55,000

 

 

 

55

 

 

 

32,945

 

 

 

-

 

 

 

33,000

 

Net loss for the year ended December 31, 2016

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(954,082 )

 

 

(954,082 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance - December 31, 2016

 

 

42,881,491

 

 

$ 42,882

 

 

$ 2,337,464

 

 

$ (3,427,649 )

 

$ (1,047,303 )

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 
13
 
 

 

Evergreen-Agra, Inc.

(Formerly Sharprock Resources Inc.)

Consolidated Statements of Cash Flows

For the Years Ended December 31,

 

 

 

2016

 

 

2015

 

 

 

 

 

 

 

 

Cash Flows from Operating Activities

 

 

 

 

 

 

Net Income (loss)

 

$ (954,082 )

 

$ 56,956

 

Adjustments to reconcile net income (loss) to

 

 

 

 

 

 

 

 

net cash used in operating activities:

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

866,994

 

 

 

44,000

 

Depreciation

 

 

650

 

 

 

800

 

Increase (decrease) in accounts payable

 

 

26,904

 

 

 

(27,041 )

Increase (decrease) in accounts payable - related parties

 

 

59,534

 

 

 

(74,715 )

Net cash used in operating activities

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Net cash used in investing activities

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Net cash provided by financing activities

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Net Increase (Decrease) in Cash

 

 

-

 

 

 

-

 

Cash and cash equivalents at beginning of period

 

 

-

 

 

 

-

 

Cash and cash equivalents at end of period

 

$ -

 

 

$ -

 

 

 

 

 

 

 

 

 

 

Supplemental Cash Flow Information:

 

 

 

 

 

 

 

 

Income taxes paid

 

$ -

 

 

$ -

 

Interest paid

 

$ -

 

 

$ -

 

 

 

 

 

 

 

 

 

 

Non-cash Financing Activities

 

 

 

 

 

 

 

 

Proceeds from private placement paid to related party

 

 

 

 

 

 

 

 

in reduction of account payable to related party

 

$ 33,000

 

 

$ -

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 
14
 
 

 

EVERGREEN-AGRA, INC.

(Formerly Sharprock Resources Inc.)

Notes to Consolidated Financial Statements

For the Years Ended December 31, 2016 and 2015

 

NOTE 1. NATURE OF OPERATIONS

 

Description of Business and History

 

Evergreen-Agra Inc. (hereinafter referred to as the “Company”) was incorporated on June 13, 2008 by filing Articles of Incorporation under the Nevada Secretary of State. The Company was incorporated under the name AMF Capital Group, Inc. In June 2009, the Company changed its name to Blackrock Resources, Inc. In January 2010, the Company changed its name to Artepharm Global Corp. Effective July 20, 2011, the Company changed its name to Sharprock Resources Inc. Effective October 23, 2013 the Company changed its name to Evergreen-Agra, Inc. During the Company’s quarter ended September 30, 2011, the Company shifted its focus from mineral exploration to organic veterinary medical products. In the quarter ended December 31, 2013, the Company shifted its focus to medical marijuana coincident with its acquisition of Evergreen Systems effective November 19, 2013. In May 2017, the Company announced plans to register the Company as a closed ended fund to invest in public companies within the cannabis sector.

 

On November 19, 2013, pursuant to a letter of intent dated September 10, 2013, the Company issued 20,000,000 post-split shares of its common stock to Rene Hamouth in exchange for 100% ownership of Evergreen Systems (“ES”). Except for conducting research on the medical marijuana industry, ES had no assets, liabilities, or business operations prior to the acquisition. At closing, the Company also issued 19,600,000 post-split shares of its common stock to Harpreet Sangha (then director and former chief executive officer of the Company from September 19, 2009 to September 1, 2013) for future services to be rendered and 1,000,000 post-split shares of its common stock to Richard Specht (secretary and director of the Company from September 1, 2013 to November 21, 2014) for services rendered. ES became a wholly owned subsidiary of the Company. The acquisition resulted in a change of control of the Company on November 19, 2013 and was accounted for as a reverse acquisition.

