UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
FUTURELAND CORP.
(Exact name of registrant as specified
in its charter)
Colorado
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3585
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41-2230041
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(State or other jurisdiction of incorporation or organization)
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(Primary Standard Industrial Classification Code Number)
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(I.R.S. Employer Identification Number)
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10901 Roosevelt Blvd
Suite 1000c
Saint Petersburg, FL 33716
727-474-0221
(Address, including zip code, and
telephone number, including area code, of Registrant's principal executive offices)
Cameron Cox
Chief Executive Officer
10901 Roosevelt Blvd
Suite 1000c
Saint Petersburg, FL 33716
727-474-0221
(Name, address, including zip code,
and telephone number,
Including area code, of agent for
service)
______________________
Please send copies of all communications
to:
Craig A. Huffman, Esq.
Securus Law Group, P.A.
13046 Racetrack Road #243
Tampa, Florida 33626
(888) 914-4144
(888) 873-4712 Facsimile
As soon as practicable after the effective
date of this Registration Statement.
(Approximate date of commencement
of proposed sale to the public)
If any of the securities being registered
on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the
following box: [ ]
If this Form is filed to register
additional securities for an offering pursuant to Rule 462(b) under the Securities Act of 1933, please check the following box
and list the Securities Act of 1933 registration statement number of the earlier effective registration statement for the same
offering. [ ]
If this Form is a post-effective
amendment filed pursuant to Rule 462(c) under the Securities Act of 1933, check the following box and list the Securities Act of
1933 registration statement number of the earlier effective registration statement for the same offering. [ ]
If this Form is a post-effective
amendment filed pursuant to Rule 462(d) under the Securities Act of 1933, check the following box and list the Securities Act of
1933 registration statement number of the earlier effective registration statement for the same offering. [ ]
Indicate by check mark whether the
registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the
definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in
Rule 12b-2 of the Exchange Act.
Large accelerated filer [ ]
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Accelerated filer [ ]
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Non-accelerated filer [ ]
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Smaller reporting company [X]
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(Do not check if a smaller reporting company)
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Calculation of Registration Fee
Title of each class of securities to be registered
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Amount to be registered [1][2]
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Proposed maximum offering price per unit [2]
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Proposed maximum aggregate offering price [2]
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Amount of registration fee [2]
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Common Stock, $0.001 par value per share
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2,000,000
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$0.50
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$1,000,000
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$100.70
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(1)
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The shares of our common stock being registered hereunder are being registered for resale by the selling stockholder, as defined in the accompanying prospectus, pursuant to an equity purchase agreement.
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(2) Estimated pursuant to Rule
457(a) of the Securities Act of 1933, as amended (the "Securities Act") solely for purposes of calculating the registration
fee.
The
Registrant hereby submits this Registration Statement and shall amend such on such date or dates as may be necessary to delay its
effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall
become effective on such date as the
Commission,
acting pursuant to said Section 8(a), may determine.
The information
in this prospectus is not complete and may be changed. The recipients of shares of common stock in this sale may not sell these
securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is
not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or
sale is not permitted.
PRELIMINARY
PROSPECTUS
FutureLand
Corp.
1
,000,000
SHARES OF COMMON STOCK
This prospectus relates
to the offer and sale, from time to time, of up to 2,000,000 shares of the common stock of FutureLand Corp., a Colorado corporation
(the “Company”, “FutureLand,” “we,” “us,” and “our”), by Kodiak Capital
Group, LLC, whom we refer to in this document as “Kodiak Capital” or the “selling stockholder.” The shares
being registered herein are comprised of an aggregate of 1,000,000 shares of common stock that are issuable pursuant to an equity
purchase agreement (the “Purchase Agreement”) that we entered into with Kodiak Capital on April 08, 2016. Kodiak
Capital is an “underwriter” within the meaning of the Securities Act of 1933, as amended (the “Securities Act”)
in connection with the resale of our common stock under the Equity Purchase Agreement.
Pursuant to the Purchase
Agreement, from the date that the Securities and Exchange Commission has declared the Registration Statement of which this prospectus
forms a part effective (the “Effective Date”) until the one-year anniversary thereof, we have the right to sell, from
time to time, up to an aggregate of $1,000,000 shares of common stock (the “Put Shares”) to Kodiak. The Company will
control the timing and amount of future sales to Kodiak, if any, but we would be unable to sell shares to Kodiak if such purchase
would result in Kodiak’s beneficial ownership equaling more than 9.99% of our outstanding common stock. The purchase price
(“Purchase Price”) of the Put Shares will be equal to 70% of the lowest closing bid price of the Common Stock for any
trading day during the five consecutive trading days immediately following the date of the Company’s notice to the Purchaser
requesting the purchase (the “Valuation Period”).
Because the actual
date and Purchase Price for the Company’s put right under the Purchase Agreement is unknown, the actual purchase price for
the shares is unknown and there is no maximum amount of our shares that may be issued by the Company pursuant to the Purchase Agreement.
Accordingly, we caution readers that, although we are registering 2,000,000 shares, the number of shares actually issued under
the Purchase Agreement may be substantially greater than the number registered. Please refer to the section of this prospectus
titled “
Description of Purchase Agreement
” for a more complete discussion of the Purchase Agreement and the
terms by which we may issue additional shares of our common stock. Please refer to the section of this prospectus titled “
Selling
Stockholders
” for additional information regarding the selling stockholder.
Our auditors have
expressed substantial doubt as to our ability to continue as a going concern. We expect that we will need approximately $1,000,000
in order to fund our estimated minimum day-to-day operational costs to continue as a going concern for the next twelve
months from the date of this prospectus. We intend to raise capital to fund our operations through sale of our common stock to
Kodiak Capital under the Purchase Agreement and through other private placements of our common stock.
We are not selling
any shares of common stock in this offering. We, therefore, will not receive any proceeds from the sale of the shares by the selling
stockholder. We will, however, receive proceeds from the sale, if any, of securities to the selling stockholder pursuant to our
exercise of the put right under the Purchase Agreement.
The selling stockholder
may sell common stock from time to time in the principal market on which the stock will be traded at the prevailing market price
or in negotiated transactions. See “
Plan of Distribution
” for more information about how the selling stockholder
may sell the shares of common stock being registered pursuant to this prospectus. Any participating broker-dealers may be deemed
to be “underwriters” within the meaning of the Securities Act of 1933, as amended (the “Securities Act”),
and any commissions or discounts given to any such broker-dealer or affiliates of a broker-dealer may be regarded as underwriting
commissions or discounts under the Securities Act. The selling stockholder has informed us that it is not a broker-dealer, is not
an affiliate of a broker dealer, and does not have any agreement or understanding, directly or indirectly, with any person to distribute
our common stock. We have paid and will pay the expenses incurred in registering the Put Shares, including legal and accounting
fees.
Our common stock is currently quoted
on the OTCPINK market under the symbol “FUTL.” On May 16 2016, the last quoted sale price of our common stock as reported
on the OTCPINK was $0.35 per share.
Investing in
our securities involves significant risks, including those set forth in the “Risk Factors” section of this prospectus
beginning on page
8.
Neither the
Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed
upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
We qualify as an "emerging
growth company" as defined in the Jumpstart our Business Startups Act ("JOBS Act"). For more information, see the
prospectus section titled "Emerging Growth Company Status" starting on page 3.
THE COMPANY HAS MINIMAL REVENUES
TO DATE AND THERE CAN BE NO ASSURANCE THAT THE COMPANY WILL BE SUCCESSFUL IN FURTHERING ITS OPERATIONS AND/OR REVENUES. PERSONS
SHOULD NOT INVEST UNLESS THEY CAN AFFORD TO LOSE THEIR ENTIRE INVESTMENT. INVESTING IN OUR SECURITIES INVOLVES A HIGH DEGREE OF
RISK. YOU SHOULD PURCHASE THESE SECURITIES ONLY IF YOU CAN AFFORD A COMPLETE LOSS OF YOUR INVESTMENT. SEE "RISK FACTORS"
BEGINNING ON PAGE 6 OF THIS PROSPECTUS.
NEITHER
THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED
IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THESE
SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
NO
PERSON IS AUTHORIZED TO GIVE ANY INFORMATION NOT CONTAINED IN THE PROSPECTUS IN CONNECTION WITH THIS OFFERING AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.
The date
of this prospectus is _______, 2016.
TABLE
OF CONTENTS
PART
I - INFORMATION REQUIRED IN PROSPECTUS
Contents
PRELIMINARY PROSPECTUS
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3
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PROSPECTUS SUMMARY
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7
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
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13
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RISK FACTORS
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14
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USE OF PROCEEDS
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29
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DIVIDEND POLICY
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30
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MARKET FOR COMMON EQUITY AND RELATED MATTERS
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30
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MANAGEMENT’S DISCUSSION AND ANALYSIS
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34
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OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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34
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DESCRIPTION OF BUSINESS
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35
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DESCRIPTION OF PROPERTIES
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53
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LEGAL PROCEEDINGS
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53
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LEADERSHIP
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53
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EXECUTIVE COMPENSATION
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56
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
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58
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DESCRIPTION OF PURCHASE AGREEMENT
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59
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SELLING STOCKHOLDERS
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61
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PLAN OF DISTRIBUTION
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61
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DESCRIPTION OF CAPITAL STOCK
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63
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DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES LIABILITIES
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65
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LEGAL MATTERS
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65
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EXPERTS
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65
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WHERE YOU CAN FIND MORE INFORMATION
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65
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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
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66
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You should rely only on the information contained in this Prospectus. We have not authorized anyone to provide you with information
that is different from that contained in this Prospectus. This Prospectus is not an offer to sell these securities and is not soliciting
an offer to buy these securities in any state where the offer or sale is not permitted. The information in this Prospectus is complete
and accurate only as of the date on the front cover regardless of the time of delivery of this Prospectus or of any sale of our
securities.
PROSPECTUS SUMMARY
The following
summary highlights selected information contained in this prospectus. This summary does not contain all the information you should
consider before investing in our common stock. You should read the entire prospectus carefully, including the "Risk Factors"
beginning on page 6, and our financial statements and the notes to the financial statements included elsewhere in this prospectus.
As used throughout this prospectus, the terms "FutureLand," "Company", "we," "us," "FUTL,"
or "our" refer to FutureLand Corp. also referred to as "FL."
PROSPECTUS
SUMMARY
You should rely only on the
information contained in this prospectus. We have not authorized anyone to provide you with information different from the
information that is contained in this prospectus. You should not rely on any information or representations not contained in this
prospectus, if given or made, as having been authorized by us. This prospectus does not constitute an offer or solicitation in
any jurisdiction in which the offer or solicitation would be unlawful. The information contained in this prospectus is accurate
only as of the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of the common stock.
Except
as otherwise indicated, market data and industry statistics used throughout this prospectus are based on independent industry publications
and other publicly available information.
Recent
Developments
FutureLand Corp. (formerly known as AEGEA, Inc.) ("we",
"us", the "Company") was incorporated in Colorado on November 29, 2007 under the name Forever Valuable Collectibles,
Inc. The Company changed its name effective July 1, 2013 in connection with a July 22, 2013 acquisition of AEGEA, LLC which was
in the planning stages of developing an international community and mega-resort destination in the heart of South Florida called
AEGEA. Prior to the acquisition of AEGEA, LLC, the Company was engaged in the business of buying and reselling commemorative professional
and college sports memorabilia. On March 10, 2015, an Exchange Agreement was entered (the "Agreement"), by and among
certain shareholders and debt holders of the Company, representing the majority of the outstanding shares of the Company ("the
AEGA Holders"), and FutureWorld, Corp. (hereafter referred to as "FWDG"), a Colorado Corporation which was the owner
of the wholly owned subsidiary, FutureLand Properties, LLC, (hereafter referred to as "FLP"), a Colorado Limited Liability
Corporation. Additionally, on June 1, 2015, FWDG, as sole member of FLP resolved that effective with the Exchange Agreement dated
March 10, 2015, FWDG sold all rights, title and ownership of FutureLand Properties, LLC to the Company, including all member units,
assets, intellectual property, contracts, leases, and real property which includes 200 acres in La Vita, Colorado,
In connection with the Exchange
Agreement, we issued an aggregate of 27,845,280 shares of our common stock to FWDG and or its assignee. FWDG and the AEGA Holders
entered into the purchase and exchange agreement where the AEGA Holders agreed to deliver to FutureWorld their shareholdings in
the Company in exchange for certain actions, including AEGEA Holders resignation as directors and officers of the Company and the
simultaneous appointment of two directors as designated by FLP. In return for the AEGEA Holders shares of the Company, in combination
with certain debt forgiveness totaling $100,000 by the AEGEA Holders, the AEGA Holders shall receive, an amount of shares to be
equal to 4.9% of the outstanding shares of the Company calculated after the reverse stock split which became effective on May 1,
2015. Such shares as held by the AEGA Holders which are surrendered in return for the new exchange shares to be issued, shall be
cancelled in such exchange and returned to treasury. Such exchange shares when issued shall contain certain anti-dilutive rights
whereby the AEGEA Holders shall receive additional shares for a period of one year from the date of issuance in order to retain
4.9% of the outstanding shares of the Company, issuable within ten days of the end of each fiscal quarter following such initial
issuance. Pursuant to the Agreement, all assets of the Company, including all intellectual property, contractual rights, business
plans, architectural works, property rights, and other valuable matters, shall be sold to the AEGA
Holders, into a new private
entity formed at their direction, control and benefit, in settlement for another $100,000 in debt due to AEGEA Holders by the Company
and certain liabilities will be assumed by the new private entity.
In May 2015, we changed our
name to FutureLand Corp. and effected a 1 for 400 reverse stock split of our common stock. All share and per share data in this
annual report have been retroactively restated to reflect the reverse stock split.
As of the date of this report,
all of the required actions have been taken by the parties such as change in management and the issuance of 27,845,280 common shares
as discussed above and such Exchange Agreement is binding on the parties with closing subject to the completion of remaining actions.
Upon closing and the cancellation of all outstanding shares of Series B convertible preferred stock has occurred, the additional
shares to the AEGA Holders has occurred, all payments for contracts and vendors has been paid and/or settled by the Company, this
transaction is expected to be accounted for as a reverse recapitalization of FLP with the business of FLP being the continuing
business since the member of FLP will have voting and management control of the combined entity.
On October 30, 2014, FLP closed on 239.96 Acres in
La Vita, Colorado in Huerfano County for $60,000. FLP entered into a lease agreement contract with a lease with Colorado
Flower Company, LTD on Dec 1, 2014 allotting 37 acres for their grow facilities. FLP was formed as a Colorado State company
on October 6, 2014 by FutureWorld Corp.
Prior to FLP being formed, the State of Colorado amended
their laws allowing cannabis grow facilities to be separated from cannabis dispensaries effectively opening up an entirely new
business opportunity that FLP entered into at that time. At such time, FLP pursued the business plan to secure a cannabis or hemp
grower to execute their business plan of leasing the land, the structures, the technologies and provide maintenance contracts associated
with the grow. Integral to its strategy is to provide the financing for the entire grow operation so as to establish a position
by which to harness a competitive advantage in striking the right kind of lease in conjunction with Colorado State laws that would
allow FLP to make above average returns. On Jan 20, 2015 FLP entered a contract with GPS, La Vita, Inc. allotting 5 acres
for their immediate grow facilities. All of these contracts, and land ownings are currently in FLP.
The FutureLand
Story - Our Business
FutureLand Corp. is an agricultural land lease company
catering to the industrial hemp, legal medical marijuana and recreational cannabis market. FutureLand was started to capitalize
upon the distinct separation of the cultivation grows from the dispensaries, specifically with respect to Colorado. In the State
of Colorado, which has become the quintessential poster-child for what the industry may look like for the rest of America, at least
temporarily, as other states determine what exact direction they will choose to go, there are residency laws that must be adhered
to. For instance, in order to get a license to grow or profit from cannabis in Colorado you must be a 2 year resident.
The laws are very specific; anyone who is not a 2 year resident cannot profit from the sale of the cannabis flower or infused products.
Because of this mandate, Future Land Corp must be a land owner and leaser in order to effectively participate in the cannabis grow
industry, which we believe is essential in order to gain a competitive advantage. We also must own the structures on the
land to control the lease and our future position in the industry.
The business model is simple; offer growers the opportunity
to grow. We have the land and then we find a growers requiring assist in funding and obtaining their license and grow facility.
Next, we arrange for additional operational items needed, including but not limited to, complete build-outs provided from our associated
company, HempTech Corp, in order to capture additional revenue.
Solving the Problem of Land to Grow Cannabis
A complete and current market survey was conducted for the Colorado State Department of Revenue which estimated usage in Colorado
to be up to 346,000 lbs. per annum for residents and visitors combined.
At December 1, 2014 the Colorado market was currently
being serviced by 92 licensed growers which have led to continued shortages in the supply chain.
There are three main customer groups: pharmaceutical
and research laboratories, dispensaries, and recreational outlets. The customer segments are sufficiently distinct to be able to
target each one differently. The industry has been undergoing consolidation for several years now. We believe will be able to serve
the industry by leveraging the competitive edge of healthy, potent plants on a consistent supply basis.
FL's Land and its Operations in Walsenburg, Colorado
On, October 30
th
, 2014 FutureLand closed on 239.96 Acres in La Vita, Colorado in Huerfano County for $60,000.
The property has increased in value ten times since then. At such time, FL went into overdrive to secure a cannabis grower
to execute their business plan of leasing the land, the structures, the technologies and provide maintenance contracts associated
with the grow. Integral to our strategy was to provide the financing for the entire grow operation so as to establish a position
by which to harness a competitive advantage in striking the right kind of lease in conjunction with Colorado State laws that would
allow FL to make above average returns.
FL will have units that are leased out to growers –
that have licenses (we will fund the application). 90% of all growing will be done in Grow Houses.
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Medical and Recreational
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FL will initially focus on Leasing to Recreational Growers due to Demand
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FL will also fund its own grow facilities that will be
JV's with local growers (See Grow Houses sections). This will be done in various states as the market opens up allowing publicly
traded companies to do so. Presently there are 4 legal states plus the District of Columbia open for retail/recreational
cannabis: Alaska, Colorado, Washington, Oregon and Washington D.C. In the next years, it is likely that several more states
will also legalize recreational use of cannabis.
Overview of FL's Land Lease Terms
FL will lend to the Lessees initial Licensing Costs (out
of first proceeds)
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Funding for licenses (lend money for the license)
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Included
in Lessees Monthly Rent:
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Road Infrastructure to Grow house
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Building the Grow Houses (FL will own buildings)
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Access to water (will buy from FL)
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Technology – through Hemp Tech Corp.
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Hydroponic Systems – without soil growing
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Hoop Houses – temporary
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Additional costs to Lessee (
Not included
in Monthly
Rent)
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Staffing & Master Grower
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Buy nutrients for plants (i.e., Miracle grow-like nutrients)
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FL's Current Land Divided into Lots for Lessees and FL
Funded Grow Houses
FL's Goals – 3 Lessors with 24 Units &
3 FL funded Grow Houses with 24 Units
Our five year goal is to continue to expand operations
in and around the existing operations. Our initial operations are designed with expansion in mind through re-investment. We have
chosen facilities, at the expense of initial profits, with this "room for expansion" without significant capital outlay,
in mind. This expansion can be achieved through either additional licensed crop growth, i.e. multiple crops, or additional crop
rotation through faster maturing crops. We will use the profits from our grow cycles to fund new growth, expand employment and
develop the infrastructure in both the medicinal and recreational fields.
We have identified four keys factors that will be
instrumental to our success.
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1)
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The first key factor is the implementation of strict financial controls. By having the proper controls,
production efficiency and accountability will be maximized.
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2)
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The second key factor will be the "never ending pursuit of perfection"; similar to the
wine industry, bouquet, flavor and strength are key elements to production.
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3)
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The third key factor is the recognition and implementation of the philosophy that 100% regulatory
compliance and customer satisfaction is required to ensure a profitable business.
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4)
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The fourth key is consistency, consistency of supply, consistency of product. In an industry currently
plagued by product shortages (some dispensaries have had to close their doors due to lack of product) and erratic quality, consistency
will ensure continued sales.
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Land Lease and Grow Competitors
There are 106 MED Licensed Retail Marijuana Product Manufacturers
in Colorado as of March 2, 2015. (See attached "MED Licensed Retail Marijuana Product Manufacturers as of March 2, 2015").
As mentioned previously, this limited number of Product Manufacturers has led to shortages of supply for many Retail Dispensaries.
Grow Licensing
Licensing, both State and Local is a precursor to all
production. Initial application will be for Type 1 License which allows for the production of 3,600 plants. It is envisaged
that as the need requires and future production facilities become available, further applications will be made for Type 2 licensing
(6,000 plants) and Type 3 licensing (10,000 plants).
Production levels are directly contingent on space availability
and set-up costs. Further details relating to set-up costs and operating expenses can be found in the appendices to this document.
Production Level Analysis
Attached as an appendix is a Production Level Financial
Analysis which is predicated on the following:
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on average, 1 crop per quarter (13 week grow, harvest, dry and deliver);
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deep water under current systems yield on average 8 ounces a plant (final
yields may be higher);
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additional Seeds / Clones purchased in 2nd through 4th quarters to access/blend
different strains;
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Federal Income Tax is calculated by the application of Section 280E of the
Income Tax
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Assessment Act which disallows (amongst other items)
items that are not directly attributable to the growth of the product. Therefore, in general, items such as excise duty, rent,
advertising, depreciation, legal fees, wages, utilities, and security services that form part of the General and Administrative
Expenses of the corporation, on a Federal level, are not allowed as a deduction from income. Legal actions are currently in play
to repeal this section of the act in relation to Legalized Marijuana operations. Should such actions be successful it would have
the effect of reducing the Federal Income Tax Expense by the following:
Further analysis schedules provide details of the cost
/ equipment requirement involved in the set-up and operating of an individual crop cycle. Concurrent cycles, subject to licensing
constraints, can be approximated by doubling the Supplies, Lighting Equipment, Utilities Analyses and adding additional accounting,
sales, growing, harvesting and packaging employees.
Security of the Land and its Products
FutureLand will make use of its relationship with HempTech Corp. to provide a state of the art security system. HempTech
Corp has the SPIDer (Secure Perimeter Intrusion Detection Network) line of products to meet the needs of security and intrusion
detection in the indoor and outdoor cannabis grow industry.
The SPIDer Intrusion Detection network is a multifaceted
product family which provides near real-time detection of intruders for either a remote inside facility or large open air agricultural
facilities. Product examples include but not limited to; active fence systems, HD infrared and color camera networked via radio
systems, motion detectors, microwave security systems and intelligent LED lighting systems. HempTech will design specific
packages to support applications ranging from small indoor facilities to large outdoor agriculture facilities covering hundreds
of acres. The SPIDer systems consist of 3 levels of detection to identify intruders and threats in areas that are restricted.
The first level utilizes an electronically charged coaxial
cable, FlexPS, woven into your chain link fencing. Excessive fence movement will set off an alarm through your network notification
system that someone is attempting to enter your facility. This is a very cost effective means to secure your site to meet
security requirements for your company. A Microwave Protection system, MPS* product is also available to protect gates and
open fields where appropriate fencing is unavailable.
The second
level consists of a microwave intrusion monitoring system μltr
awave which creates a secure corridor of detection within
the restricted area. When activated, this system will detect any movement within the defined corridor. Intrusion detection
becomes extremely reliable by combining the fence system with the corridor intrusion detection thus eliminating nuisance alarms
at the perimeter such as objects hitting a fence.
The third level is a multi-level detection and verification
network that uses both level one and level two systems to rapidly identify a potential intruder and provide you information for
a rapid decision. Full motion light and inferred cameras are also integrated into the system. These cameras can be directed
by the response of the intrusion detection network. This level of integration requires CaNNaLyTiX software to fully integrate all
the components. FL will outsource armed security for operations and armored trucks for moving cash.
Government Regulation
Our business plan includes allowing
medical and recreational license holders in legal states to lease land for the purpose of growing cannabis which we believe
could be deemed to be aiding and abetting illegal activities, a violation of Federal law. We intend on remaining within the guidelines
outlined in the Cole Memo (as more fully described in this prospectus), which does not alter the Department of Justice's authority
to enforce Federal law, including Federal laws relating to cannabis, but does recommend that U.S. Attorneys prioritize enforcement
of Federal law away from the cannabis industry operating as permitted under certain state laws so long as certain conditions are
met. However, we cannot provide assurance that we are in full compliance with the Cole Memo or any other laws or regulations.
Company Information
We are a Colorado corporation. Our
address is 8400 E. Crescent Parkway, Suite 600, Greenwood Village, Colorado 80111. Our telephone number is (720) 370-3558 and our
website is www.futurelandcorp.com. Our second office is at 10901 Roosevelt Blvd, Suite 1000c, Saint Petersburg, FL 33716. The information
on our website is not a part of this prospectus.
Emerging Growth Company
We are an "emerging growth company," as defined in the JOBS Act, and we may take advantage of certain exemptions from
various reporting requirements that are applicable to other public companies.
Section 107(b) of the JOBS Act provides
that an "emerging growth company" can take advantage of the extended transition period provided in Section 7(a)(2)(B)
of the Securities Act for complying with new or revised accounting standards. In other words, an "emerging growth company"
can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have
irrevocably opted out of the extended transition period for complying with new or revised accounting standards pursuant to Section
107(b) of the JOBS Act.
We could remain an "emerging
growth company" for up to five years, or until the earliest of (i) the last day of the first fiscal year in which our annual
gross revenues are $1 billion, as adjusted, or more, (ii) the date that we become a "large accelerated filer" as defined
in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), which would occur if the market
value of our common stock that is held by non-affiliates exceeds $700 million as of the last business day of our most recently
completed second fiscal quarter, or (iii) the date on which we have issued more than $1 billion in non-convertible debt during
the preceding three-year period.
THE OFFERING
Securities offered
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Up to 2,000,000 shares of our Common Stock
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Maximum Offering Amount
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$1,000,000.
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Offering price
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Common stock issued and outstanding before this offering
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32,397,930
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Common stock issued and outstanding after this offering
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34,397,930
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Use of proceeds
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FutureLand will use the net proceeds from this offering for our general corporate purposes and working capital, to accelerate company growth, purchase more lands in other legal states and continue developing our current leases in Colorado. See "Use of Proceeds."
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Risk factors
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See "Risk Factors" beginning on page 10 and the other information set forth in this prospectus for a discussion of factors you should consider before deciding to invest in our securities.
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Market for Common Stock
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Since May 9, 2015, our common stock has been quoted on the OTCPINKS under the symbol "FUTL". The last reported sale price of the Company's common stock, as of May 16, 2016 was $0.35 per share. See "Market for Common Stock" on page 23.
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We have not declared or paid any dividends on our common stock since our inception, and we do not anticipate paying any such dividends for the foreseeable future.
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(1)
Based on 32,397,930 shares of common stock outstanding on May 16, 2016 and excludes.
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The number of shares of our common
stock outstanding before this offering excludes:
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4,000,000 shares of common stock issuable under our 2014 Equity Incentive Plan to certain employees and directors, not included in this Offering.
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CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
The information contained
in this Prospectus, including in the documents incorporated by reference into this Prospectus, includes some statements that are
not purely historical and that are “forward-looking statements.” Such forward-looking statements include, but are not
limited to, statements regarding our management’s expectations, hopes, beliefs, intentions and/or strategies regarding the
future, including our financial condition and results of operations. In addition, any statements that refer to projections, forecasts
or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements.
The words “anticipates,” “believes,” “continue,” “could,” “estimates,”
“expects,” “intends,” “may,” “might,” “plans,” “possible,”
“potential,” “predicts,” “projects,” “seeks,” “should,” “would”
and similar expressions, or the negatives of such terms, may identify forward-looking statements, but the absence of these words
does not mean that a statement is not forward-looking.
RISK FACTORS
An investment in our securities is subject to numerous
risks, including the risk factors described below. You should carefully consider the risks, uncertainties, and other factors described
below, in addition to the other information set forth in this Prospectus, before making an investment decision with regard to our
securities. Any of these risks, uncertainties, and other factors could materially and adversely affect our business, financial
condition, results of operations, cash flows, or prospects. In that case, the trading price of our Common Stock could decline,
and you may lose all or part of your investment. See also "Cautionary Note Regarding Forward-Looking Statements."
