Acquisition of PhytoSPHERE Systems, LLC (“PSS”)

On December 15, 2012, the Company entered into a Purchase and Sale of Assets Agreement (the “Agreement”) with PSS whereby upon the closing of the transaction the Company was to acquire certain assets of PSS in exchange for an aggregate payment of $35,000,000 in five installments of either cash or common stock shares, as determined in the Company’s sole discretion. The closing occurred on January 29, 2013 at which time the Company began to take delivery of the acquired assets and made its first installment payment in the amount of $4,500,000 by issuing 900,000 common stock shares with a quoted market price on that date of $5.00. On April 1, 2013, the Company made its second installment payment in the amount of $6,000,000 by issuing 1,000,000 common stock shares with a quoted market price on that date of $6.00. The remaining installments are due on or before June 30, 2013, September 30, 2013 and December 31, 2013 in the amounts of $8,000,000, $10,000,000 and $6,500,000, respectively.

Lending Arrangement with Roen Ventures, LLC (“ROV”)

On March 1, 2013, the Company entered into a lending arrangement with ROV, a Nevada limited liability company owned 50% by the Company’s President, Secretary and Treasurer who is also a director. The promissory note is for up to $2,000,000, bears interest at 5.0% and is unsecured. There are no specific repayment terms except that all unpaid principal and accrued interest is due and payable on March 1, 2015.

Investment in KannaLife Sciences, Inc. (“KLS”)

On March 4 and April 11, 2013, pursuant to a Stock and Warrant Purchase Agreement (the “Agreement”), the Company acquired a total of 2,039,626 shares of Series A Preferred Stock, 11,960,000 shares of Common Stock and Warrants to purchase the same shares in KLS, a Delaware corporation and phyto-medical company specializing in the research and development of pharmacological products derived from plants. These share holdings constitute a 16.65% share of the Series A Preferred Stock and the Common Stock as of April 12, 2013. The shares were acquired through two payments of $250,000 each and included the exercise of a portion of its Common Stock Warrant. The Agreement also contemplates two additional closings of $250,000 on or before July 1, 2013 and October 1, 2013. If the Company exercises its right to these additional closings it will then own and hold 33.3% of the Series A Preferred Stock and the Common Stock.