 

NOTE 2. GOING CONCERN UNCERTAINTY

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. At December 31, 2016, the Company had negative working capital of $1,047,303. Further, the Company has had no revenues from inception on August 15, 2013. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from this uncertainty.

 

The future of the Company is dependent upon its ability to obtain financing and upon future profitable operations. Management has plans to seek additional capital through a private placement of its common stock. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence.

 

 
15
 
 

 

NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Principles of Consolidation

 

The accompanying consolidated financial statements include the accounts of Evergreen-Agra, Inc. (from November 19, 2013 to December 31, 2016) and its wholly owned subsidiary ES (from inception on August 15, 2013 to December 31, 2016). All significant intercompany balances and transactions have been eliminated in consolidation.

 

Basis of Presentation

 

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and are expressed in U.S. dollars.

 

Use of Estimates

 

In preparing the consolidated financial statements in conformity with U.S. GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

 

Cash and Cash Equivalents

 

The Company considers all highly liquid instruments with original maturities of three months or less when acquired to be cash equivalents. We had no cash equivalents at December 31, 2015 and 2016.

 

Equipment

 

Equipment is stated at historical cost less accumulated depreciation. Depreciation is provided using the straight-line method over the estimated useful lives of the assets, generally ranging from three to five years.

 

Stock-Based Compensation

 

Stock-based compensation is accounted for at estimated fair value in accordance with Accounting Standards Codification 718, “Compensation – Stock Compensation.”

 

Income Taxes

 

The Company accounts for income taxes under the provisions issued by the FASB which requires recognition of deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns. Under this method, deferred tax liabilities and assets are determined based on the difference between the financial statements and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company computes tax assets benefits for net operating losses carried forward. The potential benefit of net operating losses has not been recognized in these consolidated financial statements because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future years.

 

Income (Loss) Per Common Share

 

The Company reports net income (loss) per share in accordance with provisions of the FASB. The provisions require dual presentation of basic and diluted income (loss) per share. Basic net income (loss) per share excludes the impact of common stock equivalents. Diluted net income (loss) per share utilizes the average market price per share when applying the treasury stock method in determining common stock equivalents. For the periods presented, there were no common stock equivalents outstanding.

 

 
16
 
 

 

Fair Value of Financial Instruments

 

Pursuant to ASC No. 820, “Fair Value Measurements and Disclosures”, the Company is required to estimate the fair value of all financial instruments included on its balance sheet as of December 31, 2015 and 2016. The Company’s financial instruments consist of cash and accounts payable. The Company considers the carrying value of such amounts in the financial statements to approximate their fair value due to the short-term nature of these financial instruments.

 

Reclassification

 

Certain 2015 expense amounts have been reclassified to conform to the current year’s presentation.

 

Recent Accounting Pronouncements

 

Certain accounting pronouncements have been issued by the FASB and other standard setting organizations which are not yet effective and therefore have not yet been adopted by the Company. The impact on the Company’s financial position and results of operations from adoption of these standards is not expected to be material.

 

NOTE 4. ACCOUNTS PAYABLE

 

Accounts payable at December 31, 2016 and 2015 consists of:

 

 

 

2016

 

 

2015

 

Former law firms

 

$ 478,545

 

 

$ 475,048

 

Former audit firms

 

 

7,625

 

 

 

7,625

 

Other service providers

 

 

88,572

 

 

 

65,165

 

Total

 

$ 574,742

 

 

$ 547,838

 

 

At December 31, 2016, $145,273 of the total $574,742 accounts payable is denominated in Canadian Dollars. These accounts payable were translated to United States Dollars using the December 31, 2016 exchange rate of $0.74482.

 

At December 31, 2015, $139,315 of the total $547,838 accounts payable is denominated in Canadian Dollars. These accounts payable were translated to United States Dollars using the December 31, 2015 exchange rate of $0.7215.