RISKS RELATING TO OUR FINANCIAL CONDITION
We have a limited operating history, which may
make it difficult for investors to predict future performance based on current operations.
We have a limited operating history upon which investors
may base an evaluation of our potential future performance. In particular, we have not proven that we can maintain and lease properties
associated with FutureLand grow operations, locations, leaseholds, placements, supply hydroponic growing equipment or sell our
hydroponic produce in a manner that enables us to be profitable and meet customer requirements, develop intellectual property to
enhance FutureLand leased grow facilities, obtain the necessary permits and/or achieve certain milestones to develop leased facilities,
FutureLand's line of products cigarettes, develop and maintain relationships with key manufacturers and strategic partners to extract
value from our intellectual property, raise sufficient capital in the public and/or private markets, or respond effectively to
competitive pressures. As a result, there can be no assurance that we will be able to develop or maintain consistent revenue sources,
or that our operations will be profitable and/or generate positive cash flows.
Any forecasts we make about our operations may prove
to be inaccurate. We must, among other things, determine appropriate risks, rewards, and level of investment in our product lines,
respond to economic and market variables outside of our control, respond to competitive developments and continue to attract, retain,
and motivate qualified employees. There can be no assurance that we will be successful in meeting these challenges and addressing
such risks and the failure to do so could have a materially adverse effect on our business, results of operations, and financial
condition. Our prospects must be considered in light of the risks, expenses, and difficulties frequently encountered by companies
in the early stage of development. As a result of these risks, challenges, and uncertainties, the value of your investment could
be significantly reduced or completely lost.
Our independent auditor's report from inception
to the fiscal years ended March 31, 2015 is qualified as to our ability to continue as a going concern.
Due to the uncertainty of our ability to meet our current
operating and capital expenses, in our audited annual financial statements as of and for the year ended March 31, 2015, our independent
auditors included a note to our financial statements regarding concerns about our ability to continue as a going concern. Recurring
losses from operations raise substantial doubt about our ability to continue as a going concern. The presence of the going concern
note to our financial statements may have an adverse impact on the relationships we are developing and plan to develop with third
parties as we continue the commercialization of our products and could make it challenging and difficult for us to raise additional
financing, all of which could have a material adverse impact on our business and prospects and result in a significant or complete
loss of your investment.
We have incurred significant losses in prior periods,
and losses in the future could cause the quoted price of our Common Stock to decline or have a material adverse effect on our financial
condition, our ability to pay our debts as they become due, and on our cash flows.
We have incurred significant losses in prior periods.
The Company had a net loss and net cash used in operations of $1,263, for the three months ended September 30, 2015 and a working
capital deficit, stockholders' deficit, and deficit accumulated during the development stage of $1,985,451, at September 30, 2015
and is in the development stage with limited revenues. These matters raise substantial doubt about the Company's ability to continue
as a going concern. The ability of the Company to continue as a going concern is dependent on the Company's ability to further
implement its business plan, raise additional capital, and generate revenues. The consolidated financial statements do not include
any adjustments that might be necessary if the Company is unable to continue as a going concern.
We will likely need additional capital to sustain
our operations and will likely need to seek further financing, which we may not be able to obtain on acceptable terms or at all.
If we fail to raise additional capital, as needed, our ability to implement our business model and strategy could be compromised.
We have limited capital resources and operations. To
date, our operations have been funded entirely from the
proceeds of debt and equity financings. We expect to
require substantial additional capital in the near future to expand our product lines, develop our intellectual property base,
and establish our targeted levels of commercial production. We may not be able to obtain additional financing on terms acceptable
to us, or at all.
Even if we obtain financing for our near-term operations,
we expect that we will require additional capital thereafter. Our capital needs will depend on numerous factors including: (i)
our profitability; (ii) the release of competitive products by our competition; (iii) the level of our investment in research and
development; and (iv) the amount of our capital expenditures, including acquisitions. We cannot assure you that we will be able
to obtain capital in the future to meet our needs.
If we raise additional funds through the issuance of
equity or convertible debt securities, the percentage ownership held by our existing stockholders will be reduced and our stockholders
may experience significant dilution. In addition, new securities may contain rights, preferences, or privileges that are senior
to those of our Common Stock. If we raise additional capital by incurring debt, this will result in increased interest expense.
If we raise additional funds through the issuance of securities, market fluctuations in the price of our shares of Common Stock
could limit our ability to obtain equity financing.
We cannot give you any assurance that any additional
financing will be available to us, or if available, will be on terms favorable to us. If we are unable to raise capital when needed,
our business, financial condition, and results of operations would be materially adversely affected, and we could be forced to
reduce or discontinue our operations.
RISKS RELATING TO OUR BUSINESS AND INDUSTRY
We face intense competition and many of our competitors
have greater resources that may enable them to compete more effectively.
The industries in which we operate in general are subject
to intense and increasing competition. Some of our competitors may have greater capital resources, facilities, and diversity of
product lines, which may enable them to compete more effectively in this market. Our competitors may devote their resources to
developing and marketing products that will directly compete with our product lines. Due to this competition, there is no assurance
that we will not encounter difficulties in obtaining revenues and market share or in the positioning of our products. There are
no assurances that competition in our respective industries will not lead to reduced prices for our products. If we are unable
to successfully compete with existing companies and new entrants to the market this will have a negative impact on our business
and financial condition.
If we fail to protect our intellectual property,
our business could be adversely affected.
Our viability will depend, in part, on our ability to
develop and maintain the proprietary aspects of our technology to distinguish our products from our competitors' products. We rely
on copyrights, trademarks, trade secrets, and confidentiality provisions to establish and protect our intellectual property.
Any infringement or misappropriation of our intellectual
property could damage its value and limit our ability to compete. We may have to engage in litigation to protect the rights to
our intellectual property, which could result in significant litigation costs and require a significant amount of our time. In
addition, our ability to enforce and protect our intellectual property rights may be limited in certain countries outside the United
States, which could make it easier for competitors to capture market position in such countries by utilizing technologies that
are similar to those developed or licensed by us.
Competitors may also harm our sales by designing products
that mirror the capabilities of our products, grow operations, leasing strategies, sources of products and sales or technology
without infringing on our intellectual property rights. If we do not obtain sufficient protection for our intellectual property,
or if we are unable to
effectively enforce our intellectual property rights,
our competitiveness could be impaired, which would limit our growth and future revenue.
We may also find it necessary to bring infringement or
other actions against third parties to seek to protect our intellectual property rights. Litigation of this nature, even if successful,
is often expensive and time-consuming to prosecute and there can be no assurance that we will have the financial or other resources
to enforce our rights or be able to enforce our rights or prevent other parties from developing similar technology or designing
around our intellectual property.
Although we believe that our technology does not
and will not infringe upon the patents or violate the proprietary rights of others, it is possible such infringement or violation
has occurred or may occur, which could have a material adverse effect on our business.
We are not aware of any infringement by us of any person's
or entity's intellectual property rights. In the event that products we sell are deemed to infringe upon the patents or proprietary
rights of others, we could be required to modify our products, obtain a license for the manufacture and/or sale of such products,
or cease selling such products. In such event, there can be no assurance that we would be able to do so in a timely manner, upon
acceptable terms and conditions, or at all, and the failure to do any of the foregoing could have a material adverse effect upon
our business.
There can be no assurance that we will have the financial
or other resources necessary to enforce or defend a patent infringement or proprietary rights violation action. If our products
or proposed products are deemed to infringe or likely to infringe upon the patents or proprietary rights of others, we could be
subject to injunctive relief and, under certain circumstances, become liable for damages, which could also have a material adverse
effect on our business and our financial condition.
Our trade secrets may be difficult to protect.
Our success depends upon the skills, knowledge, and experience
of our scientific and technical personnel, our consultants and advisors, as well as our licensors and contractors. Because we operate
in several highly competitive industries, we rely in part on trade secrets to protect our proprietary technology and processes.
However, trade secrets are difficult to protect. We enter into confidentiality or non-disclosure agreements with our corporate
partners, employees, consultants, outside scientific collaborators, developers, and other advisors. These agreements generally
require that the receiving party keep confidential and not disclose to third parties confidential information developed by the
receiving party or made known to the receiving party by us during the course of the receiving party's relationship with us. These
agreements also generally provide that inventions conceived by the receiving party in the course of rendering services to us will
be our exclusive property, and we enter into assignment agreements to perfect our rights.
These confidentiality, inventions, and assignment agreements
may be breached and may not effectively assign intellectual property rights to us. Our trade secrets also could be independently
discovered by competitors, in which case we would not be able to prevent the use of such trade secrets by our competitors. The
enforcement of a claim alleging that a party illegally obtained and was using our trade secrets could be difficult, expensive,
and time consuming and the outcome would be unpredictable. In addition, courts outside the United States may be less willing to
protect trade secrets. The failure to obtain or maintain meaningful trade secret protection could adversely affect our competitive
position.
Our business, financial condition, results of operations,
and cash flows have been, and may in the future be, negatively impacted by challenging global economic conditions.
The recent global economic slowdown has caused disruptions
and extreme volatility in global financial markets, increased rates of default and bankruptcy, and declining consumer and business
confidence, which has led to decreased levels of consumer spending. These macroeconomic developments have and could continue to
negatively impact our business, which depends on the general economic environment and levels of consumer spending. As a result,
we may not be able to maintain our existing customers or attract new customers, or we may be forced to reduce the price of our
products and not be able to source new grow operations in selected states or expand such abilities. We are unable to predict the
likelihood of the occurrence, duration or severity of such disruptions in the credit and financial markets and adverse global economic
conditions. Any general or market-specific economic downturn could have a material adverse effect on our business, financial condition,
results of operations, and cash flows.
Our future success depends on our key executive
officers and our ability to attract, retain, and motivate qualified personnel.
Our future success largely depends upon the continued
services of our executive officers and management team. If one or more of our executive officers are unable or unwilling to continue
in their present positions, we may not be able to replace them readily, if at all. Additionally, we may incur additional expenses
to recruit and retain new executive officers. If any of our executive officers joins a competitor or forms a competing company,
we may lose some or all of our customers. Finally, we do not maintain "key person" life insurance on any of our executive
officers. Because of these factors, the loss of the services of any of these key persons could adversely affect our business, financial
condition, and results of operations, and thereby an investment in our Common Stock.
Our continuing ability to attract and retain highly qualified
personnel will also be critical to our success because we will need to hire and retain additional personnel as our business grows.
There can be no assurance that we will be able to attract or retain highly qualified personnel. We face significant competition
for skilled personnel in our industry. This competition may make it more difficult and expensive to attract, hire, and retain qualified
managers and employees. Because of these factors, we may not be able to effectively manage or grow our business, which could adversely
affect our financial condition or business. As a result, the value of your investment could be significantly reduced or completely
lost.
Our success depends, in part, on the adoption
of FutureLand Technology, facilities and products by several segments, including local available licensed cannabis or hemp farmers,
and greenhouse growers, and if these segments do not adopt our products and plans, then our revenue will be severely limited.
The major groups to whom we believe may hire FutureLand
for leases, leaseholds, operations, and business plan may not continue to embrace its products. Acceptance of FutureLand grow operations
will depend on several factors, including cost, ease of use, familiarity of use, convenience, timeliness, strategic partnerships,
and reliability. If we fail to meet FutureLand's customers' needs and expectations adequately, its product offerings may not be
competitive and our ability to commence or continue generating revenues could be reduced. We also cannot ensure that our business
model will gain wide acceptance among all targeted groups. If the market fails to continue to develop, or develops more slowly
than we expect, our ability to commence or continue generating revenues could be reduced.
A drop in the retail price of commercially grown
produce may negatively impact FutureLand's business.
The demand for FutureLand grown
produce depends in part on the price of commercially grown produce and crops to be produced on such land, and for such products
produced. Fluctuations in economic and market conditions that impact the prices of commercially grown produce, such as increases
in the supply of such produce and the decrease in the price of commercially grown produce, could cause the demand for hydroponic
grown produce to decline, which would have a negative impact on our business.
We may not be able to effectively manage our growth
or improve our operational, financial, and management
information systems, which would impair our results
of operations.
In the near term, we intend to expand the scope of our
operations activities significantly. If we are successful in executing our business plan, we will experience growth in our business
that could place a significant strain on our business operations, finances, management and other resources. The factors that may
place strain on our resources include, but are not limited to, the following:
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The need for continued development of our financial and information management
systems;
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The need to manage strategic relationships and agreements with manufacturers,
customers and partners; and
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Difficulties in hiring and retaining skilled management, technical, and other
personnel necessary to support and manage our business.
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Financial abilities to accumulate additional grow properties for cultivation
facilities.
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Additionally, our strategy envisions a period of rapid
growth that may impose a significant burden on our administrative and operational resources. Our ability to effectively manage
growth will require us to substantially expand the capabilities of our administrative and operational resources and to attract,
train, manage, and retain qualified management and other personnel. There can be no assurance that we will be successful in recruiting
and retaining new employees, or retaining existing employees.
We cannot provide assurances that our management will
be able to manage this growth effectively. Our failure to successfully manage growth could result in our sales not increasing commensurately
with capital investments or otherwise materially adversely affecting our business, financial condition, or results of operations.
If we are unable to adopt or incorporate technological
advances into FutureLand products, our business could become less competitive, uncompetitive, or obsolete and we may not be able
to compete effectively with competitors' products.
We expect that technological advances in the processes
and procedures for hydroponic growing equipment will continue to occur. As a result, there are risks that products that compete
with FutureLand grow operations could be improved or developed. If we are unable to adopt or incorporate technological advances,
FutureLand grow operations could be less efficient or cost-effective than methods developed and sold by its competitors, which
could cause FutureLand grow operations to become less competitive, uncompetitive or obsolete, which would have a material adverse
effect on FutureLand Technology's financial condition, and to a much lesser extent, on our financial condition.
Competing forms of specialized agricultural equipment
may be more desirable to consumers or make FutureLand grow operations obsolete.
There are currently several different specialized agricultural
equipment technologies being deployed in farming operations. Further development of any of these competitive technologies may lead
to advancements in farming techniques that will make some of our methods of farming obsolete. Both Growers and Consumers may prefer
alternative technologies and products. Any developments that contribute to the obsolescence of certain technologies and advances
may substantially impact our business, reducing our ability to generate revenues.
Litigation may adversely affect our business, financial
condition, and results of operations.
From time to time in the normal course of our business
operations, we may become subject to litigation that may result in liability material to our financial statements as a whole or
may negatively affect our operating results if changes to our business operations are required. The cost to defend such litigation
may be significant and may
require a diversion of our resources. There also may
be adverse publicity associated with litigation that could negatively affect customer perception of our business, regardless of
whether the allegations are valid or whether we are ultimately found liable. Insurance may not be available at all or in sufficient
amounts to cover any liabilities with respect to these or other matters. A judgment or other liability in excess of our insurance
coverage for any claims could adversely affect our business and the results of our operations.
Our major shareholders have significant control
over stockholder matters and the minority stockholders will have little or no control over our affairs.
Our major shareholders, being FutureWorld
Corp. and Talari Industries currently own approximately 75% of our outstanding Common Stock, and, through the ownership of preferred
stock, have approximately 97% of stockholder voting power, and thus significant control over stockholder matters, such as election
of directors, amendments to the Articles of Incorporation, and approval of significant corporate transactions. As a result, our
minority stockholders will have little or no control over its affairs.
If we fail to implement and maintain proper and
effective internal controls and disclosure controls and procedures pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, our
ability to produce accurate and timely financial statements and public reports could be impaired, which could adversely affect
our operating results, our ability to operate our business, and investors' views of us.
As of March 31, 2015, management assessed the effectiveness
of our internal controls over financial reporting. Management concluded, as of the three months ended September 30, 2015, that
our internal controls and procedures were not effective to detect the inappropriate application of U.S. GAAP rules. Management
concluded that our internal controls were adversely affected by deficiencies in the design or operation of our internal controls,
which management considered to be material weaknesses. These material weaknesses include the following:
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lack of a functioning audit committee due to a lack of a majority of independent
members and a lack of a majority of outside directors on our Board, resulting in ineffective oversight in the establishment
and monitoring of required internal controls and procedures;
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inadequate segregation of duties consistent with control objectives; and
ineffective controls over period end financial disclosure and reporting processes.
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The failure to implement and maintain proper and effective internal controls
and disclosure controls could result in material weaknesses in our financial reporting such as errors in our financial statements
and in the accompanying footnote disclosures that could require restatements. Investors may lose confidence in our reported financial
information and disclosure, which could negatively impact our stock price.
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We do not expect that our internal controls over financial
reporting will prevent all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable,
not absolute, assurance that the control system's objectives will be met. Further, the design of a control system must reflect
the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Controls
can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the
controls. Over time, controls may become inadequate because changes in conditions or deterioration in the degree of compliance
with policies or procedures may occur. Because of the inherent limitations in a cost-effective control system, misstatements due
to error or fraud may occur and not be detected.
Our insurance coverage may be inadequate to cover
all significant risk exposures.
We will be exposed to liabilities that are unique to
the products and land holdings we provide. While we intend to maintain insurance for certain risks, the amount of our insurance
coverage may not be adequate to cover all claims or liabilities, and we may be forced to bear substantial costs resulting from
risks and uncertainties of our business. It is also not possible to obtain insurance to protect against all operational risks and
liabilities. The failure to obtain adequate insurance coverage on terms favorable to us, or at all, could have a material adverse
effect on our business,
financial condition, and results of operations. We do
not have any business interruption insurance. Any business disruption or natural disaster could result in substantial costs and
diversion of resources.
Because we do not have an audit or compensation
committee, stockholders will have to rely on our officers and directors, most of whom are not independent, to perform these functions.
Because we do not have an audit or compensation committee,
stockholders will have to rely on our officers and directors, most of whom are not independent, to perform these functions. Thus,
there is a potential conflict of interest in that our officers and directors have the authority to determine issues concerning
management compensation, nominations, and audit issues that may affect management decisions.
Federal regulation and enforcement may adversely
affect the implementation of medical marijuana laws and regulations may negatively impact our revenues and profits.
Currently, there are 23 states plus the District of Columbia
that have laws and/or regulations that recognize, in one form or another, legitimate medical uses for cannabis and consumer use
of cannabis in connection with medical treatment. Many other states are considering similar legislation. Conversely, under the
Controlled Substance Act (the "CSA"), the policies and regulations of the Federal government and its agencies are that
cannabis has no medical benefit and a range of activities including cultivation and the personal use of cannabis is prohibited.
Unless and until Congress amends the CSA with respect to medical marijuana, as to the timing or scope of any such potential amendments
there can be no assurance, there is a risk that federal authorities may enforce current federal law, and we may be deemed to be
producing, cultivating, or dispensing marijuana in violation of federal law with respect to the licensed and leased activities
of FutureLand and its subsidiary FutureWorld Holdings, Inc. current or proposed business operations or we may be deemed to be facilitating
the sale or distribution of drug paraphernalia in violation of federal law with respect to our use of proprietary technologies
in our business operations. Active enforcement of the current federal regulatory position on cannabis may thus indirectly and adversely
affect our revenues and profits. The risk of strict enforcement of the CSA in light of Congressional activity, judicial holdings,
and stated federal policy remains uncertain.
The U.S. Supreme Court declined to hear a case brought
by San Diego County, California that sought to establish federal preemption over state medical marijuana laws. The preemption claim
was rejected by every court that reviewed the case. The California 4th District Court of Appeals wrote in its unanimous ruling,
"Congress does not have the authority to compel the states to direct their law enforcement personnel to enforce federal laws."
However, in another case, the U.S. Supreme Court held that, as long as the CSA contains prohibitions against marijuana, under the
Commerce Clause of the United States Constitution, the United States may criminalize the production and use of homegrown cannabis
even where states approve its use for medical purposes.
In an effort to provide guidance to federal law enforcement,
the DOJ has issued Guidance Regarding Marijuana Enforcement to all United States Attorneys in a memorandum from Deputy Attorney
General David Ogden on October 19, 2009, in a memorandum from Deputy Attorney General James Cole on June 29, 2011, and in a memorandum
from Deputy Attorney General James Cole on August 29, 2013. Each memorandum provides that the DOJ is committed to the enforcement
of the CSA, but, the DOJ is also committed to using its limited investigative and prosecutorial resources to address the most significant
threats in the most effective, consistent, and rational way. The August 29, 2013 memorandum provides updated guidance to federal
prosecutors concerning marijuana enforcement in light of state laws legalizing medical and recreational marijuana possession in
small amounts.
The memorandum sets forth certain enforcement priorities
that are important to the federal government:
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Distribution of marijuana to children;
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Revenue from the sale of marijuana going to criminals;
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Diversion of medical marijuana from states where it is legal to states where
it is not; Using state authorized
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marijuana activity as a
pretext of other illegal drug activity; Preventing violence in the cultivation and distribution of marijuana;
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Preventing drugged driving;
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Growing marijuana on federal property; and
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Preventing possession or use of marijuana on federal property.
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The DOJ has not historically devoted resources to prosecuting
individuals whose conduct is limited to possession of small amounts of marijuana for use on private property but has relied on
state and local law enforcement to address marijuana activity. In the event the DOJ reverses its stated policy and begins strict
enforcement of the CSA in states that have laws legalizing medical marijuana and recreational marijuana in small amounts, there
may be a direct and adverse impact to our business and our revenue and profits. Furthermore, H.R. 83, enacted by Congress on December
16, 2014, provides that none of the funds made available to the DOJ pursuant to the 2015 Consolidated and Further Continuing Appropriations
Act may be used to prevent certain states, including Colorado and California, from implementing their own laws that authorized
the use, distribution, possession, or cultivation of medical marijuana.
We could be found to be violating laws related
to medical cannabis.
Currently, there are 23 states plus the District of Columbia
that have laws and/or regulations that recognize, in one form or another, legitimate medical uses for cannabis and consumer use
of cannabis in connection with medical treatment. Many other states are considering similar legislation. Conversely, under the
CSA, the policies and regulations of the federal government and its agencies are that cannabis has no medical benefit and a range
of activities including cultivation and the personal use of cannabis is prohibited. Unless and until Congress amends the CSA with
respect to medical marijuana, as to the timing or scope of any such amendments there can be no assurance, there is a risk that
federal authorities may enforce current federal law. The risk of strict enforcement of the CSA in light of Congressional activity,
judicial holdings, and stated federal policy remains uncertain. This would cause a direct and adverse effect on our subsidiaries'
intended businesses and on our revenue and profits.
Variations in state and local regulation and enforcement
in states that have legalized medical cannabis that may restrict marijuana-related activities, including activities related to
medical cannabis, may negatively impact our revenues and profits.
Individual state laws do not always conform to the federal
standard or to other states laws. A number of states have decriminalized marijuana to varying degrees, other states have created
exemptions specifically for medical cannabis, and several have both decriminalization and medical laws. Four states, Colorado,
Washington, Oregon, and Alaska, have legalized the recreational use of cannabis. Variations exist among states that have legalized,
decriminalized, or created medical marijuana exemptions. For example, Alaska and Colorado have limits on the number of marijuana
plants that can be homegrown. In most states, the cultivation of marijuana for personal use continues to be prohibited except for
those states that allow small-scale cultivation by the individual in possession of medical marijuana needing care or that person's
caregiver. Active enforcement of state laws that prohibit personal cultivation of marijuana may indirectly and adversely affect
our business and our revenue and profits.
It is possible that federal or state legislation
could be enacted in the future that would prohibit us or potential customers from selling FutureLand grow operations, and if such
legislation were enacted, our revenues could decline, leading to a loss in your investment.
We are not aware of any federal or state regulation that
regulates the sale of indoor cultivation equipment to medical or recreational marijuana growers. The extent to which the regulation
of drug paraphernalia under the CSA is applicable to our business and the sale of FutureLand products is found in the definition
of "drug paraphernalia." Drug paraphernalia means any equipment, product, or material of any kind that is primarily intended
or designed for use in manufacturing, compounding, converting, concealing, producing processing, preparing, injecting, ingesting,
inhaling, or otherwise introducing into the human body a controlled substance, possession of which is unlawful.
Our understanding of federal or state regulation is that
the sale of indoor cultivation equipment to medical or recreational cannabis growers is prohibited if the primary intent or design
of the equipment is for indoor cultivation of medical or recreational cannabis. Our products are primarily designed for general
agricultural use. There are no direct or indirect design features in our equipment specifically or primarily for the cultivation
of medical marijuana. Although it is possible that medical marijuana may be grown with our equipment, we make no inquiry of our
customers as to their intended agricultural use of our technology products. If federal and/or state legislation is enacted which
prohibits the sale of our growing equipment to medical cannabis growers, our revenues would decline, which could lead to a loss
of a material portion of your investment.
Prospective customers may be deterred from doing
business with a company with a significant nationwide online presence because of fears of federal or state enforcement of laws
prohibiting possession and sale of medical or recreational marijuana.
Our website is visible in jurisdictions where medicinal
and/or recreational use of marijuana is not permitted and, as a result, we may be found to be violating the laws of those jurisdictions.
We could lose potential customers as they could fear federal prosecution for growing marijuana with FutureLand's equipment, reducing
our revenue. In most states in which the production and sale of marijuana have been legalized, there are additional laws or licenses
required and some states altogether prohibit home cultivation, all of which could make the loss of potential customers more likely.
Marijuana remains illegal under federal law.
Marijuana is a Schedule-I controlled substance and is
illegal under federal law. Even in those states in which the use of marijuana has been legalized, its use remains a violation of
federal law. Since federal law criminalizing the use of marijuana preempts state laws that legalize its use, strict enforcement
of federal law regarding marijuana would likely result in our inability to proceed with our business plans, especially in respect
of FutureLand.
We may not obtain or maintain the necessary permits
and authorizations to operate licensed marijuana grow businesses.
FutureLand may not be able to obtain or maintain the
necessary licenses, permits, authorizations, or accreditations, or may only be able to do so at great cost, to operate their respective
medical marijuana business. In addition, we may not be able to comply fully with the wide variety of laws and regulations applicable
to the medical marijuana industry. Failure to comply with or to obtain the necessary licenses, permits, authorizations, or accreditations
could result in restrictions on our ability to operate the medical marijuana business, which could have a material adverse effect
on our business.
If we incur substantial liability from litigation,
complaints, or enforcement actions, our financial condition could suffer.
FutureLand participation in the medical marijuana industry
may lead to litigation, formal or informal complaints, enforcement actions, and inquiries by various federal, state, or local governmental
authorities against these subsidiaries. Litigation, complaints, and enforcement actions involving these subsidiaries could consume
considerable amounts of financial and other corporate resources, which could have a negative impact on our sales, revenue, profitability,
and growth prospects. As FutureLand, we are dependent upon existing license holders as lessees on their properties in Colorado,
or other states in the future and will itself only be able to start the process of obtaining final licenses to cultivate and sell
medical marijuana in Colorado, and are not as such presently engaged in the cultivation or distribution of marijuana, our subsidiaries
have not been, and are not currently, subject to any material litigation, complaint, or enforcement action regarding marijuana
(or otherwise) brought by any federal, state, or local governmental authority.
We may have difficulty accessing the service of
banks, which may make it difficult for us to operate.
Since the use of marijuana is illegal under federal law,
there is a strong argument that banks cannot accept for deposit funds from businesses involved in the marijuana industry. Consequently,
businesses involved in the marijuana industry often have difficulty finding a bank willing to accept their business. The inability
to open bank accounts may make it difficult for us to operate our contemplated medical marijuana businesses in the case FutureLand
Properties marijuana growing and leasing land business.
FutureLand business activities in some states
is dependent upon obtaining certain licenses for grow operations.
FutureLand's business model includes helping licensees
get their licenses from both the county and the state in order to grow on our land. In the state of Colorado, in order to
be able to grow cannabis you must be a two year resident and be approved both from the county in which you want to grow and also
at the state level. The county and state have non-refundable costs associated with applying to get a license. They
vary some from county to county. In Huerfano County there is a $1,300 fee due at the time of application and a $10,000 refundable
retainer that is given back in a year's time, with the assumption that they don't need to use it for some legal purpose.
