8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): June 29, 2021

Marijuana Company of America, Inc.

(Name of registrant in its charter)

Utah	000-27039	98-1246221
(State or jurisdiction of	(Commission File	(IRS Employer
incorporation or organization)	Number)	Identification No.)

633 W. 5th Street, Suite 2826

Los Angeles, CA 90071

Telephone: (888) 777-4362

(Address and Telephone Number of Registrant’s Principal
Executive Offices and Principal Place of Business)

Jesus M. Quintero

Marijuana Company of America, Inc.

633 W. 5th Street, Suite 2826

Los Angeles CA 90071

Telephone: (888) 777-4362

(Name, Address, and Telephone Number for Agent of Service)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425).

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12).

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)).

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)).

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

Title of each class Trading Symbol(s) Name of each exchange on which registered

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This Current Report on Form 8-K of Marijuana Company of America, Inc., a Utah corporation (the “Company”), as well as other filings with the Securities and Exchange Commission (“SEC”), and the Company’s press release contained herein, contain statements relating to future results, plans, assumptions, assessments and information, including certain projections and business trends, that constitute “Forward-Looking Statements” within the meaning of the Private Securities Litigation Reform Act of 1995.

Forward-looking statements include statements concerning plans, objectives, goals, strategies, expectations, future events or performance and underlying assumptions and other statements that are other than statements of historical facts. These statements are often, but not always, made through the use of words or phrases such as “anticipates,” “believes,” “can,” “could,” “may,” “potential,” “should,” “will,” “plans,” “continuing,” “ongoing,” “expects,” “intends to,” and similar words or phrases. Certain statements contained herein are forward-looking statements and, accordingly, involve risks and uncertainties that could cause actual results or outcomes to differ materially from those expressed in such forward-looking statements, including, without limitation, risks related to our business and risks associated with our securities. The Company’s expectations, beliefs and projections are expressed in good faith and are believed by the Company to have a reasonable basis, including without limitations, management’s examination of historical operating trends, and data contained in the Company’s records and other data available from third parties. There can be no assurance that management’s expectations, beliefs or projections will be achieved or accomplished. Certain risks and uncertainties may cause actual results to be materially different from projected results contained in forward-looking statements in this Current Report and in other disclosures. The Company’s future results will depend upon various other risks and uncertainties, including, but not limited to, those detailed in the Company’s other filings with the SEC. Actual results may differ materially from those expressed or implied by forward-looking statements. The Company disclaims any obligation to revise any forward-looking statements to reflect the occurrence, or lack thereof, of events or circumstances after the date such forward-looking statements were made, except as required by law.

Unless otherwise provided in this Current Report on Form 8-K, all references to “we,” “us,” “Company,” “our,” “Marijuana Company of America,” “MCOA,” or the “Registrant” refer to the parent entity, Marijuana Company of America, Inc., a Utah corporation. Unless otherwise indicated in this Current Report on Form 8-K, all references to the Company’s board of directors shall refer to the board of directors of Marijuana Company of America, Inc., a Utah corporation.

Item 1.01 Entry into a Material Definitive Agreement.

Agreement and Plan of Merger

On June 29, 2021, the Company, cDistro Merger Sub, Inc., a Nevada corporation and a wholly-owned subsidiary of the Company (“Merger Sub”), and cDistro, Inc., a privately-held Nevada corporation engaged in the hemp and CBD product distribution business (“cDistro”) entered into an Agreement and Plan of Merger (the “Merger Agreement”) pursuant to which, among other things, Merger Sub agreed to merge with and into cDistro, with cDistro becoming a wholly-owned subsidiary of the Company and the surviving corporation in the merger (the “Merger”). The Merger is intended to qualify for federal income tax purposes as a tax-free reorganization under the provisions of Section 368(a) of the Internal Revenue Code of 1986, as amended.

cDistro distributes high quality hemp-derived cannabinoid products at www.cdistro.com, and is uniquely positioned to take advantage of the developing market opportunity generated by consumers’ growing demand for hemp-derived cannabinoid products and the lack of distribution networks.

Earnout Agreement

In connection to the Merger, the Company and the existing securityholders of cDistro entered into an earnout agreement dated June 29, 2021 (the “Earnout Agreement”), whereby the Company agreed to issue additional common stock to the existing securityholders of cDistro as compensation for the Merger conditioned upon the achievement of certain gross revenue milestones, as more fully detailed therein.

Leak-Out Agreement

On June 29, 2021, in connection with the Merger and the Earnout Agreement, the existing securityholder of cDistro entered into a Lock-Up and Leak-Out Agreement with the Company pursuant to which, among other thing, such shareholder agreed to certain restrictions regarding the resale of the common stock issued pursuant to the Merger for a period of six months from the date of the Merger , as more fully detailed therein.

Board Observation Rights Letter

On June 29, 2021, in connection with the Merger, the Company and the existing securityholder of cDistro executed a board observation rights letter (the “Board Rights Letter”), pursuant to which the Company agreed to grant such securityholder certain board observation rights, in a non-voting observational capacity, as more fully detailed therein.

Employment Agreement

On June 29, 2021, in connection with the Merger, the Company and the Chief Executive Officer of cDistro entered into an employment agreements, pursuant to which that employees will serve as cDistro’s Chief Executive Officer for a 3-year term (the “Employment Agreement”).

Stock Purchase Agreement

On June 29, 2021, in connection with the Merger, the Company and cDistro entered into a stock purchase agreement (the “Stock Purchase Agreement”), pursuant to which the Company agreed to purchase certain shares of cDistro’s common stock. Pursuant to the Stock Purchase Agreement, the Company will purchase 350,000 shares of cDistro common stock at the price of $1.00 per share, with the proceeds to be used by cDistro for general working capital and operational purposes.

The preceding summaries of the Merger Agreement, the Earnout Agreement, the Leak-Out Agreement, the Board Rights Letter, the Employment Agreement and the Stock Purchase Agreement do not purport to be complete and are qualified in their entirety by reference to the full text of the Merger Agreement, the Earnout Agreement, the Leak-Out Agreement, the Board Rights Letter, the Employment Agreement and the Stock Purchase Agreement, respectively, which are filed as Exhibits 2.1, 10.1, 10.2, 10.3, 10.4, and 10.5, respectively, to this Current Report on Form 8-K and incorporated herein by reference.

Item 2.01. Completion of Acquisition or Disposition of Assets.

On June 30, 2021, pursuant to the terms of the Merger Agreement, Merger Sub merged with and into cDistro, with cDistro continuing as the surviving corporation and a wholly-owned subsidiary of the Company. A copy of the certificate of merger merging Merger Sub with and into cDistro is filed herewith as Exhibit 3.1 and incorporated herein by reference.

At the effective time of the Merger, and subject to the terms and conditions of the Merger Agreement, the outstanding shares of common stock of cDistro were converted into the right to receive 265,164,070 shares of the Company’s common stock, with 220,970,059 additional shares of the Company’s common stock conditionally issuable over the 12 months following the Merger pursuant to the Earnout Agreement. The Earnout Agreement provides that the 220,970,059 additional shares of the Company’s common stock that may be issued thereunder will be issued upon the achievement of certain cDistro revenue milestones. Accordingly, the full aggregate common stock consideration that may be issuable in the Merger to the former securityholders of cDistro on a fully-diluted basis, pursuant to the terms of the Earnout Agreement, is a total of 486,134,129 shares. As a result of the Merger, on the date of this filing the Company has 5,333,688,925 shares of common stock issued and outstanding on a fully-diluted basis.

The Merger Agreement contains customary representations, warranties and covenants made by the Company, Merger Sub and cDistro, including representations and covenants relating to obtaining the requisite approvals from each company’s board and shareholders, as applicable, and indemnification of directors and officers. The Merger Agreement provided that consummation of the Merger was subject to certain closing conditions including, but not limited to, obtaining all appropriate consents and closing certificates.

The description of the agreements above are qualified in their entirety by reference to the full text of the agreements filed as Exhibits hereto, which are incorporated herein by reference. These agreements have been included as exhibits to this Current Report on Form 8-K to provide investors and securityholders with information regarding certain of their respective terms and conditions. This information is not intended to provide any financial or other information about the parties to the agreements or their respective subsidiaries or affiliates. The representations, warranties and covenants contained in the agreements are made only for purposes of that agreement and as of specific dates, are solely for the benefit of the parties to the agreements, may be subject to limitations agreed upon by the parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties instead of establishing these matters as facts, and may be subject to standards of materiality applicable to the parties that differ from those applicable to investors. Investors should not rely on the representations, warranties and covenants or any description thereof as characterizations of the actual state of facts or condition of the parties to the agreements or any of their respective subsidiaries or affiliates. Moreover, information concerning the subject matter of the representations, warranties and covenants may change after the dates of the agreements, and such subsequent information may not be fully reflected in public disclosures by the parties to the applicable agreement. The information in these agreements should be considered in conjunction with the entirety of the factual disclosure about the Company in the Company’s public reports filed with the SEC.

Item 3.02 Unregistered Sale of Equity Securities.

The description of the Merger set forth in Item 1.01 of this Current Report on Form 8-K is incorporated into this Item 3.02 by reference. The issuance of the Company’s common stock was made in reliance on the exemption provided by Section 4(a)(2) of the Securities Act of 1933, as amended, for the offer and sale of securities not involving a public offering.

Item 7.01 Regulation FD Disclosure.

On June 30, 2021, the Company issued a press release announcing the consumation of the Merger. A copy of the press release is furnished herewith under the Securities Exchange Act of 1934, as amended, as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

Item 9.01 Financial Statement and Exhibits.

(a) Financial Statements of Business Acquired.

The Company intends to file financial statements required by this Item 9.01(a) under the cover of an amendment to this Current Report on Form 8-K no later than 71 calendar days after the date on which this Form 8-K was required to be filed.

(b) Pro Forma Financial Information.

The Company intends to file pro forma financial information as required by this Item 9.01(b) under the cover of an amendment to this Current Report on Form 8-K no later than 71 calendar days after the date on which this Form 8-K was required to be filed.

(c) Not applicable.

(d) Exhibits 

Exhibit No.	Description
2.1	Agreement and Plan of Merger, dated June 29, 2021, by and among Marijuana Company of America, Inc., cDistro Merger Sub, Inc. and cDistro, Inc.*
3.1	Certificate of Merger merging cDistro Merger Sub, Inc. with and into cDistro, Inc.*
10.1	Form of Earnout Agreement.*
10.2	Form of Lock-Up and Leak-Out Agreement.*
10.3	Form of Board Rights Letter. *
10.4	Form of Stock Purchase Agreement.*
10.5	Form of Employment Agreement. *
99.1	Press Release dated June **, 2021, titled “Marijuana Company of America, Inc. Acquires cDistro, One of the Industry's Fastest Growing Hemp and CBD Product Distributors” *

* Filed herewith.

SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	MARIJUANA COMPANY OF AMERICA, INC.
	By:   /S/ Jesus M. Quintero
Date: July 1, 2021	Name: Jesus M. Quintero Title: Chief Executive Officer

EX-2.1

Exhibit 2.1

FORM OF

AGREEMENT AND PLAN OF MERGER

by and among

Marijuana Company of America, Inc.,

CDistro Merger Sub, Inc.

and

cDistro, Inc. 

Dated as of June 29, 2021

THIS AGREEMENT AND PLAN OF MERGER, dated as of June 29, 2021 (this “Agreement”), by and among Marijuana Company of America, Inc., a Utah corporation (the “Company”), cDistro Merger Sub, Inc., a Nevada corporation and a wholly owned subsidiary of the Company (“Merger Sub”), and cDistro, Inc., a Nevada corporation (“cDistro”).

WHEREAS, the board of directors of the Company has unanimously (a) determined that this Agreement and the transactions contemplated by this Agreement are fair to, and in the best interests of, the Company and its stockholders, (b) adopted, pursuant to NRS 92A.120, this Agreement and the transactions contemplated by this Agreement, (c) directed that this Agreement be submitted for approval by a vote of the Company’s stockholders, and (d) recommended that the Company’s stockholders affirmatively vote to approve this Agreement;

WHEREAS, a majority of the Company’s stockholders entitled to vote on this Agreement have (a) determined that this Agreement and the transactions contemplated by this Agreement are fair to, and in the best interests of, the Company, and (b) approved and declared advisable this Agreement and the transactions contemplated by this Agreement by written consent as provided in NRS 78.320;

WHEREAS, the board of directors of Merger Sub has unanimously (a) adopted, pursuant to NRS 92A.120, this Agreement and the transactions contemplated by this Agreement, (b) determined that this Agreement and the transactions contemplated by this Agreement are fair to, and in the best interests of Merger Sub and Company (as Merger Sub’s sole stockholder), and (c) recommended that Company (as Merger Sub’s sole stockholder) approve this Agreement; and

WHEREAS, concurrently with the execution and delivery of this Agreement, as a condition and inducement to cDistro’s, Company’s and Merger Sub’s willingness to enter into this Agreement, Beach Labs, Inc., as beneficial owner of shares representing, in the aggregate, 100% percent of the issued and outstanding shares of cDistro as of the date of this Agreement, is entering into a leakout agreement with the Company (the “Leakout Agreement”) and an earnout agreement with the Company (the “Earnout Agreement”); and

WHEREAS, pursuant to this Agreement, at the Effective Time, the Company will acquire 1,000,000 shares of the common stock of cDistro, equal to 100% of the issued and outstanding securities of cDistro, so that cDistro will become a wholly owned subsidiary of the Company, and cDistro will acquire shares of the common stock of the Company according to an exchange ratio, with the potential to earn an additional amount of shares as part of the transactions contemplated by this Agreement pursuant to the Earnout Agreement; and

WHEREAS, pursuant to the Earnout Agreement, the parties hereto intend that Beach Labs, Inc. will acquire additional shares of the Company as part of this transaction by reaching certain revenue targets over the twelve months following the Effective Time; and

WHEREAS, for federal income tax purposes, the Company, Merger Sub and cDistro intend that the Merger qualify as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”);

NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements set forth in this Agreement and intending to be legally bound hereby, the parties hereto agree as follows:

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ARTICLE I

THE MERGER

Section 1.1 The Merger. Upon the terms and subject to satisfaction or waiver of the conditions set forth in this Agreement, and in accordance with the NRS, Merger Sub, at the Effective Time, shall be merged with and into cDistro. As a result of the Merger, the separate corporate existence of Merger Sub shall cease and cDistro shall continue as the surviving corporation of the Merger (the “Surviving Corporation”) and shall be a wholly owned subsidiary of the Company.

Section 1.2 Closing. The closing of the Merger (the “Closing”) shall take place on such date as mutually determined by the parties hereto after the satisfaction or waiver of the conditions (excluding conditions that, by their nature, cannot be satisfied until the Closing Date) set forth in Article VI, unless this Agreement has been theretofore terminated pursuant to its terms (the actual date of the Closing being referred to herein as the “Closing Date”). The Closing shall be held at the place previously agreed to in writing by the parties. At the Closing, the parties hereto shall cause the Merger to be consummated by filing a certificate of merger relating to the Merger (the “Certificate of Merger”) with the Secretary of State of the State of Nevada, in such form as required by, and executed in accordance with the relevant provisions of, the NRS (the date and time of such filing, or if another date and time is specified in such filing, such specified date and time, being the “Effective Time”).

Section 1.3 Effect of the Merger. At the Effective Time, the effect of the Merger shall be as provided in the Certificate of Merger, this Agreement and the applicable provisions of the NRS. Without limiting the generality of the foregoing, at the Effective Time, except as otherwise provided herein, all the property, rights, privileges, powers and franchises of cDistro and Merger Sub shall vest in the Surviving Corporation, and all debts, liabilities and duties of cDistro and Merger Sub shall become the debts, liabilities and duties of the Surviving Corporation.

Section 1.4 Certificate of Incorporation; By-laws. At the Effective Time, (i) the Certificate of Incorporation, as amended, of the Surviving Corporation shall be its Certificate of Incorporation and (ii) the By-laws of the Surviving Corporation shall be its By-laws, in each case until thereafter changed or amended as provided therein or applicable federal, state, national, foreign, material local or municipal or other law, statute, constitution, principle of common law, resolution, ordinance, code, edict, decree, rule, regulation, ruling or requirement issued, enacted, adopted, promulgated, implemented or otherwise put into effect by or under the authority of any governmental body or authority (“Law”).

Section 1.5 Directors and Officers of Surviving Corporation. At the Effective Time, the initial directors of the Surviving Corporation shall be the persons designated on Exhibit A hereto, each to hold office in accordance with the Certificate of Incorporation and By-laws of the Surviving Corporation. The initial officers of the Surviving Corporation shall be the persons designated on Exhibit A hereto, each to hold office in accordance with the Certificate of Incorporation and By-laws of the Surviving Corporation.

ARTICLE II 

EXCHANGE AND CONVERSION OF SECURITIES

Section 2.1 Exchange and Conversion of Securities. At the Effective Time, by virtue of the Merger and without any action on the part of the Company, Merger Sub, cDistro or the holders of any of the following securities:

(a) Exchange of Merger Sub Stock for Surviving Corporation Stock. Each share of common stock of Merger Sub issued and outstanding immediately prior to the Effective Time shall be converted into and be exchanged for one newly and validly issued, fully paid and nonassessable share of common stock of the Surviving Corporation. Each stock certificate of Merger Sub evidencing ownership of any such shares shall, as of the Effective Time, evidence ownership of such shares of common stock of the Surviving Corporation. 