 

The above accounts payable represent amounts primarily recorded in the records of Evergreen-Agra, Inc. (formerly Sharprock Resources, Inc.) prior to the reverse acquisition of Evergreen Systems on November 19, 2013. Current management of the Company disputes these recorded liabilities.

 

 
17
 
 

 

NOTE 5. ACCOUNTS PAYABLE – RELATED PARTIES

 

Accounts payable – related parties at December 31, 2016 and 2015 consists of:

 

 

 

2016

 

 

2015

 

 

 

 

 

 

 

 

Harpreet Sangha, chief executive office of the Company from September 19, 2009 to September 1, 2013 and director of the Company from September 19, 2009 to May 4, 2014

 

$ 51,645

 

 

$ 50,264

 

 

 

 

 

 

 

 

 

 

Herminder Rai, chief financial officer of the Company from April 12, 2012 to September 21, 2013 and director of the Company from May 8, 2012 to March 11, 2014

 

 

57,482

 

 

 

55,732

 

 

 

 

 

 

 

 

 

 

Sam Sangha, brother of Harpreet Sangha

 

 

115,951

 

 

 

112,321

 

 

 

 

 

 

 

 

 

 

Rene Hamouth, chief executive officer of the Company from September 1, 2013 to July 17, 2014, director of the Company from September 1, 2013, and Chairman of the board of directors of the Company from July 17, 2014

 

 

12,956

 

 

 

530

 

 

 

 

 

 

 

 

 

 

Craig Alford, director of the Company from October 14, 2011 to September 1, 2013

 

 

234,609

 

 

 

227,262

 

Total

 

$ 472,643

 

 

$ 446,109

 

 

At December 31, 2016, $451,118 of the total $472,643 accounts payable – related parties is denominated in Canadian Dollars. These accounts payable were translated to United States Dollars using the December 31, 2016 exchange rate of $0.74482.

 

At December 31, 2015, $436,992 of the total $446,109 accounts payable – related parties is denominated in Canadian Dollars. These accounts payable were translated to United States Dollars using the December 31, 2015 exchange rate of $0.7215.

 

The above accounts payable represent amounts primarily recorded in the records of Evergreen-Agra, Inc. (formerly Sharprock Resources, Inc.) prior to the reverse acquisition of Evergreen Systems on November 19, 2013. Current management of the Company disputes these recorded liabilities.

 

NOTE 6. COMMON STOCK ISSUANCES

 

Issuances in 2015

 

On June 30, 2015, the Company issued 100,000 shares of its common stock to Bram Solloway for consulting services. The $44,000 estimated fair value of the 100,000 shares of Company common stock has been charged to “Stock-based compensation” in the statement of operations for the three months ended June 30, 2015.

 

On July 2, 2015, the 19,600,000 shares of Company common stock issued to Harpreet Sangha on November 19, 2013 were returned to the Company transfer agent and cancelled due to the resignation of Harpreet Sangha as Chairman of the Board and as a director on May 4, 2014.

 

Issuances in 2016

 

On February 25, 2016, the Company issued 17,339,889 shares of its common stock to Matthew Rhoden pursuant to an Executive Agreement between the Company, Matt Rhoden (the “Executive”) and Rene Hamouth (the “Principal Shareholder”) dated January 4, 2016. The agreement provided for the employment of the Executive as Chief Executive Officer of the Company for a period of 5 years, unless sooner terminated by the Board of Directors. The agreement also provided for the Executive and Principal Stockholder to vote together on all matters presented to the shareholders for vote and for each to grant the other a right of first refusal on shares owned by each during the term of the agreement. The $866,994 estimated fair value of the 17,339,889 shares of Company common stock was charged to “Officer compensation” in the statement of operations for the three months ended March 31, 2016. The 17,339,889 shares of Company common stock were returned to the Company and cancelled on January 13, 2017 due to Mr. Rhoden’s resignation as chief executive officer and director at the Company on January 12, 2017.

 

On September 1, 2016, the Company sold 55,000 shares of its common stock at a price of $0.60 per share to an investor in a private placement. The $33,000 proceeds were paid to Rene Hamouth and recorded as a reduction in the Company’s liability to Mr. Hamouth (see Note 5).