At the state level there is a $5,000 fee associated with making an application. Other factors include potential moratoriums
instituted from time to time either from the state or the counties for getting licenses in certain areas. Currently you cannot
be a convicted felon and get a grow license. Additionally, the individual grow licenses need to be attached to a particular
location. It is possible, however, to get a locational license transferred to a different property but there is an application
process that goes along with the request that may or may not get approved.
We are dependent on appropriate zoning and
variances for our grow operations. The lack of such zoning and needed variances could materially impact our business and production.
The zoning for being able to grow cannabis seems to be
a bit of a moving target right now. On the one hand it is agricultural so you might expect it to be able to be grown on agricultural
permitted land, but there seems to be push backs at the county level to have cannabis properties designated as commercial to keep
them from being able to reach out for special grants and subsidies typically only offered only to agriculturally zoned products.
There seems to be resistance from farmers to not allow cannabis an agricultural designation which could cause some zoning problems
going forward.
We are dependent upon Water supplies and sourcing.
The lack of water from grow facilities could materially impact our business
.
The entire state of Colorado is over-appropriated for
water. This means that every ounce of water, even water that does not exist yet, from say a future flood, is already accounted
for by people making claim to the water and having been given those claims by the state. The state reserves the right to
make modifications regularly concerning these matters for things like priority of the water, abatement of water to other users
of water, and reallocation of water to different parties or expanding area allotments for water and many other such determinations.
This often involves water consultants, water attorneys, water selling, and lengthy water courts. However, while growers of
cannabis will often need to go down this path, the state has provided a substitutionary water plan application to allow for growing
during the period the licensee must go through the courts. That being said, there are still risks associated with getting
approval for the amount of water needed. The amount will vary too whether there is a hydroponic grow versus a potted grow.
In Colorado water is calculated on acre feet of water, which come up to approximately 325,000 gallons per year per acre.
It is important to attach your ballot to the right race horse going in.
FL is arranging to purchase water from the city of Walsenburg
who already has a very large supply of water rights. They are parceling out a portion of those rights and will be applying
to the state to expand its allocation out to our 240 acres along with many other properties. It makes sense to attach our
ticket alongside the goals of a municipality that already has ample water rights available, and desires to sell a portion of those
rights to us. This minimizes our risk to get them, on the one hand, and increases the chance for us to get more water from
an abundant and ready supply while not needing to go back to water court in order to obtain such sourcing.
RISKS RELATED TO AN INVESTMENT IN OUR SECURITIES
We may allocate net proceeds
from this offering in ways which differ from our estimates based on our current plans and assumptions discussed in the section
entitled "Use of Proceeds" and with which you may not agree.
The allocation of net proceeds of
the offering set forth in the "Use of Proceeds" section below represents our estimates based upon our current plans and
assumptions regarding industry and general economic conditions, our future revenues and expenditures. The amounts and timing of
our actual expenditures will depend on numerous factors, including access to new business ventures, land deals, success of our
FutureLand for Business initiatives, cash generated by our operations and business developments. We may find it necessary or advisable
to use portions of the proceeds from this offering for other purposes. Circumstances that may give rise to a change in the use
of proceeds and the alternate purposes for which the proceeds may be used are discussed in the section entitled "Use of Proceeds"
below. You may not have an opportunity to evaluate the information on which we base our decisions on how to use the proceeds and
may not agree with the decisions made. Additional information is available in the "Use of Proceeds" section of this Registration
Statement of which this Prospectus is a part of.
We expect to experience volatility in the price
of our Common Stock, which could negatively affect stockholders' investments.
The trading price of our Common
Stock may be highly volatile and could be subject to wide fluctuations in response to various factors, some of which are beyond
our control. The stock market in general has experienced extreme price and volume fluctuations that have often been unrelated or
disproportionate to the operating performance of companies with securities traded in those markets. Broad market and industry factors
may seriously affect the market price of companies' stock, including ours, regardless of actual operating performance. All of these
factors could adversely affect your ability to sell your shares of Common Stock or, if you are able to sell your shares, to sell
your shares at a price that you determine to be fair or favorable.
The market price for our common
stock will be particularly volatile given our status as a relatively unknown company, with a limited operating history and lack
of profits which could lead to wide fluctuations in our share price. You may be unable to sell your common stock at or above your
purchase price, which may result in substantial losses to you.
Our stock price will be particularly
volatile when compared to the shares of larger, more established companies that trade on a national securities exchange and have
large public floats. The volatility in our share price will be attributable to a number of factors. First, our common
stock will be compared to the shares of such larger, more established companies, sporadically and thinly traded. As a consequence
of this limited liquidity, the trading of relatively small quantities of shares by our shareholders may disproportionately influence
the price of those shares in either direction. The price for our shares could decline precipitously in the event that a large
number of our common stock are sold on the market without commensurate demand. Secondly, we are a speculative or "risky"
investment due to our limited operating history and lack of profits to date, and uncertainty of future market acceptance for our
potential products. As a consequence of this enhanced risk, more risk-adverse investors may, under the fear of losing all
or most of their investment in the event of negative news or lack of progress, be more inclined to sell their shares on the market
more quickly and at greater discounts than would be the case with the stock of a larger, more established company that trades on
a national securities exchange and has a large public float. Many of these factors are beyond our control and may decrease
the market price of our common stock, regardless of our operating performance. We cannot make any predictions or projections
as to what the prevailing market price for our common stock will be at any time. Moreover, the OTC MARKET is not a liquid market
in contrast to the major stock exchanges. We cannot assure you as to the liquidity or the future market prices of our common stock
if a market does develop. If an active market for our common stock does not develop, the fair market value of our common stock
could be materially adversely affected.
Our Common Stock is categorized as "penny
stock," which may make it more difficult for investors to sell their shares of Common Stock due to suitability requirements.
Our Common Stock is categorized as "penny stock."
The SEC has adopted Rule 15g-9 which generally defines "penny stock" to be any equity security that has a market price
(as defined) of less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. The
price of our Common Stock is significantly less than $5.00 per share, and is therefore considered "penny stock." This
designation imposes additional sales practice requirements on broker-dealers who sell to persons other than established customers
and accredited investors. The penny stock rules require a broker- dealer buying our securities to disclose certain information
concerning the transaction, obtain a written agreement from the purchaser, and determine that the purchaser is reasonably suitable
to purchase the securities given the increased risks generally inherent in penny stocks. These rules may restrict the ability and/or
willingness of brokers or dealers to buy or sell our Common Stock, either directly or on behalf of their clients, may discourage
potential stockholders from purchasing our Common Stock, or may adversely affect the ability of stockholders to sell their shares.
Financial Industry Regulatory Authority ("FINRA")
sales practice requirements may also limit a stockholder's ability to buy and sell our
Common Stock, which could
depress the price of our Common Stock.
In addition to the "penny stock" rules described
above, FINRA has adopted rules that require a broker-dealer to have reasonable grounds for believing that the investment is suitable
for that customer before recommending an investment to a customer. Prior to recommending speculative low priced securities to their
non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer's financial status,
tax status, investment objectives, and other information. Under interpretations of these rules, FINRA believes that there is a
high probability that speculative low priced securities will not be suitable for at least some customers. Thus, the FINRA requirements
make it more difficult for broker-dealers to recommend that their customers buy our Common Stock, which may limit your ability
to buy and sell our shares of Common Stock, have an adverse effect on the market for our shares of Common Stock, and thereby depress
our price per share of Common Stock.
The elimination of monetary liability against our
directors, officers, and employees under Colorado law and the existence of indemnification rights for our obligations to our directors,
officers, and employees may result in substantial expenditures by us and may discourage lawsuits against our directors, officers,
and employees.
Our Articles of Incorporation contain a provision permitting
us to eliminate the personal liability of our directors to us and our stockholders for damages for the breach of a fiduciary duty
as a director or officer to the extent provided by Colorado law. We may also have contractual indemnification obligations under
any future employment agreements with our officers. The foregoing indemnification obligations could result in us incurring substantial
expenditures to cover the cost of settlement or damage awards against directors and officers, which we may be unable to recoup.
These provisions and the resulting costs may also discourage us from bringing a lawsuit against directors and officers for breaches
of their fiduciary duties, and may similarly discourage the filing of derivative litigation by our stockholders against our directors
and officers even though such actions, if successful, might otherwise benefit us and our stockholders.
We may issue additional shares of Common Stock
or preferred stock in the future, which could cause significant dilution to all stockholders.
Our Articles of Incorporation authorize the issuance
of up to 1,000,000,000 shares of Common Stock and 10,000,000 shares of preferred stock, with no par value. As of March 31, 2016,
we had
32,397,930
shares of Common Stock, 0 shares of Series A Preferred Stock, and
2,000 shares of Series B Preferred Stock outstanding; however, we may issue additional shares of Common Stock or preferred stock
in the future in connection with a financing or an acquisition.
Anti-takeover effects of certain provisions of
Colorado state law hinder a potential takeover of us.
Colorado has a business combination law which prohibits
certain business combinations between Colorado corporations and "interested stockholders" for three years after an "interested
stockholder" first becomes an "interested stockholder," unless the corporation's board of directors approves the
combination in advance. For purposes of Colorado law, an "interested stockholder" is any person who is (i) the beneficial
owner, directly or indirectly, of ten percent or more of the voting power of the outstanding voting shares of the corporation,
or (ii) an affiliate or associate of the corporation and at any time within the three previous years was the beneficial owner,
directly or indirectly, of ten percent or more of the voting power of the then-outstanding shares of the corporation. The definition
of the term "business combination" is sufficiently broad to cover virtually any kind of transaction that would allow
a potential acquirer to use the corporation's assets to finance the acquisition or otherwise to benefit its own interests rather
than the interests of the corporation and its other stockholders.
The effect of Colorado's business combination law is
to potentially discourage parties interested in taking control of us from doing so if it cannot obtain the approval of our Board.
Both of these provisions could limit the price investors would be willing to pay in the future for shares of our Common Stock.
Because we do not intend to pay any cash dividends
on our Common Stock, our stockholders will not be able to receive a return on their shares unless they sell them.
We intend to retain any future earnings to finance the
development and expansion of our business. We do not anticipate paying any cash dividends on our Common Stock in the foreseeable
future. Declaring and paying future dividends, if any, will be determined by our Board, based upon earnings, financial condition,
capital resources, capital requirements, restrictions in our Articles of Incorporation, contractual restrictions, and such other
factors as our Board deems relevant. Unless we pay dividends, our stockholders will not be able to receive a return on their shares
unless they sell them. There is no assurance that stockholders will be able to sell shares when desired.
We are classified as an "emerging
growth company" as well as a "smaller reporting company" and we cannot be certain if the reduced disclosure requirements
applicable to emerging growth companies and smaller reporting companies will make our common stock less attractive to investors.
We are an "emerging growth
company," as defined in the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements
that are applicable to other public companies, including, but not limited to, not being required to comply with the auditor attestation
requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic
reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation
and shareholder approval of any golden parachute payments not previously approved. We cannot predict if investors will find
our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive
as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.
Section 107 of the JOBS Act provides
that an "emerging growth company" can take advantage of the extended transition period provided in Section 7(a)(2)(B)
of the Securities Act for complying with new or revised accounting standards. In other words, an "emerging growth company"
can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We
have irrevocably opted out of the extended transition period for complying with new or revised accounting standards pursuant to
Section 107(b) of the JOBS Act.
We could remain an "emerging
growth company" for up to five years, or until the earliest of (i) the last day of the first fiscal year in which our annual
gross revenues exceed $1 billion, (ii) the date that we become a "large accelerated filer" as defined in Rule 12b-2 under
the Exchange Act, which would occur if the market value of our common stock that is held by non-affiliates exceeds $700 million
as of the last business day of our most recently completed second fiscal quarter, or (iii) the date on which we have issued more
than $1 billion in non-convertible debt during the preceding three-year period.
Notwithstanding the above, we are
also currently a "smaller reporting company." Specifically, similar to "emerging
growth companies," "smaller
reporting companies" are able to provide simplified executive compensation disclosures in their filings; are exempt from the
provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that independent registered public accounting firms provide an
attestation report on the effectiveness of internal control over financial reporting; and have certain other decreased disclosure
obligations in their SEC filings.
Decreased disclosures in our SEC
filings due to our status as an "emerging growth company" or "smaller reporting company" may make it harder
for investors to analyze our results of operations and financial prospects.
The application of Rule 144 creates some investment
risk to potential investors; for example, existing shareholders may be able to rely on Rule 144 to sell some of their holdings,
driving down the price of the shares you purchased.
There are
6,450,281
shares of our common stock held by non-affiliates and
5,508,080
shares held by affiliates
that Rule 144 of the Securities Act of 1933 defines as restricted securities. The SEC adopted amendments to Rule 144 which became
effective on February 15, 2008 that apply to securities acquired both before and after that date. Under these amendments, a person
who has beneficially owned restricted shares of our common stock for at least six months would be entitled to sell their securities
provided that: (i) such person is not deemed to have been one of our affiliates at the time of, or at any time during the three
months preceding a sale, (ii) we are subject to the Exchange Act periodic reporting requirements for at least 90 days before the
sale and (iii) if the sale occurs prior to satisfaction of a one-year holding period, we provide current information at the time
of sale.
Persons who have beneficially owned
restricted shares of our common stock for at least six months but who are our affiliates at the time of, or at any time during
the three months preceding a sale, would be subject to additional restrictions, by which such person would be entitled to sell
within any three-month period only a number of securities that does not exceed the greater of either of the following:
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1% of the total number of securities
of the same class then outstanding (32,397,930 shares of common stock as of the date of this Report); or
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the average weekly trading volume of such securities during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale;
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provided, in each case, that we
are subject to the Exchange Act periodic reporting requirements for at least three months before the sale. Such sales by affiliates
must also comply with the manner of sale, current public information and notice provisions of Rule 144.
Risks Related to Short-Term
Financing
Convertible Promissory Notes
in the aggregate amount of $
272,000
mature on August 22, 2016, and if we do not have
sufficient financial resources to repay the Notes when due, our business would suffer.
On
March 22, 2016, we became obligated on two promissory notes of $272,500
in aggregate principal amount due on August 22,
2016. The Company currently does not have sufficient financial resources to repay these notes. If the Company does not generate
or secure sufficient financial resources in the short six-month period from the date of issuance of the notes, the Company would
default, the Lenders could take actions to collect the unpaid amounts due and the Company’s business would suffer.
The Conversion Price under
the Convertible Promissory Notes may be less than the then-prevailing market price for our common stock.
The Conversion Price under the
Convertible Promissory Notes is $.30, and possibly less if there is a default, which may be less than the then-prevailing market
price for our common stock. The Lenders have a financial incentive to sell our common stock immediately upon receiving the shares
to realize the profit equal to the difference between the discounted price and the market price. If the Lenders sell the shares,
the price of our common stock could decrease. If our stock price decreases, the Lenders may have a further incentive to sell the
shares of our common stock that it holds. These sales may have a further impact on our stock price.
Risks Related to our Agreements
with Kodiak Capital
The sale of our common stock
to Kodiak Capital may cause dilution, and the sale of the shares of common stock acquired by Kodiak Capital, or the perception
that such sales may occur, could cause the price of our common stock to fall.
On April 08, 2016, we entered
into the Purchase Agreement with Kodiak Capital. Pursuant the Purchase Agreement, Kodiak Capital has committed to purchase up to
an aggregate of $1,000,000 of our common stock. The shares that may be sold pursuant to the Purchase Agreement in the future may
be sold by us to Kodiak Capital at our discretion from time to time, commencing after the SEC has declared effective the registration
statement that includes this prospectus and concluding on the one-year anniversary thereof. The purchase price of the Put Shares
will be equal to 80% of the lowest closing bid price of the Common Stock for any trading day during the five consecutive trading
days immediately following the date of the Company’s notice to the Purchaser requesting the purchase.
We generally have the right
to control the timing and amount of any sales of our shares to Kodiak Capital, except that, pursuant to the terms of the Purchase
Agreement, we would be unable to sell shares to Kodiak Capital if such purchase would result in its beneficial ownership equaling
more than 9.99% of the outstanding common stock. Kodiak Capital may ultimately purchase all, some or none of the shares of our
common stock that may be sold pursuant to the Purchase Agreement and, after it has acquired shares, Kodiak Capital may sell all,
some or none of those shares. Therefore, sales to Kodiak Capital by us could result in substantial dilution to the interests of
other holders of our common stock. Additionally, the sale of a substantial number of shares of our common stock to Kodiak Capital,
or the anticipation of such sales, could make it more difficult for us to sell equity or equity-related securities in the future
at a time and at a price that we might otherwise wish to effect sales.
Kodiak Capital will pay
less than the then-prevailing market price for our common stock for purchases under the Purchase Agreement.
The common stock to be issued to
Kodiak Capital pursuant to the Purchase Agreement will be purchased at a 30% discount to the lowest closing bid price of the common
stock for the five consecutive trading days immediately following our request for Kodiak Capital to purchase the shares. Kodiak
Capital has a financial incentive to sell our common stock immediately upon receiving the shares to realize the profit equal to
the difference between the discounted price and the market price. If Kodiak Capital sells the shares, the price of our common stock
could decrease. If our stock price decreases, Kodiak Capital may have a further incentive to sell the shares of our common stock
that it holds. These sales may have a further impact on our stock price.
NOTE ABOUT FORWARD-LOOKING STATEMENTS
Statements under, "Prospectus
Summary," "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations,"
"Description of Business" and elsewhere in this prospectus may be "forward-looking statements." Forward-looking
statements include, but are not limited to, statements that express our intentions, beliefs, expectations, strategies, predictions
or any other statements relating to our future activities or other future events or conditions. These statements include, among
other things, statements regarding:
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the growth of our business and revenues and our expectations about the factors that influence our success;
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our plans to continue to invest in systems, facilities, and infrastructure, increase our hiring and grow our business;
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our plans for FutureLand to purchase more lands for lease to the cultivators;
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our ability to attain funding and the sufficiency of our sources of funding;
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our expectation that our cost of revenues, development expenses, sales and marketing expenses, and general and administrative expenses will increase;
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fluctuations in our capital expenditures;
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our plans for potential business partners and any acquisition plans;
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as well as other statements regarding
our future operations, financial condition and prospects, and business strategies. These statements are based on current expectations,
estimates and projections about our business based, in part, on assumptions made by management. These statements are not guarantees
of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes
and results may, and are likely to, differ materially from what is expressed or forecasted in the forward-looking statements due
to numerous factors, including those described above and those risks discussed from time to time in this registration statement,
of which this prospectus is a part, including the risks described under "Risk Factors." Any forward- looking statements
speak only as of the date on which they are made, and we do not undertake any obligation to update any forward-looking statement
to reflect events or circumstances that occur in the future.
If one or more of these or other
risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may vary materially
from what we may have projected. Any forward-looking statements you read in this prospectus reflect our current views with respect
to future events and are subject to these and other risks, uncertainties and assumptions relating to our operations, results of
operations, financial condition, growth strategy and liquidity. You should specifically consider the factors identified in this
prospectus that could cause actual results to differ before making an investment decision.
TAX CONSIDERATIONS
We are not providing any tax advice
as to the acquisition, holding or disposition of the securities offered herein. In making an investment decision, investors are
strongly encouraged to consult their own tax advisor to determine the U.S. Federal, state and any applicable foreign tax consequences
relating to their investment in our securities.
USE OF PROCEEDS
This prospectus relates
to shares of our common stock that may be offered and sold from time to time by the selling stockholder. We will not receive any
proceeds upon the sale of shares by the selling stockholder in this offering. However, we may receive gross proceeds of up to $1,000,000
under the Purchase Agreement, assuming that we sell the full amount of our common stock that we have the right, but not the obligation,
to sell to Kodiak Capital under such agreement. See “Plan of Distribution” elsewhere in this prospectus for more information.
We currently expect
to use the funds and the net proceeds from the sale of shares to Kodiak Capital under the Purchase Agreement to fund the scaling
of operations and for general corporate purposes. We will have broad discretion in determining how we will allocate the proceeds
from any sales to Kodiak Capital.
Even if we sell $1,000,000
worth of shares of our common stock to Kodiak Capital pursuant to the Purchase Agreement, we may need to obtain additional financing
in the future in order to fund our current and future planned operations. We may seek additional capital in the private and/or
public equity markets. We are evaluating additional
equity financing opportunities
on an ongoing basis and may execute them when appropriate. However, there can be no assurances that we can consummate such a transaction,
or consummate a transaction at favorable pricing.
DIVIDEND POLICY
We have never declared
nor paid any cash dividends, and currently intend to retain all our cash and any earnings for use in our business and, therefore,
do not anticipate paying any cash dividends in the foreseeable future. Any future determination to pay cash dividends will be at
the discretion of the Board of Directors and will be dependent upon our consolidated financial condition, results of operations,
capital requirements and such other factors as the Board of Directors deems relevant.
MARKET FOR COMMON
EQUITY AND RELATED MATTERS
Since April 9, 2015, our common
stock has been quoted on the OTCPINKS under the symbol "FUTL". Trading in our common stock has historically lacked consistent
volume, and the market price has been volatile.
The following table presents, for
the periods indicated, the high and low sales prices of the Company's common stock, and is based upon information provided by the
OTCPINKS Marketplace. These quotations below reflect inter-dealer prices, without retail mark-up, mark-down, or commission, and
may not necessarily represent actual transactions.
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CLOSING BID PRICE PER SHARE*
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HIGH
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LOW
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Year ended December 31, 2015
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First Quarter
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$
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5.50
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$
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4.00
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Second Quarter
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$
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10.87
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$
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4.50
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Third Quarter
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$
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2.50
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$
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0.60
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Fourth Quarter
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$
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0.60
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$
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0.55
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* The quotations do not reflect inter-dealer
prices, without retail mark-up, mark-down or commission and may not represent actual transactions.
On April 16, 2016,
the closing bid price on the OTC Markets Group, Inc.’s OTCPINK tier for our Common Stock was $0.35.
As of December 31, 2015, there were
32,397,930 shares of our common stock issued and outstanding and 4,000,000 shares of common stock issuable under our 2015 Equity
Incentive Plan to certain employees and directors.
SHARES
ELIGIBLE FOR FUTURE SALE
There is
currently a very limited market for sale and purchase of our common stock. We cannot predict the effect, if any, that market sales
of shares of our common stock or the availability of shares of our common stock for sale will have on the market price of our common
stock prevailing from time to time. Sales of substantial amounts of our common stock in the public market after this offering could
adversely affect market prices prevailing from time to time and could impair our ability to raise capital through the sale of our
equity securities.
Transfer
Agent and Registrar
The transfer
agent and registrar for the Company's common stock will be ClearTrust LLC, 16540 Pointe Village Dr, Ste 206, Lutz, FL 33558. We
have appointed the transfer agent on August 4, 2014. ClearTrust is an SEC registered stock transfer agent.
2015 Equity Incentive Plan
The following table sets forth equity
compensation plan information as of March 31, 2015:
Plan category
|
|
Number of securities to be issued upon exercise of outstanding options, warrants and rights
|
|
|
Weighted-average exercise price of outstanding options, warrants and rights
|
|
|
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
|
|
|
|
(a)
|
|
|
(b)
|
|
|
(c)
|
|
Equity compensation plans approved by security holders:
|
|
|
|
|
|
|
|
|
|
2015 Equity Incentive Plan
|
|
|
4,000,000
|
|
|
|
|
|
$
|
4,000,000
|
|
Equity compensation plans not approved by security holders
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Total
|
|
|
4,000,000
|
|
|
|
|
|
|
$
|
4,000,000
|
|
2015 Equity Incentive Plan.
In
June 2015, our shareholders approved our 2015 Equity Incentive Plan ("2015 Plan"). Our 2015 Plan provides for the
grant of incentive stock options to our employees and our parent and subsidiary corporations' employees, and for the grant of nonstatutory
stock options, stock bonus awards, restricted stock awards, performance stock awards and other forms of stock compensation to our
employees, including officers, consultants and directors. Our 2015 Plan also provides that the grant of performance stock awards
may be paid out in cash as determined by the Committee (as defined herein).
Authorized Shares.
A
total of 4,000,000 shares of our common stock are reserved for issuance pursuant to the 2015 Plan. Shares issued under our 2015
Plan may be authorized but unissued or reacquired shares of our common stock. Shares subject to stock awards granted under our
2015 Plan that expire or terminate without being exercised in full, or that are paid out in cash rather than in shares, will not
reduce the number of shares available for issuance under our 2015 Plan. Additionally, shares issued pursuant to stock awards under
our 2015 Plan that we repurchase or that are forfeited, as well as shares reacquired by us as consideration for the exercise or
purchase price of a stock award, will become available for future grant under our 2015 Plan.
Administration.
Our
Board of Directors, or a duly authorized committee thereof (collectively, the "Committee"), has the authority to administer
our 2015 Plan. Our Board may also delegate to one or more of our officers the authority to designate employees other than Directors
and officers to receive specified stock, which, in respect to those awards, said officer or officers shall then have all that the
Committee would have.
Subject to the terms of our 2015
Plan, the Committee has the authority to determine the terms of awards, including recipients, the exercise price or strike price
of stock awards, if any, the number of shares subject to each stock award, the fair market value of a share of our common stock,
the vesting schedule applicable to the awards, together with any vesting acceleration, the form of consideration, if any, payable
upon exercise or settlement of the stock award and the terms and conditions of the award agreements for use under our 2015 Plan.
The Committee has the power to modify
outstanding awards under our 2014
Plan, subject to the terms of the 2015 Plan and applicable law. Subject to the terms of our 2015 Plan, the Committee has the authority
to reprice any outstanding option or stock appreciation right, cancel and re-grant any outstanding option or stock appreciation
right in exchange for new stock awards, cash or other consideration, or take any other action that is treated as a repricing under
generally accepted accounting principles, with the consent of any adversely affected participant.
Stock Options.
Stock
options may be granted under the 2015 Plan. The exercise price of options granted under our 2015 Plan must at least be equal to
the fair market value of our common stock on the date of grant. The term of an incentive stock option may not exceed 10 years,
except that with respect to any participant who owns more than 10% of the voting power of all classes of our outstanding stock,
the term must not exceed 5 years and the exercise price must equal at least 110% of the fair market value on the grant date. The
Committee will determine the methods of payment of the exercise price of an option, which may include cash, shares or other property
acceptable to the Committee, as well as other types of consideration permitted by applicable law. No single participant may receive
more than 25% of the total options awarded in any single year. Subject to the provisions of our 2015 Plan, the Committee determines
the other terms of options.
Performance Shares
. Performance
shares may be granted under our 2015 Plan. Performance shares are awards that will result in a payment to a participant only if
performance goals established by the administrator are achieved or the awards otherwise vest. The Committee will establish organizational
or individual performance goals or other vesting criteria in its discretion, which, depending on the extent to which they are met,
will determine the number and/or the value of performance shares to be paid out to participants. After the grant of a performance
share, the Committee, in its sole discretion, may reduce or waive any performance criteria or other vesting provisions for such
performance shares. The Committee, in its sole discretion, may pay earned performance units or performance shares in the form of
cash, in shares or in some combination thereof, per the terms of the agreement approved by the Committee and delivered to the participant.
This agreement will state all terms and condition of the agreements.
Restricted Stock.
The
terms and conditions of any restricted stock awards granted to a participant will be set forth in an award agreement and, subject
to the provisions in the 2015 Plan, will be determined by the Committee. Under a restricted stock award, we issue shares of our
common stock to the recipient of the award, subject to vesting conditions and transfer restrictions that lapse over time or upon
achievement of performance conditions. The Committee will determine the vesting schedule and performance objectives, if any, applicable
to each restricted stock award. Unless the Committee determines otherwise, the recipient may vote and receive dividends on shares
of restricted stock issued under our 2015 Plan.
Other Share-Based Awards and
Cash Awards.
The Committee may make other forms of equity-based awards under our 2015 Plan, including, for example, deferred
shares, stock bonus awards and dividend equivalent awards. In addition, our 2015 Plan authorizes us to make annual and other cash
incentive awards based on achieving performance goals that are pre-established by our compensation committee.
Change in Control.