(b) Exchange of cDistro Common Stock for Company Common Stock. 1,000,000 shares of Surviving Corporation common stock, representing 100% of cDistro’s outstanding securities issued and outstanding immediately prior to the Effective Time (“cDistro Common Stock”), shall be automatically converted into a right to receive a number of shares of Common Stock of the Company (“Company Common Stock”) equal to $1,200,000 divided by the average closing price of Marijuana Company of America, Inc. common stock for the 20-day period immediately preceding the Effective Time, as reported by OTC Markets, multiplied by 70% (the “Exchange Ratio”).  Pursuant to the Earnout Agreement, up to the additional value of $1,000,000 in Company Common Stock may be issued as compensation. At the Effective Time, all such shares of cDistro Common Stock shall be tendered to Merger Sub. The Exchange Ratio is subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Company relating to the Company’s securities, combinations, recapitalization, reclassifications, extraordinary distributions and similar events.

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ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND MERGER SUB

Except as set forth in the Disclosure Schedule which identifies exceptions by specific section references delivered by the Company and Merger Sub to cDistro prior to the execution of this Agreement (the “Company Disclosure Schedule”), the Company and Merger Sub hereby jointly and severally represent and warrant to cDistro as follows:

Section 3.1 Organization and Qualification; Subsidiaries. Each of the Company and Merger Sub is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada.  Each of the Company and Merger Sub has not agreed nor is it obligated to make, or is bound by any agreements, contract or similar documents under which it may become obligated to make, any future investment in or capital contribution to any other entity.  Each of the Company and Merger Sub has the requisite power and authority and all necessary governmental approvals to own, lease and operate its properties and to carry on its business as it is now being conducted. Each of the Company and Merger Sub is duly qualified or licensed to do business, and is in good standing, in each jurisdiction where the character of the properties owned, leased or operated by it or the nature of its business makes such qualification, licensing or good standing necessary, except for such failures to be so qualified, licensed or in good standing that would not, individually or in the aggregate, have a material adverse effect. The Company does have subsidiaries other than Merger Sub.

Section 3.2 Certificate of Incorporation and By-laws; Corporate Books and Records. The copies of the Company’s Restated Certificate of Incorporation (the “Company Certificate”) and Amended and Restated By-laws (the “Company By-laws”) provided to cDistro are complete and correct copies thereof as in effect on the date hereof. Neither the Company nor Merger Sub is in violation of any of the provisions of the Company or Merger Sub’s Certificate or the Company or Merger Sub’s By-laws. True and complete copies of all minute books of the Company have been made available by the Company to cDistro.

Section 3.3 Capitalization. As of the Effective Time, (A) 4,856,957,259 shares of Company Common Stock (other than treasury shares) will be issued and outstanding, all of which shall be validly issued and fully paid, nonassessable and free of preemptive rights, and (B) 10,143,042,741 shares of Company Common Stock will be held in the treasury of the Company.

Section 3.4 Authority.

(a) Each of the Company and Merger Sub has all necessary corporate power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated by this Agreement. The execution and delivery of this Agreement by the Company and Merger Sub and the consummation by the Company and Merger Sub of the transactions contemplated hereby have been duly and validly authorized by all necessary corporate action and no other corporate proceedings on the part of the Company or Merger Sub and no stockholder votes are necessary to authorize this Agreement or to consummate the transactions contemplated hereby. This Agreement has been duly authorized and validly executed and delivered by each of the Company and Merger Sub and constitutes a legal, valid and binding obligation of each of the Company and Merger Sub, enforceable against each of the Company and Merger Sub in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles.

(b) The Board of Directors of the Company (the “Company Board”), by resolutions duly adopted by unanimous vote by unanimous written consent and not subsequently rescinded or modified in any way (the “Company Board Approval”), has duly (i) determined that this Agreement and the transactions contemplated hereby (including the Merger) are advisable and fair to and in the best interests of the Company and its stockholders, and (ii) approved and adopted this Agreement, and the transactions contemplated hereby (including the Merger). The Company Board Approval constitutes approval of this Agreement and the Merger as required under any applicable state takeover Law and no such state takeover Law is applicable to the Merger or the other transactions contemplated hereby, including, without limitation, the restrictions on business combinations contained in NRS 78.378 through 78.3793, inclusive, and NRS 78.411 through 78.444, inclusive.

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(c) Merger Sub’s Board of Directors, by unanimous written consent, has (i) determined that this Agreement and the transactions contemplated hereby (including the Merger) are advisable and fair to and in the best interests of the Company, as Merger Sub’s sole stockholder, (ii) approved and adopted this Agreement and the transactions contemplated hereby (including the Merger), and (iii) recommended that the Company approve and adopt this Agreement and the transactions contemplated hereby (including the Merger).

Section 3.5 No Conflict; Required Filings and Consents.

(a) The execution and delivery of this Agreement by each of the Company and Merger Sub does not, and the performance of this Agreement by each of the Company and Merger Sub will not, (A) contravene, conflict with or result in a violation of any provision of the Company Certificate or Company By-laws or any equivalent organizational documents of any of its Subsidiaries (including Merger Sub), (B) (assuming that all consents, approvals, authorizations and permits described in Section 3.5(b) have been obtained and all filings and notifications described in Section 3.5(b) have been made and any waiting periods thereunder have terminated or expired) conflict with or violate any Law applicable to the Company or any of its subsidiaries or any order, writ, injunction, judgment or decree to which the Company or Merger Sub, or any of the property or asset of the Company or Merger Sub is subject, bound or affected or (C) require any consent or approval under, result in any breach of or any loss of any benefit under, constitute a change of control or default (or an event which with notice or lapse of time or both would become a default) under or give to others any right of termination, vesting, amendment, acceleration or cancellation of, or result in the creation of a lien or other encumbrance on any property or asset of the Company of Merger Sub pursuant to, any contract or other instrument or obligation, except, with respect to clauses (B) and (C), for any such conflicts, violations, consents, approvals, breaches, losses, defaults or other occurrences which would not, individually or in the aggregate, have a material adverse effect. The execution and delivery of this Agreement by each of the Company and Merger Sub does not, and the performance of this Agreement by each of the Company and Merger Sub will not, contravene, conflict with or result in a violation of any of the terms or requirements of, or give any (a) nation, state, commonwealth, province, territory, county, municipality, district or other jurisdiction of any nature; (b) federal, state, local, municipal, foreign or other government; (c) governmental or quasi-governmental authority of any nature (including any governmental division, department, agency, commission, bureau, instrumentality, official, ministry, fund, foundation, center, organization, unit, body or entity and any court or other tribunal, and for the avoidance of doubt, any taxing authority); or (d) self-regulatory organization (including Nasdaq) (a “Governmental Body”) the right to revoke, withdraw, suspend, cancel, terminate or modify, any authorization that is held by the Company or Merger Sub, except as would not reasonably be expected to be material to the Company or Merger Sub or their respective business.

(b) The execution and delivery of this Agreement by each of the Company and Merger Sub does not, and the performance of this Agreement by each of the Company and Merger Sub will not, require any consent, approval, authorization or permit of, or filing with or notification to, any Governmental Entity or any other person, except (A) under the Exchange Act, the Securities Act, applicable Blue Sky Law and the filing and recordation of the Certificate of Merger as required by the NRS and (B) where failure to obtain such consents, approvals, authorizations or permits, or to make such filings or notifications, would not, individually or in the aggregate, have a material adverse effect.

(c) The execution and delivery of this Agreement by each of the Company and Merger Sub does not, and the performance of this Agreement by the Company and Merger Sub, does not contravene, conflict with or result in a violation or breach of, or result in a default under, any provision of any material agreement, contract, subcontract, lease (whether for real or personal property), mortgage, license, sublicense or other legally binding commitment or undertaking of any nature to which such person is a party or by which such person or any of its assets are bound or affected under applicable Law agreements, document or contract (“Material Contract”), or give any person the right to: (i) declare a default or exercise any remedy under any Company or Merger Sub Material Contract; (ii) any material payment, rebate, chargeback, penalty or change in delivery schedule under any Company or Merger Sub Material Contract; (iii) accelerate the maturity or performance of any Company or Merger Sub Material Contract; or (iv) cancel, terminate or modify any term of any Company or Merger Sub Material Contract, except in the case of any non-material breach, default, penalty or modification.

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(d) The execution and delivery of this Agreement by each of the Company and Merger Sub does not, and the performance of this Agreement by the Company and Merger Sub shall not result in the imposition or creation of any lien, pledge, hypothecation, charge, mortgage, security interest, lease, license, option, easement, reservation, servitude, adverse title, claim, infringement, interference, option, right of first refusal, preemptive right, community property interest or restriction or encumbrance of any nature (including any restriction on the voting of any security, any restriction on the transfer of any security or other asset, any restriction on the receipt of any income derived from any asset, any restriction on the use of any asset and any restriction on the possession, exercise or transfer of any other attribute of ownership of any asset (“Encumbrance”)  upon or with respect to any asset owned or used by the Company or Merger Sub.

(e) Except for the filing of the Certificate of Merger with the Secretary of State of the State of Nevada pursuant to the NRS and the Preferred Stock and holders of notes, the Company or Merger Sub is not nor will it be required to make any filing with or give any notice to, or to obtain any consent from, any person in connection with (x) the execution, delivery or performance of this Agreement, or (y) the consummation of the contemplated transactions, which if individually or in the aggregate were not given or obtained, would reasonably be expected to prevent or materially delay the ability of the Company or Merger Sub to consummate the contemplated transactions. 

Section 3.6 Ownership of Merger Sub; No Prior Activities. Merger Sub is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada. Merger Sub is a direct wholly-owned subsidiary of the Company. Merger Sub has not conducted any activities other than in connection with the organization of Merger Sub, the negotiation and execution of this Agreement and the consummation of the transactions contemplated hereby. Merger Sub has no Subsidiaries.

Section 3.7 Financials.

(a) The consolidated financial statements of the Company as of the period ending December 31, 2020, audited through December 31, 2020 (including the notes thereto) provided by the Company to cDistro (the “Company Financial Statements”) were prepared in accordance with GAAP applied (except as may be indicated in the notes thereto) on a consistent basis throughout the periods indicated (except as may be indicated in the notes thereto), and present fairly the consolidated financial position, results of operations and cash flows of the Company and the consolidated subsidiaries of the Company as of the respective dates thereof and for the respective periods indicated therein. The books and records of the Company and each of its subsidiaries have been, and are being, maintained in accordance with applicable material legal and accounting requirements.

(b) Except as and to the extent set forth on the consolidated balance sheet of the Company and its consolidated subsidiaries included in the Company’s Financial Statements or as otherwise disclosed in the Company Disclosure Schedules, none of the Company, Merger Sub or any of its consolidated subsidiaries has any liabilities, indebtedness, or expense of any kind, whether accrued, absolute, contingent, matured or unmatured (whether or not required to be reflected in the financial statements in accordance with GAAP) or obligations of any nature (whether accrued, absolute, contingent or otherwise) that would be required to be reflected on a balance sheet or in notes thereto prepared in accordance with GAAP, except for normal year-end adjustments and liabilities or obligations incurred in the ordinary course of business that would not, individually or in the aggregate, have a material adverse effect.

(c) Each of the Company and Merger Sub maintains accurate books and records reflecting their assets and liabilities.  The Company has a material weakness in its internal controls as reported in its filings with the Securities and Exchange Commission (the “SEC”).

(d) There have been no formal internal investigations regarding financial reporting or accounting policies and practices discussed with, reviewed by or initiated at the direction of the chief executive officer or chief financial officer or the Company Board of Directors or any committee thereof.  Neither the Company nor its independent auditors have identified (i) any fraud, whether or not material, that involves the Company, its management or other employees who have a role in the preparation of financial statements or the internal accounting controls utilized by the Company or (ii) any claim or allegation regarding any of the foregoing.

(e) Between the date of the Company’s latest unaudited Balance Sheet and the date of this Agreement, the Company has conducted its business only in the ordinary course of business (except for the execution and performance of this Agreement and the discussions, negotiations and transactions related thereto) and there has not been any change, event, circumstance, or development that would reasonably be expected to have a material adverse effect on the business, condition (financial or otherwise), assets, liabilities or results of operations of the Company (a “Company Material Adverse Effect”).  The Company and Merger Sub do not have any knowledge of any Company Material Adverse Effect regarding the preparation and completion of the audit being conducted on the Company’s Financial Statements for the fiscal year ended December 31, 2020.

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Section 3.8 Brokers. No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the Merger based upon arrangements made by or on behalf of the Company or Merger Sub.

Section 3.9 Tax Treatment. Neither the Company nor Merger Sub, has taken or agreed to take any action that would prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code. Neither the Company nor Merger Sub is aware of any agreement, plan or other circumstance that would prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code.

Section 3.10 Litigation. Except as and to the extent disclosed in the Company Disclosure Schedule, (a) there is no suit, claim, action, proceeding or investigation pending or, to the knowledge of the Company or Merger Sub, threatened in writing against the Company or Merger Sub (b) each of the Company and Merger Sub is not subject to any outstanding and unsatisfied order, writ, injunction, decree or arbitration ruling, award or other finding. There is no suit, claim, action, proceeding or investigation pending or, to the knowledge of the Company or Merger Sub, threatened in writing against the Company or Merger Sub that, as of the date hereof, challenges the validity or propriety, or seeks to prevent consummation of, the Merger or any other transaction contemplated by this Agreement.

Section 3.11 Vote Required. The affirmative vote of the holders of a majority of the outstanding shares of Merger Sub Common Stock are the only votes of the holders of any class or series of capital stock or other equity securities of the Company or Merger Sub necessary to approve this Agreement and the transactions contemplated hereby, including the Merger (the “Merger Sub Stockholder Approval”).

Section 3.12    Taxes.

(a)  Except as set forth in the Company Disclosure Schedule, each of the Company and Merger Sub has prepared and timely filed all material tax returns required to be filed relating to any and all taxes concerning or attributable to the Company and Merger Sub and their respective operations other than taxes being disputed, and such tax returns have been completed in accordance with applicable legal requirements in all material respects. Each of the Company and Merger Sub has paid or withheld all taxes required to be paid or withheld with respect to their Employees and have paid over to the appropriate Taxing authority all such taxes. Each of the Company and Merger Sub has executed any outstanding waiver of any statute of limitations on or outstanding extension of the period for the assessment or collection of any Tax.

(b)  Except as set forth in the Company Disclosure Schedule, no audit or other examination of any tax return of the Company or Merger Sub is presently in progress, nor has the Company or Merger Sub been notified in writing of any request for such an audit or other examination.

(c)  Except as set forth in the Company Disclosure Schedule, each of the Company and Merger Sub has no liabilities for unpaid taxes which have not been accrued or reserved on the Company Balance Sheet in accordance with GAAP, and the Company and Merger Sub has not incurred any liability for taxes since the date of the Company Balance Sheet other than in the ordinary course of business. There are no liens on the assets of the Company or Merger Sub relating to or attributable to taxes.  

(d) The Company has not been, during the applicable period specified in Section 897(c)(1)(A)(ii) of the Code, a “United States Real Property Holding Company” within the meaning of Section 897(c)(2) of the Code.  The Company (i) has never been a member of an affiliated group (within the meaning of Code §1504(a)) filing a consolidated federal income Tax Return, (ii) owes no amount under any tax sharing, indemnification or allocation agreement, (iii) has any liability for the taxes of any person (other than the Company) under Treas. Reg. § 1.1502-6 (or any similar provision of state, local or foreign legal requirements), as a transferee or successor, by contract, or otherwise.  Each of the Company or Merger Sub has not constituted either a “distributing corporation” or a “controlled corporation” in a distribution of stock intended to qualify for tax-free treatment under Section 355 of the Code.

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(e)  There is no agreement, plan, arrangement or other contract covering any current or former employee or other service provider of the Company or Merger Sub to which  the Company or Merger Sub is a party or by which the Company or Merger Sub is bound that, considered individually or considered collectively with any other such agreements, plans, arrangements or other contracts, will, or could be expected to, as a result of the transactions contemplated hereby, give rise directly or indirectly to the payment of any amount that would be characterized as an “parachute payment” within the meaning of Section 280G of the Code (or any corresponding or similar provision of state, local or foreign tax law).  No employee, director, consultant or other service provider of the Company or Merger Sub is entitled to receive any additional gross up payment from the Company by reason of any taxes imposed by Section 4999 of the Code.

(f)  There is no contract of the Company or Merger Sub covering any of its employees that, considered individually or considered collectively with any other such contract of the Company or Merger Sub, will, or would reasonably be expected to, as a result of the transactions contemplated hereby (whether alone or upon the occurrence of any additional or subsequent events), give rise directly or indirectly to the payment of any amount that could reasonably be expected to be non-deductible under Section 162(m) of the Code (or any corresponding or similar provision of state, local or foreign Tax Legal Requirements).

Section 3.13    Compliance.  Each of the Company and Merger Sub is not in any material respect in conflict with, or in default or in violation of, any federal, state, local, municipal, foreign or other law, statute, constitution, principle of common law, resolution, ordinance, code, order, edict, decree, rule, regulation, ruling or requirement issued, enacted, adopted, promulgated, implemented or otherwise put into effect by or under the authority of any governmental entity applicable to the Company or Merger Sub or by which the Company or Merger Sub or any of their respective businesses or properties is bound or affected, including, any laws, rules or regulations relating to anticompetitive or unfair pricing or trade practices, false advertising, consumer protection, export or import controls, government contracting, anti-kickback compliance, occupational health and safety, equal employment opportunities, fair employment practices, and sex, race, religious and age discrimination.  There is no judgment, injunction, order or decree binding upon the Company or Merger Sub which has or would reasonably be expected to have the effect of prohibiting or materially impairing the Company’s Merger Sub’s business or the parties’ ability to consummate the transactions contemplated herein.

Section 3.14 Employee Plans.