 

 
18
 
 

 

NOTE 7. INCOME TAXES

 

The Company has generated taxable losses for the periods presented. Accordingly, no provisions for income taxes have been recorded.

 

The Company’s effective tax rate differs from the United States Federal income tax rate as follows:

 

 

 

2016

 

 

2015

 

 

 

 

 

 

 

 

Corporate Federal income tax at 35%

 

$ (333,929 )

 

$ 19,934

 

Non-deductible stock-based compensation

 

 

303,448

 

 

 

15,400

 

Non-deductible (non-taxable) foreign exchange (gain) loss

 

 

6,536

 

 

 

(39,811 )

Change in valuation allowance

 

 

23,945

 

 

 

4,477

 

Provision for Income Taxes

 

$ -

 

 

$ -

 

 

At December 31, 2016, the Company has net operating loss carryforwards which expire from 2028 to 2036. The deferred tax asset relating to these net operating loss carryforwards has been fully reserved for at December 31, 2016 and December 31, 2015 since management’s assessment has not yet determined it to be more likely than not that the net operating loss carryforwards will be realized.

 

Current United States income tax laws limit the amount of loss available to be offset against future taxable income when a substantial change in ownership occurs. Therefore, the amount available to offset future taxable income may be limited.

 

NOTE 8. SUBSEQUENT EVENTS

 

On January 13, 2017, the 17,339,889 shares of Company common stock issued to Matthew Rhoden on February 15, 2016 (see NOTE 6) were returned to the Company and cancelled due to the resignation of Matthew Rhoden as chief executive officer and director of the Company on January 12, 2017.

 

Pursuant to a Debt Settlement Agreement dated January 18, 2017 between Rene Hamouth individually and Mark Henley, the Company erroneously issued a total of 102,000 shares of its common stock to Mr. Henley on January 19, 2017 and February 1, 2017. As the agreement was with Rene Hamouth individually (not the Company), Mr. Hamouth delivered 102,000 shares of his common stock to the Company transfer agent for cancellation on July 7, 2017 to correct the erroneous Company issuance of the 102,000 shares of Common stock.

 

On March 1, 2017, the Company issued 25,000 shares of its common stock to its law firm for services rendered. The $15,000 estimated fair value of the 25,000 shares of Company common stock will be charged to “Professional fees” in the statement of operations for the three months ended March 31, 2017.

 

 
19
 
 

 

On March 7, 2017, the Company issued 250,000 shares of its common stock to Jonas LaForge in connection with contemplated transactions with Green – Era consulting and Med – Care Advisors. The conditions for closing were not completed and the Company has requested Mr. LaForge return the 250,000 shares for cancellation.

 

On June 23, 2017, the Company changed its name to Evergreen – Agra Global Investments, Inc.

 

ITEM 9. CHANGES IN AND DISAGREEMENT WITH ACCOUNTANTS ON FINANCIAL DISCLOSURE

 

None.

 

ITEM 9A. CONTROLS AND PROCEDURES

 

Management

 

Mr. Rene Hamouth is our Company’s President and Chairman of the Board of Directors. All references herein to management of the Company is to Mr. Hamouth. He has agreed to allocate his time to the activities of the Company for which he will be compensated.

 

Management’s Report On Internal Control Over Financial Reporting

 

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) of the Exchange Act.

 

Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2016 based on the criteria for effective internal control over financial reporting established in Internal Control--Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) and SEC guidance on conducting such assessments. Based on that evaluation, our management concluded that, during the period covered by this report, such internal controls over financial reporting were not effective to detect the inappropriate application of US GAAP rules as more fully described below. This was due to deficiencies that existed in the design or operation of our internal controls over financial reporting that adversely affected our internal controls and that may be considered to be material weaknesses. 

