Item 2.01 Completion of Acquisition or Disposition of Assets
As previously reported in our Quarterly Report on Form 10-Q for the quarter
ended September 30, 2023, the Company entered into an agreement (the "CVC
Agreement") with CVC International, Inc. ("CVC"), an institutional investor who
holds certain of the Company's Convertible Promissory Notes (the "Notes"), one
of which was secured by a $500,000 mortgage on the property the Company owned in
Lebanon, Oregon, which the Company intended to develop as a cannabis grow and
production facility (the "Property").
Pursuant to the CVC Agreement, CVC released its $500,000 mortgage lien on the
Property, to enable the Company to sell the Property and utilize the proceeds
therefrom for the benefit of the Company and its shareholders, without having to
repay CVC the $500,000 Note held by CVC.
Additionally, CVC agreed to advance certain sums against the sale of the
Property ("Advances"), which included $150,000 advanced at the time the CVC
Agreement was entered into and an $120,000 which was advanced to the Company on
November 10, 2022. The advances bear interest at the rate of 10% per annum and
are convertible into shares of our common stock at $0.08 per share, subject to
market adjustment.
On February 28, 2023 we sold the Property for a price of $769,500, less
commissions and customary closing costs. The net proceeds of the sale were used
to repay the advances and an additional short-term loan of $100,000 (plus
interest due of $5,000). After such repayments, the Company realized net
proceeds of approximately $302,000,000.
Additionally, the Company has entered into an asset purchase agreement for the
sale of its Salem Retail Cannabis Store ("Store 2") for $210,000.00, less a 6%
closing commission and minor closing expenses. The purchase price has been
deposited in escrow, with a closing anticipated to occur prior to the end of
March 2023, subject to the receipt of approval from the Oregon Liquor Control
and Cannabis Commission.
The Company intends to utilize the net proceeds of approximately $500,000 from
both the sale of the Property and Store 2, for general working capital including
the resolution of its three non-performing store leases in South Oregon, the
development of its planned Oregon Psilocybin business and planned Florida hybrid
Ketamine Clinic and Telehealth business, as well as for the enhancement of its
Portland Kaya Shack Retail Cannabis store to create a streamlined model designed
to facilitate franchising efforts and development of its international projects.
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