(a)  The Company has not maintained, established, sponsored, participated in, or contributed to any material plan, program, policy, practice, contract, agreement or other arrangement providing for compensation, severance, termination pay, deferred compensation, performance awards, stock or stock-related awards, fringe benefits or other employee benefits or remuneration of any kind, whether written or unwritten or otherwise, funded or unfunded (herein,  the “Company Employee Plan”), including without limitation, each “employee benefit plan,” within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). The Company is not a party, and never has been a party, to any employment, severance, consulting, relocation, or other agreement or contract under which the Company has a current material obligation (herein, “Company Employee Agreement”). The Company has no commitment to establish any new Company Employee Plan or Company Employee Agreement, to materially modify any Company Employee Plan or Company Employee Agreement (except to the extent required by applicable legal requirements), or to adopt or enter into any Company Employee Plan or Company Employee Agreement. 

(b) The Company has never maintained, established, sponsored, participated in, or contributed to, any (i) Pension Plan which is subject to Title IV of ERISA or Section 412 of the Code; (ii) Multiemployer Plan; (iii) “multiple employer plan” as defined in ERISA or the Code; or (iv) a “funded welfare plan” within the meaning of Section 419 of the Code.  No Company Employee Plan provides health benefits that are not fully insured through an insurance contract.

(c)  Neither the Company nor Merger Sub is in conflict with, or in default under or in violation of, any applicable foreign, federal, state and local laws, regulations, or collective bargaining agreements or arrangements respecting employment, employment practices, terms and conditions of employment, Tax withholding, prohibited discrimination, equal employment, fair employment practices, immigration status, employee safety and health, and wages and hours, except for those conflicts, defaults or violations that, individually or in the aggregate, would not, individually or in the aggregate, have a material adverse effect.

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(d)  Each of the Company and Merger Sub is not a party to any collective bargaining agreement or union contract with respect to the Company employees and no collective bargaining agreement is being negotiated by the Company or Merger Sub.  There is no labor dispute, strike or work stoppage against the Company pending or, to the knowledge of the Company, threatened or reasonably anticipated.  As of the date hereof, there are no actions, suits, claims, or proceedings pending, or, to the knowledge of the Company, threatened against the Company, relating to any labor, safety or discrimination matters involving any the Company employee, including, without limitation, charges of material unfair labor practices or discrimination complaints.

Section 3.15 Real Property. The Company does not currently own, or has ever owned, any real property.

Section 3.16 Takeover Statutes. The Board of Directors of the Company has approved this Agreement and the transactions contemplated hereby as required to render inapplicable to such agreements and transactions any takeover statutes pursuant to the Nevada Revised Statutes, to the extent applicable. To the knowledge of the Company, no other state takeover or similar statute or regulation (each, a “Takeover Statute”) is applicable to the Merger or the other transactions contemplated by this Agreement.

Section 3.17 Intellectual Property. The Company owns, or has the legal and valid right to use, as currently being used by  the Company, all intellectual property owned by, licensed to, or controlled by the Company that is necessary for or used in the business of the Company as presently conducted (“Company IP Rights”), and with respect to Company IP Rights that are owned by the Company, has the right to bring actions for the infringement of such Company IP Rights.

Section 3.18 Assets. The Company owns, and has good and valid title to, or, in the case of leased properties and assets, valid leasehold interests in, all tangible properties or tangible assets and equipment used or held for use in its business or operations or purported to be owned by it, including: (a) all assets reflected on the Company Unaudited Balance Sheet; and (b) all other assets reflected in the books and records of the Company as being owned by the Company.  All of such assets are owned or, in the case of leased assets, leased by the Company free and clear of any Encumbrances.

Section 3.19 Environmental Matters. The Company has complied with all applicable federal, state, local or foreign Law relating to pollution or protection of human health or the environment (including ambient air, surface water, ground water, land surface or subsurface strata), including any Law or regulation relating to emissions, discharges, releases or threatened releases of hazardous materials, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of hazardous material (“Environmental Laws”), which compliance includes the possession by the Company of all permits and other governmental authorizations required under applicable Environmental Laws and compliance with the terms and conditions thereof, except for any failure to be in such compliance that, either individually or in the aggregate, would not reasonably be expected to be material to the Company or its business.  The Company has not received, any written notice or other communication (in writing or otherwise), whether from a Governmental Body or other person, that alleges that the Company is not in compliance with or has liability pursuant to any Environmental Law and, to the knowledge of the Company, there are no circumstances that would reasonably be expected to prevent or interfere with the cDistro’s or any of its Subsidiaries’ compliance in any material respects with any Environmental Law, except where such failure to comply would not reasonably be expected to be material to the Company or its business.  No current or (during the time a prior property was leased or controlled by the Company) prior property leased or controlled by the Company has had a release of or exposure to hazardous materials in material violation of or as would reasonably be expected to result in any material liability of the Company pursuant to Environmental Law.  No consent, approval or governmental authorization of or registration or filing with any Governmental Body is required by Environmental Laws in connection with the execution and delivery of this Agreement or the contemplated transactions.

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ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF CDISTRO

Except as set forth in the Disclosure Schedule which identifies exceptions by specific section references delivered by cDistro to the Company prior to the execution of this Agreement (the “cDistro Disclosure Schedule”), cDistro hereby represents and warrants to the Company as follows:

Section 4.1 Organization and Qualification; Subsidiaries. cDistro is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada.  cDistro has no subsidiaries. cDistro does not own any capital stock of, or any equity, ownership or profit sharing interest of any nature in, or controls directly or indirectly, any other entity.  cDistro is not nor has it otherwise been, directly or indirectly, a party to, member of or participant in any partnership, joint venture or similar business entity.  cDistro has not agreed nor is it obligated to make, or is bound by any agreements, contract or similar documents under which it may become obligated to make, any future investment in or capital contribution to any other entity.  cDistro has the requisite power and authority and all necessary governmental approvals to own, lease and operate its properties and to carry on its business as it is now being conducted. cDistro is duly qualified or licensed to do business, and is in good standing, in each jurisdiction where the character of the properties owned, leased or operated by it or the nature of its business makes such qualification, licensing or good standing necessary, except for such failures to be so qualified, licensed or in good standing that would not, individually or in the aggregate, have a material adverse effect.

Section 4.2 Certificate of Incorporation and By-laws; Corporate Books and Records. The copies of cDistro’s Certificate of Incorporation (the “cDistro Certificate”) and By-laws (the “cDistro By-laws”) as provided to the Company are complete and correct copies thereof as in effect on the date hereof. cDistro is not in violation of any of the provisions of the cDistro Certificate or the cDistro By-laws. True and complete copies of all minute books of cDistro have been made available by cDistro to the Company.

Section 4.3 Capitalization.

(a) The authorized capital stock of cDistro consists of 1,350,000 shares of capital stock consisting of: (i) 1,350,000 shares of Common Stock, par value of $0.0001 per share; and (ii) no shares of preferred stock. As of the Effective Time, 1,000,000 shares of cDistro Common Stock (other than treasury shares) were issued and outstanding, all of which were validly issued and fully paid, nonassessable and free of preemptive rights, (B) 350,000 shares of cDistro Common Stock were held in the treasury of cDistro. As of the Effective Time, 0 shares of preferred stock were authorized, issued or outstanding. All capital stock or other equity securities of cDistro have been issued in compliance with applicable federal and state securities laws. cDistro does not have any subsidiaries.

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(b) Except as otherwise disclosed in the cDistro Disclosure Schedule, as of the Effective Time, there were no options, warrants or other rights, agreements, arrangements or commitments of any character to which cDistro is a party or by which cDistro is bound relating to the issued or unissued capital stock or other equity interests of cDistro, or securities convertible into or exchangeable for such capital stock or other equity interests, or obligating cDistro to issue or sell any shares of its capital stock or other equity interests, or securities convertible into or exchangeable for such capital stock of, or other equity interests in, cDistro. cDistro has not issued any shares of its capital stock, or securities convertible into or exchangeable for such capital stock or other Equity Interests, other than those shares of capital stock reserved for issuance as set forth in this Section 4.3 or the cDistro Disclosure Schedule. cDistro has previously provided the Company with a true and complete list, as of the date hereof, of the shareholders of cDistro.

(c) There are no outstanding contractual obligations of cDistro (A) restricting the transfer of, (B) affecting the voting rights of, (C) requiring the repurchase, redemption or disposition of, or containing any right of first refusal with respect to, (D) requiring the registration for sale of, or (E) granting any preemptive or antidilutive right with respect to, any shares of cDistro Common Stock or any capital stock of, or other equity interests in, cDistro. There are no outstanding contractual obligations of cDistro to provide funds to or make any investment (in the form of a loan, capital contribution or otherwise) in, any person.

(d) cDistro does not have outstanding any bonds, debentures, notes, or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of cDistro on any matter. cDistro has not adopted a stockholders’ rights plan.

Section 4.4 Authority.

(a) cDistro has all necessary corporate power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated by this Agreement. The execution and delivery of this Agreement by cDistro and the consummation by cDistro of the transactions contemplated hereby have been duly and validly authorized by all necessary corporate action and no other corporate proceedings on the part of cDistro and no stockholder votes are necessary to authorize this Agreement or to consummate the transactions contemplated hereby. This Agreement has been duly authorized and validly executed and delivered by cDistro and constitutes a legal, valid and binding obligation of cDistro, enforceable against cDistro in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles.

(b) The Board of Directors of cDistro (the “cDistro Board”) by resolutions duly adopted by unanimous written consent and not subsequently rescinded or modified in any way (the “cDistro Board Approval”), has duly (i) declared that this Agreement and the transactions contemplated hereby (including the Merger) are advisable and fair to, advisable and in the best interests of cDistro and its stockholders, and (ii) approved and adopted this Agreement and the transactions contemplated hereby (including the Merger); and (iii) the Board resolved to recommend  that the stockholders of cDistro adopt this Agreement and vote for the approval of the Merger and directed that this Agreement and the transactions contemplated hereby be submitted for consideration by cDistro’s stockholders in accordance with this Agreement.

Section 4.5 No Conflict; Required Filings and Consents.

(a) The execution and delivery of this Agreement by cDistro does not, and the performance of this Agreement by cDistro will not (A) contravene, conflict with or result in a violation of any provision of the cDistro Certificate or cDistro By-laws, (B) (assuming that all consents, approvals, authorizations and permits described in Section 4.5(b) have been obtained and all filings and notifications described in Section 4.5(b) have been made and any waiting periods thereunder have terminated or expired) conflict with or violate any Law applicable to cDistro or any order, writ, injunction, judgment or decree to which cDistro,  or any of the property or asset of cDistro is subject, bound or affected, or (C) require any consent or approval under, result in any breach of or any loss of any benefit under, constitute a change of control or default (or an event which with notice or lapse of time or both would become a default) under or give to others any right of termination, vesting, amendment, acceleration or cancellation of, or result in the creation of a lien or other encumbrance on any property or asset of cDistro pursuant to, any contract or other instrument or obligation, except, with respect to clauses (B) and (C), for any such conflicts, violations, consents, approvals, breaches, losses, defaults or other occurrences which would not, individually or in the aggregate, have a material adverse effect. The execution and delivery of this Agreement by cDistro does not, and the performance of this Agreement by cDistro will not, contravene, conflict with or result in a violation of any of the terms or requirements of, or give any Governmental Body the right to revoke, withdraw, suspend, cancel, terminate or modify, any authorization that is held by cDistro, except as would not reasonably be expected to be material to cDistro or its business.

(b) The execution and delivery of this Agreement by cDistro does not, and the performance of this Agreement by cDistro will not, require any consent, approval, authorization or permit of, or filing with or notification to, any Governmental Entity or any other person, except (A) under the Exchange Act, the Securities Act, applicable Blue Sky Law and the filing and recordation of the Certificate of Merger as required by the NRS and (B) where failure to obtain such consents, approvals, authorizations or permits, or to make such filings or notifications, would not, individually or in the aggregate, have a material adverse effect.

(c) The execution and delivery of this Agreement by cDistro does not, and the performance of this Agreement by cDistro will contravene, conflict with or result in a violation or breach of, or result in a default under, any provision of any agreement, contract, subcontract, lease (whether for real or personal property), mortgage, license, sublicense or other legally binding commitment or undertaking of any nature to which such person is a party or by which such person or any of its assets are bound or affected under applicable Law agreements, document or contract (“Material Contract”), or give any person the right to: (i) declare a default or exercise any remedy under any cDistro Material Contract; (ii) any material payment, rebate, chargeback, penalty or change in delivery schedule under any cDistro Material Contract; (iii) accelerate the maturity or performance of any cDistro Material Contract; or (iv) cancel, terminate or modify any term of any cDistro Material Contract, except in the case of any non-material breach, default, penalty or modification.

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(d) result in the imposition or creation of any lien, pledge, hypothecation, charge, mortgage, security interest, lease, license, option, easement, reservation, servitude, adverse title, claim, infringement, interference, option, right of first refusal, preemptive right, community property interest or restriction or encumbrance of any nature (including any restriction on the voting of any security, any restriction on the transfer of any security or other asset, any restriction on the receipt of any income derived from any asset, any restriction on the use of any asset and any restriction on the possession, exercise or transfer of any other attribute of ownership of any asset (“Encumbrance”)  upon or with respect to any asset owned or used by cDistro.

(e) Except for the filing of the Certificate of Merger with the Secretary of State of the State of Nevada pursuant to the NRS, cDistro is not nor will it be required to make any filing with or give any notice to, or to obtain any consent from, any person in connection with (x) the execution, delivery or performance of this Agreement, or (y) the consummation of the contemplated transactions, which if individually or in the aggregate were not given or obtained, would reasonably be expected to prevent or materially delay the ability of cDistro to consummate the contemplated transactions. 

Section 4.6 Financial Statements.

(a)  cDistro has delivered to the Company true and complete copies of (i) the unaudited financial statements of cDistro as of the periods ending December 31, 2020 and March 31, 2021, together with related unaudited consolidated statements of income, stockholders’ equity and cash flows, and notes thereto (the “cDistro Financial Statements”) which were prepared in accordance with GAAP applied (except as may be indicated in the notes thereto) on a consistent basis throughout the periods indicated (except as may be indicated in the notes thereto), and present fairly the consolidated financial position, results of operations and cash flows of cDistro as of the respective dates thereof and for the respective periods indicated therein. The books and records of cDistro have been, and are being, maintained in accordance with applicable material legal and accounting requirements.

(b) Except as and to the extent set forth on the balance sheet of cDistro included in the cDistro Financial Statements,  cDistro has no liabilities indebtedness, or expense of any kind, whether accrued, absolute, contingent, matured or unmatured (whether or not required to be reflected in the financial statements in accordance with GAAP) or obligations of any nature (whether accrued, absolute, contingent or otherwise) that would be required to be reflected on a balance sheet or in notes thereto prepared in accordance with GAAP, except for normal year-end adjustments and liabilities or obligations incurred in the ordinary course of business that would not, individually or in the aggregate, have a material adverse effect.

(c) cDistro maintains accurate books and records reflecting their assets and liabilities and maintains a system of internal accounting controls designed to provide reasonable assurance that: (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of the financial statements of cDistro and to maintain accountability of cDistro’s assets; (iii) access to cDistro’s assets is permitted only in accordance with management’s general or specific authorization; (iv) the recorded accountability for cDistro’s  assets is compared with the existing assets at regular intervals and appropriate action is taken with respect to any differences; and (v) accounts, notes and other receivables and inventory are recorded accurately, and proper and adequate procedures are implemented to effect the collection thereof on a current and timely basis.  cDistro maintains internal control over financial reporting that provides reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes.

(d) There have been no formal internal investigations regarding financial reporting or accounting policies and practices discussed with, reviewed by or initiated at the direction of the chief executive officer or chief financial officer or the cDistro Board of Directors or any committee thereof.  Neither cDistro nor its independent auditors have identified (i) any significant deficiency or material weakness in the design or operation of the system of internal accounting controls utilized by cDistro, (ii) any fraud, whether or not material, that involves cDistro, its management or other employees who have a role in the preparation of financial statements or the internal accounting controls utilized by cDistro, or (iii) any claim or allegation regarding any of the foregoing.

(e) Between the date of the cDistro Financial Statements and the date of this Agreement, cDistro has conducted its business only in the ordinary course of business (except for the execution and performance of this Agreement and the discussions, negotiations and transactions related thereto) and there has not been any change, event, circumstance, or development that would reasonably be expected to have a material adverse effect on the business, condition (financial or otherwise), assets, liabilities or results of operations of cDistro (a “cDistro Material Adverse Effect”).

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Section 4.7 Brokers. No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the Merger based upon arrangements made by or on behalf of cDistro.

Section 4.8 Tax Treatment. cDistro, has not taken or agreed to take any action that would prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code. cDistro is not aware of any agreement, plan or other circumstance that would prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code.

Section 4.9 Litigation. Except as and to the extent disclosed in Section 4.9 of the cDistro Disclosure Schedule, (a) there is no suit, claim, action, proceeding or investigation pending or, to the knowledge of cDistro, threatened in writing against cDistro; and (b) cDistro is not subject to any outstanding and unsatisfied order, writ, injunction, decree or arbitration ruling, award or other finding. There is no suit, claim, action, proceeding or investigation pending or, to the knowledge of cDistro, threatened in writing against cDistro that, as of the date hereof, challenges the validity or propriety, or seeks to prevent consummation of, the Merger or any other transaction contemplated by this Agreement.

Section 4.10 Vote Required. The affirmative vote of the holders of a majority of the outstanding shares of cDistro Common Stock are the only votes of the holders of any class or series of capital stock or other equity securities of cDistro necessary to approve this Agreement and the transactions contemplated hereby, including the Merger (the “cDistro Stockholder Approval”).

Section 4.11    Taxes.

