Diego Pellicer Worldwide, Inc. (OTCMKTS:DPWW) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement.
Item 5.02 Departure of Directors or Certain Officers;
Election of Directors; Appointment of Certain Officers;
Compensatory Arrangement of Certain Officers.
On February 8, 2017, David Thonpson was appointed to serve as
Vice President of Finance and Nello Gonfantini was appointed to
serve as Vice President of Real Estate by the Board of Directors
of Diego Pellicer Worldwide, Inc. (the Company or Diego).
Effective that same date, the Board of Directors of the Company
voted to expand the membership of the Board of Directors to five
(5) members and appointed David Thompson and Nello Gonfantini to
serve as members of the Board of Directors until their successors
are elected and duly qualified. Messrs. Gonfiantini and Thompson
have been serving as consultants to the Company since May 2016,
assisting Chief Executive Ron Throgmartin in financial and
operational matters.
Ron Throgmartin, the Companys CEO stated, Nello and Dave have
advised us in this critical transition during the last six
months. We have recently completed the successful opening of our
Seattle flagship retail store and will open the Denver retail
facility this month. In addition to this, our two Colorado grow
facilities will transition over to operational control by our
Denver tenant realizing full lease revenue during the second
quarter. We expect to be cash flow positive sometime in the
second quarter. This will demonstrate the successful execution of
our business model. Gonfiantini and Thompson will be part of the
executive team that will identify new opportunities and execute
on the Companys strategy.
Nello Gonfiantini, the newly appointed Vice President Real
Estate, observed that, With 27 jurisdictions legalizing
marijuana, most having medical dispensaries and some legalizing
recreational marijuana, there are almost more opportunities than
time and money to execute. We are mobilizing to take advantage of
this accelerating growth. Ours is one of the only public
companies in this space with the strategy and ability to
capitalize on this outsized growth. Lease revenue will provide
premium recurring revenue for our Company while having the option
of capitalizing on consolidating a high growth industry.
David Thompson, the Companys new Vice President Finance, related
that, I was in the gaming industry and participated in the first
gaming IPO as Chairmen of the Finance Committee at Harrahs and
went on to form a technology company which provided systems and
games to the gaming industry. I took my company public. Our
shares were listed traded on the NASDAQ and I served as CEO and
Chairman of the board for 15 years.
Continuing, Mr. Thompson stated that, I see the same
opportunities in the cannabis industry. The operators are mom and
pops, just like the casino industry when I first started working
in it. Profits were high because of the few states in which it
was legal. In the 1990s, widespread legalization by the states
contributed to the industrys rapid growth. Is this sounding
familiar? There was a rush by the gaming companies to go public
to acquire liquidity and access to capital. The industry began to
consolidate. This pattern has been repeated over and over again,
industry by industry in our economy. It is the natural evolution
of new industries. And, it will happen in the cannabis industry.
Acquisition of traditional financing is almost impossible for the
licensee/operator due to the FDAs current classification of
Marijuana quipped Thompson. Therein lies the opportunity for
Diego. With our access to debt and equity capital, we can build
and lease facilities to the operators. The extent to which we can
attract capital is the extent to which we will grow our lease
revenues. With our unique business model and our option to
acquire the operating company, we can offer the operator the
timely opportunity to participate in the industry consolidation,
be a part of a company with a powerful brand name and seasoned
management as well as having the liquidity and earnings multiples
that are afforded successful public companies. This is a win for
our investors, a win for our tenants, and a strategy for
perpetuation and growth of the Company.
Vice President Gonfiantini added that, In the meantime, our
Company gets a premium return from our leasing business model
with the opportunity for a big upside upon consolidation.
CEO Throgmartin concluded that, We will continue to focus on new
markets and expand in Colorado and Oregon. California and Florida
are obviously huge markets. Out target leasing model is a 20 to
30 percent return on our investment in facilities. In addition,
we will have income from accessory sales. The exact contribution
to profits from these accessory sales are a little difficult to
quantify at this time until we get more experience. In the
meantime, we are continuing to refine facility design, training
platforms, accessory product line expansion, and continued cost
containment. We feel we will continue to extend our lead.
The Board authorized the execution and delivery of 5-year
employment agreements for each of the new executive officers.
Each shall receive base salaries of $7,500 monthly, with each
eligible for bonuses based upon achievement of specific goals and
milestones to be determined by the Board. Both received stock
grants of restricted common shares in amounts equal to 2.5 % and
a non-qualified stock option to purchase an amount of the
Companys restricted common shares equal to 5% of the Companys
outstanding common stock determined as of February1, 2017. The
stock options are exercisable over a 10-year period at the
exercise price of $0.25 per common share. These agreements
further provide that each executive officer has the right to
maintain his beneficial ownership position at 7.5% throughout the
5-year terms of their employment agreements, adjustable each
successive year. This beneficial ownership right includes in its
computation any shares acquired before February 1, 2017 but not
after such date.
In addition, the Board also authorized an amendment to the
employment agreement for the Companys CEO, providing that Mr.
Throgmartin shall also receive stock grants of the Companys
restricted common shares so that his beneficial ownership
position in the Companys common shares shall be equal to 10% of
the Companys outstanding common shares, adjusted annually for
each year of the term of his employment agreement. As with the
new Vice Presidents, the computation of the beneficial ownership
position of 10% shall not include any shares he subsequently
purchases but does include shares he owned as of February1, 2017.
Readers are cautioned not to rely upon the above summaries of the
cited agreements but to read the full text of these agreements
attached as exhibits to this current report.
Item 9.01 Financial Statements and Exhibits.
| Exhibit | Description | |
| 10.4 |
Form of Employment Agreement for David Thompson, Vice President Finance, and Nello Gonfantini, Vice President- Real Estate, dated February 10, 2017. |
|
|
10.5 |
Form of Amendment No. 1 to Employment Agreement of Ron Throgmartin, dated February 8, 2017 |
About Diego Pellicer Worldwide, Inc. (OTCMKTS:DPWW)
Diego Pellicer Worldwide, Inc., formerly Type 1 Media, Inc., is a development-stage company. The Company is a real estate and a consumer retail development company. The Company is focused on developing its Diego Pellicer marijuana brand along with both cannabis and non-cannabis products. The Company’s initial focus is to acquire and develop legally compliant real estate locations for the purposes of leasing them to state licensed companies in the cannabis industry. The Company leases real estate to licensed marijuana operators, including but not limited to, providing complete growing space, processing space, recreational and medical retail sales space and related facilities to licensed marijuana growers, processors, dispensary and recreational store operators. Additionally, the Company plans to explore ancillary opportunities in the regulated marijuana industry, as well as offering for wholesale distribution branded non-marijuana clothing and accessories. Diego Pellicer Worldwide, Inc. (OTCMKTS:DPWW) Recent Trading Information
Diego Pellicer Worldwide, Inc. (OTCMKTS:DPWW) closed its last trading session up +0.045 at 0.274 with shares trading hands.