Item 1.01 Entry into a Material Definitive Agreement.
As previously reported on the Form 8-K filed by mCig, Inc. on September 23, 2013, the Company entered into a Share Cancellation / Exchange / Return to Treasury Agreement with Paul Rosenberg, the chief executive officer of mCig, Inc., for the cancellation of 230,000,000 shares of our common stock held by Mr. Rosenberg in exchange for 23,000,000 shares of our companys Series A Preferred Stock. Under the terms of the Agreement the Preferred Shares are convertible and can be exchanged for a stated number of shares of the company's common stock, but not earlier than one year after the date of signature of the agreement.
The Share Cancellation / Exchange / Return to Treasury Agreement was amended on April 10, 2014. Under terms of which all or any part of the Preferred Shares held by Shareholder can be converted at any time or from time to time, and can be exchanged for a stated number of the company's Common Stock Shares.
As of May 28, 2014, there were no set conversion terms for the Series A preferred stock either in the certificate of designation of mCigs Series A preferred stock or in the agreement, as amended, under which Mr. Rosenberg received 23,000,000 shares of Series A preferred stock.
The Board of Directors determines the stated number of the Companys common stock shares into which the Series A preferred shares can be converted into both with respect to the 23,000,000 Series A preferred shares already issued and with respect to the remaining 27,000,000 authorized but unissued shares of Series A preferred stock.
The Series A Preferred shares of mCig, Inc. carry ten (10) votes per each share of Preferred stock while mCig, Incs common shares carry one (1) vote per each share outstanding. Thus, a logical conversion ratio for Mr. Rosenbergs 23,000,000 Series A preferred shares would be 10:1 indicating the Preferred shares are exchangeable into 230,000,000 common shares in the Company.