(a)  Except as otherwise disclosed on the cDistro Disclosure Schedule, cDistro has prepared and timely filed all material tax returns required to be filed relating to any and all taxes concerning or attributable to cDistro and its operations, and such tax returns have been completed in accordance with applicable legal requirements in all material respects. cDistro has paid or withheld all taxes required to be paid or withheld with respect to their Employees and have paid over to the appropriate Taxing authority all such taxes. cDistro has executed any outstanding waiver of any statute of limitations on or outstanding extension of the period for the assessment or collection of any Tax.

(b)  No audit or other examination of any tax return of cDistro is presently in progress, nor has cDistro been notified in writing of any request for such an audit or other examination.

(c)  cDistro has no liabilities for unpaid taxes which have not been accrued or reserved on the cDistro Balance Sheet in accordance with GAAP, and cDistro has not incurred any liability for taxes since the date of the cDistro Balance Sheet other than in the ordinary course of business. There are no liens on the assets of cDistro relating to or attributable to taxes.  

(d) cDistro has not been, during the applicable period specified in Section 897(c)(1)(A)(ii) of the Code, a “United States Real Property Holding Company” within the meaning of Section 897(c)(2) of the Code.  cDistro (i) has never been a member of an affiliated group (within the meaning of Code §1504(a)) filing a consolidated federal income Tax Return, (ii) owes no amount under any tax sharing, indemnification or allocation agreement, (iii) has any liability for the taxes of any person (other than cDistro) under Treas. Reg. § 1.1502-6 (or any similar provision of state, local or foreign legal requirements), as a transferee or successor, by contract, or otherwise.  cDistro has not constituted either a “distributing corporation” or a “controlled corporation” in a distribution of stock intended to qualify for tax-free treatment under Section 355 of the Code.

(e)  There is no agreement, plan, arrangement or other contract covering any current or former employee or other service provider of cDistro to which cDistro is a party or by which cDistro is bound that, considered individually or considered collectively with any other such agreements, plans, arrangements or other contracts, will, or could be expected to, as a result of the transactions contemplated hereby, give rise directly or indirectly to the payment of any amount that would be characterized as an “parachute payment” within the meaning of Section 280G of the Code (or any corresponding or similar provision of state, local or foreign tax law.  No employee, director, consultant or other service provider of cDistro is entitled to receive any additional gross up payment from cDistro by reason of any taxes imposed by Section 4999 of the Code.

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(f)  There is no contract of cDistro covering any of its employees that, considered individually or considered collectively with any other such contract of cDistro, will, or would reasonably be expected to, as a result of the transactions contemplated hereby (whether alone or upon the occurrence of any additional or subsequent events), give rise directly or indirectly to the payment of any amount that could reasonably be expected to be non-deductible under Section 162(m) of the Code (or any corresponding or similar provision of state, local or foreign Tax Legal Requirements).

Section 4.12 Employee Plans.

(a)  cDistro has not maintained, established, sponsored, participated in, or contributed to any material plan, program, policy, practice, contract, agreement or other arrangement providing for compensation, severance, termination pay, deferred compensation, performance awards, stock or stock-related awards, fringe benefits or other employee benefits or remuneration of any kind, whether written or unwritten or otherwise, funded or unfunded (herein, a “cDistro Employee Plan”), including without limitation, each “employee benefit plan,” within the meaning of Section 3(3) of the ERISA. Except as set forth in the cDistro Disclosure Schedule, cDistro is not a party, and never has been a party, to any employment, severance, consulting, relocation, or other agreement or contract under which cDistro has a current material obligation (herein, a “cDistro Employee Agreement”). cDistro has no commitment to establish any new cDistro Employee Plan or cDistro Employee Agreement, to materially modify any cDistro Employee Plan or cDistro Employee Agreement (except to the extent required by applicable legal requirements), or to adopt or enter into any cDistro Employee Plan or cDistro Employee Agreement. 

(b) cDistro has never maintained, established, sponsored, participated in, or contributed to, any (i) Pension Plan which is subject to Title IV of ERISA or Section 412 of the Code; (ii) Multiemployer Plan; (iii) “multiple employer plan” as defined in ERISA or the Code; or (iv) a “funded welfare plan” within the meaning of Section 419 of the Code.  No cDistro Employee Plan provides health benefits that are not fully insured through an insurance contract.

(c)  cDistro is not in conflict with, or in default under or in violation of, any applicable foreign, federal, state and local laws, regulations, or collective bargaining agreements or arrangements respecting employment, employment practices, terms and conditions of employment, Tax withholding, prohibited discrimination, equal employment, fair employment practices, immigration status, employee safety and health, and wages and hours, except for those conflicts, defaults or violations that, individually or in the aggregate, would not, individually or in the aggregate, have a material adverse effect.

(d)  cDistro is not a party to any collective bargaining agreement or union contract with respect to cDistro employees and no collective bargaining agreement is being negotiated by cDistro.  There is no labor dispute, strike or work stoppage against cDistro pending or, to the knowledge of cDistro, threatened or reasonably anticipated.  As of the date hereof, there are no actions, suits, claims, or proceedings pending, or, to the knowledge of cDistro, threatened against cDistro, relating to any labor, safety or discrimination matters involving any cDistro employee, including, without limitation, charges of material unfair labor practices or discrimination complaints.

Section 4.14 Real Property. cDistro does not currently own, or has ever owned, any real property.

Section 4.15 Takeover Statutes. The Board of Directors of cDistro has approved this Agreement and the transactions contemplated hereby as required to render inapplicable to such agreements and transactions NRS 78.378 through 78.3793, inclusive, and NRS 78.411 through 78.444, inclusive, to the extent applicable. To the knowledge of cDistro, no other state takeover or similar statute or regulation (each, a “Takeover Statute”) is applicable to the Merger or the other transactions contemplated by this Agreement.

Section 4.16 Intellectual Property. cDistro owns, or has the legal and valid right to use, as currently being used by cDistro, all intellectual property owned by, licensed to, or controlled by cDistro that is necessary for or used in the business of cDistro as presently conducted (“cDistro IP Rights”), and with respect to cDistro IP Rights that are owned by cDistro, has the right to bring actions for the infringement of such cDistro IP Rights.

Section 4.17 Assets. cDistro owns, and has good and valid title to, or, in the case of leased properties and assets, valid leasehold interests in, all tangible properties or tangible assets and equipment used or held for use in its business or operations or purported to be owned by it, including: (a) all assets reflected on the cDistro Unaudited Balance Sheet; and (b) all other assets reflected in the books and records of cDistro as being owned by cDistro.  All of such assets are owned or, in the case of leased assets, leased by cDistro free and clear of any Encumbrances.

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Section 4.18 Environmental Matters.

cDistro has complied with all applicable federal, state, local or foreign Law relating to pollution or protection of human health or the environment (including ambient air, surface water, ground water, land surface or subsurface strata), including any Law or regulation relating to emissions, discharges, releases or threatened releases of hazardous materials, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of hazardous material (“Environmental Laws”), which compliance includes the possession by cDistro of all permits and other governmental authorizations required under applicable Environmental Laws and compliance with the terms and conditions thereof, except for any failure to be in such compliance that, either individually or in the aggregate, would not reasonably be expected to be material to cDistro or its business.  cDistro has not received, any written notice or other communication (in writing or otherwise), whether from a Governmental Body or other person, that alleges that cDistro is not in compliance with or has liability pursuant to any Environmental Law and, to the knowledge of cDistro, there are no circumstances that would reasonably be expected to prevent or interfere with the Company’s or any of its Subsidiaries’ compliance in any material respects with any Environmental Law, except where such failure to comply would not reasonably be expected to be material to cDistro or its business.   No current or (during the time a prior property was leased or controlled by cDistro) prior property leased or controlled by cDistro has had a release of or exposure to hazardous materials in material violation of or as would reasonably be expected to result in any material liability of cDistro pursuant to Environmental Law.  No consent, approval or governmental authorization of or registration or filing with any Governmental Body is required by Environmental Laws in connection with the execution and delivery of this Agreement or the contemplated transactions.

ARTICLE V

COVENANTS

Section 5.1 Tax-Free Reorganization Treatment.

(a) The Company and cDistro shall use their commercially reasonable best efforts and shall cause their respective subsidiaries to use their commercially reasonable best efforts, to take or cause to be taken any action necessary for the Merger to qualify as a reorganization within the meaning of Section 368(a) of the Code, except with respect to the Cash Consideration. Neither the Company nor cDistro shall, nor shall they permit any of their respective subsidiaries to, take or cause to be taken any action that could reasonably be expected to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code.

(b) This Agreement is intended to constitute, and the parties hereto hereby adopt this Agreement as, a “plan of reorganization” within the meaning Treasury Regulation Sections 1.368-2(g) and 1.368-3(a). Each of the Company and cDistro shall report the Merger as a reorganization within the meaning of Section 368 of the Code, unless otherwise required pursuant to a “determination” within the meaning of Section 1313(a) of the Code.

Section 5.2 Preparation of the Form 8-K.

As promptly as practicable after the date hereof, the Company shall prepare one or more Current Reports on Form 8-K under the Exchange Act (including any amendments thereof, the “Form 8-K”) as required by the Exchange Act for disclosure of the transactions contemplated hereby.  The Company shall prepare one or more such Form 8-Ks to be filed by Company with the SEC, from time to time after the Closing, as required by applicable Legal Requirements.  Such Form 8-Ks shall comply as to form in all material respects with the applicable provisions of the Exchange Act and the rules and regulations thereunder and shall contain all information regarding cDistro, the Company and the transactions contemplated herein as would be required to be contained in a General Form for Registration of Securities on Form 10, including the consent of cDistro’s independent accountants as to the filing of cDistro’s financial statements contained therein, to the extent applicable, except that cDistro and Company shall be permitted to defer the filing of pro forma financial information to the extent permitted to do so under applicable laws and regulations  (a final draft capable of being filed with the SEC shall be referred to as the “Final Draft Form 8-K”).

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Section 5.3  cDistro Stockholder Approval. cDistro shall use reasonable best efforts to obtain the cDistro Stockholder Approval within twenty (20) business days following the date hereof in compliance with applicable legal requirements.

Section 5.4 Regulatory Matters; Reasonable Best Efforts.

(a) Each party hereto shall cooperate and promptly prepare and file all necessary documentation, to effect all necessary applications, notices, petitions and filings, and shall use reasonable best efforts to take or cause to be taken all actions, and do or cause to be done all things in order to obtain all approvals and authorizations of all governmental entities, necessary or advisable to consummate and make effective, in the most expeditious manner reasonably practicable, the Merger and the other transactions contemplated by this Agreement. cDistro shall have the right to review and approve in advance all characterizations of the information relating to cDistro, on the one hand, and the Company shall have the right to review and approve in advance all characterizations of the information relating to the Company, on the other hand, in either case, that appear in any application, notice, petition or filing made in connection with the Merger or the other transactions contemplated by this Agreement with any governmental entity. cDistro and the Company agree that they will consult and cooperate with each other with respect to the obtaining of all such necessary approvals and authorizations of governmental entities.

(b)  Subject to the terms and conditions set forth in this Agreement, each of the parties hereto shall use its reasonable best efforts (subject to, and in accordance with, applicable legal requirements) to take, or cause to be taken, promptly all actions, and to do, or cause to be done, promptly and to assist and cooperate with the other parties in doing, all things necessary, proper or advisable to consummate and make effective the Merger and the other transactions contemplated by this Agreement, including (i) the obtaining of all necessary consents or waivers from third parties and governmental entities, (ii) the defending of any lawsuits or other legal proceedings, whether judicial or administrative, challenging this Agreement or the consummation of the transactions contemplated by this Agreement, and (iii) the execution and delivery of any additional instruments necessary to consummate the transactions contemplated by this Agreement.  Notwithstanding the foregoing, nothing in this Section 5.4(b) shall (i) limit any applicable rights a party may have to terminate this Agreement pursuant to  Section 7.1 so long as such party has up to then complied in all material respects with its obligations under this  Section 5.4(b) or require any party to offer, accept or agree to (A) dispose or hold separate any part of its businesses, operations, assets or product lines, (B) not compete in any geographic area or line of business, (C) restrict the manner in which, or whether, such party or any of its affiliates may carry on business in any part of the world or (D) pay any consideration (other than ordinary course filing, application or similar fees and charges) to obtain any approval, consent or waiver from a third party necessary, proper or advisable to consummate the transactions contemplated hereby, including the Merger or (iii) require any party to this Agreement to contest or otherwise resist any administrative or judicial action or proceeding, including any proceeding by a private party, challenging any of the transactions contemplated hereby, including the Merger, as violative of any antitrust law.

ARTICLE VI

CLOSING CONDITIONS

Section 6.1 Conditions to Obligations of Each Party Under This Agreement. The respective obligations of each party to effect the Merger and the other transactions contemplated herein shall be subject to the satisfaction at or prior to the Effective Time of the following conditions, any or all of which may be waived, in whole or in part, to the extent permitted by applicable Law:

(a) No Order. No governmental entity, nor any federal or state court of competent jurisdiction or arbitrator shall have enacted, issued, promulgated, enforced or entered any statute, rule, regulation, executive order, decree, judgment, injunction or arbitration award or finding or other order (whether temporary, preliminary or permanent), in any case which is in effect and which prevents or prohibits consummation of the Merger or any other transactions contemplated in this Agreement.

(b) Consents and Approvals. All material consents, approvals and authorizations of any governmental entity required of cDistro, the Company or any of their subsidiaries shall have been obtained.

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(c) Execution and Delivery of Lock-Up and Leak-Out Agreements. The cDistro stockholder listed on attached Schedule A shall execute and deliver to the Company a Lock-Up and Leak-Out agreement on or prior to the Effective Time.  A stockholder shall not receive its respective certificate evidencing its shares of Company Common Stock unless and until it has executed and delivered its Lock-Up and Leak-Out agreement to the Company.

Section 6.2 Additional Conditions to Obligations of the Company and Merger Sub. The obligations of the Company and Merger Sub to effect the Merger and the other transactions contemplated herein are also subject to the following conditions:

(a) Representations and Warranties. The representations and warranties of cDistro contained in this Agreement shall be true and correct (without giving effect to any limitation as to materiality set forth therein) at and as of the Effective Time as if made at and as of such time, except where the failure of such representations and warranties to be true and correct would not, individually or in the aggregate, have a material adverse effect.

(b) Agreements and Covenants. cDistro shall have performed or complied in all material respects with all agreements and covenants required by this Agreement to be performed or complied with by it on or prior to the Effective Time.

(c) No Material Adverse Effect. Since the date hereof, there shall not have been any change, event, occurrence or development that, individually or in the aggregate, has had or could reasonably be expected to have a material adverse effect on cDistro.

(d) Closing Certificates. The Company shall have received a certificate signed by the Chief Executive Officer of cDistro, in his individual and corporate capacity, dated the Effective Time, to the effect that, to his knowledge, the conditions set forth in Section 6.2(a), Section 6.2(b) and Section 6.2(c) have been satisfied.

Section 6.3 Additional Conditions to Obligations of cDistro. The obligation of cDistro to effect the Merger and the other transactions contemplated herein are also subject to the following conditions:

(a) Representations and Warranties. The representations and warranties of the Company and Merger Sub contained in this Agreement shall be true and correct (without giving effect to any limitation as to materiality set forth therein) at and as of the Effective Time as if made at and as of such time, except where the failure of such representations and warranties to be true and correct would not, individually or in the aggregate, have a material adverse effect. 

(b) Agreements and Covenants. The Company and Merger Sub shall have performed or complied in all material respects with all agreements and covenants required by this Agreement to be performed or complied with by each of them on or prior to the Effective Time.

(c) No Material Adverse Effect. Since the date hereof, there shall not have been any change, event, occurrence or development that, individually or, in the aggregate, has had or could reasonably be expected to have a material adverse effect on the Company or Merger Sub.

(d) Closing Certificates. cDistro shall have received a certificate signed by the Chief Executive Officer of the Company, in his individual and corporate capacity, dated the Effective Time, to the effect that, to his knowledge, the conditions set forth in Section 6.3(a), Section 6.3(b) and Section 6.3(c) have been satisfied.

(e) Consents and Approvals. All material consents, approvals and authorizations of any person other than a Governmental Entity required to be set forth in Section 3.5 or Section 4.5 or the related sections of the Company Disclosure Schedule or the cDistro Disclosure Schedule, as applicable, shall have been obtained.

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ARTICLE VII

TERMINATION, AMENDMENT AND WAIVER

Section 7.1 Termination. This Agreement may be terminated, and the Merger contemplated hereby may be abandoned, at any time prior to the Effective Time, by action taken or authorized by the Board of Directors of the terminating party or parties, whether before or after approval of the matters presented in connection with the Merger by the stockholders of the Company or the stockholders of cDistro:

(a) By mutual written consent of cDistro and the Company, by action of their respective Boards of Directors;

(b) By either the Company or cDistro if the Merger shall not have been consummated prior to June 30, 2021 (such date, the “Outside Date”); provided, however, that the right to terminate this Agreement under this Section 7.1(b) shall not be available to any party whose failure to fulfill any obligation under this Agreement (including without limitation such party’s obligations set forth in Section 5.7) has been the cause of, or resulted in, the failure of the Effective Time to occur on or before the Outside Date;

(c) By either the Company or cDistro if any governmental entity shall have issued an order, decree or ruling or taken any other action permanently restraining, enjoining or otherwise prohibiting the transactions contemplated by this Agreement, and such order, decree, ruling or other action shall have become final and non-appealable (which order, decree, ruling or other action the parties shall have used their commercially reasonable best efforts to resist, resolve or lift, as applicable, subject to the provisions of Section 5.7);

(d) By written notice of cDistro (if cDistro is not in material breach of its obligations or its representations and warranties under this Agreement), if there has been a breach by the Company or Merger Sub of any representation, warranty, covenant or agreement contained in this Agreement which (i) would result in a failure of a condition set forth in Section 6.3(a) or 6.3(b); and (ii) cannot be cured prior to the Outside Date; provided that cDistro shall have given the Company written notice, delivered at least twenty (20) days prior to such termination, stating cDistro’s intention to terminate this Agreement pursuant to this Section 7.1(d) and the basis for such termination;

(e) By written notice of the Company (if the Company is not in material breach of its obligations or its representations and warranties under this Agreement), if there has been a breach by cDistro of any representation, warranty, covenant or agreement contained in this Agreement which (i) would result in a failure of a condition set forth in Section 6.2(a) or 6.2(b) and (ii) cannot be cured prior to the Outside Date; provided that the Company shall have given cDistro written notice, delivered at least twenty (20) days prior to such termination, stating the Company’s intention to terminate this Agreement pursuant to this Section 7.1(e) and the basis for such termination; or

(f) By written notice of either cDistro or the Company if (i) the Company Stockholder Approval shall not have been obtained, or (ii) the cDistro Stockholder Approval shall not have been obtained.