 

The matters involving internal controls and procedures that our management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: (1) lack of a functioning audit committee due to a lack of a majority of outside directors on our board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; (2) inadequate segregation of duties consistent with control objectives; and (3) ineffective controls over period end financial disclosure and reporting processes. The aforementioned material weaknesses were identified by our Chief Executive Officer and our Chief Financial Officer in connection with the review of our financial statements as of December 31, 2016.

 

Management believes that the material weaknesses set forth in items (2) and (3) above did not have an effect on our financial results. However, management believes that the lack of a functioning audit committee and the lack of a majority of outside directors on our board of directors results in ineffective oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement in our financial statements in future periods. 

 

This Annual Report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit the company to provide only management’s report.

 

 
20
 
 

 

Management’s Remediation Initiatives

 

In an effort to remediate the identified material weaknesses and other deficiencies and enhance our internal controls, we plan to initiate, the following series of measures once we have the financial resources to do so: 

 

We intend to create a position to segregate duties consistent with control objectives and to increase our personnel resources and technical accounting expertise within the accounting function when funds are available to us. In addition, we plan to appoint one or more outside directors to our board of directors who shall be appointed to an audit committee resulting in a fully functioning audit committee who will undertake the oversight in the establishment and monitoring of required internal controls and procedures such as reviewing and approving estimates and assumptions made by management when funds are available to us.

 

Changes in Internal Control over Financial Reporting

 

There were no changes in our internal control over financial reporting that occurred during the last quarter of our fiscal year ended December 31, 2016, which have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

ITEM 9B. OTHER INFORMATION

 

Not applicable.

 

 
21
 
 

 

PART III

 

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

 

The name, age and titles of our executive officers and directors are as follows:

 

Age

Position

 

Rene Hamouth

68

Chairman of the Board, President, Secretary and a Director

Todd Hazlewood

42

Chief Financial Officer and a Director

Facundo I. Bacardi

73

Senior Advisor and a Director

Pol Galido

41

Chief Information Officer and a Director

 

Mr. Rene Hamouth is our Company’s President and Chairman of the Board of Directors. All references herein to management of the Company is to Mr. Hamouth. He has agreed to allocate his time to the activities of the Company for which he will be compensated.

 

Term of Office

 

Our directors are appointed to hold office until the next annual meeting of our stockholders or until their successor is elected and qualified, or until they resign or are removed in accordance with the provisions of the State of Nevada Statutes. Our officers are appointed by our Board of Directors and hold office until removed by the Board.

 

Significant Employees

 

We have no significant employees other than our officers and directors.

 

Family Relationships

 

There are currently no family relationships between any of our board of directors or our executive officers.

 

Committees of the Board of Directors

 

Our Board of Directors acts as our nominating committee and our audit committee; we do not have separate committees that perform these functions.

 

 
22
 
 

 

Involvement in Certain Legal Proceedings

 

Except as disclosed in this annual report, during the past ten years none of the following events have occurred with respect to any of our directors or executive officers:

 

1.

A petition under the Federal bankruptcy laws or any state insolvency law was filed by or against, or a receiver, fiscal agent or similar officer was appointed by a court for the business or property of such person, or any partnership in which he was a general partner at or within two years before the time of such filing, or any corporation or business association of which he was an executive officer at or within two years before the time of such filing;

 

2.

Such person was convicted in a criminal proceeding or is a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses);

 

3.

Such person was the subject of any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from, or otherwise limiting, the following activities:

 

i.

Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity;

ii.

Engaging in any type of business practice; or

 

iii.

Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of Federal or State securities laws or Federal commodities laws;

 

4.

Such person was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described in paragraph (3)(i) above, or to be associated with persons engaged in any such activity;

5.

Such person was found by a court of competent jurisdiction in a civil action or by the Commission to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated;

6.

Such person was found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated;

7.

Such person was the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of:

 

i.

Any Federal or State securities or commodities law or regulation; or

ii.

Any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or

iii.

Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or

 

 

8.

Such person was the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

 

There are currently no legal proceedings to which our officers and directors are a party adverse to us or in which our officers and director has a material interest adverse to us.