If
the Company is merged or consolidated with another entity or sells or otherwise disposes of substantially all of its assets to
another company while awards or options remain outstanding under the 2015 Plan, unless provisions are made in connection with such
transaction for the continuance of the 2015 Plan and/or the assumption or substitution of such awards or options with new options
or stock awards covering the stock of the successor company, or parent or subsidiary thereof, with appropriate adjustments as to
the number and kind of shares and prices, then all outstanding options and stock awards which have not been continued, assumed
or for which a substituted award has not been granted shall, whether or not vested or then exercisable, unless otherwise specified
in the relevant agreements, terminate immediately as of the effective date of any such merger, consolidation or sale.
Change in Capitalization.
If
the Company shall effect a subdivision or consolidation of shares or other capital readjustment, the payment of a stock dividend,
or other increase or reduction of the number of shares of the common stock outstanding, without receiving consideration therefore
in money, services or property, then awards amounts, type, limitations, and other relevant consideration shall be appropriately
and proportionately adjusted. The Committee shall make such adjustments, and its determinations shall be final, binding and conclusive.
Plan Amendment or Termination.
Our
Board has the authority to amend, suspend, or terminate our 2015 Plan, provided that such action does not materially impair the
existing rights of any participant without such participant's written consent. The 2015 Plan will terminate ten (10) years after
the earlier of (i) the date the 2015 Plan is adopted by the Board, or (ii) the date the 2015 Plan is approved by the stockholders,
except that awards that are granted under the 2015 Plan prior to its termination will continue to be administered under the terms
of the 2015 Plan until the awards terminate, expire or are exercised.
Penny Stock
Considerations
Our shares are "penny
stocks", as that term is generally defined in the Securities Exchange Act of 1934 to mean equity securities with a price of
less than $5.00. Thus, our shares are subject to rules that impose sales practice and disclosure requirements on broker-dealers
who engage in certain transactions involving a penny stock.
Under the penny stock
regulations, a broker-dealer selling a penny stock to anyone other than an established customer must make a special suitability
determination regarding the purchaser and must receive the purchaser's written consent to the transaction prior to the sale, unless
the broker-dealer is otherwise exempt.
In addition, under
the penny stock regulations, the broker-dealer is required to:
·
Deliver, prior to any transaction involving a penny stock, a disclosure schedule prepared by the Securities and Exchange Commission relating to the penny stock market, unless the broker-dealer or the transaction is otherwise exempt;
|
·
Disclose commissions payable to the broker-dealer and our registered representatives and current bid and offer quotations for the securities;
|
·
Send monthly statements disclosing recent price information pertaining to the penny stock held in a customer's account, the account's value, and information regarding the limited market in penny stocks; and
|
·
Make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction, prior to conducting any penny stock transaction in the customer's account.
|
Because of these regulations,
broker-dealers may encounter difficulties in their attempt to sell shares of our Common Stock, which may affect the ability of
selling shareholders or other holders to sell their shares in the secondary market, and have the effect of reducing the level of
trading activity in the secondary market. These additional sales practice and disclosure requirements could impede the
sale of our securities, if our securities become publicly traded. In addition, the liquidity for our securities may
be decreased, with a corresponding decrease in the price of our securities. Our shares in all probability are subject
to such penny stock rules and our shareholders will, in all likelihood, find it difficult to sell their securities.
Sales of our common stock under
Rule 144
There are
6,450,281
shares of our common stock held by non-affiliates and
5,508,080
shares held by affiliates
that Rule 144 of the Securities Act of 1933 defines as restricted securities.
There are currently
5,438,951
of our shares currently held by non-affiliates which may be resold without
restrictions under Rule 144. The remaining non-affiliate shares as well as all of the affiliates’ shares are subject
to the resale restrictions of Rule 144. In general, non-affiliates holding restricted securities must hold their shares for
a period of at least six months. In general, affiliates holding restricted securities must hold their shares for a period
of at least six months, may not sell more than one percent of the total issued and outstanding shares in any 90-day period, and
must resell the shares in an unsolicited brokerage transaction at the market price. The availability for sale of substantial
amounts of common stock under Rule 144 could reduce prevailing market prices for our securities.
Holders
As of the date of this registration
statement, we had 132 shareholders of record of our common stock.
Dividends
We have not declared
any cash dividends on our common stock since our inception and do not anticipate paying such dividends in the foreseeable future. We
plan to retain any future earnings for use in our business. Any decisions as to future payments of dividends will depend
on our earnings and financial position and such other facts, as the Board of Directors deems relevant.
Where You Can Find Additional
Information
We have filed
with the Securities and Exchange Commission a registration statement on Form S-1. For further information about us and
the shares of common stock to be sold in the offering, please refer to the registration statement and the exhibits and schedules
thereto. The registration statement and exhibits may be inspected, without charge, and copies may be obtained at prescribed rates,
at the SEC's Public Reference Room at 100 F St., N.E., Washington, D.C. 20549. The public may obtain information on
the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The registration statement and other
information filed with the SEC are also available at the web site maintained by the SEC at http://www.sec.gov.
MANAGEMENT’S
DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following discussion
of our financial condition and results of operations should be read in conjunction with our financial statements and the related
notes, and other financial information included in this Form 10-K.
Our Management's
Discussion and Analysis contains not only statements that are historical facts, but also statements that are forward-looking. Forward-looking
statements are, by their very nature, uncertain and risky. Although the forward-looking statements in this Report reflect
the good faith judgment of our management, such statements can only be based on facts and factors currently known by them. Consequently,
and because forward-looking statements are inherently subject to risks and uncertainties, the actual results and outcomes may differ
materially from the results and outcomes discussed in the forward-looking statements. You are urged to carefully review and consider
the various disclosures made by us in this report as we attempt to advise interested parties of the risks and factors that may
affect our business, financial condition, and results of operations and prospects.
Forward-Looking
Statements
The following discussion
of our financial condition and results of operations should be read in conjunction with our audited financial statements and the
related notes, and other financial information included in this Form 10-K.
Our Management's Discussion
and Analysis contains not only statements that are historical facts, but also statements that are forward-looking. Forward-looking
statements are, by their very nature, uncertain and risky. These risks and uncertainties include international, national,
and local general economic and market conditions; our ability to sustain, manage, or forecast growth; our ability to successfully
make and integrate acquisitions; new product development and introduction; existing government regulations and changes in, or the
failure to comply with, government regulations; adverse publicity; competition; the loss of significant customers or suppliers;
fluctuations and difficulty in forecasting operating results; change in business strategy or development plans; business disruptions;
the ability to attract and retain qualified personnel; the ability to protect technology; the risk of foreign currency exchange
rate; and other risks that might be detailed from time to time in our filings with the Securities and Exchange Commission.
Although the forward-looking
statements in this Report reflect the good faith judgment of our management, such statements can only be based on facts and factors
currently known by them. Consequently, and because forward-looking statements are inherently subject to risks and uncertainties,
the actual results and outcomes may differ materially from the results and outcomes discussed in the forward-looking statements. You
are urged to carefully review and consider the various disclosures made by us in this report and in our other reports as we attempt
to advise interested parties of the risks and factors that may affect our business, financial condition, and results of operations
and prospects.
DESCRIPTION OF
BUSINESS
Company Information; Organization
FutureLand, Corp. (formerly known as AEGEA, Inc.) ("we",
"us", the "Company") was incorporated in Colorado on November 29, 2007 under the name Forever Valuable Collectibles,
Inc. The Company changed its name effective July 1, 2013 in connection with a July 22, 2013 acquisition of AEGEA, LLC which was
in the planning stages of developing an international community and mega-resort destination in the heart of South Florida called
AEGEA. Prior to the acquisition of AEGEA, LLC, the Company was engaged in the business of buying and reselling commemorative professional
and college sports memorabilia. On March 10, 2015, an Exchange Agreement was entered (the "Agreement"), by and among
certain shareholders and debt holders of the Company, representing the majority of the outstanding shares of the Company ("the
AEGA Holders"), and FutureWorld Corp. (hereafter referred to as "FWDG"), a Delaware Corporation which was the owner
of the wholly owned subsidiary, FutureLand Properties, LLC, (hereafter referred to as "FLP"), a Colorado Limited Liability
Corporation. Additionally, on June 1, 2015, FWDG, as sole member of FLP resolved that effective with the Exchange Agreement dated
March 10, 2015, FWDG sold all rights, title and ownership of FutureLand Properties, LLC to the Company, including all member units,
assets, intellectual property, contracts, leases, and real property which includes 200 acres in La Vita, Colorado,
In connection with the Exchange
Agreement, we issued an aggregate of 27,845,280 shares of our common stock to FWDG and or its assignee. FWDG and the AEGA Holders
entered into the purchase and exchange agreement where the AEGA Holders agreed to deliver to FutureWorld their shareholdings in
the Company in exchange for certain actions, including AEGEA Holders resignation as directors and officers of the Company and the
simultaneous appointment of two directors as designated by FLP. In return for the AEGEA Holders shares of the Company, in combination
with certain debt forgiveness totaling $100,000 by the AEGEA Holders, the AEGA Holders shall receive, an amount of shares to be
equal to 4.9% of the outstanding shares of the Company calculated after the reverse stock split which became effective on May 1,
2015. Such shares as held by the AEGA Holders which are surrendered in return for the new exchange shares to be issued, shall be
cancelled in such exchange and returned to treasury. Such exchange shares when issued shall contain certain anti-dilutive rights
whereby the AEGEA Holders shall receive additional shares for a period of one year from the date of issuance in order to retain
4.9% of the outstanding shares of the Company, issuable within ten days of the end of each fiscal quarter following such initial
issuance. Pursuant to the Agreement, all assets of the Company, including all intellectual property, contractual rights, business
plans, architectural works, property rights, and other valuable matters, shall be sold to the AEGA Holders, into a new private
entity formed at their direction, control and benefit, in settlement for another $100,000 in debt due to AEGEA Holders by the Company
and certain liabilities will be assumed by the new private entity.
In May 2015, we changed our
name to FutureLand, Corp. and effected a 1 for 400 reverse stock split of our common stock. All share and per share data in this
annual report have been retroactively restated to reflect the reverse stock split.
As of the date of this report,
all of the required actions have been taken by the parties such as change in management and the issuance of 27,845,280 common shares
as discussed above and such Exchange Agreement is binding on the parties with closing subject to the completion of remaining actions.
Upon closing and the cancellation of all
outstanding shares of Series
B convertible preferred stock has occurred, the additional shares to the AEGA Holders has occurred, all payments for contracts
and vendors has been paid and/or settled by the Company, this transaction is expected to be accounted for as a reverse recapitalization
of FLP with the business of FLP being the continuing business since the member of FLP will have voting and management control of
the combined entity.
On, October 30, 2014, FLP closed on 239.96 Acres in La
Vita, Colorado in Huerfano County for $60,000. FLP entered into a lease agreement contract with a lease with Colorado Flower
Company, LTD on Dec 1, 2014 allotting 37 acres for their grow facilities. FLP was formed as a Colorado State company on October
6, 2014 by FutureWorld Corp.
Prior to FLP being formed, the State of Colorado amended
their laws allowing cannabis grow facilities to be separated from cannabis dispensaries effectively opening up an entirely new
business opportunity that FLP entered into at that time. At such time, FLP pursued the business plan to secure a cannabis or hemp
grower to execute their business plan of leasing the land, the structures, the technologies and provide maintenance contracts associated
with the grow. Integral to its strategy is to provide the financing for the entire grow operation so as to establish a position
by which to harness a competitive advantage in striking the right kind of lease in conjunction with Colorado State laws that would
allow FLP to make above average returns. On Jan 20, 2015 FLP entered a contract with GPS, La Vita, Inc. allotting 5 acres
for their immediate grow facilities. All of these contracts, and land ownings are currently in FLP.
We are a Colorado corporation. Our
address is 8400 E. Crescent Parkway, Suite 600, Greenwood Village, Colorado 80111. Our telephone number is (720) 370-3558 and our
website is www.futurelandcorp.com. Our second office is at 3637 4
th
Street North, Saint Petersburg, FL 33704. The information
on our website or mobile apps is not a part of this prospectus.
Our independent registered public
accounting firm has issued an audit opinion for our Company which includes an explanatory paragraph expressing substantial doubt
as to our ability to continue as a going concern.
We have never declared bankruptcy,
have never been in receivership, and have never been involved in any legal action or proceedings. Since incorporation, we have
not made any significant purchase or sale of assets. We do not own physical properties.
We are not a blank check registrant,
as that term is defined in Rule 419(a)(2) of Regulation C of the Securities Act, since we have a specific business plan or purpose.
We have not had preliminary contact or discussions with, nor do we have any present plans, proposals, arrangements or understandings
with, any representatives of the owners of any business or company regarding the possibility of an acquisition or merger.
Results of Operations
For the fiscal year
ended December 31, 2015 we generated no revenue with cost of sales of
$64
. We did
not generate any revenue as of December 31, 2014.
For the fiscal year
ended December 31, 2015 and December 31, 2014, we incurred $
1,279,597
and $
443,541
,
respectively, in operating expenses. The increase in our operating expenses are due to increases in costs related to additional
payroll costs, building lease, increased operational activities and professional expenses related to being a publicly traded Company.
Our expenses related
to research and development for the fiscal year ended December 31, 2015 and December 31, 2014 were $
20,518
and $
36,080
, respectively.
As of December
31, 2015 we had total liabilities of $
110,147
, while at December 31, 2014, we had
total liabilities of $
21,245
. The increase was the result of accrued payroll
expenses from hiring new employees, accounts payable and accrued expenses and deferred rent on our building lease.
Liquidity
and Capital Resources
As of December
31, 2015, we had $
168,804
in total current assets. We had current liabilities of
$
76,885
as of December 31, 2015. Accordingly, we had a working capital of $
91,919
as of December 31, 2015.
Operating activities
used $
704,230
in cash for the year ended December 31, 2015, as compared with $
411,335
used for the year ended December 31, 2014. Our negative operating cash flow for the year ended July 31, 2015 was mainly a result
of our net loss for the period, offset by the effects of depreciation, loss on the sale of the asset, stock issued for services,
increase in accounts receivable, inventory and prepaid expense, the increase in accounts payable and accrued liabilities and decrease
in costs and estimated earnings in excess of billings for the ongoing projects, decrease in accrued compensation and a decrease
in deferred rent.
Financing activities
for the year ended December 31, 2015 generated $
461,262
in cash, as compared with
$
864,750
for the year ended December 31, 2014. Proceeds from financing activities
consisted primarily of proceeds from issuance of common stock for cash.
Cash Requirements:
Current Operational Activities
Our estimated
minimum day-to-day operational costs, exclusive of those costs in our Plan of Operations for the next 12 months, as set forth above,
are estimated to be approximately $
430,800
to maintain current operational activities
during the next 12 months. Our minimal annual operating expenses includes $
352,000
in payroll expenses, our lease agreement for our 1,000 sq. ft. facility of $
55,200
per year, our estimated annual utility expenses of $
10,800
and $
12,800
in miscellaneous operating expenses. In addition, we will have $
75,000
in costs related
to maintaining our publicly traded status over the next 12 months.
Existing
Cash and Operational Cash Flow
As of April 16,
2016, we had $
262,285
in cash.
Kodiak
Capital Group LLC Investment Agreement for $1,000,000
On April 08, 2016,
the Company entered into an Equity Purchase Agreement (the “Purchase Agreement”) and a Registration Rights Agreement
(the “Registration Rights Agreement”) with Kodiak Capital Group, LLC (the “Purchaser”). Under the Purchase
Agreement, the Company shall issue and sell to the Purchaser a number of shares of its common stock, par value $0.0001 per share
(“Common Stock”) at a purchase price equal to the Maximum Commitment Amount (as defined in the Purchase Agreement)
of $1,000,000 (the “Put Shares”). In accordance with the Registration Rights Agreement, the Company has agreed to file
a registration statement on Form S-1 by June 30, 2016 (the “Registration Statement”) to register for resale the Put
Shares of Common Stock that may be issued under the Purchase Agreement.
Pursuant to the Purchase
Agreement, from the date that the Securities and Exchange Commission has declared the Registration Statement effective (the “Effective
Date”) until the one-year anniversary thereof, the Company has the right to sell, from time to time, up to an aggregate of
$1,000,000 Put Shares of Common Stock to the Purchaser. The Company will control the timing and amount of future sales, if any.
The purchase price of the Put Shares will be equal to 70% of the lowest closing bid price of the Common Stock for any trading day
during the five consecutive trading days immediately following the date of the Company’s notice to the Purchaser requesting
the purchase.
There is no minimum
amount that the Company may require the Purchaser to purchase at any one time. The Company may not require the Purchaser to purchase
Put Shares of Common Stock if such purchase, together with the shares of Common Stock underlying the Note, would result in the
Purchaser’s beneficial ownership exceeding 9.99% of the outstanding Common Stock. The Purchase Agreement contains customary
representations, warranties, covenants, closing conditions, and indemnification and termination provisions. The Purchaser has covenanted
not to cause or engage in any direct or indirect short selling of the Common Stock. The Purchase Agreement may be terminated by
the Company at any time at its discretion without any cost to the Company.
The Purchase Agreement
and the Registration Rights Agreement are provided to give investors information regarding the agreements’ respective terms.
They are not provided to give investors factual information about the Company or any other parties thereto. In addition, the representations,
warranties and covenants contained in the Purchase Agreement and the Registration Rights Agreement were made only for purposes
of those agreements and as of specific dates, were solely for the benefit of the parties to those agreements, and may be subject
to limitations agreed by the contracting parties, including being qualified by disclosures exchanged between the parties in connection
with the execution of such agreements. Investors are not third-party beneficiaries under these agreements and should not view the
representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or conditions
of the Company.
Meeting
Cash Requirements
Based upon the
assumption of our monthly current operational burn rate remaining unchanged during the fiscal year, exclusive of those costs in
our Additional Planned Operations for the next 12, months as set forth above, the Company currently has sufficient funds through
a combination of the Sources of Funding above to continue our current operations for the next 12 months. There is no assurance
we will obtain the anticipated funds from our Sources of Funding. For example, in order to raise funding through our Equity
Purchase Agreement, we will first have to clear a registration statement with the SEC. There can be no assurance that the funds
from the Equity Purchase Agreement can be utilized, or that additional financing will be available to us on acceptable terms, or
at all. If we don't obtain the anticipated funds from our Sources of Funding, and we don't take other measures such as cutting
back operational activities, we may not have sufficient funds to continue operations for the next 12 months.
The ability to
fund our Additional Planned Operational Activities is contingent upon us obtaining additional financing. If we don't obtain
the anticipated funds from our Sources of Funding beyond those needed for Current Operational Activities, we may be able to finance
our Additional Planned Operations and continue growing our business.
We cannot guarantee
we will be successful in our business operations. We cannot guarantee that we will have sufficient financial resources to
fund Current Operational Activities and Additional Planned Operational Activities. Our business is subject to risks inherent
in the establishment of a new business enterprise, including the financial risks associated with the limited capital resources
currently available to us for the implementation of our business strategies. To become profitable and competitive, we must continue
to execute our business plan as described above.
Off-Balance
Sheet Arrangements
We do not have
any off-balance sheet arrangements.
Critical Accounting
Policies and Estimates
For a discussion of our accounting
policies and related items, please see the Notes to the Financial Statements, included in
Item
8.
BUSINESS
FutureLand Corp. operates its presented business as an
agricultural company catering to the industrial hemp, legal medical marijuana and recreational cannabis market. FutureLand was
started to capitalize upon the distinct separation of the cultivation grows from the dispensaries, specifically with respect to
Colorado. In the State of Colorado, which has become the quintessential poster-child for what the industry may look like for the
rest of America, at least temporarily, as other states determine what exact direction they will choose to go, there are residency
laws that must be adhered to. For instance, in order to get a license to grow or profit from cannabis in Colorado you must
be a 2 year resident. The laws are very specific; anyone who is not a 2 year resident cannot profit from the sale of the
cannabis flower or infused products. Because of this mandate, Future Land Corp must be a land owner and leaser in order to
effectively participate in the cannabis grow industry, which we believe is essential in order to gain a competitive advantage.
We also must own the structures on the land to control the lease and our future position in the industry.
The business model is simple; offer growers the opportunity
to grow. We have the land and then we find a growers requiring assist in funding and obtaining their license and grow facility.
Next, we arrange for additional operational items needed, including but not limited to, complete build-outs provided from an associated
company, HempTech Corp, in order to capture additional revenue.
Solving the Problem of Land to Grow Cannabis
A complete and current market survey was conducted for
the Colorado State Department of Revenue which estimated usage in Colorado to be up to 346,000 lbs. per annum for residents and
visitors combined. As of March 2, 2015 the Colorado market was currently being serviced by 106 licensed growers which have led
to continued shortages in the supply chain.
There are three main customer groups: pharmaceutical
and research laboratories, dispensaries, and recreational outlets. The customer segments are sufficiently distinct to be able to
target each one differently. The industry has been undergoing consolidation for several years now. We believe will be able to serve
the industry by leveraging the competitive edge of healthy, potent plants on a consistent supply basis.
Land Lease and Grow Competitors
There are 106 MED Licensed Retail Marijuana Product Manufacturers in Colorado as of March 2, 2015. (See attached "MED Licensed
Retail Marijuana Product Manufacturers as of March 2, 2015"). As mentioned previously, this limited number of Product
Manufacturers has led to shortages of supply for many Retail Dispensaries.
Grow Licensing
Licensing, both State and Local is a precursor to all
production. Initial application will be for Type 1 License which allows for the production of 3,600 plants. It is envisaged
that as the need requires and future production facilities become available, further applications will be made for Type 2 licensing
(6,000 plants) and Type 3 licensing (10,000 plants).
Production levels are directly contingent on space availability
and set-up costs. Further details relating to set-up costs and operating expenses can be found in the appendices to this document.
Production Level Analysis
Attached is an appendix is a Production Level Financial
Analysis which is predicated on the following:
|
§
|
on average, 1 crop per quarter (13 week grow, harvest, dry and deliver);
|
|
§
|
deep water under current systems yield on average 8 ounces a plant (final
yields may be higher);
|
|
§
|
additional Seeds / Clones purchased in 2nd through 4th quarters to access/blend
different strains;
|
|
§
|
Federal Income Tax is calculated by the application of Section 280E of the
Income Tax
|
Assessment Act which disallows (amongst other items)
items that are not directly attributable to the growth of the
product. Therefore, in general, items such as excise
duty, rent, advertising, depreciation, legal fees, wages, utilities, and security services that form part of the General and Administrative
Expenses of the corporation, on a Federal level, are not allowed as a deduction from income. Legal actions are currently in play
to repeal this section of the act in relation to Legalized Marijuana operations. Should such actions be successful it would have
the effect of reducing the Federal Income Tax Expense by the following:
Further analysis schedules provide details of the cost
/ equipment requirement involved in the set-up and operating of an individual crop cycle. Concurrent cycles, subject to licensing
constraints, can be approximated by doubling the Supplies, Lighting Equipment, Utilities Analyses and adding additional accounting,
sales, growing, harvesting and packaging employees.
Security of the Land and its Products
FutureLand will make use of the relationship FutureLand Corp (FUTL) has with HempTech Corp. to provide a state of the art security
system. HempTech Systems has the SPIDer (Secure Perimeter Intrusion Detection Network) line of products to meet the needs
of security and intrusion detection in the indoor and outdoor cannabis grow industry.
The SPIDer Intrusion Detection network is a multifaceted
product family which provides near real-time detection of intruders for either a remote inside facility or large open air agricultural
facilities. This technology is derived from the Infrax SPIDer Intrusion detection networks designed for electrical substations
and remote facilities in the electric energy business. Product examples include but not limited to; active fence systems,
HD infrared and color camera networked via radio systems, motion detectors, microwave security systems and intelligent LED lighting
systems. Infrax Systems Inc. will design specific packages to support applications ranging from small indoor facilities to
large outdoor agriculture facilities covering hundreds of acres. The SPIDer systems consist of 3 levels of detection to identify
intruders and threats in areas that are restricted.
The first level utilizes an electronically charged coaxial
cable, FlexPS, woven into your chain link fencing. Excessive fence movement will set off an alarm through your network notification
system that someone is attempting to enter your facility. This is a very cost effective means to secure your site to meet
security requirements for your company. A Microwave Protection system, MPS* product is also available to protect gates and
open fields where appropriate fencing is unavailable.
The second
level consists of a microwave intrusion monitoring system μltrawave which creates a secure corridor of detection within the
restricted area. When activated
, this system will detect any movement within the defined corridor. Intrusion detection
becomes extremely reliable by combining the fence system with the corridor intrusion detection thus eliminating nuisance alarms
at the perimeter such as objects hitting a fence.
The third level is a multi-level detection and verification
network that uses both level one and level two systems to rapidly identify a potential intruder and provide you information for
a rapid decision. Full motion light and inferred cameras are also integrated into the system. These cameras can be directed
by the response of the intrusion detection network. This level of integration requires CaNNaLyTiX software to fully integrate all
the components. This is complete proprietary technology licensed to FUTL and FL. FL will outsource armed security for operations
and armored trucks for moving cash.
Background and Overview of FL's Land Lease Business
Silo
FL Corp is an agricultural company catering to the industrial
hemp, legal medical marijuana and recreational cannabis market. Future Land was started to capitalize upon the distinct separation
of the cultivation grows from the
dispensaries, specifically with respect to Colorado.
In the State of Colorado, which has become the quintessential poster-child for what the industry may look like for the rest of
America, at least temporarily, as other states determine what exact direction they will choose to go, there are residency laws
that must be adhered to. For instance, in order to get a license to grow or profit from cannabis in Colorado you must be
a 2 year resident. The laws are very specific; anyone who is not a 2 year resident cannot profit from the sale of the cannabis
flower or infused products. Because of this mandate, Future Land Corp must be a land owner and leaser in order to effectively
participate in the cannabis grow industry, which we believe is essential in order to gain a competitive advantage. We also
must own the structures on the land to control the lease and our future position in the industry.
The business model is simple; offer growers the opportunity
to grow. We have the land and then we find a growers requiring assist in funding and obtaining their license and grow facility.
Next, we arrange for additional operational items needed, including but not limited to, complete build-outs provided from our sister
company, HempTech Corp, in order to capture additional revenue.
Solving the Problem of Land to Grow Cannabis
A complete and current market survey was conducted for
the Colorado State Department of Revenue which estimated usage in Colorado to be up to 346,000 lbs. per annum for residents and
visitors combined.
There are three main customer groups: pharmaceutical
and research laboratories, dispensaries, and recreational outlets. The customer segments are sufficiently distinct to be able to
target each one differently. The industry has been undergoing consolidation for several years now. We believe will be able to serve
the industry by leveraging the competitive edge of healthy, potent plants on a consistent supply basis.
FL's Land and it's Product and Service in Walsenburg,
Colorado
On, October 30
th
, 2014 Future Land closed
on 239.96 Acres in La Vita, Colorado in Huerfano County for $60,000. The property has increased in value ten times since
then. At such time, FL went into overdrive to secure a cannabis grower to execute their business plan of leasing the land,
the structures, the technologies and provide maintenance contracts associated with the grow. Integral to our strategy was
to provide the financing for the entire grow operation so as to establish a position by which to harness a competitive advantage
in striking the right kind of lease in conjunction with Colorado State laws that would allow FL to make above average returns.
FL will have units that are leased out to growers –
that have licenses (we will fund the application). 90% of all growing will be done in Grow Houses.
|
§
|
Medical and Recreational
|
|
§
|
FL will initially focus on Leasing to Recreational Growers due to Demand
|
FL will also fund its own grow facilities that will be
JV's with local growers (See Grow Houses sections). This will be done in various states as the market opens up allowing publicly
traded companies to do so. Presently there are 4 legal states plus the District of Columbia open for retail/recreational
cannabis: Alaska, Colorado, Washington, Oregon and Washington D.C. In the next years, it is likely that several more states
will also legalize recreational use of cannabis.