Section 7.2 Effect of Termination; Limitation on Liability. In the event of termination of this Agreement by either cDistro or the Company as provided in Section 7.1, this Agreement shall forthwith become void and there shall be no liability or obligation on the part of cDistro or the Company or their respective subsidiaries, officers or directors except (x) with respect to this Section 7.2 and Article VIII and (y) with respect to any liabilities or damages incurred or suffered by a party as a result of the willful and material breach by the other party of any representations, warranties, covenants or other agreements set forth in this Agreement.

Section 7.3 Amendment. To the extent permitted by applicable Law, this Agreement may be amended by the parties, by action taken or authorized by their respective Boards of Directors, at any time before or after approval of the matters presented in connection with the Merger by the stockholders of cDistro and the Company; provided, that after any such approval, no amendment shall be made that by law requires further approval by the Company’s or cDistro’s stockholders, as the case may be, without such further approval. This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties.

Section 7.4 Waiver. At any time prior to the Effective Time, any party hereto may (a) extend the time for the performance of any of the obligations or other acts of the other party hereto, (b) waive any inaccuracies in the representations and warranties of the other party contained herein or in any document delivered pursuant hereto, and (c) waive compliance by the other party with any of the agreements or conditions contained herein.

Section 7.5 Fees and Expenses. Subject to Section 7.2(a), Section 7.2(b) and Section 7.2(c) hereof, all expenses incurred by the parties hereto shall be borne solely and entirely by the party which has incurred the same (including, but not limited to, fees and expenses of counsel, accountants, investment bankers and other advisors).

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ARTICLE VIII

GENERAL PROVISIONS

Section 8.1 Non-Survival of Representations and Warranties. The representations and warranties of cDistro contained in ARTICLE IV of this Agreement, or in any certificate or other writing delivered pursuant hereto or thereto or in connection herewith or therewith, shall survive the Closing until the twelve (12) month anniversary of the Closing Date (the “Survival Period”); provided that the representations and warranties of the Company set forth in Sections 4.1 (Organization; Standing and Power; Subsidiaries), 4.2 (Capital Structure), 4.3 (Authority; Non-Contravention; Necessary Consent), 4.5 (Undisclosed Liabilities), and 4.7 (Taxes) (collectively, the “Specified Representations”) shall survive until the expiration of the applicable statute of limitations applicable to claims related thereto.  The covenants and agreements of the parties hereto contained in this Agreement or in any certificate or other writing delivered pursuant hereto or in connection herewith shall survive the Closing indefinitely or for the shorter period explicitly specified therein, except that for such covenants and agreements that survive for such shorter period, breaches thereof shall survive indefinitely or until the latest date permitted by law.  Notwithstanding the preceding sentences, any breach of representation, warranty, covenant or agreement in respect of which indemnity may be sought under this Agreement shall survive the time at which it would otherwise terminate pursuant to the preceding sentences, if written notice of the inaccuracy or breach thereof giving rise to such right of indemnity shall have been given to the party against whom such indemnity may be sought prior to such time.

Section 8.2 Notices. Any notices or other communications required or permitted under, or otherwise in connection with this Agreement, shall be in writing and shall be deemed to have been duly given when delivered in person or upon confirmation of receipt when transmitted by electronic email transmission (but only if followed by transmittal by national overnight courier or hand for delivery on the next business day) or on receipt after dispatch by registered or certified mail, postage prepaid, addressed, or on the next business day if transmitted by national overnight courier, in each case as follows:

If to cDistro, addressed to it at:

cDistro, Inc.

3450 S. Ocean Blvd., #122

Palm Beach, FL 33480

Attention: Ronald P. Russo, Jr., CEO

Email: rr@cdistro.com 

If to the Company or Merger Sub, addressed to it at:

Marijuana Company of America, Inc.

1340 West Valley Parkway, Suite 205

Escondido, CA 92029 

Attention: Jesus M. Quintero, CEO

Email: jesus@hempsmart.com

Section 8.3 Headings. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

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Section 8.4 Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of Law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner to the end that transactions contemplated hereby are fulfilled to the extent possible.

Section 8.5 Entire Agreement. This Agreement (together with the Exhibits, cDistro Disclosure Schedule and Company Disclosure Schedule and the other documents delivered pursuant hereto) constitutes the entire agreement of the parties and supersedes all prior agreements and undertakings, both written and oral, between the parties, or any of them, with respect to the subject matter hereof, and except as otherwise expressly provided herein, is not intended to confer upon any other person any rights or remedies hereunder.

Section 8.6 Governing Law; Consent to Jurisdiction; Waiver of Trial by Jury.

(a) This Agreement shall be governed by, and construed in accordance with, the Laws of the State of Nevada, without regard to laws that may be applicable under conflicts of laws principles.

(b) Each of the parties hereto hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of any Nevada State court, or Federal court of the United States of America, sitting in Nevada, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement or the agreements delivered in connection herewith or the transactions contemplated hereby or thereby or for recognition or enforcement of any judgment relating thereto, and each of the parties hereby irrevocably and unconditionally (A) agrees not to commence any such action or proceeding except in such courts, (B) agrees that any claim in respect of any such action or proceeding may be heard and determined in such Nevada State court or, to the extent permitted by law, in such Federal court, (C) waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any such action or proceeding in any such Nevada State or Federal court and (D) waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such Nevada State or Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 8.2. Nothing in this Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted by Law.

Section 8.7 Counterparts. This Agreement may be executed in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement.

[Remainder of page intentionally left blank]

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IN WITNESS WHEREOF, the Company, Merger Sub and cDistro have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.

MARIJUANA COMPANY OF AMERICA, INC.

By:	/s/ Jesus M. Quintero
Name: Jesus M. Quintero
Title: Chief Executive Officer

CDISTRO MERGER SUB, INC.

By:	/s/ Jesus M. Quintero
Name: Jesus M. Quintero
Title: President and CEO

CDISTRO, INC.

By:	/s/ Ronald P. Russo, Jr.
Name: Ronald P. Russo, Jr.
Title: President and CEO

EXHIBIT A

DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION

Directors: 

Ronald P. Russo, Jr.

Jesus M. Quintero

Officers:

Ronald P. Russo, Jr. – Chief Executive Officer

Jesus M. Quintero – Chief Financial Officer

A-1

EXHIBIT B

DISCLOSURE SCHEDULES

Company: None

cDistro: None

B-1

SCHEDULE A

LOCK-UP/LEAK-OUT SHAREHOLDER

1. Beach Labs, Inc.

C-1

EX-3.1

Exhibit 3.1

 

 

 

 

EX-10.1

Exhibit 10.1

FORM OF

EARNOUT AGREEMENT

This EARNOUT AGREEMENT (this “Agreement”) is entered into this 28th day of June, 2021, by and between Beach Labs, Inc. (“Beach Labs”) and Marijuana Company of America, Inc. (the “Company,” and together with Beach Labs, the “Parties”). The Parties are entering into this Agreement in connection with Beach Labs’s sale of cDistro, Inc. (cDistro”) to the Company, pursuant to an Agreement and Plan of Merger dated as of June 28, 2021, by and among cDistro, Beach Labs and the Company (the “Merger Agreement”). Capitalized terms used herein without definition shall have the meanings ascribed to such terms in the Merger Agreement.

WHEREAS, as part of the transactions contemplated in the Merger Agreement, Beach Labs shall be entitled to certain additional stock compensation as set forth in the Merger Agreement based upon the financial performance of the Business.

WHEREAS, Beach Labs and the Company have agreed that calculation and payment of such earnout amounts is to be made in accordance with the terms of this Agreement.

NOW, THEREFORE, in consideration of the premises and of the respective covenants and provisions contained herein, Beach Labs and the Company agree as follows:

1. Definitions.

“Budgeted Gross Revenue” means, for the Earnout Period, the amount set forth on Exhibit A.

“Commencement Date” shall mean the first day of the fiscal quarter preceding the Closing Date.

“Earnout Amount” means $250,000, corresponding to a respective Gross Revenue realization of $600,000 for each Earnout Period, with a corresponding Earnout Payment which shall be made in Company common stock based on the Earnout Price Ratio.

“Earnout Payment” means each payment made pursuant to Section 2(a) below.

“Earnout Period” means each complete fiscal quarter following the Commencement Date in which cDistro achieves an initial or consecutive Gross Revenue amount of at least $600,000.

“Earnout Price Ratio” means the valuation formula for the Earnout Payments as defined in Exhibit A attached hereto. The Earnout Price Ratio is subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Company relating to the Company’s securities, combinations, recapitalization, reclassifications, extraordinary distributions and similar events.

“Forecast” means the forecast provided by cDistro to the Company on which the Company’s valuation of the Business was based, which is set forth on Exhibit B.

“Gross Revenue” shall have the meaning assigned to such term in Section 3(a).

“Gross Revenue Statement” shall have the meaning assigned to such term in Section 3(b)(i).

“Independent Accounting Firm” shall have the meaning assigned to such term in Section 3(b)(ii).

“Term” means the period commencing on the Commencement Date and ending on the first anniversary thereof.

“Total Earnout” means $1 million, the payment of which shall be made in Company common stock based on the formula set forth on Exhibit A hereto.

2. Earnout Payment.

(a) Period for Payment. The Budgeted Gross Revenue and Earnout Amount for each Earnout Period shall be as set forth on Exhibit A.

(b) Earnout Payment.

(i) The Company shall, pursuant to Section 3(b), calculate the cDistro Gross Revenue earned and shall pay to Beach Labs the number of shares of Company common stock corresponding to the Earnout Price Ratio applied to the Earnout Amount for each Earnout Period that corresponds to the amount of Gross Revenue set forth in the Earnout table on Exhibit A with respect to such Earnout Period.

(ii) If and when the cumulative Gross Revenue during the Term, as determined pursuant to Section 3, equals or exceeds the Budgeted Gross Revenue for the Term, the Company shall pay to Beach Labs the Earnout Amount attributable to such amount of Gross Revenue set forth in the Earnout table on Exhibit A.

(iii) The Earnout Payment with respect to each Earnout Period shall be paid to Beach Labs as soon as practicable after the amount of the Earnout Payment has been determined and any dispute with respect thereto has been settled pursuant to Section 3.

(iv) Beach Labs shall not be entitled to any interest on any payments under this Agreement.

3. Computation of Gross Revenue.

(a) Calculation of Gross Revenue. “Gross Revenue” shall mean the Gross Revenue of the Business for any Earnout Period, as determined in accordance with GAAP.

(b) Time of Determination.

(i) For each quarter during the Term, the Company shall prepare or cause to be prepared and delivered to Beach Labs, within 10 days after completion by the Company’s independent accountants of their audit or review, as applicable, of the Company’s financial statements, but in no event more than 10 days following the date the Company files its Quarterly Report on Form 10-Q or its Annual Report on Form 10-K, as applicable, a written statement setting forth the computation of Gross Revenue of the Company attributable to cDistro for such quarter (the “Gross Revenue Statement”). During the 10 Business Days immediately following Beach Labs’s receipt of the Gross Revenue Statement and during the period in which any dispute with respect thereto is pending and unresolved, the Company shall provide Beach Labs reasonable access during normal business hours to such books and records of the Company as Beach Labs may reasonably request in order to review and verify the Company’s calculation of Gross Revenue as set forth in the Gross Revenue Statement. The Gross Revenue set forth in such Gross Revenue Statement shall become final and binding upon the Parties 10 Business Days following Beach Labs’s receipt thereof unless Beach Labs gives written notice of their disagreement to the Company prior to such date, setting forth in reasonable detail the basis for such disagreement.

(ii) If Beach Labs shall have any objections to the Company’s calculation of Gross Revenue as set forth on the Gross Revenue Statement, the Company and Beach Labs shall attempt in good faith to reach an agreement as to the matter in dispute. If the Company and Beach Labs fail to resolve such dispute within 20 Business Days after the Company’s receipt of such objection (or such longer period as mutually agreed upon by the Company and Beach Labs), then any such dispute may thereafter be referred by either Party for resolution to the Nonpartisan Accountants. The Company and Beach Labs shall take, or cause to be taken, all actions and do, or cause to be done, all things necessary to cooperate with the Independent Accounting Firm in its resolution of the dispute. The determination of the Independent Accounting Firm shall be made as promptly as practicable and shall be final, binding and conclusive on all parties hereto. The fees and expenses of the Independent Accounting Firm incurred in resolving the dispute shall be borne by Beach Labs, unless the final determination of Gross Revenue, after resolution of such dispute, exceeds the Company’s calculation of Gross Revenue set forth on the Gross Revenue Statement by more than 5%, in which case such fees and expenses shall be borne by the Company.

(c) Time of Payment. Any payments owed to Beach Labs pursuant to this Agreement shall be made within 10 Business Days following the date upon which the applicable Gross Revenue Statement for the relevant quarter of any Earnout Period becomes final and binding pursuant to Section 3(b)(i) above or any dispute with respect to such Gross Revenue Statement is resolved pursuant to Section 3(b)(ii) above.

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4. Management of the Business.

(a) Subject to applicable Law and the provisions of this Section 4 and the Company’s obligations to its shareholders, the Company shall be entitled to do any act (or refrain therefrom) in the conduct of the Business if they act in good faith, consistent with reasonable business practices and reasonably consider such action (or determination not to act) to be necessary and not for the purpose of adversely affecting the Gross Revenue of the Business or impairing the ability of the Business to maximize Gross Revenue; provided that if the Company proposes to take any action outside of the ordinary course of business that could reasonably be expected to have a material adverse effect on Gross Revenue, it shall notify Beach Labs and if Beach Labs reasonably believes that such action would have a material adverse effect on Gross Revenue, then the Company and Seller shall negotiate in good faith with respect to adjusting the Budgeted Gross Revenue for any periods affected thereby or otherwise amending the methodology for calculation of Earnout Payments hereunder.

(b) Notwithstanding the provisions of Section 4(a) above, during the Term, the Company shall:

(i) maintain a financial record keeping system that enables the Company to separately account for all items of revenue and expense of the Business necessary to calculate Gross Revenue hereunder;

(ii) subject to the provisions of Section 4(c) below, enable cDistro’s current management team to retain reasonable authority to make decisions regarding the operation of the Business consistent with maximizing both Gross Revenue and the operating results of the Company; and

(iii) provide the Business with such commercially reasonable personnel, technical and financial resources as are appropriate to operate the Business consistent with the Forecast. The determination of whether such resources are consistent with the level of resources underlying the Forecast shall be measured by ratios, including the ratios of operating expenses to revenue, the ratio of capital expenditures to revenue, the ratio of working capital to revenue and the ratio of Gross Revenue to revenue; provided, that any adjustment to resources shall be subject to a commercially reasonable time frame.

(c) If (i) the Company sells or transfers to an unrelated third party all or substantially all of the Business, including substantially all of the assets used by the Company in conducting the Business, prior to the end of the Term and (ii) such third party does not assume all of the Company’s obligations under this Agreement, then the Company shall pay to Beach Labs (x) the full $250,000 in Earnout for each Earnout Period not yet completed as of the date of such sale or transfer. Such amount will be paid to Beach Labs within 30 days of the closing of such sale or transfer.

5. Miscellaneous.

(a) Entire Agreement. This Agreement and the documents referred to herein contain the entire agreement between the Parties and supersede any prior understandings, agreements, or representations by or between the Parties, written (including electronic) or oral, which may have related to the subject matter hereof in any way.

(b) Succession and Assignment. This Agreement shall be binding upon and inure to the benefit of the Parties named herein and their respective successors and permitted assigns. No Party may assign either this Agreement or any of its rights, interests, or obligations hereunder without the prior written approval of the other Parties, provided that (i) the Company may assign this Agreement or any of its rights, interests, or obligations hereunder to any of its Affiliates without the approval of Beach Labs, provided, that, notwithstanding any such assignment, the Company shall guarantee the payment obligations hereunder, (ii) subject to Section 4(d), the Company may assign this Agreement or any of its rights, interests, or obligations hereunder to a third party in connection with the sale of all or substantially all of the Business to such third party, and (iii) Beach Labs may assign this Agreement or any of its rights, interests, or obligations hereunder to a trust established for the benefit of such shareholders without the approval of the Company.

(c) Counterparts. This Agreement may be executed in two or more counterparts, and by the Parties in separate counterparts, each of which shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement.

(d) Headings. The descriptive headings herein are inserted for convenience of reference only and are not intended to be part of or to affect the meaning or interpretation of this Agreement.