 

 
23
 
 

 

Compliance with Section 16 of the Securities Exchange Act

 

Section 16(a) of the Exchange Act requires the executive officers and directors, and persons who beneficially own more than ten percent of our equity securities, to file reports of ownership and changes in ownership with the Securities and Exchange Commission. Officers, directors and greater than ten percent shareholders are required by SEC regulation to furnish us with copies of all Section 16(a) forms they file. We have not received copies of any such forms from our executive officers and directors during the fiscal year ended December 31, 2016.

 

Code of Ethics

 

Our board of directors adopted our code of ethical conduct that applies to all of our employees and directors, including our principal executive officer, principal financial officer, principal accounting officer or controller, and persons performing similar functions.

 

We believe the adoption of our Code of Ethical Conduct is consistent with the requirements of the Sarbanes-Oxley Act of 2002.

 

Our Code of Ethical Conduct is designed to deter wrongdoing and to promote:

 

 

·

Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;

 

·

Full, fair, accurate, timely and understandable disclosure in reports and documents that we file or submit to the Securities & Exchange Commission and in other public communications made by us;

 

·

Compliance with applicable governmental laws, rules and regulations;

 

·

The prompt internal reporting to an appropriate person or persons identified in the code of violations of our Code of Ethical Conduct; and

 

·

Accountability for adherence to the Code.

 

·

We will provide a copy of the Code of Ethics to any person without charge, upon request. Requests can be sent to: 19800 MACARTHUR SUITE 300 IRVINE CA 92612.

 

ITEM 11. EXECUTIVE COMPENSATION

 

Management Compensation

 

The table below summarizes all compensation awarded to, earned by, or paid to our named executive officers during our fiscal years ended December 31, 2016 and 2015.

 

Summary Compensation Table

 

Name and principal position

 

Year

 

 

Salary

($)

 

Bonus ($)

 

Stock

Awards

($)

 

Option

Awards

($)

 

Non-Equity

Incentive Plan

Compensation

($)

 

Non-

Qualified

Deferred

Compensation

Earnings

($)

 

All Other

Compensation

($)

 

Total ($)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rene Hamouth

Chairman (1)

 

2016
2015

 

 

Nil
Nil

 

Nil
Nil

 

Nil
Nil

 

Nil
Nil

 

Nil
Nil

 

Nil
Nil

 

Nil
Nil

 

Nil
Nil

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Todd Hazlewood
Chief Financial Officer (3)

 

2016
2015

 

 

Nil
Nil

 

Nil
Nil

 

Nil
Nil

 

Nil
Nil

 

Nil
Nil

 

Nil
Nil

 

Nil
Nil

 

Nil
Nil

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Matthew Rhoden

Chief Executive Officer (2)

 

2016
2015

 

 

Nil
Nil

 

Nil
Nil

 

$866,994
Nil

 

Nil
Nil

 

Nil
Nil

 

Nil
Nil

 

Nil
Nil

 

$866,994
Nil

 

_____________

(1)

Mr. Rene Hamouth, Chief Executive Officer of the Company from September 1, 2013 to July 17, 2014, director of the Company from September 1, 2013, and Chairman of the Board of Directors of the Company from July 17, 2014

 

 
24
 
 

 

(2)

Mr. Matthew Rhoden, Chief Executive Officer of the Company from January 4, 2016 to January 12, 2017.

(3)

Mr. Todd Hazlewood, Chief Financial Officer of the Company from July 17, 2014

 

Outstanding Equity Awards as of December 31, 2016

 

There were no outstanding equity awards as of December 31, 2016 for each of our named executive officers.

 

Equity Compensation Plans

 

We do not currently have any equity compensation plans at this time.

 

Compensation of Directors

 

The following table provides information regarding compensation during our fiscal years ended December 31, 2016 and 2015 earned by directors who are not executive officers. Our directors who are executive officers do not receive additional compensation for their service as directors and their compensation is disclosed in the “Summary Compensation” Table above.