Overview of FL's Land Lease Terms
FL will lend to the Lessees initial Licensing Costs (out
of first proceeds)
|
§
|
Funding for licenses (lend money for the license)
|
Included
in Lessees Monthly Rent:
|
§
|
Road Infrastructure to Grow house
|
|
§
|
Building the Grow Houses (FL will own buildings)
|
|
§
|
Access to water (will buy from FL)
|
|
§
|
Technology – through Hemp Tech Corp.
|
|
§
|
Hydroponic Systems – without soil growing
|
|
§
|
Hoop Houses – temporary
|
Additional costs to Lessee (
Not included
in Monthly
Rent)
|
§
|
Staffing & Master Grower
|
|
§
|
Buy nutrients for plants (i.e., Miracle grow-like nutrients)
|
FL's Goals – 3 Lessors with 24 Units & 3
FL funded Grow Houses with 24 Units
Our five year goal is to continue to expand operations
in and around the existing operations. Our initial operations are designed with expansion in mind through re-investment. We have
chosen facilities, at the expense of initial profits, with this "room for expansion" without significant capital outlay,
in mind. This expansion can be achieved through either additional licensed crop growth, i.e. multiple crops, or additional crop
rotation through faster maturing crops. We will use the profits from our grow cycles to fund new growth, expand employment and
develop the infrastructure in both the medicinal and recreational fields
We have identified four keys factors that will be instrumental
to our success.
1)
The
first key factor is the implementation of strict financial controls. By having the proper controls, production efficiency and accountability
will be maximized.
2)
The
second key factor will be the "never ending pursuit of perfection"; similar to the wine industry, bouquet, flavor and
strength are key elements to production.
3)
The
third key factor is the recognition and implementation of the philosophy that 100% regulatory compliance and customer satisfaction
is required to ensure a profitable business.
4)
The
fourth key is consistency, consistency of supply, consistency of product. In an industry currently plagued by product shortages
(some dispensaries have had to close their doors due to lack of product) and erratic quality, consistency will ensure continued
sales.
Land Lease and Grow Competitors
There are 92 MED Licensed Retail Marijuana Product Manufacturers
in Colorado as of December 1, 2014. (See attached "MED Licensed Retail Marijuana Product Manufacturers as of December 1, 2014").
As mentioned previously, this limited number of Product Manufacturers has led to shortages of supply for many Retail Dispensaries.
Grow Licensing
Licensing, both State and Local is a precursor to all
production. Initial application will be for Type 1 License which
allows for the production of 3,600 plants. It is
envisaged that as the need requires and future production facilities become available, further applications will be made for Type
2 licensing (6,000 plants) and Type 3 licensing (10,000 plants).
Production levels are directly contingent on space availability
and set-up costs. Further details relating to set-up costs and operating expenses can be found in the appendices to this document.
Production Level Analysis
Attached as an appendix is a Production Level Financial
Analysis which is predicated on the following:
|
§
|
on average, 1 crop per quarter (13 week grow, harvest, dry and deliver);
|
|
§
|
deep water under current systems yield on average 8 ounces a plant (final
yields may be higher);
|
|
§
|
additional Seeds / Clones purchased in 2nd through 4th quarters to access/blend
different strains;
|
|
§
|
Federal Income Tax is calculated by the application of Section 280E of the
Income Tax
|
Assessment Act which disallows (amongst other items)
items that are not directly attributable to the growth of the product. Therefore, in general, items such as excise duty, rent,
advertising, depreciation, legal fees, wages, utilities, and security services that form part of the General and Administrative
Expenses of the corporation, on a Federal level, are not allowed as a deduction from income. Legal actions are currently in play
to repeal this section of the act in relation to Legalized Marijuana operations. Should such actions be successful it would have
the effect of reducing the Federal Income Tax Expense by the following:
Further analysis schedules provide details of the cost
/ equipment requirement involved in the set-up and operating of an individual crop cycle. Concurrent cycles, subject to licensing
constraints, can be approximated by doubling the Supplies, Lighting Equipment, Utilities Analyses and adding additional accounting,
sales, growing, harvesting and packaging employees.
Security of the Land and its Products
FutureLand will make use of the relationship FutureLand
Corp (FUTL) has with HempTech Corp. to provide a state of the art security system. HempTech Systems has the SPIDer (Secure
Perimeter Intrusion Detection Network) line of products to meet the needs of security and intrusion detection in the indoor and
outdoor cannabis grow industry.
The SPIDer Intrusion Detection network is a multifaceted
product family which provides near real-time detection of intruders for either a remote inside facility or large open air agricultural
facilities. This technology is derived from the Infrax SPIDer Intrusion detection networks designed for electrical substations
and remote facilities in the electric energy business. Product examples include but not limited to; active fence systems,
HD infrared and color camera networked via radio systems, motion detectors, microwave security systems and intelligent LED lighting
systems. Infrax Systems Inc. will design specific packages to support applications ranging from small indoor facilities to
large outdoor agriculture facilities covering hundreds of acres. The SPIDer systems consist of 3 levels of detection to identify
intruders and threats in areas that are restricted.
Challenges – Water
The city of Walsenburg has 20 years of reserve water.
We sat down with the mayor and administrator and were told that they are willing to put in an application to expand the reaches
of a portion of this reserve to extend to the outlying regions of the city to include our property in Majors Ranch. Specifically,
they are willing to sell us all the water that we need. One condition was that we get on the same page as our HOA.
We then met with the President
and its board and had a meeting of the minds about the
project. When we are ready the city will apply to the state and we will apply with the city for a substitutionary water plan
to put into effect while the main plan is going through water court. These plans can take up to 5 years to approve, but the
substitutionary water plan allows us to buy the water from the city as if it existed until such time as the main plan is approved.
There are other paths to go down. For instance, we could look to truck the water, but this is not a good long-term plan for
the amount of water CFC will need.
FL has Two Executed Leases with CFC and GPS –
La Vita (First Lessees)
Colorado Flower Company
|
GPS La Vita, Inc. – Subsidiary of INCC (Publically Traded)
|
Leased them 37 acres at $10K/per acre
§
5
Year Renewable Lease is for $575K/month
§
$370K
for land
§
$205K
for All other
§
Total
Rent for Unit #1: $575K
|
§
Lessee
Land Only - $10K/per acres
§
Lessee
is paying for all grow house buildings – FL will buy building back in 3 years from Proceeds
§
Total
Rent for Lessee #2 – Unit #1: $345
|
FL's Capital Requirements for its Land Lease Silo
- $3M
The Colorado Flower Company lease is set on the back
39.96 acres as shown above (Lessee #1). The GPS, La Vita, Inc. lease is located adjacent to the 39.96 acres on the
southern edge of the 200 acres known as Lot 19 in HOA Majors Ranch, La Vita CO (Lessee #2). The beauty of this land is that
it comes with relative little clearing required and is already zoned agricultural and legal to grow cannabis and hemp. Colorado
Flower Company, LTD will grow 3600 plants in accordance with a Tier 1 license and once they have been able to demonstrate to the
state that they can sell it, they will be eligible to apply for a Tier 2 (6000 Plants) and then a Tier 3 license (10,000 Plants).
FL went to contract with a lease for Colorado Flower
Company, LTD on Dec 1, 2014 allotting 37 acres for their grow facilities. It is a 5-year lease with 2 three-year renewals.
The lease specifies $385,000 per month to FL for leasing the land and the structure. $10,000 per month per acre plus $15,000
for the structure per month. In the future as structures get added to the property we will lease each out for an additional
$15,000 per month plus a management/consulting fee of approximately $333,333 per month per new facility. On Jan 20, 2015
FL went to contract with GPS, La Vita, Inc. allotting 5 acres for their immediate grow facilities with the ability to scale up
into 35 acres. This lease is $10,000 per month per acre starting with the first 5 acres and FL reserves the right to participate
in expansion, dollar for dollar, beyond the first 5 acres allotted. This, too, is a 5 year lease with options to renew.
Revenue Centers from Land Lease Silo
Based on 3,600 acres plant grows, below are the two revenue
centers and their break downs:
Revenue Centers by Units
|
|
|
Revenue Center #1
|
|
Revenue Center #2
|
Define a Unit
|
|
Lessee's First Unit Rent
|
|
Lessee's Rent Units 2-8
|
Gross Revenue
|
|
$575,000 per month
|
|
$345,000 per month
|
Cost of Goods Sold
|
|
0
|
|
0
|
Gross Margin
|
|
$575,000
|
|
$345,000
|
Gross Margin %
|
|
100%
|
|
100%
|
Business Silo #2
-
Grow
Houses
Overview of FL's Grow Houses
FL will enter the Cannabis growing business. Each
grow house requires a license. To qualify to obtain a growing license, the majority owner (50.1%) must reside in the state
(i.e., Colorado, Oregon, etc.). Therefore, FL will do joint ventures with entrepreneurs who are specialist in Cannabis growing.
FL will provide the funding and land (depending on the location) for these grow houses.
What defines FL's Grow Houses Business Silo?
The primary market segments which FL's Grow House Silo
will be selling are:
|
1.
|
Recreational Dispensaries
which sell cannabis and secondary products in accordance
with State and Local laws to the public. The tax structure and strain development is very different than the medicinal industry.
|
|
2.
|
Medicinal Dispensaries
, which sell cannabis and secondary products to aid in the
treatment or management of a physical condition and is prescribed to individual via a medical establishment. The product strains
are developed for very specific conditions like hunger and pain management as well as seizure control. The focus of the strains
makes it a very different pursuit than the recreational strain development.
|
|
3.
|
Pharmaceutical Science Labs
which purchase raw plants and concentrates to further
medicinal studies on cannabis.
|
|
4.
|
Cannabis Secondary Product Processors
, which manufacture medical grade, concentrates,
secondary, and retail end products for their own labels. These companies purchase the plants to extract the THC and transform process
it into sell able secondary products for their own brand.
|
FL's Grow Houses – Solving the Industry's
Problem
Some of the major problems facing current Grow Houses
are:
|
1.
|
These businesses were started by inexperienced entrepreneurs who lacked Proper planning;
|
|
2.
|
The funding the needed
|
|
3.
|
The business expertise
|
|
5.
|
The financial and banking challenges
|
|
6.
|
Initial negative public opinion; and
|
|
7.
|
Many entrepreneurs jumped into the industry because they loved the product, but did not know how
to monetize the product correctly, efficiently and effectively.
|
FL will be able to address all of these problems and
correct them with:
|
1.
|
Proper planning and education to the entrepreneurs
|
|
2.
|
Provide all of the necessary funding
|
|
3.
|
Provide the land and equipment needed
|
|
4.
|
Provide the back-office support including executive guidance to the Grow House Entrepreneur
|
|
5.
|
Provide buying discounts
|
|
6.
|
Assist with all building a national brand and all Sales and Marketing
|
FL's LOI and JV with Pueblo Flower Company, LLC.
FL has signed an LOI to do a joint venture with Pueblo Flower Company, LLC. These grow experts have already
established their expertise in this area. They have an
accomplished business team that will be operational managers of this grow house.
FL's JV and Deal Structure with Pueblo Flower Company,
LLC.
The terms of this lease Joint Venture are outlined below
with $3M in funding in exchange for the following:
|
§
|
49.9% equity ownership with a non-dilution clause (Note: currently,
laws demand that out-of-state equity owners can only be minority shareholders)
|
|
§
|
1 Board Seat – with the corporate bylaws set up requiring unanimous
consent of the board
|
|
§
|
Executive Oversight of all Operational and Financial Issues by FL's EVP's
|
|
§
|
Quarterly Cash Distributions
|
|
§
|
Pueblo's executive team will complete a comprehensive 5-Year business plan
with financial projections
|
As FL is contributing initial outlay of capital for this
company, the majority equity owners must also contribute capital back into the company for growth from their portion of the profit
proceeds. Therefore, upon the initial cash flow, the majority equity owners will reinvest $2.5M from their portion of the
profits back into the company to equal out capital contributions on both from both parties. This capital contribution from the
majority owners (out of the 50.1% owners) can be done over the course of the first 4 harvests (at 25% per cash distribution).
Pueblo's $3M Use of Proceeds
Pueblo's $3M Use of Proceeds includes:
|
§
|
Construction of Grow House and purchase of all Equipment
|
§
Revenue Centers #3 from Grow House Silo
Based on 3,600 acres plant grows, below are the two revenue
centers and their break downs. Wholesale product pricing are estimated at $2,400 per pound; with Retail pricing at $4,000
per pound.
Business Silo #3
Dispensaries & Distribution
Centers
FL's Dispensaries – Medical and Recreational
and Their Products
FL's dispensaries will be both medical and recreational
in nature. The products must be separate and cannot be sold in the same dispensaries (depending on laws in each state).
In both types of dispensaries, FL will provide three
major types of products:
|
1.
|
Cannabis buds (flowers)
|
|
3.
|
Oils, Waxes and other products
|
All dispensaries will be managed with the same basic
format – regardless of if they are recreational or medical. Their branding will be different and regionally, other
brands may be developed (i.e., FL dispensaries verses Blunt Inc. dispensaries). Additionally, to promote brand awareness
and consistence, FL will seek to have all architecture and décor done in the same basic format in each dispensary.
FL will have security and testing of
products available to consumers (depending on Medical
or Recreational Dispensaries.
Initially, FL will have grow houses attached to their
dispensaries (i.e., Blunt, Inc.). However, until FL identifies new opportunities to fund or purchase individual dispensaries,
FL will supply retail product to its dispensaries through their own onsite grow houses from land they purchased or leased.
FL signs an LOI with Blunt, Inc. for Recreational
Dispensaries in Oregon
Blunt Inc. an Oregon company will do a joint venture with FL. Their business model includes having land with their own grow houses
and then multiple dispensaries based. This Oregon based company's primary focus on the development and sales of recreational cannabis
using a unique sales and marketing plan. Blunt's business model is mirrored off the very successful beer distributor's model.
Their unique sales and marketing plan calls for an aggressive branding and marketing campaign using celebrity spokes people and
events with the cast members from hit show on Comedy Central "Workaholics" – a cannabis based comedy that his a
hit show for the college aged community and cannabis-loving community.
- 33 -
FL's JV and Deal Structure with Blunt Inc.
The terms of this LOI and Joint Venture are outlined
below with FL providing $3M in funding in exchange for the following:
|
§
|
40% equity ownership with a non-dilution clause (Note: currently, laws
demand that out-of-state equity owners can only be minority shareholders)
|
|
§
|
1 Board Seat – with the corporate bylaws set up requiring unanimous
consent of the board
|
|
§
|
Executive Oversight of all Operational and Financial Issues by FL's EVP's
|
|
§
|
Quarterly Cash Distributions
|
|
§
|
Blunt's executive team will complete a comprehensive 5-Year business plan
with financial projections
|
As FL is contributing initial outlay of capital for this
company, the majority equity owners must also contribute capital back into the company for growth from their portion of the profit
proceeds. Therefore, upon the initial cash flow, the majority equity owners will reinvest $2.5M from their portion of the
profits back into the company to equal out capital contributions on both from both parties. This capital contribution from the
majority owners (out of the 50.1% owners) can be done over the course of the first 4 harvests (at 25% per cash distribution).
Blunt's $3M Use of Proceed
|
§
|
Construction of Grow House and purchase of all Equipment
|
Revenue Center #4 from Dispensaries Silo
Based on 3,600 acres plant grows, below is FL's 4th revenue
center: Blunt Inc. Grow Houses and Dispensaries) and its breakdowns: medical and recreational. As Blunt will be both growing
the product and selling it in their dispensaries, the revenue shown is at a retail pricing at $4,000 per pound.
FL's Entrance into Dispensaries
FL will likely invest in dispensaries and manufacturing
of waxes, oils and other infusible product in the near future. However, for the sake of this business plan, no revenue is
shown for dispensaries only, only Blunt Inc.'s JV that includes both (1) Real Estate and Grow Houses; and (2) their own brand of
dispensaries in Oregon.
Business Silo #4 - Medical Businesses
The Medical Cannabis Industry Opportunities
Dating back to ancient Chinese medicine, there has long been a following of this "magical" herb, praised for its soothing
and hallucinogenic qualities [Source: Guy, Whittle and Robson]. Though recreational use of the drug is still illegal in the U.S.,
the popularity of the drug for medicinal purposes is on the rise. With more states legalizing medical cannabis each year –
currently 20+ states and the District of Columbia have passed legislation governing the drug's use for medical purposes the substance
is increasingly being used to help treat these five common ailments.
There are two types of receptors in our body that allows
us to take in the effects of medical cannabis - CB1 receptors that are found primarily in the brain, spinal cord, and
periphery and CB2 receptors that are found on the immune tissues [source: McCarberg, Bill M.D.]. When coming into contact
with cannabis, our body produces molecules (called endocannabinoids) that interact with these CB1 and CB2 receptors which produces
the euphoric state that helps to dull our senses to various symptoms [source: McCarberg, Bill M.D.].
One common use of medical cannabis is to ease the symptoms
of nausea. In trials conducted by National Cancer Institute, two FDA-approved cannabis-based drugs, dronabinol and nabilone, helped
to reduce chemotherapy-related nausea and vomiting in cancer patients. When taken orally, the drugs "worked as well as or
better than some of the weaker FDA-approved drugs to relieve nausea and vomiting" [source: National Cancer Institute].
States around the country — more than 20+ in total
— have legalized medical marijuana. Experts have been changing their minds too — recently, CNN's chief medical
correspondent Sanjay Gupta reversed his opinion on medical marijuana. While recreational pot usage is controversial, many
people agree with Gupta's new stance, and believe that the drug should be legal for medical uses.
And even though the benefits of smoking pot may be overstated
by advocates of marijuana legalization, new laws will help researchers study the drug's medicinal uses and better understand how
it impacts the body. Currently only 6% of studies on marijuana analyze its medicinal properties. Keep in mind, though,
that there are negative effects of smoking too much pot or using it for non-medicinal purposes. When overused or abused, pot
can lead to dependency and mess with your memory and emotions.
There are at least two active chemicals in marijuana
that researchers think have medicinal applications. Those are Cannabidiol (CBD) — which seems to impact the brain without
a high— and tetrahydrocannabinol (THC) — which has pain relieving (and other) properties. Also keep in mind that
some of these health benefits can potentially be gained by taking THC pills like Dronabinol, a synthetic form of THC, which in
some ways might be more effective than smoked marijuana. (Source: Randy Astaiza).
Medical Uses of Cannabis
There are proven medical benefits to Cannabis use including:
|
§
|
It can be used to treat
Glaucoma.
|
|
§
|
Cannabis reduces some of the
awful pain and nausea from chemo
, and
stimulates appetite.
|
|
§
|
It may help reverse the
carcinogenic effects of tobacco and improve lung
health
.
|
|
§
|
It can help control
epileptic seizures
.
|
|
§
|
It often helps enormously with
chronic pain
|
|
§
|
Decreases the symptoms of a severe seizure disorder known as
Dravet's Syndrome
.
|
|
§
|
A chemical found in marijuana
stops cancer from spreading
.
|
|
§
|
It may decrease
anxiety
.
|
|
§
|
THC slows the progression of
Alzheimer's disease
.
|
|
§
|
The drug eases the pain of
multiple sclerosis
.
|
|
§
|
Other types of
muscle spasms
could be helped too.
|
|
§
|
It lessens side effects from treating
hepatitis C
and increases treatment
effectiveness.
|
|
§
|
Marijuana treats
inflammatory bowel diseases
.
|
|
§
|
It relieves
arthritis
discomfort.
|
|
§
|
It helps your
metabolism
.
|
|
§
|
It improves the symptoms
of Lupus, an autoimmune disorder.
|
|
§
|
While not really a health benefit, marijuana
spurs creativity in the brain
.
|
|
§
|
Marijuana might be able to help with
Crohn's disease
.
|
|
§
|
Pot soothes tremors for people with
Parkinson's disease.
|
|
§
|
Marijuana helps veterans suffering from
PTSD
.
|
|
§
|
Marijuana protects the brain after a
stroke
.
|
|
§
|
It might protect the brain from
concussions and trauma.
|
|
§
|
It can help
eliminate nightmares
.
|
FL's Medical Marijuana will target Research and Product
Development Businesses
FL's will be identifying and targeting investment opportunities
in the medical marijuana (Cannabis) space. These investment opportunities may be in research or product development.
The merits of each investment opportunity will be judged
on an individual basis. However, given recent findings in the medical marijuana space, FL anticipates that this will be a
growing and very lucrative investment opportunity given the increasing number of states that are legalizing its use for medicinal
purposes.
Business Silo #5
–
Entertainment
FL Plans to enter into the Entertainment Arena of
the Cannabis Industry
With Cannabis only recently being legalized for recreational
use, there are very few entertainment based destination venues that cannabis users can go to legally to utilize the product in
public environments. FL is developing a business model that will bring together fun and product sales. We call this
project:
FutureLand
.
Creating a Destination devoted to Cannabis. This
Entertainment Venue will include celebrity endorsements and branding with the following:
|
1.
|
Gated/Private – Daily Cover Charge
|
|
4.
|
Multiple Restaurants / Food Courts
|
|
5.
|
Open Areas for Product Use including Hookah Bars (Alcohol served if legal)
|
|
8.
|
Movies with food served
|
|
9.
|
Chucky Cheese®-like games
|
|
10.
|
Gardens and outdoor area for customers
|
|
11.
|
Out-door Amp theater for concerts
|
|
12.
|
Nearby Lodging – adjacent to Park
|
Market Conditions
FutureLand is poised to take advantage
of two rapidly growing industry: cannabis.
Cannabis Market Growth and Current
Trends
Since the launch of FutureLand,
there have been a series of events that have help further shape the development of the cannabis and mobile technology industries:
•
|
|
On August 29, 2013, Deputy Attorney General James Cole issued a memo ("The Cole Memo") in response to certain states passing measures to legalize the medical and adult-use of cannabis. The Cole Memo does not alter the Department of Justice's authority to enforce Federal law, including Federal laws relating to cannabis, regardless of state law, but does recommend that U.S. Attorneys to focus their time and resources on certain priorities, rather than businesses legally operating under state law. These guidelines focus on ensuring that cannabis does not cross state lines, keeping dispensaries away from schools and public facilities, strict-enforcement of state laws by regulatory agencies, among other priorities.
|
•
|
|
On January 1, 2014, the first sales of cannabis for adult-use permissible under state law took place in Colorado. This event resulted in significant media coverage for the industry. Since that time, three other states have made adult-use permissible under their state law and several states have ballot proposals pending at upcoming elections.
|
On February 14, 2014, the Departments
of Justice and Treasury issued a joint memo allowing banks and financial institutions to accept deposits from dispensaries operating
legally under state law. In most cases, dispensaries had been forced to operate on a cash basis, presenting significant security
and accounting issues. This was a major step in legitimizing and accepting the cannabis industry on a national level.
Current States with Laws Permitting
the Medical or Adult Use of Cannabis
As of June 30, 2015, 23 states and
the District of Columbia have passed laws allowing some degree of medical use of cannabis, while four of those states and the District
of Columbia have also legalized the adult-use of cannabis. The states which have enacted such laws are listed below:
State
|
|
|
Year Passed
|
|
1. Alaska*
|
|
|
1998
|
|
2. Arizona
|
|
|
2010
|
|
3. California
|
|
|
1996
|
|
4. Colorado*
|
|
|
2000
|
|
5. Connecticut
|
|
|
2012
|
|
6. District of Columbia*
|
|
|
2010
|
|
7. Delaware
|
|
|
2011
|
|
8. Hawaii
|
|
|
2000
|
|
9. Illinois
|
|
|
2013
|
|
10. Maine
|
|
|
1999
|
|
11. Maryland
|
|
|
2014
|
|
12. Massachusetts
|
|
|
2012
|
|
13. Michigan
|
|
|
2008
|
|
14. Minnesota
|
|
|
2014
|
|
15. Montana
|
|
|
2004
|
|
16. Nevada
|
|
|
2000
|
|
17. New Hampshire
|
|
|
2013
|
|
|
|
|
2010
|
|
19. New Mexico
|
|
|
2007
|
|
20. New York
|
|
|
2014
|
|
21. Oregon*
|
|
|
1998
|
|
22. Rhode Island
|
|
|
2006
|
|
23. Vermont
|
|
|
2004
|
|
24. Washington*
|
|
|
1998
|
|
* State has enacted laws permitting
the adult use of cannabis, in addition to medical use.
Public Support for Legalization
Increasing
A Gallup poll conducted in October
2013 found that 58% of the American people supported legalizing the adult-use of cannabis, an increase of 22% from 2005 alone.
This is the first time in American history the majority of registered voters support the full legalization of cannabis for adult-use.
Moreover, of 67% participants aged 35 and below voted in support of recreational adult-use, setting the trend for years to come.
A 2013 ArcView Market Research report
predicts an additional 14 states will legalize the adult-use of cannabis and two states will legalize medical-use within the next
five years. If public support for cannabis legalization continues to increase, we believe it is likely that Federal policies towards
marijuana will be reformed. The combination of additional states legalizing adult-use under state law, expansion of medical-use
provisions in states where it is currently permitted under state law and increased public awareness is projected to cause marijuana
sales permitted under state law to grow from $1.43 billion in 2013 to $10.2 billion in 2018, according to ArcView Market Research.
Market Conditions that Could
Limit Our Business
Cannabis is a Schedule I Controlled
Substance under Federal law and, as such, there are several factors that could limit our market and our business. They include,
but are not limited to:
•
|
|
The Federal government and many private employers prohibit drug use of any kind, including cannabis, even where it is permissible under state law. Random drug screenings and potential enforcement of these employment provisions significantly reduce the size of the potential cannabis market;
|
•
|
|
Enforcement of Federal law prohibiting cannabis occurs randomly and often without notice. This could scare many potential investors away from cannabis-related investments and makes it difficult to make accurate market predictions;
|
•
|
|
There is no guarantee that additional states will pass measures to legalize cannabis under state law. In many states, public support of legalization initiatives is within the margin of error of pass or fail. This is especially true when a supermajority is needed to pass measures, like in Florida where a state constitutional amendment permitting medical cannabis has been proposed, but requires 60% approval to pass. Changes in voters' attitudes and turnout have the potential to slow or stop the cannabis legalization movement and potentially reverse recent cannabis legalization victories;
|
•
|
|
There has been some resistance and negativity as a result of recent cannabis legalization at the state level, especially as it relates to drugged driving. The lack of clearly defined and enforced laws at the state level has the potential to sway public opinion against marijuana legalization; and
|
•
|
|
Even if the Federal government does not enforce the Federal law prohibiting cannabis, the legality of the state laws regarding the legalization of cannabis are being challenged through lawsuits. Oklahoma and Nebraska recently sued Colorado over the legalization of cannabis, and other lawsuits have been brought by private groups and local law enforcement officials. If these lawsuits are successful, state laws permitting cannabis sales may be overturned and significantly reduce the size of the potential cannabis market and affect our business.
|
Employees and Consultants
FutureLand has 2 full-time employees
and one full time independent contractor.
Insurance
We do not maintain any insurance
and do not intend to maintain insurance in the future. Because we do not have any insurance, if we are made a party of a legal
action, we may not have sufficient funds to defend the litigation. If that occurs a judgment could be rendered against us that
could cause us to cease operations.
Government Regulation
Marijuana is a categorized as a
Schedule I controlled substance by the Drug Enforcement Agency and the United States Department of Justice and is illegal to grow,
possess and consume under Federal law. However, since 1995, 23 states and the District of Columbia have passed state laws that
permit doctors to prescribe cannabis for medical-use and four states and the District of Columbia have enacted laws that legalize
the adult-use of cannabis for any reason. This has created an unpredictable business-environment for dispensaries and collectives
that legally operate under certain state laws but in violation of Federal law. On August 29, 2013, United States Deputy Attorney
General James Cole issued the Cole Memo to United States Attorneys guiding them to prioritize enforcement of Federal law away from
the cannabis industry operating as permitted under certain state laws, so long as:
•
|
|
cannabis is not being distributed to minors and dispensaries are not located around schools and public buildings;
|
|
•
|
|
the proceeds from sales are not going to gangs, cartels or criminal enterprises;
|
|
|
|
|
•
|
|
cannabis grown in states where it is legal is not being diverted to other states;
|
|
|
|
|
|
•
|
|
cannabis-related businesses are not being used as a cover for sales of other illegal drugs or illegal activity;
|
|
|
•
|
|
there is not any violence or use of fire-arms in the cultivation and sale of marijuana;
|
|
|
|
•
|
|
there is strict enforcement of drugged-driving laws and adequate prevention of adverse health consequences; and
|
•
|
|
cannabis is not grown, used, or possessed on Federal properties.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Cole Memo is meant only as a
guide for United States Attorneys and does not alter in any way the Department of Justice's authority to enforce Federal law, including
Federal laws relating to cannabis, regardless of state law. We believe and have implemented procedures and policies to ensure we
are operating in compliance with the "Cole Memo". However, we cannot provide assurance that our actions are in full compliance
with the Cole Memo or any other laws or regulations.