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(e) Governing Law. All questions concerning the construction, validity, and interpretation of this Agreement shall be governed by and construed in accordance with the domestic laws of the State of Nevada, without giving effect to any choice of law or conflict of law provision that would cause the application of the laws of any jurisdiction other than the State of Nevada. Each of the Parties hereto hereby irrevocably and unconditionally consents to submit to the exclusive jurisdiction of the state or federal courts of the State of Nevada for any Litigation arising out of or relating to this Agreement and the transactions contemplated hereby (and agrees not to commence any litigation, proceeding or action relating thereto except in such courts). Each of the Parties hereto hereby irrevocably and unconditionally waives any objection to the laying of venue of any Litigation arising out of this Agreement or the transactions contemplated hereby in the state or federal courts of the State of Nevada and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such Litigation, proceeding or action brought in any such court has been brought in an inconvenient forum. Each Party hereto hereby consents to process being served in any such Litigation by the mailing of a copy thereof to the address set forth in Section 5(h) below and agrees that such service upon receipt shall constitute good and sufficient service of process or notice thereof. Nothing in this Section 5(e) shall affect or eliminate any right to serve process in any other manner contemplated by applicable Law.

(f) Amendments and Waivers. This Agreement may be amended and any provision of this Agreement may be waived only if such amendment or waiver is set forth in a writing executed by each of the Parties. No course of dealing between or among any Persons having any interest in this Agreement shall be deemed effective to modify, amend, or discharge any part of this Agreement or any rights or obligations of any Party under or by reason of this Agreement.

(g) Severability. Whenever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable Law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable Law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Agreement.

(h) Notices. All notices, demands, and other communications given or delivered under this Agreement shall be in writing and shall be deemed to have been given, (a) when received if given in person, (b) on the date of electronic confirmation of receipt if sent by e-mail, facsimile or other wire transmission, (c) three days after being deposited in the U.S. mail, certified or registered mail, postage prepaid, or (d) one day after being deposited with a reputable overnight courier. Notices, demands, and communications to the Parties shall, unless another address is specified in writing, be sent to the address or facsimile number indicated below:

Notices to Beach Labs:

Beach Labs Inc.

3450 S. Ocean Blvd., #122

Palm Beach, FL 33480

Attention: Ronald P. Russo, Jr.

Email: rr@cdistro.com

Notices to the Company:

Marijuana Company of America, Inc.

1340 West Valley Parkway, Suite 205

Escondido, CA 92029

Attention: Jesus M. Quintero, CEO

Email: jesus@hempsmart.com

(i) Expenses. Except for payments to the Independent Accountant, if any, pursuant to Section 3(b)(ii), all costs and expenses (including, without limitation, legal fees and expenses) incurred in connection with this Agreement shall be paid by the Party incurring such costs and expenses, provided, however, that in any collection action brought to enforce the Company’s obligation to make a payment pursuant to Section 3(c) with respect to an Earnout Payment finally determined in accordance with Section 3, the prevailing party shall be entitled to reasonably attorneys’ fees and any other costs incurred in that proceeding in addition to any other relief to which it is entitled.

(j) Incorporation of Exhibits. The Exhibits identified in this Agreement are incorporated herein by reference and made a part hereof.

(k) Construction.

(i) All references in this Agreement to “dollars” or “$” shall mean United States dollars;

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(ii) When a reference is made in this Agreement to a section or article, such reference shall be to a section or article of this Agreement unless otherwise clearly indicated to the contrary.

(iii) Whenever the words “include”, “includes” or “including” are used in this Agreement they shall be deemed to be followed by the words “without limitation.”

(iv) The words “hereof” “hereby” “herein” and “herewith” and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement as a whole and not to any particular provision of this Agreement.

(v) The plural of any defined term shall have a meaning correlative to such defined term, and words denoting any gender shall include all genders. Where a word or phrase is defined herein, each of its other grammatical forms shall have a corresponding meaning.

(vi) A reference to any Party to this Agreement or any other agreement or document shall include such Party’s permitted successors and permitted assigns.

(vii) A reference to any legislation or to any provision of any legislation shall include any modification or re-enactment thereof, any legislative provision substituted therefor and all regulations and statutory instruments issued thereunder or pursuant thereto.

(viii) The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties, and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any provisions of this Agreement.

[Signature Page Follows]

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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above.

COMPANY:
MARIJUANA COMPANY OF AMERICA, INC.
By:	Jesus M. Quintero
Print Name:	Jesus M. Quintero
Its:	Chief Executive Officer
CDISTRO:
CDISTRO, INC.
By:	/s/ Ronald P. Russo, Jr.
Print Name:	Ronald P. Russo, Jr.
Its:	Chief Executive Officer

6

EX-10.2

Exhibit 10.2

FORM OF

LEAK OUT AGREEMENT

This LEAK-OUT AGREEMENT (the “Agreement”) is made as of June 29, 2021 (the “Effective Date”) by and between Marijuana Company of America, Inc. a Utah corporation, (the “Company”), and the undersigned holder of common stock (the “Stockholder”) of the Company.

WHEREAS, to ensure the development of an orderly trading market in the Company’s common stock (“Common Stock”), the Company and the Stockholder intend to enter into this Agreement to provide for the circumstances under which the Stockholder may sell or otherwise dispose of shares of the Company’s securities; and

WHEREAS, pursuant to that certain plan of merger and exchange of even date herewith (the “Merger Agreement”), Stockholder is the holder of 265,164,070 shares of common stock of the Company, and pursuant to that certain earnout agreement of even date herewith (the “Earnout Agreement”), Stockholder may hold additional shares of Common Stock under the Merger Agreement (such Common Stock acquired by the Stockholder pursuant to the Merger Agreement and the Earnout Agreement, the “Leak-out Shares”);

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Company and the undersigned Stockholder agree as follows:

Six Month Restrictions on Sales; Volume Limitations. Beginning on the Effective Date of this Agreement and continuing for six months following the Effective Date, the Stockholder shall have the right to effect open market sales of his, her or its, as the case may be, Leak-out Shares in an aggregate amount not to exceed the Total Monthly Volume month, or the Total Weekly Volume per week.

For purposes of this Agreement, “Total Weekly Volume” and “Total Monthly Volume” shall mean 10% of the total number of shares of the Company’s Common Stock that are actually traded (bought and sold) prior to the Stockholder’s open market sales, as calculated by adding the daily volume of the Common Stock for the day(s) of that week prior to the open market sale. Leak-out Share amounts that may be sold are not cumulative. If the Stockholder waives his, her or its, as the case may be, rights at any time during the Leak-out Period, pursuant to this Section (b) (“Waivable Period”), the calculated Leak-out Share amounts that may be sold for those Waivable Periods shall not accrue and not add to Leak-out Share amounts that may be sold in future period or periods.

Application of this Agreement to Shares Sold or Otherwise Transferred. So long as such sales are made in compliance with the requirements of this Agreement, Leak-out Shares sold in the public market shall thereafter not be subject to the restrictions on sale contained in this Agreement. 

Attempted Transfers. Any attempted or purported sale or other Transfer of any Leak-out Shares by the Stockholder in violation or contravention of the terms of this Agreement shall be null and void ab initio. The Company shall instruct its transfer agent to reject and refuse to transfer on its books any Leak-out Shares that may have been attempted to be sold or otherwise transferred in violation or contravention of any of the provisions of this Agreement and shall not recognize any person or entity.

Broker Authorization. The Stockholder hereby authorizes any and all brokers, for all accounts holding the Stockholder’s Leak-out Shares, to provide directly to the Company, immediately upon the Company’s request, a copy of all account statements showing the Leak-out Shares and all trading activity in the Leak-out Shares during the Leak-out Period.

Acknowledgement of Representation. The Stockholder represents and warrants to the Company that the Stockholder was or had the opportunity to be represented by legal counsel and other advisors selected by Stockholder in connection with this Agreement. The Stockholder has reviewed this Agreement with his, her or its legal counsel and other advisors and understands the terms and conditions hereof.

Legends on Certificates. All Leak-out Shares now or hereafter owned by the Stockholder, except any shares purchased in open market transactions by Stockholders that are not affiliates (as such term is defined under securities laws) of the Company, shall be subject to the provisions of this Agreement and the certificates representing such Leak-out Shares shall bear the following legends:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY STATE SECURITIES LAWS. THEY MAY NOT BE SOLD, ASSIGNED, PLEDGED OR OTHERWISE TRANSFERRED FOR VALUE UNLESS THEY ARE REGISTERED UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR UNLESS THE CORPORATION RECEIVES AN OPINION OF COUNSEL SATISFACTORY TO IT, OR OTHERWISE SATISFIES ITSELF, THAT AN EXEMPTION FROM REGISTRATION IS AVAILABLE.

THE SALE, ASSIGNMENT, GIFT, BEQUEST, TRANSFER, DISTRIBUTION, PLEDGE, HYPOTHECATION OR OTHER ENCUMBRANCE OR DISPOSITION OF THE SHARES REPRESENTED BY THIS CERTIFICATE IS RESTRICTED BY AND MAY BE MADE ONLY IN ACCORDANCE WITH THE TERMS OF A LEAK-OUT AGREEMENT, A COPY OF WHICH MAY BE EXAMINED AT THE OFFICE OF THE CORPORATION.

Governing Law; Venue. All disputes arising under this Agreement shall be governed by and interpreted in accordance with the laws of the State of Nevada, without regard to principles of conflict of laws.  Any action brought by either party against the other concerning the transactions contemplated by this Agreement must be brought only in the civil or state courts of Nevada or in the federal courts located in the State of Nevada.  Both parties and the individual signing this Agreement on behalf of the Company agree to submit to the jurisdiction of such courts.  The prevailing party shall be entitled to recover from the other party its reasonable attorney’s fees and costs.  In the event that any provision of this Agreement is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conformed with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or unenforceability of any other provision of this Agreement. Nothing contained herein shall be deemed or operate to preclude the Stockholder from bringing suit or taking other legal action against the Company in any other jurisdiction to collect on the Company’s obligations to the Stockholder, to realize on any collateral or any other security for such obligations, or to enforce a judgment or other decision in favor of the Stockholder. 

Binding Effect. This Agreement will be binding upon and inure to the benefit of the Company, its successors and assigns and to the Stockholder and their respective permitted heirs, personal representatives, successors and assigns.

Entire Understanding. This Agreement sets forth the entire agreement and understanding of the parties hereto in respect of the subject matter hereof and the transactions contemplated hereby and supersedes all prior written and oral agreements, arrangements and understandings relating to the subject matter hereof. This Agreement may only be changed by an agreement in writing, mutually signed by the Company and the Stockholder subject to this Agreement.

Remedies. The parties hereto acknowledge that money damages are not an adequate remedy for violations of this Agreement and that any party may, in such party’s sole discretion, apply to any court of competent jurisdiction for specific performance or injunctive relief or such other relief as such court may deem just and proper in order to enforce this Agreement or prevent any violation hereof and, to the extent permitted by applicable law, each party hereto waives any objection to the imposition of such relief. All rights, powers and remedies provided under this Agreement or otherwise available in respect hereof, whether at law or in equity, shall be cumulative and not alternative, and the exercise or beginning of the exercise of any thereof by any party hereto shall not preclude the simultaneous or later exercise of any other such right, power or remedy by such party.

Counterparts. This Agreement may be executed by facsimile and in any number of counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument. Each counterpart may consist of a number of copies each signed by less than all, but together signed by all, of the parties hereto.

IN WITNESS WHEREOF, this Agreement has been signed as of the date first above written.

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MARIJUANA COMPANY OF AMERICA, INC.

__/s/ Jesus M. Quintero_________________________ 

By: Jesus M. Quintero

Title: Chief Executive Officer

IN WITNESS WHEREOF, the undersigned have caused this Leak-out Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

Name of Stockholder:

BEACH LABS, INC.

__/s/ Ronald P. Russo, Jr._____________________

Name of Authorized Signatory: Ronald P. Russo, Jr.

Title of Authorized Signatory: CEO

3

EX-10.3

Exhibit 10.3

FORM OF

OBSERVATION RIGHTS LETTER

Marijuana Company of America, Inc.

1340 West Valley Parkway, Suite 205

Escondido, CA 92029

June 29, 2021

Beach Labs Inc.

3450 S. Ocean Blvd., #122

Palm Beach, FL 33480

Attention: Ronald P. Russo, Jr.

Email: rr@cdistro.com

Re: Observation Rights

Dear Mr. Russo:

This letter will confirm our agreement that effective upon the consummation of the merger and share exchange between Marijuana Company of America, Inc. (the “Company”), cDistro Merger Sub, Inc. (“Merger Sub”), and cDistro, Inc. (“cDistro”) resulting in the Company’s acquisition of cDistro from Beach Labs, Inc. ( “Beach Labs”), and for so long as you personally continue to serve as an executive member of cDistro’s management, you will be entitled to the following board observation rights, in addition to rights to certain non-public financial information, inspection rights and other rights that you may be entitled to pursuant to the Agreement and Plan of Merger, Exchange Agreement, and Earnout Agreement among the Company and Beach Labs, each dated as of the date hereof:

The Company shall permit one representative of the Beach Labs (the “Observer”) to attend all meetings of the Board of Directors in a non-voting observer capacity (except as expressly provided herein), which observation right shall include the ability to participate in discussions of the Board of Directors, and shall provide such representative with copies of all notices, minutes, written consents, and other materials that it provides to members of the Board of Directors, at the time it provides them to such members. The observation right must be exercised in person.

Observer agrees, on behalf of itself and any representative exercising the observation rights set forth herein, that so long as it shall exercise its observation right (i) it shall hold in strict confidence all information and materials that it may receive or be given access to in connection with meetings of the Board of Directors and to act in a fiduciary manner with respect to all information so provided (provided that this shall not limit its ability to discuss such matters with its officers, directors or legal counsel, as necessary), and (ii) the Board of Directors may withhold from it certain information or material furnished or made available to the Board of Directors or exclude it from certain confidential “closed sessions” of the Board of Directors if the furnishing or availability of such information or material or its presence at such “closed sessions” would jeopardize the Company’s attorney-client privilege or if the Board of Directors otherwise reasonably so requires.

The rights described herein shall terminate and be of no further force or effect upon the cessation of your employment as a member of management of cDistro.

[remainder of page intentionally left blank]

Very truly yours,
MARIJUANA COMPANY OF AMERICA, INC.
By:	/s/ Jesus M. Quintero
Name:	Jesus M. Quintero
Title:	CEO

ACKNOWLEDGED AND AGREED:
Beach Labs, Inc.
By:	/s/ Ronald P. Russo, Jr.
Name:	Ronald P. Russo, Jr.
Title:	CEO

[signature page to Beach Labs Observation Rights Letter]

EX-10.4

Exhibit 10.4

FORM OF

COMMON STOCK PURCHASE AGREEMENT

COMMON STOCK PURCHASE AGREEMENT (the “Agreement”), dated as of June 29, 2021, by and between CDISTRO, INC., a Nevada corporation (the “Company”), and MARIJUANA COMPANY OF AMERICA, INC., a Utah corporation (the “Buyer”). Capitalized terms used herein and not otherwise defined herein are defined in Section 10 hereof.

WHEREAS:

Subject to the terms and conditions set forth in this Agreement, the Company wishes to sell to the Buyer, and the Buyer wishes to buy from the Company, Three Hundred Fifty Thousand ($350,000) of the Company’s common stock, par value $0.001 per share (the “Common Stock”) at the price of $1.00 per share. The shares of Common Stock to be purchased hereunder are referred to herein as the “Commitment Shares.”

NOW THEREFORE, the Company and the Buyer hereby agree as follows:

1. PURCHASE OF COMMON STOCK.

Subject to the terms and conditions set forth in this Agreement, the Company has the right to sell to the Buyer, and the Buyer has the obligation to purchase from the Company, Commitment Shares as follows:

Purchases of Common Stock. Buyer shall purchase from the Company the Commitment Shares and pay to the Company as the purchase price therefor, via wire transfer, Three Hundred Fifty Thousand Dollars ($350,000) (such purchase the “Purchase”). The parties acknowledge the prior deposit of $35,000 into escrow with Independent Law, PLLC towards the Purchase. Upon issuance and payment therefor as provided herein, such Commitment Shares shall be validly issued and are fully paid and non-assessable. The Commitment Shares shall be issued with restrictive legend.

2. BUYER’S REPRESENTATIONS AND WARRANTIES.

The Buyer represents and warrants to the Company that as of the date hereof and as of the Commencement Date:

(a) Investment Purpose. The Buyer is entering into this Agreement and acquiring the Commitment Shares (the “Securities”), for its own account for investment only and not with a view towards, or for resale in connection with, the public sale or distribution thereof; provided however, by making the representations herein, the Buyer does not agree to hold any of the Securities for any minimum or other specific term.

(b) Accredited Investor Status. The Buyer is an “accredited investor” as that term is defined in Rule 501(a)(3) of Regulation D.

(c) Information. The Buyer has been furnished with all materials relating to the business, finances and operations of the Company and materials relating to the offer and sale of the Securities that have been reasonably requested by the Buyer. The Buyer understands that its investment in the Securities involves a high degree of risk. The Buyer (i) is able to bear the economic risk of an investment in the Securities including a total loss, (ii) has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of the proposed investment in the Securities and (iii) has had an opportunity to ask questions of and receive answers from the officers of the Company concerning the financial condition and business of the Company and other matters related to an investment in the Securities.

(d) No Governmental Review. The Buyer understands that no United States federal or state agency or any other government or governmental agency has passed on or made any recommendation or endorsement of the Securities or the fairness or suitability of the investment in the Securities nor have such authorities passed upon or endorsed the merits of the offering of the Securities.

(e) Validity; Enforcement. This Agreement has been duly and validly authorized, executed and delivered on behalf of the Buyer and is a valid and binding agreement of the Buyer enforceable against the Buyer in accordance with its terms, subject as to enforceability to general principles of equity and to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies.

