NOTE 4 – INVESTMENTS

In August 2018, the Company invested $100,000, of a total contracted cash investment of $500,000, and agreed to issue 378,259 shares of common stock in exchange for 23% ownership in an entity that provides a customer relationship management and marketing platform specifically designed for companies in the cannabis industry whose product is branded Sprout. The investment balance at September 30, 2018 of $100,000 is included in Other Assets on the Company’s balance sheet. After the total cash and stock investment is made, which is expected to occur prior to the end of the 2018 fiscal year, the investment shall be accounted for under the equity method.

The Company shall assist in the ongoing development and design of Sprout, and in marketing Sprout to companies within the cannabis industry. The Company shall earn a percentage share of the revenue from sales of Sprout (i) to its current clients, and (ii) made by the Company to third parties. As of September 30, 2018, no such share of revenue was earned.

In August 2018, the Company invested $250,000 to obtain the exclusive worldwide license to sublicense, use, develop, promote, sell or otherwise commercialize in any way a technology to produce and distribute cannabis products with exceedingly precise dosing at increased production economies (“the Vitiprints license”). The amount invested was expensed and is included in Cost of Revenues, Including Depreciation within the financial statements.

Under this licensing agreement, the Company shall pay a royalty to Vitiprints equal to 10% of the net revenue, as defined, earned by the Company from sales of the Vitiprints license, with a minimum royalty of $250,000 during the initial five-year term, and $250,000 for each five-year renewal term, if renewed. As of September 30, 2018, no such net revenue was earned.