Covalent Collective Asks Investors For More Money - Grow Life 420

Covalent Collective Asks Investors For More Money

May 13, 2020

#KahliBuds #MMJ #CBD #THC

Covalent Collective raised millions of dollars from cannabis investors and planned to buy a property called the Colorado 16 (CO16). Now the company is asking those investors for more money to fight a lawsuit over the acquisition and is accusing its former director Geoff Thompson of being a co-conspirator with the CO16 sellers. It also comes to light that there is now an FBI investigation.

The Back Story

Stretching back to November of 2017, Green Market Report reported that Doyen Elements was planning to publicly list its shares on the OTC Market, and was accepting investments prior to its IPO at $7.00 a share. Shareholders of Doyen Elements learned the hard way that the company they invested in wasn’t what it seemed. It turned out there was a Doyen International, separate from Doyen Elements, which was a company that Doyen Intl. said was ignoring shareholders and had renamed itself Reach Genetics. Thompson said that this is the company these shareholders really invested in, not Doyen International. He said that Doyen International sued Doyen Elements accusing the group of hijacking the Reg. A fundraising and requesting that they stop using the Doyen name.

In January 2019, Doyen International rebranded and renamed itself to Covalent Collective, Inc. and named Bill Gregorak as Chief Executive Officer, prior to being named CEO, Gregorak served as Chief Financial Officer of Covalent Collective since February 2018. The CEO had been Thompson, who was going to stay with the company as the leader of merger and acquisitions.

In February 2019, Covalent said it was completing its first acquisition, referred to as the “Colorado 16”, which included ownership of the real estate that leased multiple medical marijuana cultivations, production, and five Colorado medical cannabis dispensaries. Hydroponics Depot, a supplier of canna agricultural supplies in Arizona, was included in the Colorado 16 acquisition.

Gregorak was asked to comment on this article but did not respond.

Colorado 16

The CO16 deal was never closed despite Covalent giving away millions of dollars to the “sellers.” Gregorak and his Covalent colleagues are now asking for an additional $3 million to fight a lawsuit between Covalent Collective and the sellers. In a YouTube video dated February 2020 Gregorak addressed the shareholders. He suggested that if shareholders own 50,000 shares, they should invest another $1,000. Investor Gene Berg says Covalent will either “take down CO16 or get its money back.” In the video, Gregorak also insists that CO16 would be the core asset of Covalent a position he changed this month.

In April, shareholders got way more detail in a lawsuit filed where former Covalent CEO Geoff Thompson is accused of being a co-conspirator with a group called the Pollack Syndicate – the sellers of CO16. It is alleged that “Thompson initially acted on behalf of the purchaser, in this case, Counterclaim Plaintiff Covalent, as its CEO and sole board member. Having befriended Thompson, Mike Pollock leveraged their friendship and “flipped” Thompson, eventually making him a co-conspirator to keep Counterclaim Plaintiffs Covalent, Advantameds and its multiple investors unaware of the fraud schemes employed by Mike Pollock, Thompson and the rest of the Pollock Syndicate.”

Covalent says it paid approximately $8 million for CO16. The case alleges that “In truth and in fact, the monies were for the personal use of one or more of the Counterclaim Defendants and the Pollock Syndicate’s operations, were not used as represented and were never intended to be returned, credited or repaid to Covalent or Advantameds.” The case also suggests that some of the money was used to pay off a previous lawsuit and that there was never any intent to actually purchase any properties.

According to the lawsuit, Thompson tried to negotiate a settlement even though he was no longer the Covalent CEO that amounted to roughly $4.1 million. The 78-page lawsuit also details numerous criminal pursuits by Pollack and his associates that Covalent executives seemed unaware of despite giving them millions. The lawsuits that have been filed are now stalled due to the COVID-19 situation. Gregorak recently said in an email to shareholders that neither side has contacted each other.

Geoff Thompson

In July 2019, Covalent said that its founder Thompson had resigned from his positions as a director and officer of the company and its various subsidiaries and agreed to relinquish all associated corporate responsibilities effective immediately. Thompson was actually in the process of working out a settlement with the SEC related to stock fraud associated with Accelera Innovations and Synergistic Holdings.

In April 2020, Thompson has agreed to a settlement with the SEC for an amount over half a million. Thompson agreed to a payment of $350,000, representing profits gained as a result of the conduct alleged in the Complaint, along with prejudgment interest in the amount of $ 74,849.97, for a total of $424,849.97. In addition to that, Thompson has agreed to pay a civil penalty in the amount of $100,000 in the form of four payments of $25,000 each. He was also barred from serving as an officer of a public company for five years and from participating in an offering of penny stock, including engaging in activities with a broker, dealer, or issuer for purposes of issuing, trading, or inducing or attempting to induce the purchase or sale of any penny stock.

One Covalent shareholder told Green Market Report that Thompson told him he had a new company called HempMetrix and that Covalent shareholders would receive pro rata shares and that HempMetrix was a Delaware C Corp. There is no record online of such a company.

However, there is a company called Hempcentrics. Thompson has a podcast dated October 2019 about it in which he describes the company. There is little additional information on this company. There is a Shopify website for the products with the URL Green Life Balance. The products are available for sale, but there is no information where the CBD is sourced or any information about the company.

The company name does resurface in an email from Gregorak to Covalent shareholders dated May 5. It says, “Covalent has not been directly involved with Hempcentrics since it was split off.  Many of you have exercised your option to receive the warrants that were awarded to you.  I am pleased to share with you that our largest single shareholder Gene Berg will join the board of Hempcentrics.  Gene and I have worked very closely together during the last year trying to resolve our acquisition dispute with the Colorado 16 so I have got to know him quite well and it has been a pleasure working with him, despite our inability to solve the acquisition issues.  I am hopeful that as Covalent recovers from its past that we will be able to find opportunities to collaborate with Hempcentrics in the future.”

The FBI Comes Calling

If the SEC violations weren’t enough to make investors nervous, get ready for the FBI. Gregorak wrote in his May 5 email, “Some of you have received a questionnaire from a Federal Bureau of Investigation agent.  If you have, as in any situation like this, it is wise to discuss what to do with your attorney.  The investigation is looking into any improprieties that may have happened at Covalent and its predecessor companies to ensure that everything in the past was done properly.  At this point, that is all we know.  To the extent that we can, we will keep you updated if there are any developments on this matter.  We have consulted with our corporate attorneys on this matter and have been advised that answering the questionnaire is voluntary.”

In Closing

In October, Thompson talked to investors about Hempcentric in a podcast and now it seems Covalent investor Gene Berg is on the board. The company website is not clear whether Thompson is still associated with the company. GMR asked Rich Kaiser who is listed as the company contact for comment, but he declined. No other contacts are listed.

The website states that the company is “Grounded In Science.” Yet, despite descriptive paragraphs of these lauded scientists, it does not name them.

Gregorak recently told investors, “ We are no longer interested in buying the Colorado 16 businesses.  Our counterclaim is demanding back the funds that Covalent has given to the Colorado 16 sellers/defendants along with associated costs and damages.” The company said it is looking at new acquisitions instead.

 

 

 

 

The post Covalent Collective Asks Investors For More Money appeared first on Green Market Report.



420GrowLife

via www.KahliBuds.com

Debra Borchardt, KahliBuds, 420GrowLife

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