 

Director Compensation

 

Name

 

Year

Fees Earned or Paid in Cash

 

Stock Awards

Option Awards

 

Non-Equity Incentive Plan Compensation

 

Non-Qualified Deferred Compensation Earnings

 

All Other Compensation (1)

 

Total

 

 

Facundo I Bacardi (1)

 

2016

Nil

 

Nil

Nil

 

Nil

 

Nil

 

Nil

 

Nil

 

 

2015

Nil

Nil

 

Nil

 

Nil

 

Nil

 

Nil

_____________

(1)

Mr. Bacardi was appointed as a director of the Company on December 13, 2013.

 

Employment Contracts

 

There are currently no employment contracts or related arrangements with our executive officers or directors.

 

 
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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

 

The following table sets forth certain information concerning the number of shares of our common stock owned beneficially as of June 30, 2017 by: (i) each person (including any group) known to us to own more than five percent (5%) of any class of our voting securities, (ii) our directors, and or (iii) our officers. Unless otherwise indicated, the stockholder listed possesses sole voting and investment power with respect to the shares shown.

 

Title of Class

 

Name and Address of Beneficial Owner

 

Amount and

Nature

of Beneficial

Ownership

 

 

Percentage

of

Common

Stock(1)

 

 

 

 

 

 

 

 

 

 

Common Stock

 

Rene Hamouth

 

17,243,889 / Direct

 

 

 

66.79 %

 

 

 

 

 

 

 

 

 

 

Common Stock

 

Todd Hazlewood

 

 

100,000

 

 

 

0.39 %

Common Stock

 

Facundo I. Bacardi

 

 

100,000

 

 

 

0.39 %

Common Stock

 

Pol Galido

 

 

225,000

 

 

 

0.87 %

Common Stock

 

Directors and Officers as a Group

 

 

17,668,889

 

 

 

68.44 %

_____________

(1)

A beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares: (i) voting power, which includes the power to vote, or to direct the voting of shares; and (ii) investment power, which includes the power to dispose or direct the disposition of shares. Certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire the shares (for example, upon exercise of an option) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person, the amount of shares outstanding is deemed to include the amount of shares beneficially owned by such person (and only such person) by reason of these acquisition rights. As a result, the percentage of outstanding shares of any person as shown in this table does not necessarily reflect the person’s actual ownership or voting power with respect to the number of shares of common stock actually outstanding on June 30, 2017.

 

 
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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

 

On February 25, 2016, the Company issued 17,339,889 shares of its common stock to Matthew Rhoden pursuant to an Executive Agreement between the Company, Matt Rhoden (the “Executive”) and Rene Hamouth (the “Principal Shareholder”) dated January 4, 2016. The agreement provided for the employment of the Executive as Chief Executive Officer of the Company for a period of 5 years, unless sooner terminated by the Board of Directors. The agreement also provided for the Executive and Principal Stockholder to vote together on all matters presented to the shareholders for vote and for each to grant the other a right of first refusal on shares owned by each during the term of the agreement. The $866,994 estimated fair value of the 17,339,889 shares of Company common stock was charged to “Officer compensation” in the statement of operations for the three months ended March 31, 2016. The 17,339,889 shares of Company common stock were returned to the Company and cancelled on January 13, 2017 due to Mr. Rhoden’s resignation as chief executive officer and director at the Company on January 12, 2017.

On September 1, 2016, the Company sold 55,000 shares of its common stock at a price of $0.60 per share to an investor in a private placement. The $33,000 proceeds were paid to Rene Hamouth and recorded as a reduction in the Company’s liability to Mr. Hamouth.

 

We do not consider any of our directors as being independent under item 407 (a) of Regulation S-K.

 

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

 

Aggregate fees for professional services rendered to us by our auditors during our last two fiscal years are set forth below.