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3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

The Company represents and warrants to the Buyer that as of the date hereof and as of the Commencement Date:

(a) Organization and Qualification. The Company is a corporation duly organized and validly existing in good standing under the laws of the State of Nevada and has the requisite corporate power and authority to carry on its business as now being conducted.

(b) Authorization; Enforcement; Validity. (i) The Company has the requisite corporate power and authority to enter into and perform its obligations under this Agreement, and each of the other agreements entered into by the parties on the Commencement Date and attached hereto as exhibits to this Agreement (collectively, the “Transaction Documents”), and to issue the Securities in accordance with the terms hereof and thereof, (ii) the execution and delivery of the Transaction Documents by the Company and the consummation by it of the transactions contemplated hereby and thereby, including without limitation, the issuance of the Commitment Shares and the reservation for issuance and the issuance of the Commitment Shares issuable under this Agreement, have been duly authorized by the Company’s Board of Directors or duly authorized committee thereof, do not conflict with the Company’s Certificate of Incorporation or Bylaws, and do not require further consent, approval or authorization by the Company, its Board of Directors or its shareholders, (iii) this Agreement has been, and each other Transaction Document shall be on the Commencement Date, duly executed and delivered by the Company and (iv) this Agreement constitutes, and each other Transaction Document upon its execution on behalf of the Company, shall constitute, the valid and binding obligations of the Company enforceable against the Company in accordance with their terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of creditors’ rights and remedies. The Board of Directors of the Company or duly authorized committee thereof has approved and authorized this Agreement and the transactions contemplated hereby.

(c) Capitalization. As of the date hereof, the authorized capital stock of the Company consists of (i) 1,350,000 shares of Common Stock, of which as of the date hereof, 1,000,000 shares are issued and outstanding, and 350,000 shares reserved for issuance or purchase pursuant to this Agreement and (ii) no shares of Preferred Stock. All of such outstanding shares have been, or upon issuance will be, validly issued and are fully paid and nonassessable. No shares of the Company’s capital stock are subject to preemptive rights or any other similar rights or any liens or encumbrances suffered or permitted by the Company, (ii) there are no outstanding debt securities, (iii) there are no outstanding options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, any shares of capital stock of the Company, or contracts, commitments, understandings or arrangements by which the Company is or may become bound to issue additional shares of capital stock of the Company or options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, any shares of capital stock of the Company, (iv) there are no agreements or arrangements under which the Company is obligated to register the sale of any of their securities under the 1933 Act, (v) there are no outstanding securities or instruments of the Company which contain any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by which the Company is or may become bound to redeem a security of the Company, (vi) there are no securities or instruments containing anti-dilution or similar provisions that will be triggered by the issuance of the Securities as described in this Agreement and (vii) the Company does not have any stock appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement. The Company has furnished or made available to the Buyer true and correct copies of the Company’s Certificate of Incorporation, as amended and as in effect on the date hereof (the “Certificate of Incorporation”), and the Company’s By-laws, as amended and as in effect on the date hereof (the “By-laws”), and summaries of the terms of all securities convertible into or exercisable for Common Stock, if any, and copies of any documents containing the material rights of the holders thereof in respect thereto.

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(d) Issuance of Securities. The Commitment Shares have been duly authorized and, upon issuance in accordance with the terms hereof, the Commitment Shares shall be (i) validly issued, fully paid and non-assessable and (ii) free from all taxes, liens and charges with respect to the issue thereof. Upon issuance and payment therefor in accordance with the terms and conditions of this Agreement, the Commitment Shares shall be validly issued, fully paid and nonassessable and free from all taxes, liens and charges with respect to the issue thereof, with the holders being entitled to all rights accorded to a holder of Common Stock.

(e) No Conflicts. The execution, delivery and performance of the Transaction Documents by the Company and the consummation by the Company of the transactions contemplated hereby and thereby (including, without limitation, the reservation for issuance and issuance of the Commitment Shares) will not result in a violation of the Certificate of Incorporation or the By-laws of the Company.

4. MISCELLANEOUS.

(a) Governing Law; Jurisdiction; Jury Trial. The corporate laws of the State of Nevada shall govern all issues concerning the relative rights of the Company and its shareholders. All other questions concerning the construction, validity, enforcement and interpretation of this Agreement and the other Transaction Documents shall be governed by the internal laws of the State of Nevada, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Nevada or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of Nevada. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of Reno, for the adjudication of any dispute hereunder or under the other Transaction Documents or in connection herewith or therewith, or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

(b) Counterparts. This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party; provided that a facsimile signature shall be considered due execution and shall be binding upon the signatory thereto with the same force and effect as if the signature were an original, not a facsimile signature.

(c) Headings. The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this Agreement.

(d) Severability. If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of any provision of this Agreement in any other jurisdiction.

(e) Entire Agreement. With the exception of the Mutual Nondisclosure Agreement between the parties dated as of March 19, 2021, this Agreement supersedes all other prior oral or written agreements between the Buyer, the Company, their affiliates and persons acting on their behalf with respect to the matters discussed herein, and this Agreement, the other Transaction Documents and the instruments referenced herein contain the entire understanding of the parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither the Company nor the Buyer makes any representation, warranty, covenant or undertaking with respect to such matters. The Company acknowledges and agrees that is has not relied on, in any manner whatsoever, any representations or statements, written or oral, other than as expressly set forth in this Agreement.

(f) Notices. Any notices, consents or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered: (i) upon receipt when delivered personally; (ii) upon receipt when sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); or (iii) one Business Day after deposit with a nationally recognized overnight delivery service, in each case properly addressed to the party to receive the same. The addresses and facsimile numbers for such communications shall be:

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If to the Company:

cDistro, Inc.

3450 S. Ocean Blvd., #122

Palm Beach, FL 33480

Attention: Ronald P. Russo, Jr.

Email: rr@cdistro.com

If to the Buyer:

Marijuana Company of America, Inc.

1340 West Valley Parkway, Suite 205

Escondido, CA 92029

Attention: Jesus M. Quintero, CEO

Email: jesus@hempsmart.com

or at such other address and/or facsimile number and/or to the attention of such other person as the recipient party has specified by written notice given to each other party one (1) Business Day prior to the effectiveness of such change. Written confirmation of receipt (A) given by the recipient of such notice, consent or other communication, (B) mechanically or electronically generated by the sender’s facsimile machine containing the time, date, and recipient facsimile number or (C) provided by a nationally recognized overnight delivery service, shall be rebuttable evidence of personal service, receipt by facsimile or receipt from a nationally recognized overnight delivery service in accordance with clause (i), (ii) or (iii) above, respectively. Any party to this Agreement may give any notice or other communication hereunder using any other means (including messenger service, ordinary mail or electronic mail), but no such notice or other communication shall be deemed to have duly given unless it actually is received by the party for whom it is intended.

(g) Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns. The Company shall not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Buyer, including by merger or consolidation. The Buyer may not assign its rights or obligations under this Agreement.

(h) No Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other person.

(i) Publicity. The Buyer shall have the right to approve before issuance any press release, SEC filing or any other public disclosure made by or on behalf of the Company whatsoever with respect to, in any manner, the Buyer, its purchases hereunder or any aspect of this Agreement or the transactions contemplated hereby; provided, however, that the Company shall be entitled, without the prior approval of the Buyer, to make any press release or other public disclosure (including any filings with the SEC) with respect to such transactions as is required by applicable law and regulations so long as the Company and its counsel consult with the Buyer in connection with any such press release or other public disclosure at least two (2) Business Days prior to its release. The Buyer must be provided with a copy thereof at least two (2) Business Days prior to any release or use by the Company thereof.

(j) Further Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

(k) Termination. This Agreement may be terminated only as follows:

(i) By the Buyer without any liability or payment to the Company, if pursuant to or within the meaning of any Bankruptcy Law, the Company commences a voluntary case or any Person commences a proceeding against the Company, a Custodian is appointed for the Company or for all or substantially all of its property, or the Company makes a general assignment for the benefit of its creditors, this Agreement shall automatically terminate without any liability or payment to the Company without further action or notice by any Person. No such termination of this Agreement under this Section 4(k)(i) shall affect the Company’s or the Buyer’s obligations under this Agreement with respect to pending purchases and the Company and the Buyer shall complete their respective obligations with respect to any pending purchases under this Agreement.

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(ii) In the event that the Commencement shall not have occurred, the Company shall have the option to terminate this Agreement for any reason or for no reason without any liability whatsoever of any party to any other party under this Agreement.

(iii) At any time after the Commencement Date, the Company shall have the option to terminate this Agreement for any reason or for no reason by delivering notice (a “Company Termination Notice”) to the Buyer electing to terminate this Agreement without any liability whatsoever of any party to any other party under this Agreement. The Company Termination Notice shall not be effective until one (1) Business Day after it has been received by the Buyer.

(iv) This Agreement shall automatically terminate on the date that the Company sells and the Buyer purchases the full Available Amount as provided herein, without any action or notice on the part of any party and without any liability whatsoever of any party to any other party under this Agreement.

Any termination of this Agreement pursuant to this Section 4(k) shall be effected by written notice from the Company to the Buyer, or the Buyer to the Company, as the case may be, setting forth the basis for the termination hereof. The representations and warranties of the Company and the Buyer contained in Sections 2 and 3 hereof shall survive the Commencement and any termination of this Agreement.

(l) No Financial Advisor, Placement Agent, Broker or Finder. The Company represents and warrants to the Buyer that it has not engaged any financial advisor, placement agent, broker or finder in connection with the transactions contemplated hereby. The Buyer represents and warrants to the Company that it has not engaged any financial advisor, placement agent, broker or finder in connection with the transactions contemplated hereby. The Company shall be responsible for the payment of any fees or commissions, if any, of any financial advisor, placement agent, broker or finder engaged by the Company relating to or arising out of the transactions contemplated hereby. The Company shall pay, and hold the Buyer harmless against, any liability, loss or expense (including, without limitation, attorneys’ fees and out of pocket expenses) arising in connection with any such claim.

(m) No Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party.

(n) Remedies, Other Obligations, Breaches and Injunctive Relief. Each party’s remedies provided in this Agreement shall be cumulative and in addition to all other remedies available to it under this Agreement, at law or in equity (including a decree of specific performance and/or other injunctive relief), no remedy of either party contained herein shall be deemed a waiver of compliance with the provisions giving rise to such remedy and nothing herein shall limit either party’s right to pursue actual damages for any failure by other party to comply with the terms of this Agreement. Each party acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the other and that the remedy at law for any such breach may be inadequate. Each party therefore agrees that, in the event of any such breach or threatened breach, the other party shall be entitled, in addition to all other available remedies, to an injunction restraining any breach, without the necessity of showing economic loss and without any bond or other security being required.

(o) Failure or Indulgence Not Waiver. No failure or delay in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege.

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IN WITNESS WHEREOF, the Buyer and the Company have caused this Common Stock Purchase Agreement to be duly executed as of the date first written above.

THE COMPANY:
CDISTRO, INC.
By:	/s/ Ronald P. Russo, Jr.
Name:	Ronald P. Russo, Jr.
Title:	Chief Executive Officer
BUYER:
MARIJUANA COMPANY OF AMERICA, INC.
By:	/s/ Jesus M. Quintero
Name:	Jesus M. Quintero
Title:	Chief Executive Officer

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EX-10.5

Exhibit 10.5

FORM OF

EMPLOYMENT AGREEMENT

This Employment Agreement (the “Agreement”) entered into between Ronald P. Russo, Jr. (“Executive”), and cDistro, Inc. (the “Company”), will be effective upon execution by both parties.

1. Position; Commencement Date.

Executive will be employed by the Company under this Agreement in the position of Chief Executive Officer. The effective starting date of Executive’s employment is June 29, 2021 (the “Commencement Date”).

2. Duties.

As the Company’s Chief Executive Officer, the Executive shall perform such duties and functions as are determined from time to time by the Company’s Board of Directors (the “Board”). In the performance of his duties with the Company, Executive shall at all times comply with the written policies of the Company and be subject to the reasonable direction of the Board.

3. Term of Employment.

The Company shall continue to employ Executive for a period of up to thirty-six (36) months, commencing on the Commencement Date and ending on June 30, 2024 (the “Contract Term”), subject to earlier termination as set forth in Section 13 (“Termination of Employment”). After the initial thirty-six month period, this Agreement shall continue for successive one-year periods thereafter, subject to the provisions of Section 13 below, and upon the same terms and conditions, except as they may be modified by the parties in writing from time to time, and unless and until written Notice shall be given by either party forty-five (45) days in advance of the end of the initial term or any successive one-year period of the intention not to continue this Agreement (the “Notice Period”) followed by the continued performance of this Agreement for the Notice Period by both parties. The Contract Term of this Agreement shall include all such extensions.

4. Base Salary.

Executive’s annual base salary will be $90,000.00 (Ninety Thousand Dollars and No Cents) and shall be paid in accordance with the regular payroll practices of the Company, subject to withholdings required by law or authorized by Executive. Executive’s salary will be subject to review annually by the Board, provided, however, that the Executive’s base salary shall not be reduced except in circumstances where the Company is making proportional reductions in the salaries of all of its executives.  

5. Executive Bonus Program.

For each full fiscal year during which Executive remains employed under this Agreement, Executive will have an opportunity to earn a fiscal year-end bonus based upon performance and earnings targets and other standards to be established by the Board for each such year and based upon the Board’s evaluations of Executive’s fiscal year results. Bonuses will be determined and awarded in the Board’s discretion following completion of the Company’s annual audit by independent auditors.

6. Employee Benefit Programs.

Executive will be eligible to participate in, and be covered by, the Company’s employee benefit programs, subject to any preconditions in those programs, upon Executive’s Commencement Date. Specific programs currently in place include: health (physician, prescription, dental, vision) insurance for Executive and his family; a short term and long term disability insurance plan; and group or individual life insurance in the amount of two times Executive’s annual salary. In addition, Executive will be entitled to four weeks of paid personal time off (“PTO”) for each 12 months Executive is employed by the Company.

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7. Reimbursements.

Executive will be reimbursed on a regular basis for reasonable, necessary and properly documented business and travel expenses incurred for the purpose of conducting the Company’s business, subject to periodic review and approval of such expenditures by the Board.

8. Conflicting Employment.

Executive shall devote the professional time and attention required to perform Executive’s obligations under this Agreement, and shall at all times faithfully, industriously and to the best of Executive’s ability, experience and talent perform all of Executive’s obligations under this Agreement.

9. Noncompetition.

Executive agrees that while he is employed by the Company and for a 6-month period following the Contract Term, Executive will not within the State of Nevada directly or indirectly compete with the Company by accepting employment or consulting contracts or performing activities for Executive’s own benefit or with or without compensation for the benefit of another (a) with respect to any business which competes with that of the Company and (b) where the activities performed by Executive are substantially similar to those performed by Executive for the Company under this Agreement.

10. Non-Disparagement.

Executive agrees and covenants that, while he is employed by the Company and for a five (5) year period following the Contract Term, he will not at any time make, publish or communicate to any person or entity or in any public forum any defamatory or disparaging remarks, comments, or statements concerning the Company, any products, services, or operations of the Company, or any of the former, current, or future officers, directors, or employees of the Company. This Section does not, in any way, restrict or impede Executive from exercising protected rights to the extent that such rights cannot be waived by agreement or from complying with any applicable law or regulation or a valid order of a court of competent jurisdiction or an authorized government agency, provided that such compliance does not exceed that required by the law, regulation, or order. The Executive shall promptly provide written notice of any such order to the Board.

11. Confidential Information.

(a)     Confidentiality. Except as herein provided, Executive agrees that during and after termination of his employment with the Company, he (i) shall keep Confidential Information (as defined below) confidential and shall not directly or indirectly, use, divulge, publish or otherwise disclose or allow to be disclosed any aspect of Confidential Information without the prior written consent of the Board except in the performance of Executive’s duties for Company; (ii) shall refrain from any action or conduct which might reasonably or foreseeably be expected to compromise the confidentiality or proprietary nature of the Confidential Information; and (iii) shall follow the written directives made by the Board of Directors from time to time regarding Confidential Information.

For purposes of this Agreement “Confidential Information” includes but is not limited to trade secrets, confidential information, knowledge or data of the Company, or any of its clients, customers, consultants, shareholders, licensees, licensors, vendors or affiliates, that Executive may produce, obtain or otherwise acquire or have access to during the course of his employment by the Company (whether before or after the date of this Agreement), including but not limited to: business plans, records, customer files and lists; sales practices; strategies and plans; sources of supply and vendors; special business relationships with vendors, agents, and brokers; promotional materials and information; financial matters; mergers; acquisitions; confidential personnel matters; inventions; developments; product specifications; procedures; pricing information; intellectual property; technical data; software programs; finances; operations and production costs; ideas; plans technology; proposals; market analysis; technical services; customer needs; customer purchasing patterns; customer renewal or expiration data; customer concerns; Company pricing, rental or lease rates, and profit margins; Company’s commissions and/or fees; insurer information unique to or tailored to Company; and other information which Company has developed at significant expenditure of time, effort and/or expense. All Confidential Information and all tangible materials containing Confidential Information are and shall remain the sole property of the Company.