Patents and Trademarks
We may apply for trademarks as we
progress as a company.
Legal Proceedings
We are not currently a party to
any legal proceedings, and we are not aware of any pending or potential legal actions.
Sources and Availability of Raw
Materials
We do not use raw materials in our
business
Seasonal Aspect of our Business
None of our products are affected
by seasonal factors.
DESCRIPTION OF
PROPERTIES
We are a Colorado corporation. Our
address is 8400 E. Crescent Parkway, Suite 600, Greenwood Village, Colorado 80111. Our telephone number is (720) 370-3558 and our
website is www.futurelandcorp.com. Our HQ office is at 10901 Roosevelt Blvd, Suite 1000c, Saint Petersburg, FL 33716. We share
13,500 sf of office space with FutureWorld Corp. at no expense. Our office in Greenwood Village, Colorado is an executive space
that costs approximately $100 per month to maintain. We are considering relocating to a bigger space with the completion of this
offering. FL also owns 239.96 Acres in La Vita, Colorado in Huerfano County.
We believe that our facilities are
adequate for our current needs and that, if required, we will be able to locate suitable new office space and obtain a suitable
replacement for our executive and administrative headquarters.
LEGAL PROCEEDINGS
We are not a party
to any material legal proceedings nor are we aware of any circumstance that may reasonably lead any third party to initiate material
legal proceedings against us.
Reports to Security Holders
We are required to file reports
and other information with the SEC. You may read and copy any document that we file at the SEC's public reference facilities at
100 F. Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-732-0330 for more information about its public reference
facilities. Our SEC filings are available to you free of charge at the SEC's web site at www.sec.gov. We are an electronic filer
with the SEC and, as such, our information is available through the Internet site maintained by the SEC that contains reports,
proxy and information statements and other information regarding issuers that file electronically with the SEC. This information
may be found at www.sec.gov and posted on our website at investors.Futurelandcorp.com.
LEADERSHIP
Directors and Executive Officers
The names and ages of our Directors
and Executive Officers are set forth below. Our By-Laws provide for not less than one and not more than nine Directors. All Directors
are elected annually by the stockholders to serve until the next annual meeting of the stockholders and until their successors
are duly elected and qualified.
Name
|
|
Age
|
|
Position and Term
|
Cameron Cox
|
|
|
41
|
|
|
Director (Since 2014), Chief Executive Officer (Since 2014)
|
|
|
|
|
|
|
|
Sam Talari
|
|
|
53
|
|
|
Director & Chairman (Since 2014)
|
|
|
|
|
|
|
|
John Verghese
|
|
|
55
|
|
|
Director (Since 2015), Chief Technology Officer (Since 2015)
|
|
|
|
|
|
|
|
Cameron
Cox, Chief Executive Officer, and Director
Cameron
Cox is the co-founder, CEO, and Board member of FutureLand since our inception. He is responsible for
executing
our strategic business development. Mr. Cox is a business entrepreneur with a wide bastion of knowledge to draw upon from many
different walks of life. A real estate expert and developer he brings ground level pragmatism to the field of dreams.
He has been involved in hundreds of millions of dollars of real estate projects from mixed use, to condos/residential, marinas,
mobile home parks, hotels, stand-alone commercial boxes and land deals with a focus on arbitrage. Mr. Cox has held a real
estate license in the state of Florida since
2001.
President
of multiple companies from Real Estate Development to 1031 Exchange Services to Business Consulting and more. Mr. Cox has
served as VP of Business Development for HempTech Corp and currently serves as Vice-President of FutureWorld Corp. (FWDG) and CEO
of FutureLand Corp. (FUTL). FutureWorld Corp. won product of the year after 94 days from launch of their THC/CBD home potency
test kit at the Cannabis Business Awards in Denver 2014 through its subsidiary CBScientific. Mr. Cox is a consummate venture
capitalist and advocate of the oncoming "Green Rush". He envisions an untapped American oncoming potential to rival
anything we have seen, or are likely to see, this century or the next. A U.S. Army Vet, and graduate of Michigan State University
with a BA in Communication, he also attended Westminster Theological Semi nary for a MDIV and University of South Florida for a
MBA.
Sam
Talari – Chairman of the Board
Mr. Talari,
raised as an entrepreneur, found his calling in incubating exciting leading edge technology companies in private and public sector,
with a unique business plan merging the boundaries between a hedge fund and a VC. Mr. Talari has been the Chief Executive Officer
of FutureWorld Corp. since November 21, 2005. Mr. Talari served as the Acting Chief Executive Officer at Infrax Systems, Inc. since
November 21, 2008 and Chief Operating Officer until October 2009 and served as its Interim President. Mr. Talari founded and manages
FutureTech since 2001 and Talari Industries since 2008. He serves as a Director at PowerCon Energy Systems, Inc, and Chairman &
CEO of Lockwood Technology. He studied Computer Science and Mathematics at the University of New Hampshire. Mr. Talari holds a
Bachelor's Degree in Computer Science, Engineering, and Mathematics from University of Lowell.
John
Verghese-CTO, Board Member
Seasoned
telecommunication expert with 23+ years of experience in building and operating local and wide area networks. Well rounded
in all the functional areas of the telecom industry from planning, engineering and operations to sales and customer support.
Extensive experience working for a local power utility to provide voice, video and data communications to corporate facilities,
power plants and substations. He also now serves as President and CEO of HempTech Corp, a global leader in solutions to the
cannabis industry.
Legal Proceedings
No officer, director,
or persons nominated for such positions, promoter or significant employee has been involved in the last five years, except as noted,
in any of the following:
·
|
A petition under the Federal bankruptcy laws or any state insolvency law was filed by or against, or a receiver, fiscal agent or similar officer was appointed by a court for the business or property of such person, or any partnership in which he was a general partner, or any corporation or business association of which he was an executive officer, all at or within two years before the time of such filing,
|
·
|
Any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses),
|
·
|
Being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities,
|
|
Being found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.
|
·
|
Having any government agency, administrative agency, or administrative court impose an administrative finding, order, decree, or sanction against them as a result of their involvement in any type of business, securities, or banking activity.
|
·
|
Being the subject of a pending administrative proceeding related to their involvement in any type of business, securities, or banking activity.
|
·
|
Having any administrative proceeding been threatened against you related to their involvement in any type of business, securities, or banking activity.
|
Corporate Governance
The Company's Board of Directors
is composed of three members: Sam Talari, who serves as Chairman of the Board, Cameron Cox and John Verghese. Talari is not "independent"
as the term is used in Item 7(d)(3)(iv)(B) of Schedule 14A under the Exchange Act, as amended. Moving forward, at such time the
Board of Directors deems additional independent directors desirable, or that we are required to have additional independent directors,
either as a result of our future listing on the NASDAQ Capital Market, or a similar market or exchange, or that we are otherwise
required by applicable law to have independent directors, we will promptly take steps to appoint such independent directors.
We do not have any standing audit,
nominating and compensation committees of the Board of Directors, or committees performing similar functions. All Board actions
have been taken by Written Action rather than formal meetings.
In lieu of an Audit Committee, the
Company's Board of Directors is responsible for reviewing and making recommendations concerning the selection of outside auditors,
reviewing the scope, results and effectiveness of the annual audit of the Company's financial statements and other services provided
by the Company's independent public accountants. The Board of Directors reviews the Company's internal accounting controls, practices
and policies.
Moving forward, at such time as
the Board of Directors believes that nominating, compensation or audit committees are necessary or desirable, or that we are required
to have such committees, either as a result of our future listing on the NASDAQ Capital Market or a similar market or exchange,
or otherwise as required by law, we will take steps to form such committees and adopt charters as may be required to comply with
all applicable rules and regulations.
We currently have a Code of Ethics
applicable to our principal executives, financial and accounting officers. A copy of the Code is available at our investor website:
www.futurelandcorp.com/investors
Shareholder Communications
Although we do not have a formal
policy regarding communications with the Board, shareholders may communicate with the Board by writing to us at 8400 E. Crescent
Parkway, Suite 600, Greenwood Village, Colorado 80111, Attention: Legal. Shareholders who would like their submission directed
to a member of the Board may so specify, and the communication will be forwarded, as appropriate.
Certain Relationships and Related
Transactions
Except as described herein (or within
the section entitled Executive Compensation of this prospectus), none of the following parties (each a "Related Party")
has, in our fiscal year ended March 2015, had any material interest, direct or indirect, in any transaction with us or in any presently
proposed transaction that has or will materially affect us:
•
|
|
any of our directors or officers;
|
|
|
|
|
any person who beneficially owns, directly or indirectly, shares carrying more than 10% of the voting rights attached to our outstanding shares of common stock; or
|
•
|
|
any member of the immediate family (including spouse, parents, children, siblings and in- laws) of any of the above persons.
|
|
On August 5, 2015, the Company approved
the issuance of 2,800,000 shares of common stock to Cameron Cox, our Chief Executive Officer and Director, per employment agreement
with Mr. Cox as a co-founder of the company in exchange for his services as a grant.
On
September 9, 2015, the Company approved the issuance of 170,000 shares of common stock to Cameron Cox, our Chief Executive Officer
and Director, per employment agreement, for back wages. The market value of the issued shares is $51,000 and is approximated to
be the fair market value of the services received.
These shares were recorded as Common
Stock to be issued and subsequently issued.
EXECUTIVE COMPENSATION
Named Executive Officers
Our "named executive officers"
for the 2015 fiscal year consisted of the following individuals:
Cameron Cox, our Chief Executive
Officer
John Verghese, our Chief Technology
Officer
Summary Compensation Table
The table below summarizes all compensation
awarded to, earned by, or paid to our Chief Executive Officer and our two most highly compensated executive officers who occupied
such position at the end of our last fiscal year for all services rendered in all capacities to us during the previous two fiscal
years.
Name &
Principal
Position
|
|
Year
|
|
Salary
$
|
|
Bonus
$
|
|
Stock
Awards (5)
$
|
|
Option
Awards (1)(5)
$
|
|
Non-Equity
Incentive Plan
Compensation
$
|
|
All Other
Compensation
$
|
|
Total
$
|
Cameron Cox
Chief Executive Officer, Director
|
|
|
2014
2015
|
|
|
|
-
$80,000
|
|
|
|
-
-
|
|
|
|
-
|
|
|
|
-
|
|
|
-
-
|
|
-
-
|
|
|
-
$80,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding Equity Awards at
March 31, 2015 Fiscal Year End
No named executive officer had unexercised
outstanding equity awards at December 31, 2015.
Narrative Disclosure to Summary
Compensation and Option Tables
On April 1, 2015, we entered into
an agreement with Cameron Cox, our Chief Executive Officer and Director, to provide services to us. For his services for a term
of four years, Mr. Cox received compensation of $6,666 per month, and was provided a stock award of 2,800,000 shares.
Equity Compensation Plan Information
Information on the 2015 Plan is
available in the section of this prospectus entitled "Market for Common Stock" found above.
Director Compensation
Our interested directors do not
receive additional compensation for their service as directors.
The following table shows for the
fiscal year ended December 31, 2015, certain information with respect to the compensation of all non-employee directors of the
Company:
Name
|
|
|
|
|
Fees Earned or
Paid in Cash
|
|
|
Stock
Awards (1)
|
|
|
Option
Awards (1)
|
|
|
Total
|
|
Sam Talari
|
|
|
(2
|
)
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
John Verghese
|
|
|
(2
|
)
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
(1)
|
|
These amounts are the aggregate fair value of the equity compensation paid to our directors during the fiscal year. The aggregate fair value is computed in accordance with FASB ASC Topic 718. See Note 3 to our consolidated financial statements contained in this Annual Report on Form 10-K regarding assumptions underlying valuation of equity awards.
|
(2)
|
|
Mr. Talari and Mr. Verghese joined the Company's Board of Directors on April 1, 2015.
|
Indemnification of Officers and
Directors
Our Amended and Restated Certificate
of Incorporation provides that we shall indemnify our officers and directors to the fullest extent permitted by applicable law
against all liability and loss suffered and expenses (including attorneys" fees) incurred in connection with actions or proceedings
brought against them by reason of their serving or having served as officers, directors or in other capacities. We shall be required
to indemnify a director or officer in connection with an action or proceeding commenced by such director or officer only if the
commencement of such action or proceeding by the director or officer was authorized in advance by the Board of Directors.
We do not currently maintain director's
and officer's liability insurance but we may do so in the future.
SECURITY OWNERSHIP
OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain
information with respect to the beneficial ownership of common stock by: (i) each director, (ii) each of the executive
officers of the Company, (iii) all current directors and executive officers as a group, and (iv) each stockholder known
to the Company to be the beneficial owner of more than 5% of the outstanding shares of common stock.
Unless otherwise indicated in the
footnotes to the table, all information set forth in the table is as of September 30, 2015, and the address for each director and
executive officer of the Company is: c/o FutureLand Corp., 3637 4
th
Street North, Saint Petersburg, FL 33704. The addresses
for the greater than 5% stockholders are set forth in the footnotes to this table.
|
|
Common Stock
|
|
|
Number of Shares
Beneficially Owned (1)
|
|
Percentage
Outstanding (2)
|
Directors and Officers
|
|
|
|
|
|
|
|
|
Cameron Cox
|
|
|
2,800,000
|
|
|
|
8.64
|
%
|
John Verghese
|
|
|
0
|
|
|
|
0
|
%
|
Sam Talari
|
|
|
10,000,000
|
(3)
|
|
|
30.87
|
%
|
|
|
|
|
|
|
|
|
|
All directors and named executive
officers as a group (3 persons)
|
|
|
12,800,000
|
|
|
|
39.51
|
%
|
|
|
|
|
|
|
|
|
|
5% Stockholders
|
|
|
|
|
|
|
|
|
FutureWorld Corp (4)
|
|
|
17,845,280 (5)
|
|
|
|
55.1%
|
|
(1)
|
|
The Company believes that each stockholder has sole voting and investment power with respect to the shares of common stock listed, except as otherwise noted. The number of shares beneficially owned by each stockholder is determined under rules of the SEC, and the information is not necessarily indicative of ownership for any other purpose. Under these rules, beneficial ownership includes (i) any shares as to which the person has sole or shared voting power or investment power and (ii) any shares which the individual has the right to acquire within 60 days after September 30, 2015 through the exercise of any stock option, warrant, conversion of preferred stock or other right, but such shares are deemed to be outstanding only for the purposes of computing the percentage ownership of the person that beneficially owns such shares and not for any other person shown in the table. The inclusion herein of any shares of common stock deemed beneficially owned does not constitute an admission by such stockholder of beneficial ownership of those shares of common stock.
|
(2)
|
|
Based on 32,397,930 shares of common stock outstanding as of December 31, 2015.
|
(3)
|
|
Sam Talari own the shares under the corporate name of Talari Industries, LLC. Mr. Talari hold 100% control of the Talari Industries, LLC. The address of Talari Industries, LLC is as follows: Talari Industries, LLC 3637 4
th
Street North, #330, ST. Pete FL 33704.
|
(4)
|
(5)
|
FutureWorld Corp was the previous parent company of FutureLand. FutureWorld received 17,845,280 of common stock of the FutureLand Corp from Aegea after the merger. Mr. Talari is the CEO of FutureWorld Corp and has majority voting power and control of the company.
|
DESCRIPTION OF
PURCHASE AGREEMENT
General
On April 08, 2016,
we entered into the Purchase Agreement with Kodiak Capital and entered into a registration rights agreement (the “Registration
Rights Agreement”) with Kodiak Capital. Pursuant to the terms of the Registration Rights Agreement, we agreed to register
for resale all of the shares that may be issued to Kodiak Capital under the Purchase Agreement.
Pursuant to the terms
of the Registration Rights Agreement, we have filed with the SEC the registration statement that includes this prospectus to register
for resale under the Securities Act of 1933, as amended (the “Securities Act”) the shares that may be issued to Kodiak
Capital upon conversion under the Purchase Agreement.
We do not have the
right to commence any sales to Kodiak Capital under the Purchase Agreement until the SEC has declared effective the registration
statement of which this prospectus forms a part. Thereafter, we may, from time to time and at our sole discretion, direct Kodiak
Capital to purchase shares of our common stock. The purchase price per share will be equal to 70% of the lowest closing bid price
of the common stock for the five consecutive trading days immediately following our request for Kodiak Capital to purchase the
shares.
Purchase of
Shares Under the Purchase Agreement
Under the Purchase
Agreement, we may direct Kodiak Capital to purchase up to $1,000,000 shares of our common stock. The closing of the sale of the
shares will occur on the sixth trading day following our request for Kodiak Capital to purchase the shares. The purchase price
per share will be equal to 70% of the lowest closing bid price of the common stock for the five consecutive trading days immediately
following our request for Kodiak Capital to purchase the shares (the “Valuation Period”). There is no minimum amount
that we may require Kodiak Capital to purchase at any one time. The Company may not require Kodiak Capital to purchase shares under
the Purchase Agreement if such purchase would result in Kodiak Capital’s beneficial ownership exceeding 9.99% of the outstanding
common stock. Other than as set forth above, there are no trading volume requirements or restrictions under Purchase Agreement,
and we will control the timing and amount of any sales of our common stock to Kodiak Capital under the Purchase Agreement.
Conditions
to Sales
Under the Purchase
Agreement, the following conditions must be satisfied in order for us to sell shares of our common stock to Kodiak Capital:
|
●
|
The registration statement of which this prospectus forms a part, and any amendment or supplement thereto, must be effective for the sale by Kodiak Capital of the shares to be purchased by it, and (i) neither we nor Kodiak Capital have received notice that the SEC has issued or intends to issue a stop order with respect to the registration statement or that the SEC otherwise has suspended or withdrawn the effectiveness of the registration statement, either temporarily or permanently, or intends or has threatened to do so and (ii) there is no other suspension of the use or withdrawal of the effectiveness of the registration statement or this prospectus.
|
|
●
|
Our representations and warranties contained in the Purchase Agreement must be true and correct in all material respects (except for representations and warranties specifically made as of a particular date), except for any conditions that have temporarily caused any representations or warranties to be incorrect and which have been corrected with no continuing impairment to us or the Kodiak Capital.
|
|
|
|
|
●
|
We must have performed in all material respects all covenants, agreements and conditions required by the Purchase Agreement to be performed, satisfied or complied with by us.
|
|
|
|
|
●
|
No statute, rule, regulation, executive order, decree, ruling or injunction has been enacted, entered, promulgated or adopted by any court or governmental authority of competent jurisdiction that prohibits or directly and materially adversely affects any of the transactions contemplated by the Purchase Agreement, and no proceeding has been commenced that may have the effect of prohibiting or materially adversely affecting any of the transactions contemplated by the Purchase Agreement.
|
|
|
|
|
●
|
The trading of our common stock has not been suspended by the SEC, the principal trading market for our common stock or Financial Industry Regulatory Authority, Inc. and our common stock has been approved for listing or quotation on and has not been delisted from such principal market.
|
|
|
|
|
●
|
The number of shares of our common stock to be purchased by Kodiak Capital at a particular closing may not exceed the number of shares that, when aggregated with all other shares of common stock then beneficially owned by it, would result in Kodiak Capital owning more than 9.99% of all of our outstanding common stock.
|
|
|
|
|
●
|
We must have no knowledge of any event more likely than not to have the effect of causing the registration statement of which this prospectus forms a part to be suspended or otherwise ineffective.
|
Our Termination
Rights
We have the unconditional
right, at any time, for any reason and without any payment or liability to us, to give notice to Kodiak Capital to terminate the
Purchase Agreement.
No Short-Selling
by Kodiak Capital
Kodiak Capital
has agreed that neither it nor any of its affiliates shall engage in any direct or indirect short-selling of our common stock during
any time prior to the termination of the Purchase Agreement.
Effect of Performance
of the Purchase Agreement on Our Stockholders
All shares of
common stock registered in this offering are expected to be freely tradable. The sale by Kodiak Capital of a significant amount
of shares registered in this offering at any given time could cause the market price of our common stock to decline and to be highly
volatile.
It is anticipated
that shares registered in this offering under issuable under the Purchase Agreement will be sold over a period commencing on the
date that the registration statement including this prospectus becomes effective through the one-year anniversary thereafter. Kodiak
Capital may ultimately purchase all, some or none of the shares of common stock not yet issued but registered in this offering.
If we sell these shares to Kodiak Capital, Kodiak Capital may sell all, some or none of such shares. Therefore, sales to Kodiak
Capital by us under the Purchase Agreement may result in substantial dilution to the interests of other holders of our common stock.
In addition, if we sell a substantial number of shares to Kodiak Capital under the Purchase Agreement, or if investors expect that
we will do so, the actual sales of shares or the mere existence of our arrangement with Kodiak Capital may make it more difficult
for us to sell equity or equity-related securities in the future at a time and at a price that we might otherwise wish to effect
such sales. However, we have the right to control the timing and amount of any sales of our shares to Kodiak Capital and the Purchase
Agreement may be terminated by us at any time at our discretion without any cost to us.
Pursuant to the
terms of the Purchase Agreement, we have the right, but not the obligation, to direct Kodiak Capital to purchase up to $1,000,000
of our common stock. Depending on the price per share at which we sell our common stock to Kodiak Capital, we may be authorized
to issue and sell to Kodiak Capital under the Purchase Agreement more shares of our common stock than are offered under this prospectus.
If we choose to do so, we must first register for resale under the Securities Act any such additional shares, which could cause
additional substantial dilution to our stockholders. The number of shares ultimately offered for resale by Kodiak Capital under
this prospectus is dependent upon the number of shares we direct Kodiak Capital to purchase under the Purchase Agreement.
SELLING STOCKHOLDERS
The following
table sets forth the shares beneficially owned, as of May 16, 2016, by the selling stockholder prior to the offering contemplated
by this prospectus, the number of shares the selling stockholder is offering by this prospectus and the number of shares it would
own beneficially if all such offered shares are sold.
Beneficial ownership
is determined in accordance with rules of attribution as promulgated by the SEC. Under these rules, a person is deemed to be a
beneficial owner of a security if that person has or shares voting power, which includes the power to vote or direct the voting
of the security, or investment power, which includes the power to vote or direct the voting of the security. The person is also
deemed to be a beneficial owner of any security of which that person has a right to acquire beneficial ownership within 60 days.
Under SEC rules, more than one person may be deemed to be a beneficial owner of the same securities, and a person may be deemed
to be a beneficial owner of securities as to which he or she may not have any pecuniary beneficial interest. Except as noted below,
each person has sole voting and investment power.
The percentages
below are calculated based on 32,397,930 shares of our common stock issued and outstanding as of May 16, 2016. The selling stockholder
does not hold any options, warrants or other securities exercisable for or convertible into shares of our common stock.
Selling stockholders
|
|
Shares Beneficially Owned Before this Offering (1)
|
|
|
Percentage of Outstanding Shares Beneficially Owned Before this Offering (1)
|
|
Shares to be Sold in this Offering (2)
|
|
Number Of Shares Beneficially Owned After this Offering
|
|
|
Percentage of Outstanding Shares Beneficially Owned After this Offering (3)
|
|
Kodiak Capital Group, LLC (4)
|
|
|
-
|
|
|
-
|
|
1,000,000
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Based on 32,397,930 outstanding shares of our common stock as of May 16, 2016.
|
|
|
|
|
(2)
|
Because the actual date and price per share for the Company’s put right under the Purchase Agreement is unknown, price and purchase price under the Purchase Agreement are unknown. Accordingly, the actual shares issuable pursuant the Purchase Agreement may be more or less than the amount of shares being registered herein.
|
|
|
|
|
(3)
|
Based on 34,397,930 outstanding shares should all shares registered hereunder be issued.
|
|
|
|
|
(4)
|
A Delaware limited liability company owned and controlled by Ryan C. Hodson. Kodiak Capital Group, LLC is not a broker-dealer or affiliate of a broker dealer. The address of this selling shareholder is 260 Newport Center Drive, Newport Beach, CA 92660.
|
Except for the
Purchase Agreement and other documents ancillary thereto, and the shares as described in this prospectus, there is no prior or
existing material relationship between us or any of our directors, executive officers, or control persons and the selling stockholder.
PLAN OF DISTRIBUTION
Equity Purchase
Agreement / Registration Rights Agreement
On April 08, 2016,
we entered into an Equity Purchase Agreement and a Registration Rights Agreement with Kodiak Capital Group, LLC in order to establish
a possible source of funding for us.
Under the Equity
Purchase Agreement, Kodiak has agreed to provide us with up to $1,000,000 of funding during the period beginning on the effective
date of this prospectus and ending on the one-year anniversary thereof. 2,000,000 shares of our common stock are being registered
pursuant to this prospectus pursuant to a Put Notice(s) under the Purchase Agreement. During this period, we can deliver a put
under the Equity Purchase Agreement by selling shares of our common stock to Kodiak and Kodiak will be obligated to purchase the
shares. A put transaction must close before we can deliver another put notice to Kodiak.
We may request
a put by sending a put notice to Kodiak, stating the amount of the put. During the five trading days following a notice, we will
calculate the amount of shares we will sell to Kodiak and the purchase price per share. The number of shares of Common Stock that
Kodiak shall purchase pursuant to each put notice shall be determined by dividing the amount of the put by the purchase price.
The purchase price
per share of common stock will be set at eighty percent (70%) of the lowest closing bid price of our common stock during the pricing
period, which is five consecutive days following a put notice.
There is no minimum
amount we can put to Kodiak at any one time. Upon effectiveness of the Registration Statement, the Company shall deliver instructions
to its transfer agent to issue shares of Common Stock to Kodiak free of restrictive legends on or before each closing date.
Pursuant to the
Purchase Agreement, Kodiak and its affiliates shall not be issued shares of our common stock that would result in its beneficial
ownership equaling more than 9.99% of our outstanding common stock.
Kodiak will not
engage in any “short-sale” (as defined in Rule 200 of Regulation SHO) of our common stock at any time during this Agreement.
On April 08, 2016, we entered into a Registration Rights Agreement with Kodiak requiring, among other things, that we prepare and
file with the SEC a Registration Statement on Form S-1 covering the shares issuable to Kodiak under the Equity Purchase Agreement.
As per the Equity
Purchase Agreement, none of Kodiak’s obligations thereunder are transferrable and may not be assigned to a third party.
Kodiak Capital
is an “underwriter” within the meaning of the Securities Act of 1933, as amended (the “Securities Act”)
in connection with the resale of our common stock under the Equity Purchase Agreement.
Penny Stock
Rules
The SEC has also
adopted rules that regulate broker-dealer practices in connection with transactions in “penny stocks” as such term
is defined by Rule 15g-9. Penny stocks are generally equity securities with a price of less than $5.00 (other than securities registered
on certain national securities exchanges or quoted on the Nasdaq system provided that current price and volume information with
respect to transactions in such securities is provided by the exchange or system).
The shares offered
by this prospectus constitute penny stocks under the Exchange Act. The shares may remain penny stocks for the foreseeable future.
The classification of our shares as penny stocks makes it more difficult for a broker-dealer to sell the stock into a secondary
market, which makes it more difficult for a purchaser to liquidate his or her investment. Any broker-dealer engaged by the purchaser
for the purpose of selling his or her shares in FutureLand Corp will be subject to the penny stock rules.
The penny stock
rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from those rules, deliver a standardized
risk disclosure document approved by the SEC, which: (i) contains a description of the nature and level of risk in the market for
penny stocks in both public offerings and secondary trading; (ii) contains a
description of
the broker’s or dealer’s duties to the customer and of the rights and remedies available to the customer with respect
to a violation to such duties or other requirements of the Securities Act; (iii) contains a brief, clear, narrative description
of a dealer market, including bid and ask prices for penny stocks and significance of the spread between the bid and ask price;
(iv) contains a toll-free telephone number for inquiries on disciplinary actions; (v) defines significant terms in the disclosure
document or in the conduct of trading in penny stocks; and (vi) contains such other information and is in such form as the SEC
shall require by rule or regulation. The broker-dealer also must provide to the customer, prior to effecting any transaction in
a penny stock, (i) bid and offer quotations for the penny stock; (ii) the compensation of the broker-dealer and its salesperson
in the transaction; (iii) the number of shares to which such bid and ask prices apply, or other comparable information relating
to the depth and liquidity of the market for such stock; and (iv) monthly account statements showing the market value of each penny
stock held in the customer’s account.