 

 

 

Year Ended

 

 

Year Ended

 

 

 

December 31,
2016

 

 

December 31,
2015

 

 

 

 

 

 

 

 

Audit Fees

 

$ 17,500

 

 

$ 17,500

 

Audit-Related Fees

 

$

nil

 

 

$

nil

 

Tax Fees

 

$

nil

 

 

$

nil

 

All Other Fees

 

$

nil

 

 

$

nil

 

Total

 

$ 17,500

 

 

$ 17,500

 

 

 
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Audit Fees

 

Audit fees are the aggregate fees billed for professional services rendered by our independent auditors for the audit of our annual financial statements, the review of the financial statements included in each of our quarterly reports and services provided in connection with statutory and regulatory filings or engagements.

 

Audit Related Fees

 

Audit related fees are the aggregate fees billed by our independent auditors for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and are not described in the preceding category.

 

Tax Fees

 

Tax fees are fees billed by our independent auditors for tax compliance, tax advice and tax planning.

 

All Other Fees

 

All other fees include fees billed by our independent auditors for products or services other than as described in the immediately preceding three categories.

 

Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Auditors

 

Our entire board of directors acts as our audit committee, and has assumed responsibility for the pre-approval of audit and permitted non-audit services to be performed by our company’s independent auditor. Our Board will, on an annual basis, consider and, if appropriate, approve the provision of audit and non-audit services by our auditors. Thereafter, our Board will, as necessary, consider and, if appropriate, approve the provision of additional audit and non-audit services by our auditors which are not encompassed by our Board’s annual pre-approval and are not prohibited by law.

 

 
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PART IV

 

ITEM 15. EXHIBITS

 

Exhibit No.

Description

3.1

Articles of Incorporation (1)

3.2

Bylaws (1)

3.3

Certificate of Amendment as filed with the Nevada Secretary of State, effective as of November 13, 2009 (2)

3.4

Certificate of Change as filed with the Nevada Secretary of State, filed December 1, 2010 (3)

3.5

Certificate of Correction as filed with the Nevada Secretary of State, filed December 2, 2010 (3)

3.6

Certificate of Amendment as filed with the Nevada Secretary of State, effective as of February 24, 2011 (4)

3.7

Articles of Merger as filed with the Nevada Secretary of State, effective as of July 20, 2011 (5)

10.1

Share Purchase Agreement, dated February 3, 2012, among Sharprock Resources Inc., Credence Holdings Limited, Union Mining Holding Limited, and two individuals who are the beneficial owners of the entire share capital of Union.(6)

10.2

Consulting Contract between the Company and Craig Alford, dated January 1, 2012 (7)

10.3

Letter Agreement between the Company and Resource Energy Development, Inc., dated October 11, 2011 (7)

31.1

Certification of Chief Executive Officer pursuant to Rule 13a-14 and Rule 15d-14(a), promulgated under the Securities and Exchange Act of 1934, as amended (8)

31.2

Certification of Chief Financial Officer pursuant to Rule 13a-14 and Rule 15d-14(a), promulgated under the Securities and Exchange Act of 1934, as amended (8)

32.1

Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (8)

 

Notes

(1)

Incorporated by reference from our Registration Statement on Form S-1, filed with the SEC on September 5, 2008.

(2)

Incorporated by reference from our Current Report on Form 8-K, filed with the SEC on March 3, 2010.

(3)

Incorporated by reference from our Current Report on Form 8-K, filed with the SEC on December 17, 2010.

(4)

Incorporated by reference from our Current Report on Form 8-K, filed with the SEC on March 2, 2011.

(5)

Incorporated by reference from our Current Report on Form 8-K, filed with the SEC on July 20, 2011.

(6)

Incorporated by reference from our Current Report on Form 8-K, filed with the SEC on February 9, 2012.

(7)

Incorporated by reference from our 10-K, filed with the SEC on April 16, 2012.

(8)

Filed herewith

 

 
29
 
 

 

SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

EVERGREEN-AGRA, INC.

Date: July 13, 2017

By:

/s/ Rene Hamouth

Rene Hamouth

President, Chairman of the Board, Secretary and a director

 

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

Signature

Title

Date

/s/ Rene Hamouth

Chairman of the Board,

July 13, 2017

Rene Hamouth

President, Secretary and a director 

 

 

30