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(b)     Limitation. Executive shall have no obligation under this Agreement to maintain in confidence any information that: (i) is in the public domain at the time of disclosure; (ii) though originally Confidential Information, subsequently enters the public domain other than by breach of Executive’s obligations hereunder or by breach of another person’s or entity’s confidentiality obligations; or (iii) is shown by documentary evidence to have been known by Executive prior to disclosure to Executive by the Company. Executive is also advised that the misappropriation of trade secrets (a form of Confidential Information, as defined herein) is a violation of law, just like the theft of any property. In addition to state law remedies, the Defend Trade Secrets Act of 2016 (the “DTSA”) enables a trade secret owner to bring a trade secret misappropriation case in federal court. The DTSA generally provides that an individual shall not be held criminally or civilly liable under any federal or state trade secret law in the following circumstances: (A) where the individual discloses trade secrets in confidence to a federal, state or local government official or to an attorney solely for the purpose of reporting or investigating a suspected violation of law; or (B) where the disclosure is made in a sealed filing in a lawsuit or other proceeding. In addition, the DTSA generally permits an individual to disclose trade secrets to the individual’s attorney in the course of pursuing a lawsuit where the person alleges retaliation for reporting a suspected violation of the law (or uses the trade secret information in such lawsuit, if the individual files any document containing the trade secret under seal and does not disclose the trade secret, except pursuant to court order). The foregoing is a very generalized summary of the immunity provisions of the DTSA intended to satisfy the notification requirements of the DTSA. The DTSA does not preclude the trade secret owner from seeking breach of contract remedies, however. Executive agrees to seek legal counsel before disclosing any trade secrets if Executive intends to seek immunity under the DTSA.

(c)     Third Party Information. Executive recognizes that the Company may have received, and in the future may receive, from third parties their confidential or proprietary information subject to a duty on the Company’s part to maintain the confidentiality of such information and to use it only for certain limited purposes. Executive agrees that Executive owes the Company and such third parties, during Executive’s employment by the Company and thereafter, a duty to hold all such confidential or proprietary information in the strictest confidence and not to disclose it to any person or firm and to use it in a manner consistent with, and for the limited purposes permitted by, the Company’s agreement with such third party. Notwithstanding the foregoing, Executive may disclose information following receipt of a Court Order requiring disclosure, but only if he first provides the Company with the prompt notice of the Court Order so that it can object and seek to prevent such disclosure.

(d)     Return of Confidential Material. In the event of Executive’s termination of employment with Company for any reason whatsoever, Executive agrees promptly to destroy or surrender and deliver to Company all records, notes, materials, equipment, drawings, documents and data of any nature pertaining to any Confidential Information or to his employment, and Executive will not retain or take with him any tangible materials containing or pertaining to any Confidential Information that Executive may produce, acquire or obtain access to during the course of his employment except for copies of Executive’s own employment records. At the Company’s request, Executive will certify in writing that Executive has destroyed or returned, as applicable, all Confidential Information in Executive’s possession.

12. Intellectual Property.

Executive agrees that all registered intellectual property, including such registered items that are reduced to writing or specifically identified by the parties, and may include registered intellectual property, specifically identified, such as inventions, innovations, improvements, technical information, trade secrets, systems, software developments, ideas, results, methods, designs, artwork, analyses, drawings, reports, copyrights, service marks, trademarks, trade names, logos and all similar or related information (whether patentable or unpatentable) which relate to the Company’s or any of its subsidiaries’ or affiliates’ businesses, research and development or existing or future products or services and which are conceived, developed or made by Executive during his employment with the Company, together with all intellectual property rights therein, including, without limitation, any patent applications, letters patent, trademark, trade name and service mark applications or registrations, copyrights and reissues thereof that may be granted for or upon any of the foregoing (collectively referred to herein as “Work Product”), shall be the sole and exclusive property of the Company.

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For the avoidance of doubt and without limiting the foregoing, (a) the Company shall be the sole owner of all right, title and interest in such Work Product, including all intellectual property rights relating to such Work Product, without Executive retaining any license or other residual right whatsoever, and (b) any rights to any new or existing Work Product are automatically conveyed, assigned and transferred to the Company pursuant to this agreement. Executive hereby waives and renounces all moral rights related, directly or indirectly, to any such existing or new Work Product. Executive will take reasonable steps to promptly disclose such Work Product to the Company’s Board and perform all actions reasonably requested by the Company (whether during or after the employment) to establish and confirm such ownership (including the execution and delivery of assignments, consents, powers of attorney and other instruments) and to provide reasonable assistance to the Company in connection with the prosecution of any applications for patents, trademarks, trade names, service marks or reissues thereof or in the prosecution or defense of interferences relating to any Work Product. Executive agrees that any such copyrightable work is work made for hire by Executive for the Company. To the extent that the immediately preceding sentence does not apply to any Work Product, Executive hereby irrevocably assigns to the Company, for no additional consideration, Executive’s entire right, title and interest in and to all Work Product and rights therein, including the right to sue, counterclaim and recover for all past, present and future infringement, misappropriation or dilution thereof, and all rights corresponding thereto throughout the world. Executive agrees that this Agreement does not, and shall not be construed to, grant Executive any license or right of any nature with respect to the Work Product or any Confidential Information, materials, software or other tools made available to Executive by the Company.

13. Termination of Employment.

(a)     By Company without Cause. The Company may terminate Executive’s employment at any time, with or without cause or advance notice. However, if the Company terminates Executive’s employment without Cause, as that term is defined in Section 13(b) below, or if Executive resigns his employment for Good Reason, as that term is defined in Section 13(c) below, Executive will receive an amount equal to his base salary for six (6) months or for the remainder of the Contract Term, whichever is less, together with (a) any other earned but unpaid amounts due under the terms of this Agreement and (b) employee benefits for the applicable severance benefit period (the “Severance Benefits”). To be eligible for Severance Benefits, Executive will be required to sign and not revoke a General Release in a form provided by the Company, on or within 52 days after his final date of employment, as a condition of receiving Severance Benefits. Severance Benefits will be paid in equal installment payments payable in accordance with the Company’s normal payroll practices, but no less frequently than monthly, commencing within 60 days following the termination date subject to the potential delay due to the application of Section 13(f) . To the extent that any severance payments are deferred compensation under Internal Revenue Code Section 409A, and are not otherwise exempt from the application of Section 409A, then, if the period during which Executive may consider and sign the release spans two calendar years, the payment of severance will not be made or begin until the later calendar year.

(b)     By Company for Cause. For purposes of this Agreement, “Cause” will mean (i) Executive’s willful failure or refusal to perform a lawful directive of the Board of Directors that is consistent with Executive’s duties and responsibilities, provided the Company provides Executive with written notice of such failure or refusal and such failure or refusal is not cured within 14 days of receipt of such notice, provided that if it is not possible to cure such failure or refusal within the 14-day period the Executive shall have a reasonable period (not to exceed 60 days) within which to cure the failure or refusal; (ii) Executive’s material misconduct or material violation of his fiduciary obligations or other duties owed to the Company; (iii) Executive’s performance of his duties in a grossly negligent manner, or violation of any law or regulation that may affect Executive’s ability to perform his duties or that is likely to harm the Company’s reputation; (iv) Executive’s conviction of or plea of no contest to any felony or commission of any act, whether or not a felony, that has a material adverse effect on his ability to perform his duties; (v) Executive’s material breach of this Agreement, or Company Policies that apply to him subject to notice and right to cure as in clause (i) above. If Executive’s employment is terminated for Cause, he shall not be entitled to Severance Benefits or payment of any outstanding Bonus, and shall receive only unpaid base salary for services rendered through the date of termination and payment for accrued and unused vacation. Such payment shall be made in a single lump-sum payment on the date of Executive’s termination.

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(c)     Executive’s Resignation for Good Reason. For purposes of this Agreement, “Good Reason” will mean that Executive resigns his employment within the Contract Term as result of: (i) a material diminution in the Executive’s base compensation; (ii) a material diminution in the Executive’s authority, duties, or responsibilities; (iii) a change in geographic location at which the Executive must perform the services to any location outside Nevada; or (iv) any other action or inaction that constitutes a material breach of the terms of this Agreement. Notwithstanding the foregoing, in no event shall such resignation constitute “Good Reason” unless and until Executive provides written notice to the chairman of the Board of Directors of the existence of the good reason condition, which notice must be within 90 days of its initial existence, and Executive provides the Company with at least 30 days to remedy the good reason condition. If the condition is not remedied, the Executive must terminate his employment within sixty (60) days following the expiration of such remedy period for the termination to be on account of a “Good Reason.”

If Executive resigns for Good Reason, he will receive the Severance Benefits.

(d)     Death. Executive’s employment and the Company’s obligations under this Agreement shall terminate automatically, effective immediately and without any notice being necessary, upon Executive’s death. Executive’s legal representative shall receive unpaid compensation for Executive’s services rendered through the date of termination and payment for accrued and unused vacation, which shall be paid in a single lump-sum payment on or before 30 days after Executive’s death.

(e)     Disability. In the event of Executive’s Disability, as defined below, Company shall have the right to terminate Executive’s employment consistent with federal and state laws relating to the rights of persons with disabilities.

For purposes of this Agreement, “Disability” will mean the Executive has been unable by reason of any mental or physical impairment to perform the essential functions of his position for 120 days (whether or not consecutive) during any period of 360 days. A determination of disability shall be made by the Company in consultation with a physician satisfactory to the Executive and the Company, and Executive shall cooperate with the efforts to make such determination. Any such determination shall be conclusive and binding on the parties for the purpose of this Agreement. Any determination of Disability under this Section 13(e) is not intended to alter any benefits Executive may be entitled to receive under any long-term disability insurance policy carried by either the Company or Executive, which benefits shall be governed solely by the terms of any such insurance policy.

(f)     Section 409A. Although the Company does not have a duty to design its compensation policies in a manner that minimizes Executive’s tax liabilities, the payment of any Severance Benefits under this Section 16 is intended to comply with the requirements of Internal Revenue Code Section 409A and final Treasury regulations promulgated thereunder. In no event shall the Executive have the ability to affect the timing of the payment of Severance Benefits by acceleration, deferral, or otherwise. If the payment of any Severance Benefits is not exempt under Section 409A and applicable regulations, this Agreement (and any definitions hereunder) will be construed in a manner that complies with Section 409A, and incorporates by reference all required definitions and payment terms. In the event any of the payments to be made to Executive upon the termination of employment are “deferred compensation” within the meaning of Section 409A, such payment shall be delayed for six months and one day if Executive is a “specified person” for such 409A purposes. No interest shall be due on any amounts deferred pursuant to this Section 13(f).

14. Successors and Assigns.

This Agreement shall be binding upon the parties hereto and their respective heirs, executors, legal representatives, successors and assigns. This Agreement is specific to Executive and may not be assigned.

15. Waiver and Amendment.

No modification, waiver or amendment of this Agreement will be effective unless in writing signed by the Executive and by the Company. No waiver by either party of any condition or provision of this Agreement shall be considered a waiver of any other condition or provision or a waiver of the same condition or provision at another time.

16. Entire Agreement.

This Agreement sets forth the entire Agreement and understanding between the Company and Executive relating to the subject matters herein and supersedes all prior or contemporaneous discussions and Agreements between the parties, whether oral or written.

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17. Governing Law.

This Agreement shall be governed by the laws of the State of Nevada.

18. Severability.

The invalidity or unenforceability of one or more provisions of this Agreement shall not affect the validity or enforceability of any other provision hereof, which shall remain in full force and effect to the maximum extent of the law.

19. Arbitration.

Any and all claims, controversies or disputes arising out of or relating to this Agreement, or the breach thereof, which remain unresolved after direct negotiations between Executive and the Company, shall first be submitted to confidential Mediation in Nevada in accordance with the Rules, Procedures and Protocols for Mediation of Disputes of Dispute Prevention & Resolution, Inc. (“DPRI”), then in effect. If any issues, claims or disputes remain unresolved after mediation concludes, Executive and the Company agree to submit any such issues to binding arbitration in Nevada before one arbitrator in accordance with the Rules, Procedures and Protocols for Arbitration of Disputes of DPRI, then in effect. However, Executive and the Company agree that the foregoing shall not preclude either of them from seeking any injunctive or equitable relief from a court of competent jurisdiction pursuant to any provision of this Agreement. Executive and the Company each further agree that, subject to Chapter 658A, Nevada Revised Statutes, as the same may hereafter be amended or recodified, the award of the arbitrator(s) shall be binding upon each of them and that judgment upon the award rendered may be entered in any court of competent jurisdiction.

20. Counterparts.

This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together will constitute one and the same instrument.

[Signature page follows]

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The directors of cDistro, Inc., who have approved the terms of this Agreement, are very pleased that you have agreed to lead the Company and are enthusiastic about the prospects for the Company under your leadership. Please acknowledge your agreement with, and acceptance of, the foregoing terms by signing below where indicated. A copy of this Agreement will be filed with the Securities and Exchange Commission as a public document.

cDistro, Inc.   _/s/ Ronald P. Russo, Jr.____________________ By: Ronald P. Russo, Jr. Its: Chief Executive Officer Date:   Executive   _/s/ Ronald P. Russo, Jr.____________________ By: Ronald P. Russo, Jr. Date:

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EX-99.1

Exhibit 99.1

Marijuana Company of America, Inc. Acquires cDistro, One of the Industry's Fastest Growing Hemp and CBD Product Distributors

Thursday, July 1, 2021, 6:00 AM

LOS ANGELES, CA / ACCESSWIRE / July 1, 2021 / Marijuana Company of America, Inc. (OTC PINK:MCOA) ("the Company"), a diversified holding company with operations and investments throughout the cannabis industry, today announced it has completed a stock-for-stock merger acquisition of cDistro, Inc. ("cDistro"). cDistro is a rapidly-expanding hemp industry distribution company and is expected to deepen the Company's distribution presence in North America. The Company plans to operate cDistro as a wholly-owned subsidiary.   

Merger Transaction

Pursuant to the terms and conditions of the merger transaction, all of the issued and outstanding shares of common stock of cDistro were exchanged for shares of common stock of MCOA, resulting in cDistro becoming a wholly owned subsidiary of MCOA. The former securityholders of cDistro now hold approximately 5.23% of the issued and outstanding common stock of the Company, and may earn additional Company common stock over the next twelve months if certain revenue targets are met by cDistro.

The acquisition of cDistro by the Company is an arm’s length transaction and was completed subject to a number of conditions, including, but not limited to, the execution of definitive agreements, the completion of mutually satisfactory due diligence, and the receipt of all required regulatory, corporate and third-party approvals, including the approval of a majority of shareholders of cDistro, and the fulfillment of all applicable regulatory requirements and conditions necessary to complete the acquisition.

A Current Report on Form 8-K containing more detailed information regarding the merger transaction and the Company will be filed with the Securities and Exchange Commission

About cDistro

At its website www.cdistro.com, cDistro distributes a select list of quality CBD brands along with smoke and vape shop related products to wholesalers, c-stores, specialty retailers, and dispensaries in North America. cDistro has seen rapid growth since its inception in the second quarter of 2020 by distributing a select catalog of eight unique product lines currently being sold to over 250 customers. cDistro currently generates approximately $150,000 per-month in gross revenues with good margins, which will be included in MCOA's audited consolidated financial statements.

"cDistro is uniquely positioned to take advantage of the developing market opportunity generated by consumers' growing demand for quality hemp products. This acquisition is significant for MCOA, as it further positions us to take advantage of immediate revenue and a healthy opportunity to seize significant market share in the specialty distribution space", said Jesus M. Quintero, CEO of MCOA.

Ron Russo, the CEO of cDistro, stated, "This acquisition is highly synergistic and intended to amplify cDistro’s national distribution. We believe that with MCOA’s operational support, cDistro has the opportunity to become a dominant distributor of products infused with CBD and hemp in the North American market. In its relatively short period of incubation, cDistro has built strong and actionable relationships with quality wholesalers, retailers, and dispensaries, and the cDistro team looks forward expanding our business exponentially with the backing of MCOA and our mutual goal of bringing innovative hemp products to consumers."

Forward-Looking Information

This news release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. These statements relate to future events or future performance. All statements other than statements of historical fact may be forward-looking statements or information. Generally, forward-looking statements and information may be identified by the use of forward-looking terminology such as “plans”, “ expects” or “does not expect”, “proposed”, “is expected”, “budgets”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases, or by the use of words or phrases which state that certain actions, events or results may, could, would, or might occur or be achieved. More particularly and without limitation, this news release contains forward-looking statements and information concerning the merger transaction (as described herein). Forward-looking statements consist of statements that are not purely historical, including any statements regarding beliefs, plans, expectations or intentions regarding the future. These forward-looking statements include, among others, statements about MCOA’s future financial performance, the impact of management changes, any organizational restructuring and the sufficiency of capital resources to fund its ongoing operating requirements; statements about MCOA’s expectations regarding the capitalization, resources and ownership structure of the combined company; statements about the potential benefits of the transaction; and any other statements other than statements of historical fact. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements that MCOA makes due to a number of important factors, including (i) risks related to the ability to realize the anticipated benefits of the transaction, (ii) risks related to the combined entity’s access to existing capital and fundraising prospects to fund its ongoing operations, and (iii) other business effects, including the effects of industry, market, economic, political or regulatory conditions, future exchange and interest rates, and changes in tax and other laws, regulations, rates and policies, including the impact of COVID-19 on the broader market. Readers are cautioned not to place undue reliance on forward-looking statements, as there can be no assurance that the plans, intentions or expectations upon which they are based will occur. By their nature, forward-looking statements involve numerous assumptions, known and unknown risks and uncertainties, both general and specific that contribute to the possibility that the predictions, estimates, forecasts, projections and other forward-looking statements will not occur.

The forward-looking statements contained in this press release are made as of the date of this press release. Except as required by law, the Company disclaims any intention and assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Detailed information regarding factors that may cause actual results to differ materially from the results expressed or implied by statements in this press release relating to the Company may be found in the Company’s periodic filings with the Securities and Exchange Commission, including the factors described in the sections entitled “Risk Factors”, copies of which may be obtained from the SEC’s website at www.sec.gov. Additionally, the Company undertakes no obligation to comment on the expectations of, or statements made by, third parties in respect of the matters discussed above.

Contact:

Jesus M. Quintero, CEO 

Jesus@hempsmart.com 

Ph: (888) 777-4362