In addition, the
penny stock rules require that, prior to a transaction in a penny stock not otherwise exempt from those rules, the broker-dealer
must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s
written acknowledgment of the receipt of a risk disclosure statement, a written agreement to transactions involving penny stocks,
and a signed and dated copy of a written suitability statement. These disclosure requirements will have the effect of reducing
the trading activity in the secondary market for our stock because it will be subject to these penny stock rules. Therefore, stockholders
may have difficulty selling those securities.
Regulation
M
During such time
as we may be engaged in a distribution of any of the shares we are registering by this registration statement, we are required
to comply with Regulation M of the Securities Exchange Act of 1934. In general, Regulation M precludes any selling security holder,
any affiliated purchasers and any broker-dealer or other person who participates in a distribution from bidding for or purchasing,
or attempting to induce any person to bid for or purchase, any security which is the subject of the distribution until the entire
distribution is complete. Regulation M defines a “distribution” as an offering of securities that is distinguished
from ordinary trading activities by the magnitude of the offering and the presence of special selling efforts and selling methods.
Regulation M also defines a “distribution participant” as an underwriter, prospective underwriter, broker, dealer,
or other person who has agreed to participate or who is participating in a distribution.
Regulation M prohibits,
with certain exceptions, participants in a distribution from bidding for or purchasing, for an account in which the participant
has a beneficial interest, any of the securities that are the subject of the distribution. Regulation M also governs bids and purchases
made in order to stabilize the price of a security in connection with a distribution of the security. We have informed the selling
stockholder that the anti-manipulation provisions of Regulation M may apply to the sales of their shares offered by this prospectus,
and we have also advised the selling stockholder of the requirements for delivery of this prospectus in connection with any sales
of the common stock offered by this prospectus.
DESCRIPTION OF
CAPITAL STOCK
Our authorized common stock consists
of 1,000,000,000 shares, no par value per share, of which 990,000,000 is authorized common stock and 100,000,000 authorized preferred
stock of which 32,397,930 shares of common were issued and outstanding and 3,000 shares of preferred series B were issued and outstanding
as of December 31, 2015.
Common Stock:
General
The following description of our
common stock is intended as a summary only and is qualified in its entirety by reference to our amended and restated certificate
of incorporation and bylaws, which are filed as exhibits to the registration statement of which this prospectus forms a part.
Voting Rights
Each share of common stock entitles
the holder to one vote on all matters submitted to a vote of the stockholders. Except as otherwise required by Delaware law, the
holders of our common stock possess all voting power. Pursuant to Delaware law, directors of the Company are elected at the annual
meeting of the stockholders by a plurality of the votes cast at the election. According to our bylaws, in general, the affirmative
vote of a majority of the shares represented at a meeting and entitled to vote on any matter, is to be the act of our stockholders.
Our bylaws provide that a majority of the outstanding shares of the Company entitled to vote, represented in person or by proxy,
constitutes a quorum at a meeting of our stockholders. Our bylaws also provide that any action which may be taken at any annual
or special meeting of our stockholders may be taken without a meeting if a written memorandum, setting forth the action so taken,
is signed by all of the holders of outstanding shares of our common stock.
Dividend Rights
The holders of our common stock are entitled to receive dividends as may be declared by our Board of Directors out of funds legally
available for dividends. Our board of directors is not obligated to declare a dividend. Any future dividends will be subject to
the discretion of our board of directors and will depend upon, among other things, future earnings, the operating and financial
condition of our company, its capital requirements, general business conditions and other pertinent factors. We have not paid any
dividends since our inception and we do not anticipate that dividends will be paid in the foreseeable future.
Miscellaneous Rights and Provisions
In the event of our liquidation,
dissolution or winding up, each share of our common stock is entitled to share ratably in any assets available for distribution
to holders of our common stock after satisfaction of all liabilities, subject to rights, if any, of the holders of any of our other
securities.
Our common stock is not convertible
or redeemable and has no preemptive, subscription or conversion rights. There are no conversions, redemption, sinking fund or similar
provisions regarding our common stock.
Our common stock, after the fixed
consideration thereof has been paid or performed, are not subject to assessment, and the holders of our common stock are not individually
liable for the debts and liabilities of our company.
Our bylaws provide that our Directors
may amend our bylaws by a majority vote of Directors or a majority vote of our shareholders.
Preferred Stock
The Company
has two classes of preferred stock authorized. As of the date of this prospectus, Preferred stock, No par value; 100,000,000 shares
authorized; Series A convertible preferred Stock, no par value; 200,000 shares authorized, no shares issued and outstanding at
December 31, 2015. Series B convertible preferred Stock, no par value; 20,000 shares authorized, 3,000 shares issued and outstanding
at December 31, 2015. Each Series B Convertible Preferred Stock is entitled to vote, on a one for one million basis, with
the holders of our common stock on all corporate matter on which common shareholders are entitled to vote and each share is convertible
into one share of our common stock.
DISCLOSURE OF
COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES LIABILITIES
Certain provisions
of Colorado Law, allow the corporation to indemnify any person against liabilities and other expenses incurred as the result of
defending or administering any pending or anticipated legal issue in connection with service to us if it is determined that person
acted in good faith and in a manner which he reasonably believed was in the best interest of the corporation. Neither
our Certificate of Formation nor or Bylaws provide specifically for indemnification of officers or directors, and as such we may
only provide such indemnification as is provided for in Colorado Law. Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to our director, officer and controlling persons, we have been advised that in
the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities
Act of 1933 and is, therefore, unenforceable.
LEGAL MATTERS
The validity of the
shares of our common stock offered hereby will be passed upon by the law firm of Securus Law Firm, Tampa, Florida.
EXPERTS
The audited financial
statements for the years ended December 31, 2015 included in this Prospectus and the Registration Statement have been audited by
Turner, Stone & Company, an independent registered public accounting firm, to the extent and for the periods set forth in their
report appearing elsewhere herein and in the Registration Statement, and are included in reliance upon such report given upon the
authority of said firm as experts in auditing and accounting.
The legality of
the shares offered under this registration statement is being passed upon by Securus Law Firm, Tampa, Florida.
WHERE YOU CAN
FIND MORE INFORMATION
We have filed
with the Securities and Exchange Commission, Washington, D.C. 20549, under the Securities Act of 1933, a registration statement
on Form S-1 relating to the shares offered hereby. This prospectus does not contain all of the information set forth in the registration
statement and the exhibits and schedules thereto. For further information with respect to our company and the shares offered by
this prospectus, you should refer to the registration statement, including the exhibits and schedules thereto. You may inspect
a copy of the registration statement without charge at the Public Reference Section of the Securities and Exchange Commission at
Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference
Room by calling the Securities and Exchange Commission. The Securities and Exchange Commission also maintains an Internet site
that contains reports, proxy and information statements and other information regarding registrants that file electronically with
the Securities and Exchange Commission. The Securities and Exchange Commission’s World Wide Web address is http://www.sec.gov.
Statements contained
in this prospectus as to the contents of any contract or other document that we have filed as an exhibit to the registration statement
are qualified in their entirety by reference to the exhibits for a complete statement of their terms and conditions.
The representations,
warranties and covenants made by us in any agreement that is filed as an exhibit to the registration statement of which this prospectus
is a part were made solely for the benefit of the parties to such agreement, including, in some cases, for the purpose of allocating
risk among the parties to such agreements, and should not be deemed to be a representation, warranty or covenant to you. Moreover,
such representations, warranties or covenants were made as of an earlier date. Accordingly, such representations, warranties and
covenants should not be relied on as accurately representing the current state of our affairs.
We file periodic
reports, proxy statements and other information with the Securities and Exchange Commission in accordance with requirements of
the Exchange Act. These periodic reports, proxy statements and other information are available for inspection and copying at the
regional offices, public reference facilities and Internet site of the Securities and Exchange Commission referred to above. We
make available through our website, free of charge, copies of these reports as soon as reasonably practicable after we electronically
file or furnish them to the Securities and Exchange Commission. Our website is located at http://www.indoorharvest.com. You can
also request copies of such documents, free of charge, by contacting the company at 10901 Roosevelt Blvd, Suite 1000c, Saint Petersburg,
FL 33716, Attention: Cameron Cox.
Information contained
on our website is not a prospectus and does not constitute a part of this prospectus.
FUTURELAND, CORP. AND SUBSIDIARIES
(FORMERLY AEGEA, INC.)
INDEX TO CONSOLIDATED
FINANCIAL STATEMENTS
December 31, 2015
CONTENTS
Report of Independent Registered Public Accounting Firm
|
F-2
|
|
|
Consolidated Financial Statements:
|
|
|
|
Consolidated Balance Sheets - As of December 31, 2015 and 2014
|
F-3
|
|
|
Consolidated Statements of Operations -
|
|
For the Years Ended December 31, 2015 and 2014
|
F-4
|
|
|
Consolidated Statements of Changes in Stockholders' Deficit -
|
|
For the Years Ended December 31, 2015 and 2014
|
F-5
|
|
|
Consolidated Statements of Cash Flows –
|
|
For the Years Ended December 31, 2015 and 2014
|
F-6
|
|
|
Notes to Consolidated Financial Statements
|
F-7 to F-16
|
F-1
Report of Independent Registered
Public Accounting Firm
Report of Independent
Registered Public Accounting Firm
The Board of Directors and Stockholders
FutureLand, Corp. and subsidiaries
Saint Petersburg, Florida
We have audited the accompanying consolidated
balance sheet of FutureLand, Corp. and subsidiaries (the “Company”), as of December 31, 2015 and the related consolidated
statements of operations, stockholders’ equity (deficit), and cash flows for the year then ended. These consolidated financial
statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audit.
We conducted our audit in accordance with
the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company
is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included
consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over
financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management as well as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.
In our opinion, the consolidated financial
statements referred to above present fairly, in all material respects, the financial position of FutureLand, Corp. and its subsidiaries
as of December 31, 2015 and the results of their operations and cash flows for the year then ended, in conformity with accounting
principles generally accepted in the United States of America.
The accompanying financial statements
have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements,
the Company requires a substantial amount of additional financing to further implement its business plan and continue operations,
which raises substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters
are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this
uncertainty.
/s/ Turner, Stone & Company, L.L.P.
Certified Public Accountants
Dallas, Colorado
April 14, 2016
F-2
|
|
(FORMERLY AEGEA, INC.)
|
|
Consolidated Balance Sheets
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
|
|
2015
|
|
|
2014
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Assets:
|
|
|
|
|
|
|
Cash
|
|
$
|
(92)
|
|
|
$
|
0
|
|
Vacant land deposit
|
|
|
4,000
|
|
|
|
0
|
|
Total Current Assets
|
|
|
3,908
|
|
|
|
0
|
|
Other Assets
Land
|
|
|
60,251
|
|
|
|
0
|
|
Construction in Progress
|
|
|
4,543
|
|
|
|
0
|
|
Provisional Goodwill
|
|
|
3,801,036
|
|
|
|
0
|
|
Related Party Receivable
|
|
|
3,450,000
|
|
|
|
0
|
|
Total Assets
|
|
$
|
7,319,738
|
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity (Deficit)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
42,338
|
|
|
$
|
86,633
|
|
Accrued expenses
|
|
|
94,435
|
|
|
|
27,829
|
|
Short-term loans - related parties
|
|
|
113,636
|
|
|
|
76,807
|
|
Convertible debenture payable, net of premium and discount
|
|
|
72,750
|
|
|
|
191,273
|
|
Accrued interest
|
|
|
0
|
|
|
|
27,454
|
|
Line of credit - related party
|
|
|
0
|
|
|
|
250,000
|
|
Accrued interest - related party
|
|
|
0
|
|
|
|
126,852
|
|
Derivative liability
|
|
|
0
|
|
|
|
10,912
|
|
Total Liabilities
|
|
|
323,636
|
|
|
|
797,219
|
|
|
|
|
|
|
|
|
|
|
Stockholders' Equity (Deficit):
|
|
|
|
|
|
|
|
|
Preferred stock, No par value; 100,000,000 shares authorized;
|
|
|
|
|
|
|
|
|
Series A convertible preferred Stock,
no par value; 200,000 designated
No shares issued & outstanding at
December 31, 2015 and 2014, respectively
|
|
|
-
|
|
|
|
-
|
|
Series B convertible preferred Stock,
No par value; 20,000 designated
3,000 shares issued &outstanding
at December 31, 2015 and 2014, respectively
|
|
|
6,450
|
|
|
|
2,150
|
|
Common stock, no par value; 1,000,000,000
shares authorized,
32,397,930 and 298,812 shares issued
and outstanding as of
December 31, 2015 and 2014, respectively
|
|
|
1,019,597
|
|
|
|
1,012,846
|
|
Additional paid-in capital
|
|
|
9,727,395
|
|
|
|
764,934
|
|
Accumulated deficit
|
|
|
(3,666,864
|
)
|
|
|
(2,577,149
|
)
|
|
|
|
|
|
|
|
|
|
Total Stockholders' Equity (Deficit)
|
|
|
7,086,578
|
|
|
|
(797,219
|
)
|
|
|
|
|
|
|
|
|
|
Total Liabilities and Stockholders' Equity (Deficit)
|
|
$
|
7,319,738
|
|
|
$
|
0
|
|
See accompanying notes to consolidated
financial statements.
|
|
F-3
|
|
(FORMERLY AEGEA, INC.)
|
|
Consolidated Statements of Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Year Ended
December 31,
|
|
|
|
2015
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses:
|
|
|
|
|
|
|
|
|
General and administrative
|
|
|
41,058
|
|
|
|
69,895
|
|
Salaries and Benefits
|
|
|
944,720
|
|
|
|
|
|
Professional fees
|
|
|
96,474
|
|
|
|
329,222
|
|
Research and development expenses
|
|
|
0
|
|
|
|
42,113
|
|
Total Operating Expenses
|
|
|
1,082,252
|
|
|
|
441,230
|
|
|
|
|
|
|
|
|
|
|
Loss from Operations
|
|
|
(1,082,252
|
)
|
|
|
(441,230
|
)
|
|
|
|
|
|
|
|
|
|
Other Income (Expenses):
|
|
|
|
|
|
|
|
|
Gains on settlement of liabilities
|
|
|
0
|
|
|
|
7,913
|
|
Interest expense
|
|
|
(6,534
|
)
|
|
|
(135,158
|
)
|
Change in fair value of derivative liability
|
|
|
0
|
|
|
|
5,082
|
|
|
|
|
|
|
|
|
|
|
Total Other Expenses
|
|
|
(6,534
|
)
|
|
|
(122,163
|
)
|
|
|
|
|
|
|
|
|
|
Net Loss
|
|
$
|
(1,088,786
|
)
|
|
$
|
(563,393
|
)
|
|
|
|
|
|
|
|
|
|
Net Loss Per Common Share:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0
|
)
|
|
$
|
(1.89
|
)
|
|
|
|
|
|
|
|
|
|
Weighted Average Number of Common Shares Outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
|
|
19,395,997
|
|
|
|
298,032
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to consolidated financial statements.
|
|
F-4
|
|
|
(FORMERLY AEGEA, INC.)
|
|
|
Consolidated Statements of Cash Flows
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Year ended
December 31,
|
________
|
|
|
|
2015
|
|
|
2014
|
|
|
|
|
|
|
|
|
Cash Flows from Operating Activities:
|
|
|
|
|
|
|
Net loss
|
|
$
|
(1,084,790
|
)
|
|
$
|
(563,393
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
|
|
|
Common stock issued for services
|
|
|
810,500
|
|
|
|
100,940
|
|
Contributed rent and services
|
|
|
-
|
|
|
|
141,506
|
|
Amortization of discount and premium related to convertible debt
|
|
|
27,308
|
|
|
|
66,472
|
|
Change in fair value of derivative
|
|
|
-
|
|
|
|
(5,082)
|
|
Security-Retainer Deposit
|
|
|
(4000)
|
|
|
|
-
|
|
Shares issued for accrued interest
|
|
|
-
|
|
|
|
-
|
|
Gain on debt conversion
|
|
|
-
|
|
|
|
(52)
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
42,337
|
|
|
|
(36,901)
|
|
Accrued expenses
|
|
|
87,900
|
|
|
|
541
|
|
Accrued interest - debenture payable
|
|
|
6,534
|
|
|
|
23,685
|
|
Accrued interest - related party
|
|
|
-
|
|
|
|
45,001
|
|
|
|
|
|
|
|
|
|
|
Net Cash Used in Operating Activities
|
|
|
(114,211)
|
|
|
|
(227,283
|
)
|
|
|
|
|
|
|
|
|
|
Cash Flows from Investing Activities:
|
|
|
|
|
|
|
|
|
Acquisition of cash in recapitalization
|
|
|
-
|
|
|
|
-
|
|
Payment for vacant land deposit
|
|
|
-
|
|
|
|
-
|
|
Refund of vacant land deposit `
|
|
|
-
|
|
|
|
250,000
|
|
|
|
|
|
|
|
|
|
|
Net Cash Provided by (Used in) Investing Activities
|
|
|
-
|
|
|
|
250,000
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Financing Activities:
|
|
|
|
|
|
|
|
|
Proceed from convertible debentures
|
|
|
140,000
|
|
|
|
52,000
|
|
|
|
|
|
|
|
|
|
|
Proceed from short-term loans - related party
|
|
|
51,619
|
|
|
|
162,915
|
|
Repayment of short-term loans
|
|
|
(37,500)
|
|
|
|
(246,108)
|
|
Repayment of short-term loans - related party
|
|
|
(40,000)
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Net Cash (Used in) Provided by Financing Activities
|
|
|
114,119
|
|
|
|
(31,193)
|
|
|
|
|
|
|
|
|
|
|
Net (Decrease) Increase in Cash
|
|
|
(92
|
)
|
|
|
(8,476
|
)
|
|
|
|
|
|
|
|
|
|
Cash, beginning of year
|
|
|
0
|
|
|
|
8,476
|
|
|
|
|
|
|
|
|
|
|
Cash, end of year
|
|
$
|
(92)
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
Cash Paid for:
|
|
|
|
|
|
|
|
|
Interest
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
Non-cash Investing and Financing Activities:
|
|
|
|
|
|
|
|
|
Common stock issued for convertible debt
|
|
$
|
16,000
|
|
|
$
|
17,400
|
|
Put premium reclassified to additional paid-in capital
|
|
$
|
-
|
|
|
$
|
17,452
|
|
Increase in debt discount and derivative liability
|
|
$
|
-
|
|
|
$
|
15,453
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to consolidated financial statements.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F-5
FUTURELAND, CORP. AND SUBSIDIARIES
(FORMERLY AEGEA, INC.)
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS
DECEMBER 31, 2015 AND 2014
NOTE 1: NATURE OF OPERATIONS, BASIS OF PRESENTATION,
RECAPITALIZATION AND GOING CONCERN
FutureLand, CORP. (formerly known
as AEGEA, Inc.) ("we", "us", the "Company") was incorporated in Colorado on November 29, 2007 under
the name Forever Valuable Collectibles, Inc. We changed our name effective July 1, 2014 in connection with our July 22, 2014 acquisition
of AEGEA, LLC which is in the planning stages of developing an international community and mega-resort destination in the heart
of South Florida called AEGEA. Prior to the acquisition of AEGEA, LLC, we were been engaged in the business of buying and reselling
commemorative professional and college sports memorabilia.
On March
10, 2015, an Exchange Agreement was entered (the "Agreement"), by and among certain shareholders and debt holders of
the Company, representing the majority of the outstanding shares of the Company ("the AEGA Holders"), and FutureWorld,
Corp. (hereafter referred to as "FWDG"), a Delaware Corporation which is the owner of the wholly owned subsidiary, FutureLand
Properties, LLC, (hereafter referred to as "FLP"), a Colorado Limited Liability Corporation. Additionally, on June 1,
2015, FWDG, as sole member of FLP resolved that effective with the Exchange Agreement dated March 10, 2015, FWDG sold all rights,
title and ownership of FLP to the Company, including all member units, assets, intellectual property, contracts, leases, and real
property which includes 200 acres in La Vita, Colorado,
In
connection with the Exchange Agreement, we issued an aggregate of 27,845,280 shares of our common stock to FWDG and or its assignee.
FWDG and the AEGA Holders entered into the purchase and exchange agreement where the AEGA Holders agreed to deliver to FutureWorld
their shareholdings in the Company in exchange for certain actions, including AEGEA Holders resignation as directors and officers
of the Company and the simultaneous appointment of two directors as designated by FLP. In return for the AEGEA Holders shares of
the Company, in combination with certain debt forgiveness totaling $100,000 by the AEGEA Holders, the AEGA Holders shall receive,
an amount of shares to be equal to 4.9% (27,845,280} of the outstanding shares of the Company calculated after the reverse stock
split which became effective on May 1, 2015. Such shares as held by the AEGA Holders which are surrendered in return for the new
exchange shares to be issued, shall be cancelled in such exchange and returned to treasury. Such exchange shares when issued shall
contain certain anti-dilutive rights whereby the AEGEA Holders shall receive additional shares for a period of one year from the
date of issuance in order to retain 4.9% of the outstanding shares of the Company, issuable within ten days of the end of each
fiscal quarter following such initial issuance. Pursuant to the Agreement, all assets of the Company, including all intellectual
property, contractual rights, business plans, architectural works, property rights, and other valuable matters, shall be sold to
the AEGA Holders, into a new private entity formed at their direction, control and benefit, in settlement for another $100,000
in debt due to AEGEA Holders by the Company and certain liabilities will be assumed by the new private entity. This transaction
is expected to be accounted for as a reverse recapitalization of FLP with the business of FLP being the continuing business since
the member of FLP will have voting and management control of the combined entity.
In May 2015,
we changed our name to FutureLand, Corp. and effected a 1 for 400 reverse stock split of our common stock. All share and per share
data in this annual report have been retroactively restated to reflect the reverse stock split.
F-6
The transaction has been accounted for using the acquisition
method of accounting which requires that, among other things, assets acquired and liabilities assumed be recorded at their fair
market values as of the acquisition date. The Company has not finalized the determination of the fair values of the liabilities
assumed and assets acquired and therefore the provisional amounts set forth are subject to adjustment when valuations are completed.
Under GAAP, companies have up to one year following an acquisition to finalize acquisition accounting.
The following details the preliminary fair value of the
provisional goodwill transferred to effect the acquisition;
AEGEA Entertainment stock issuance
per merger agreement 1,470,000 shares of common @ $3 per share $4,410,000
AEGEA Shareholders stock cancellation
per merger agreement -202,988 (cancellation of shares per agreement) ($608,964)
Fair value of the provisional goodwill transferred $3,801,036
In accordance with ASC Topic 805, Business Combination,
the application of purchase accounting requires that the total purchase price be allocated to the fair value of identifiable assets
acquired and liabilities assumed based on their fair values at the acquisition date, with amounts exceeding the fair values recorded
as goodwill. Goodwill represents the future economic benefit arising from other assets acquired that could not be individually
identified and separately recognized. The allocation process requires, among other things, an analysis of acquired fixed completed
the determination of the fair value of assets acquired and liabilities assumed, accordingly; management has not made adjustments
to the provisional fair values for the assets acquired and liabilities assumed. In addition, the Company has not made a determination
as to the deductibility of all or a portion of goodwill for tax purposes.
Description of Business
FutureLand Properties LLC. was originally formed
as a wholly-owned subsidiary of FutureWorld Corp. On October 6, 2014 FutureWorld entered into a Contribution Agreement with FutureLand,
a wholly-owned subsidiary of the Company. In accordance with this agreement, FutureLand, in return for contribution of intellectual
property, cash, and web development services by the Company, has exchanged 40,000,000 shares of its common stock representing 100%
of the shares outstanding. On March, 10th, FutureLand Properties LLC did a merger agreement with Aegea Inc. (FutureLand Corp),
ensuing FutureLand Properties LLC to become Aegea Inc. (FutureLand Corp) wholly owned subsidiary. The agreement resulted in the
FutureLand Properties LLC’s shareholders (FutureWorld Corp) to be issued 27,845,280 shares of Aegea Inc. (FutureLand Corp).
This will result in FutureLand Corp’s shares being held for investment on FutureWorld’s balance sheet.
FutureLand Corp. operates its presented business
through its subsidiary, FutureLand Properties, is an agricultural land lease company catering to the industrial hemp, legal medical
marijuana and recreational cannabis market. Future Land was started to capitalize upon the distinct separation of the cultivation
grows from the dispensaries, specifically with respect to Colorado. In the State of Colorado, which has become the quintessential
poster-child for what the industry may look like for the rest of America, at least temporarily, as other states determine what
exact direction they will choose to go, there are residency laws that must be adhered to. For instance, in order to get a license
to grow or profit from cannabis in Colorado you must be a 2-year resident. The laws are very specific; anyone who is not a 2-year
resident cannot profit from the sale of the cannabis flower or infused products.
F-7
Because of this mandate, Future Land Corp must be
a land owner and leaser in order to effectively participate in the cannabis
grow industry, which we believe is essential in order
to gain a competitive advantage. We also must own the
structures on the land to control the lease and our
future position in the industry.
The business model is simple; offer growers the opportunity
to grow. We have the land and then we find a growers requiring assist in funding and obtaining their license and grow facility.
Next, we arrange for additional operational items needed, including but not limited to, complete build-outs provided from our associated
company, HempTech Corp, in order to capture additional revenue.
EXCHANGE AGREEMENT AND SALE OF AEGEA ASSETS
As discussed above, on March 10,
2015, an Exchange Agreement was entered, by and among certain shareholders and debt holders of the Company, representing the majority
of the outstanding shares of the Company ("the AEGA Holders"), and FWDG and its wholly-owned subsidiary, FLP. Additionally,
on June 1, 2015, FWDG, as sole member of FLP resolved that effective with the Exchange Agreement dated March 10, 2015, FWDG sold
all rights, title and ownership of FLP to the Company, including all member units, assets, intellectual property, contracts, leases,
and real property which includes 200 acres in La Vita, Colorado.
Our current asset will comprise of
240 acres of prime property in southern Colorado and two signed lease agreements for grow facilities on its land. Our business
plan is to continue attracting legal license holders to lease land and grow facilities on our 240 acres. We have other developmental
land use plans for other projects being pursued as well.
On, October 30, 2014, FLP closed
on 239.96 Acres in La Vita, Colorado in Huerfano County for $60,000. FLP entered into a lease agreement contract with a lease
with Colorado Flower Company, LTD on Dec 1, 2014 allotting 37 acres for their grow facilities. FLP was formed as a Colorado
State company on October 6, 2014 by FutureWorld Corp.
Prior to FLP being formed, the State
of Colorado amended their laws allowing cannabis grow facilities to be separated from cannabis dispensaries effectively opening
up an entirely new business opportunity that FLP entered into at that time. At such time, FLP pursued the business plan to secure
a cannabis or hemp grower to execute their business plan of leasing the land, the structures, the technologies and provide maintenance
contracts associated with the grow. Integral to its strategy is to provide the financing for the entire grow operation so as to
establish a position by which to harness a competitive advantage in striking the right kind of lease in conjunction with Colorado
State laws that would allow FLP to make above average returns. On Jan 20, 2015 FLP entered a contract with GPS, La Vita,
Inc. allotting 5 acres for their immediate grow facilities. All of these contracts, and land ownings are currently in FLP.
Principles of Consolidation
The accompanying consolidated financial
statements include the accounts of the Company and its wholly-owned inactive subsidiaries, Florida Heartland EB-5 Regional Center
LLC and Aegea, LLC. All inter-company balances and transactions have been eliminated in consolidation.
F-8
Going Concern
As reflected in the accompanying consolidated
financial statements, the Company had a net loss of $1,088,786 and net cash used in operations of $114,211, for the year ended
December 31, 2015 and a working capital deficit and accumulated deficit of $3,666,864, at December 31, 2015 and has no revenues.
These matters raise substantial doubt about the Company's ability to continue as a going concern. The ability of the Company to
continue as a going concern is dependent on the Company's ability to further implement its business plan, raise additional capital,
and generate revenues. The consolidated financial statements do not include any adjustments that might be necessary if the Company
is unable to continue as a going concern.
Management’s plans with regard to
these matters encompass the following actions: 1) obtain funding from new and potentially current investors to alleviate the Company’s
working deficiency, and 2) implement a plan to generate sales. The Company’s continued existence is dependent upon its ability
to translate its user base into sales. However, the outcome of management’s plans cannot be ascertained with any degree of
certainty. The accompanying financial statements do not include any adjustments that might result should the Company be unable
to continue as a going concern.
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash and Cash Equivalents
Cash and cash equivalents include
highly liquid investments with maturities of three months or less at the time of purchase.
Use of Estimates
The preparation of consolidated financial
statements in conformity with accounting principles generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The most
significant assumptions and estimates relate to the valuation of equity issued for services, valuation of equity associated with
convertible debt, the valuation of derivative liabilities, and the valuation of deferred tax assets. Actual results could differ
from these estimates.
Fair Value Measurements and Fair Value
of Financial Instruments
The Company adopted ASC Topic 820, Fair
Value Measurements. ASC Topic 820 clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes
a fair value hierarchy to classify the inputs used in measuring fair value as follows:
Level 1: Inputs are unadjusted quoted prices
in active markets for identical assets or liabilities available at the measurement date.
F-9
Level 2: Inputs are unadjusted quoted prices
for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets
that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable
market data.
Level 3: Inputs are unobservable inputs
which reflect the reporting entity's own assumptions on what assumptions the market participants would use in pricing the asset
or liability based on the best available information.
The estimated fair value of certain financial
instruments, including all current liabilities are carried at historical cost basis, which approximates their fair values because
of the short-term nature of these instruments.
Stock-based Compensation
ASC 718, "Compensation-Stock Compensation"
requires recognition in the financial statements of the cost of employee services received in exchange for an award of equity instruments
over the period the employee is required to perform the services in exchange for the award (presumptively the vesting period).
We measure the cost of employee services received in exchange for an award based on the grant-date fair value of the award.
We account for non-employee share-based
awards based upon ASC 505-50, "Equity-Based Payments to Non-Employees." ASC 505-50 requires the costs of goods and services
received in exchange for an award of equity instruments to be recognized using the fair value of the goods and services or the
fair value of the equity award, whichever is more reliably measurable. The fair value of the equity award is determined on the
measurement date, which is the earlier of the date that a performance commitment is reached or the date that performance is complete.
Generally, our awards do not entail performance commitments. When an award vests over time such that performance occurs over multiple
reporting periods, we estimate the fair value of the award as of the end of each reporting period and recognize an appropriate
portion of the cost based on the fair value on that date. When the award vests, we adjust the cost previously recognized so that
the cost ultimately recognized is equivalent to the fair value on the vesting date, which is presumed to be the date performance
is complete.
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Derivative Liability
We evaluate convertible instruments, options,
warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to
be separately accounted for under ASC Topic 815, "Derivatives and Hedging." The result of this accounting
treatment is that the fair value of the derivative is marked-to-market each balance sheet date and recorded as a liability.
In the event that the fair value is recorded as a liability, the change in fair value is recorded in the statement of operations
as other income (expense). Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value
at the conversion date and then that fair value is reclassified to equity. Equity instruments that are initially classified
as equity that become subject to reclassification under ASC Topic 815 are reclassified to liabilities at the fair value of the
instrument on the reclassification date.
Income Taxes
The Company has adopted FASB ASC 740-10,
Accounting for Income Taxes, which requires an asset and liability approach to financial accounting and reporting for income taxes.
Deferred income tax assets and liabilities are computed annually from differences between the financial statement and tax basis
of assets and liabilities that
F-10
will result in taxable or deductible amounts
in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable
income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.
Net Loss per Common Share
The Company computes net earnings (loss)
per share in accordance with ASC 260-10, "Earnings per Share." ASC 260-10 requires presentation of both basic and diluted
earnings per share ("EPS") on the face of the income statement. Basic EPS is computed by dividing net income (loss) available
to common stockholders by the weighted average number of common shares outstanding during the period. Diluted EPS gives effect
to all dilutive potential common shares outstanding during the period. Diluted EPS excludes all dilutive potential common shares
if their effect is anti-dilutive. At December 31, 2015 and 2014, we excluded 1,000 shares of Series B Preferred Stock convertible
into 1,000 shares of common stock and 18,955 and 2,995, respectively, shares of the Company's common stock were reserved for issuance
upon conversion of convertible notes as their effect was anti-dilutive.
As of April 14, 2016, the Company has common
shares reserved for issuance upon conversion of convertible notes.
Research and Development
In accordance with ASC 730-10, expenditures
for research and development are expensed when incurred and are included in operating expenses. The Company recognized research
and development costs of $42,113 and $118,664 for the years ended December 31, 2015 and 2014, respectively, relating to contract
services performed for architectural and creative design.
Recent Accounting Pronouncements
ASU 2014-10, "Development Stage Entities
(Topic 915): Elimination of Certain Financial Reporting Requirements". ASU 2014-10 eliminates the distinction of a development
stage entity and certain related disclosure requirements, including the elimination of inception-to-date information on the statements
of operations, cash flows and stockholders' equity. The amendments in ASU 2014-10 will be effective prospectively for annual reporting
periods beginning after December 15, 2014, and interim periods within those annual periods, however early adoption is permitted.
The Company evaluated and adopted ASU 2014-10 during the year ended December 31, 2015.
In August 2014, the FASB issued ASU No.
2014-15, "Presentation of Financial Statements—Going Concern." The provisions of ASU No. 2014-15 require management
to assess an entity's ability to continue as a going concern by incorporating and expanding upon certain principles that are currently
in U.S. auditing standards. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an
evaluation every reporting period including interim periods, (3) provide principles for considering the mitigating effect of management's
plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management's plans,
(5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment
for a period of one year after the date that the financial statements are issued (or available to be issued). The amendments in
this ASU are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter.
The Company is currently assessing the impact of this ASU on the Company's consolidated financial statements.
Other accounting standards which were not
effective until after December 31, 2015 are not expected to have a material impact on the Company's consolidated financial position
or results of operations.
F-11
NOTE 3: CONCENTRATIONS
Concentrations of Credit Risk
The Company maintains accounts with financial
institutions. All cash in checking accounts is non-interest bearing and is fully insured by the Federal Deposit Insurance Corporation
(FDIC). At times, cash balances in money market accounts may exceed the maximum coverage provided by the FDIC on insured depositor
accounts. The Company believes it mitigates its risk by depositing its cash and cash equivalents with major financial institutions.
There were no cash deposits in excess of FDIC insurance at December 31, 2015.
NOTE 4: VACANT LAND DEPOSIT
N/A
NOTE 5: SHORT-TERM LOAN – RELATED
PARTIES
None
NOTE 6: CONVERTIBLE DEBENTURES AND NOTES
At December 31, 2015 and 2014, the Company
had convertible debt consisting of the following:
|
|
December 31,
2015
|
|
|
December 31,
2014
|
|
Convertible debt
|
|
$
|
155,000
|
|
|
$
|
168,000
|
|
Plus: put premium
|
|
|
5,000
|
|
|
|
3,000
|
|
Less: debt discount
|
|
|
(87,250
|
)
|
|
|
(35,294
|
)
|
Convertible debt, net
|
|
$
|
72,750
|
|
|
$
|
105,706
|
|
Convertible debt principal payments of $12,500 were in default
on maturity date as of December 31, 2015 as of the issuance date of these consolidated financial statements.
NOTE 6: CONVERTIBLE DEBENTURES AND NOTES (continued)
On October 05, 2015, the Company issued
a debenture for $55,000 for a cash advances during October 2015.
The debenture accrues interest at 10% per
annum and will convert into the company’s common stock at 45% of the
lowest closing bid price 20 days before
the conversion date. The Holder is restricted from any conversions that
would result in the Holder owning over
9.9% of the outstanding common shares of the Company after the conversion.
On November 25, 2015, the Company issued a debenture for $100,000
for a cash advances during November 2015.
The debenture accrues interest at 10% per annum and will convert
into the company’s common stock at 45% of the
lowest closing bid price 20 days before the conversion date.
The Holder is restricted from any conversions that
would result in the Holder owning over 9.9% of the outstanding
common shares of the Company after the conversion.
F-12
On January 04, 2016, the Company issued a debenture for $30,000
for a cash advances during January 2016.
The debenture accrues interest at 10% per annum and will convert
into the company’s common stock at 50% of the
lowest closing bid price 20 days before the conversion date.
The Holder is restricted from any conversions that
would result in the Holder owning over 9.9% of the outstanding
common shares of the Company after the conversion.
On January 07, 2016, the Company registered 6,000,000 shares
of common stock under form S8 with SEC for employee and consultant compensation.
On January 28, 2016, the Company issued a debenture for $93,750
for a cash advances during January 2016.
The debenture accrues interest at 10% per annum and will convert
into the company’s common stock at 50% of the
lowest closing bid price 20 days before the conversion date.
The Holder is restricted from any conversions that
would result in the Holder owning over 9.9% of the outstanding
common shares of the Company after the conversion.
On February 16, 2016, the Company issued a debenture for $80,000
for a cash advances during February 2016.
The debenture accrues interest at 8% per annum and will convert
into the company’s common stock at 50% of the
lowest closing bid price 20 days before the conversion date.
The Holder is restricted from any conversions that
would result in the Holder owning over 9.9% of the outstanding
common shares of the Company after the conversion.
On April 07, 2016, the Company issued a debenture for $30,000
for an advanced fee on an equity line of credit for $1,000,000. The debenture accrues interest at 8% per annum and will convert
into the company’s common stock at 50% of the lowest closing bid price 20 days before the conversion date. The Holder is
restricted from any conversions that would result in the Holder owning over 9.9% of the outstanding common shares of the Company
after the conversion.
NOTE 7: LINE OF CREDIT – RELATED PARTY
N/A
NOTE 8: STOCKHOLDERS' DEFICIT
Preferred Stock
On
October 4, 2014 and April 10, 2015, the Company filed a Certificate of Designations under its Amended and Restated Articles of
Incorporation (the "Certificate of Designations") with the State of Colorado to (a) designate 200,000 shares of its previously
authorized Preferred Stock as Series A Convertible Preferred Stock and (b) designate 3,000 shares of its previously authorized
Preferred Stock as Series B Preferred Stock including 1,000 shares that were previously issued on October 4, 2014. On June 9
th
,
2015, previously issued 1,000 shares on October 4, 2014 were cancelled. The Certificate of Designations and their filing were approved
by the board of directors of the Company on September 30, 2014 without shareholder approval as provided for in the Company's articles
of incorporation and under Colorado law.
F-13
On
April 10, 2015, the Company issued 2,000 shares of its Series B Preferred Stock to certain related party officers and directors
valued at $2,150 based on the common stock quoted trading value of $2.15 (post-reverse stock split) at the grant date and a one
to one conversion rate of the Series B shares into common stock. The certificate of designation does not provide for any adjustment
to the quantity or conversion terms of the Series B convertible preferred stock resulting from stock splits or other recapitalization
of common stock of the Company. Therefore, all amounts discussed above reflect pre-reverse stock split amounts.
Description
of Series A Convertible Preferred Stock
The
200,000 shares of Series A Convertible Preferred Stock have the following the designations, rights and preferences: the stated
value of each share is $500, the holder of the shares will be entitled to vote, on a one-for-one basis, with the holders of our
common stock on all corporate matter on which common shareholder are entitled to vote, the shares pay quarterly dividends in arrears
at the rate of 4% per annum based on the stated value of each share, each share is convertible into shares of our common stock
at a conversion price of $2,000 per share, subject to adjustment, at any time upon : (I) the seventh anniversary of the original
issue date of Series A Preferred Stock or (ii) the date the beneficial holder qualifies as a Permanent U.S. resident, whichever
occurs earliest, the shares are redeemable by us under certain conditions, and the conversion price of the Series A Convertible
Preferred stock is subject to proportional adjustment in the event of stock splits, stock dividends and similar corporate events.
Description of Series B Convertible Preferred
Stock
The 2,000 shares of Series B Convertible
Preferred Stock have the following the designations, rights and preferences:
The Company is not permitted to pay or
declare dividends or other distributions to the holders of the Series B Preferred Stock, whether in liquidation or otherwise, the
holder of the shares will be entitled to vote, on a one million-for-one basis, with the holders of our common stock on all corporate
matter on which common shareholders are entitled to vote, and Each share is convertible into one share of our common stock.
Common
Stock
Of the
authorized common stock, 33,867,930 shares are outstanding as of immediately after the closing of the Acquisition and after giving
effect to the shares to be issued to the former FutureLand shareholders as a result of the Acquisition. The holders of our common
stock are entitled to receive dividends from our funds legally available therefor only when, as and if declared by our Board, and
are entitled to share ratably in all of our assets available for distribution to holders of our common stock upon the liquidation,
dissolution or winding-up of our affairs. Holders of our common stock do not have any preemptive, subscription, redemption or conversion
rights. Holders of our common stock are entitled to one vote per share on all matters which they are entitled to vote upon at meetings
of stockholders or upon actions taken by written consent pursuant to Colorado corporate law. The holders of our common stock do
not have cumulative voting rights, which mean that the holders of a plurality of the outstanding shares can elect all of our directors.
All of the shares of our common stock currently issued and outstanding are fully-paid and non-assessable. No dividends have been
paid to holders of our common stock since our incorporation, and no cash dividends are anticipated to be declared or paid in the
reasonably foreseeable future.
Pursuant
to the Acquisition Agreement, upon consummation of the Acquisition, AEGEA assumed all of FutureLand's options and warrants issued
and outstanding immediately prior to the Acquisition. Prior to and as a condition to the closing of the Acquisition, each then-current
AEGEA stockholder agreed to surrender certain shares of common stock held by such holder to AEGEA and the then-current AEGEA stockholders
will retain or be issued additional shares to be an aggregate of 4.9% of common stock. Therefore, following the Acquisition, FWDG
designated holders now hold 27,845,280 shares of AEGEA common stock which is approximately 98.93% of the Company Common Stock outstanding.
The percentage ownership by FWDG designated holders will drop to around 94% of common shares after the issuance of the 4.9% new
issuance of common shares to the AEGEA stockholders.
F-14
CHANGES IN COMMON STOCK
We report 33,867,930 shares outstanding as of April 4,
2016.The difference in shares consists of the following issuances in 2016:
01/12/2016 Saeed Talari, Director 400,000 (Officer
Bonus)
01/26/2016 Hemp, Inc. 700,000 (Consulting)
01/29/2016 Alan Brantley 50,000 (Consulting)
01/29/2016 Stanley Kwong 20,000 (Consulting)
02/15/2016 Cameron Cox, CEO 100,000 (Officer Bonus)
04/01/2016 Craig Huffman, Counsel 200,000 (Consulting
fee)
NOTE 9: INCOME TAXES
Income taxes
are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective
tax bases and operating loss, capital loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using
enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered
or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that
includes the enactment date.
The Company recognizes
the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions
are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are
reflected in the period in which the change in judgment occurs. The Company records interest and penalties related to unrecognized
tax benefits as a component of general and administrative expenses. Our consolidated federal tax return and any state tax returns
are not currently under examination.
The
Company has adopted FASB ASC 740-10, Accounting for Income Taxes, which requires an asset and liability approach to financial accounting
and reporting for income taxes. Deferred income tax assets and liabilities are computed annually from differences between the financial
statement and tax basis of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted
tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances
are established when necessary to reduce deferred tax assets to the amount expected to be realized.
F-15
NOTE 10: RELATED PARTIES
On April 23,2015, a Site Development and Licensed Agreement was signed between HempTech Corp and FutureLand Corp. The agreement
is for 5 years and calls for HempTech to provide exclusive consulting agreement on design, development and construction of grow
facilities being leased by FutureLand Corp. The initial consulting fee of $50,000 has been recorded and owed by FutureLand to HempTech
corp. Mr. Talari is the largest shareholder of both HempTech and FutureLand Corp have
NOTE 11: SUBSEQUENT EVENTS
The Company issued Mr. Craig Huffman 200,000 shares of
common stock in S8 shares for his consulting resulting in the merger between Aegea, Inc. and FutureLand Properties LLC in March
2015. The Company is expecting to issue a total of 750,000 shares of common stock in the relations to aforementioned consulting
fee.
On April 07, 2016, the Company issued a debenture for
$60,000 to Kodiak Capital for an advanced fee on an equity line of credit for $1,000,000. The debenture accrues interest at 8%
per annum and will convert into the company’s common stock at 50% of the lowest closing bid price 20 days before the conversion
date. The Holder is restricted from any conversions that would result in the Holder owning over 9.9% of the outstanding common
shares of the Company after the conversion.
F-16
PROSPECTUS – SUBJECT TO COMPLETION
DATED May 18, 2016
FutureLand, Corp.
YOU SHOULD RELY ONLY
ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR THAT WE HAVE REFERRED YOU TO. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
INFORMATION THAT IS DIFFERENT. THIS PROSPECTUS IS NOT AN OFFER TO SELL COMMON STOCK AND IS NOT SOLICITING AN OFFER TO BUY COMMON
STOCK IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
Dealer Prospectus
Delivery Obligation
Until _____________________ (90 days
from the date of this prospectus) all dealers that effect transactions in these securities, whether or not participating in this
offering, may be required to deliver a prospectus. This is in addition to the dealers' obligation to deliver a prospectus when
acting as underwriters and with respect to their unsold allotments or subscriptions.
The Date of This
Prospectus Is:
_____ __, 2016
Part II-INFORMATION
NOT REQUIRED IN PROSPECTUS
INDEMNIFICATION
OF OFFICERS AND DIRECTORS
The TBCA contains
specific provisions for indemnification of officers and directors. In 1989, the Colorado Legislature amended the TBCA to expand
the scope of this indemnification and to provide for assistance by a corporation with respect to litigation costs incurred by its
officers or directors in certain circumstances.
I. Standards
for Indemnification
Article 2.02-1
of the TBCA identifies circumstances by which indemnification must be made, may be made, and may not be made, and defines different
standards for indemnification depending on the director's conduct.
A. Mandatory
indemnification
A defendant-director
is entitled to indemnification as a matter of right if he was "wholly successful, on the merits or otherwise, in the defense
of the proceeding." TBCA art. 2.02-1 H. A director who successfully defends against the suit wholly on a procedural or other
nonsubstantive ground is nevertheless entitled to mandatory indemnification. If the director who prevails in the litigation is
later forced to file suit against the corporation in order to recover his indemnification, the expenses of that suit are also recoverable
under the statute. TBCA art. 2.02-11.
B. Discretionary
indemnification
In cases where
a director is found liable to a third person, but has not received a personal benefit, or the director settles a lawsuit brought
by or on behalf of the corporation, indemnification by the corporation is discretionary. TBCA art. 2.02-IB. The corporation may
not exercise its discretion to indemnify the director in these circumstances, however, unless the director (i) conducted himself
in good faith; (ii) reasonably believed that his conduct was in the corporation's best interests or, in cases where the questioned
actions were not committed by the director in his official capacity, that his conduct was at least not opposed to the corporation's
best interests; and (iii) in the case of any criminal proceeding, had no reasonable cause to believe his conduct was unlawful.
Id.
The determination
of whether discretionary indemnification of the director is even permitted must be made either: (i) by a majority vote of a quorum
of disinterested directors (i.e., directors who are not named in the lawsuit at the time the vote is taken); (ii) if such a quorum
is unavailable, by a majority vote of a committee of two or more disinterested directors selected by a vote of all directors; (iii)
by special legal counsel selected either by a vote of a quorum of disinterested directors, the committee established in the manner
described above, or, if neither of those options is available, by vote of all directors; or (iv) by vote of the shareholders, excluding
shares held by directors named as defendants in the proceeding. art. 2.02-1F.
Once it is determined
that indemnification is permitted, the corporation's discretionary decision to actually authorize the indemnification, and its
determination as to the "reasonableness" of the expenses for which indemnification is sought, must be made in the same
manner, unless the determination that indemnification is permissible was made by special legal counsel, in which event the authorization
decision must be made in the manner specified for selection of the special legal counsel. art. 2.02-IF(3), 2.02-1G. By a 1985 statutory
clarification of section G, a mandatory indemnification agreement in the articles of incorporation, bylaws, a resolution of shareholders
or directors or an agreement that makes the permissive indemnification provision in section B mandatory is enforceable even though
it was not adopted in the manner described above, and it may not be avoided by the corporation failing to authorize the indemnification
under article 2.02-1G. The issue of whether a director is eligible for indemnification is not foreclosed by the defendant's settlement
of the case or even a judgment entered against him, because a director may be deemed to have been found liable for a claim only
if he shall have been so adjudged in a court of competent jurisdiction after exhaustion of all appeals. art. 2.02-1D.
In many cases,
a director may seek to avoid liability to a third person through a contractual release or indemnity by such third person. In effect,
such a provision would prevent the need for any corporate indemnification of the director with respect to such matter and thus
any related interpretation under article 2.02-1 of the TBCA. It is important to note, however, that the Supreme Court of Colorado
recently held that a person seeking indemnity from a third person as a result of the consequences of such person's own negligence
must express such intent in a conspicuous manner within the four comers of a written contract. Dresser Indus., Inc. v. Page Petroleum,
Inc., 853 S.W.2d 505, 508 (Tex. 1993). Accordingly, directors should take great care to ensure that any contractual release or
indemnity by a third person satisfies such requirements.
C. Prohibited
Indemnification
Article 2.2-1C
prohibits indemnification when the director "is found liable on the basis that personal benefit was improperly received by
him, whether or not the benefit resulted from an action taken in the person's official capacity" and when the director "is
found liable to the corporation." However, that provision is modified by article 2.02-1E, which allows corporations to indemnify
directors even if they are found liable to the corporation or are found to have improperly received a personal benefit, but the
indemnification is limited to "reasonable expenses actually incurred by the director in connection with the proceeding."
No indemnification is available if the director is found liable for "willful or intentional misconduct in the performance
of his duty to the corporation." Id.
Our Articles of
Incorporation provide that no director or officer of the Company shall be personally liable to the Company or its stockholders
for monetary damages for any breach of fiduciary duty by such person as a director or officer, except for the payment of dividends
in violation of Colorado law. Our Bylaws provide, in pertinent part, that the Company shall indemnify any person made a party
to or involved in any civil, criminal or administrative action, suit or proceeding by reason of the fact that such person is or
was a director or officer of the Company, or of any corporation which such person served as such at the request of the Company,
against expenses reasonably incurred by, or imposed on, such person in connection with, or resulting from, the exercise of such
action, suit, proceeding or appeal thereon, except with respect to matters as to which it is adjudged in such action, suit or proceeding
that such person was liable to the Company, or such other corporation, for negligence or misconduct in the performance of such
persons duties as a director or officer of the Company. The determination of the rights of such indemnification and the amount
thereof may be made, at the option of the person to be indemnified, by (1) order of the Court or administrative body or agency
having jurisdiction over the matter for which indemnification is being sought; (2) resolution adopted by a majority of a quorum
of our disinterested directors; (3) if there is no such quorum, resolution adopted by a majority of the committee of stockholders
and disinterested directors of the Company; (4) resolution adopted by a majority of the quorum of directors entitled to vote at
any meeting; or (5) Order of any Court having jurisdiction over the Company. Such right of indemnification is not exclusive
of any other right which such director or officer may have, and without limiting the generality of such statement, they are entitled
to their respective rights of indemnification under any bylaws, agreement, vote of stockholders, provision of law, or otherwise
in addition to their rights under our Bylaws.
With regard to
the foregoing provisions, or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Securities Act of 1933, as amended, and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other than the payment by us of expenses incurred or paid
by a director, officer or controlling person of the Corporation in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the securities being registered, we will, unless in
the opinion of our counsel the matter has been settled by a controlling precedent, submit to a court of appropriate jurisdiction
the question of whether such indemnification by us is against public policy as expressed in the Securities Act of 1933, as amended,
and will be governed by the final adjudication of such case.
OTHER EXPENSES
OF ISSUANCE AND DISTRIBUTION
The following
table is an itemization of all expenses, without consideration to future contingencies, incurred or expected to be incurred by
us in connection with the issuance and distribution of the securities being offered by this prospectus. Items marked with an asterisk
(*) represent estimated expenses. We have agreed to pay all the costs and expenses of this offering. Selling security holders will
pay no offering expenses.
ITEM
|
|
AMOUNT
|
|
|
|
|
|
SEC Registration Fee*
|
|
$
|
101
|
|
Legal Fees and Expenses*
|
|
$
|
25,000
|
|
Accounting Fees and Expenses*
|
|
$
|
5,000
|
|
Miscellaneous
|
|
$
|
-
|
|
Total*
|
|
$
|
30,101
|
|
____________
* Estimated Figure
EXHIBITS
Item 3
1
|
Articles of Incorporation – FutureLand Corp.
|
|
|
2
|
Bylaws - FutureLand Corp.
|
Item 4
1
|
Form of common stock Certificate of FutureLand Corp. (1)
|
|
|
2
|
FutureLand 2015 Stock Award Plan (2)
|
Item 5
1
|
Legal Opinion of Securus Law Firm, P.A. (11)
|
Item 10
1
|
Employment Agreement – Cox (1)
|
|
|
2
|
Equity purchase agreement between FutureLand Corp and Kodiak Capital Group, LLC. * (Exhibit 10.2)
|
Item 23
1
|
Consent of Turner & Stone * (Exhibit 23.1)
|
|
|
2
|
Consent of Securus Law Firm (included in Exhibit 5.1) (11)
|
All other Exhibits called for by Rule
601 of Regulation S-K are not applicable to this filing.
____________
(*) Information pertaining to
our common stock is contained in our Articles of Incorporation and Bylaws.
UNDERTAKINGS
The undersigned registrant hereby undertakes:
|
1.
|
To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
|
|
i.
|
To include any prospectus required by section 10(a)(3) of the Securities Act of 1933;
|
|
ii.
|
To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement.
|
|
iii.
|
To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;
|
|
2.
|
That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
|
|
3.
|
To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
|
|
4.
|
That, for the purpose of determining liability
under the Securities Act of 1933 to any purchaser: Each prospectus filed pursuant to Rule 424(b) as part of a registration
statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in
reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used
after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration
statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus
that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede
or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or
made in any such document immediately prior to such date of first use.
Insofar as indemnification for liabilities
arising under the Securities Act of 1933 may be permitted to our directors, officers and controlling persons, we have been advised
that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by us of expenses incurred or paid by a director, officer or controlling person of the corporation
in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection
with the securities being registered, we will, unless in the opinion of our counsel the matter has been settled by a controlling
precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by us is against public policy
as expressed in the Securities Act of 1933, as amended, and will be governed by the final adjudication of such case.
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(5)
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That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities:
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(i)
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The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
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(a)
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Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424 (§230.424 of this chapter);
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(b)
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Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;
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(c)
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The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and
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(d)
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Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
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SIGNATURES
Pursuant to the
requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized in Saint Petersburg, FL.
FutureLand Corp., a Colorado corporation
Title
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Name
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Date
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Signature
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CEO
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Cameron Cox
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May 23, 2016
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/s/
Cameron Cox
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Pursuant to the requirements of the
Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant and in the capacities
and on the dates indicated:
Signature
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Title
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Date
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/s/ Cameron Cox
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Principal Executive Officer, Principal Accounting Officer and
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Cameron Cox
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Principal Financial Officer and Director
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May 23, 2016
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/s/ Sam Talari
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Sam Talari
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Director
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May 23, 2016
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/s/ John Verghese
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John Verghese
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Director
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May 23, 2016
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Futureland (CE) (USOTC:FUTL)
Gráfica de Acción Histórica
De Abr 2024 a May 2024
Futureland (CE) (USOTC:FUTL)
Gráfica de Acción Histórica
De May 2023 a May 2024