|6 Months Ended|
Jun. 30, 2018
|Notes to Financial Statements|
|NOTE 17 - SUBSEQUENT EVENTS||
Equity Financing Facility
On July 25, 2018, the Company issued a $5,000,000 convertible note to an accredited investor pursuant to the 2018 Master Securities Purchase Agreement. The convertible note matures in January 25, 2020 and accrues interest at a rate of 7.5% per year.
On July 25, 2018, the Company entered into a Securities Purchase Agreement with an accredited investor and issued a $150,000 convertible note. The convertible note matures in January 25, 2019 and accrues interest at a rate of 3.0% per year.
Debt and Interest Converted into Equity
Subsequent to June 30, 2018, senior convertible promissory notes and accrued interest issued under the 2018 Master Securities Purchase Agreement, in the amount of $3,000,000 and $35,938, respectively, were converted into 1,932,888 shares of common stock.
In July 2018, the Company issued 945,000 options which vest quarterly over 3 years to various directors and executives.
On July 26, 2018, the Company received approvals from local authorities for the change of ownership in NuLeaf. As a result, the notes receivable balance at June 30, 2018 was converted into a 50% ownership interest in NuLeaf in July 2018. See “Note 6 – Notes Receivable” for additional disclosure.
On July 26, 2018, the Company announced that it has secured a 25% ownership stake in The Healing Tree Collective, Inc., a cannabis dispensary operator based in California. On July 23, 2018, The Healing Tree Collective, Inc. was awarded a retail permit associated with a facility on W. Pendleton Ave, Santa Ana, by the City of Santa Ana. The remaining 75% of The Healing Tree Collective, Inc. and therefore the associated permit, is held by other members of The Healing Tree Collective, Inc., with whom the Company partnered in order to complete the permit application process. Under the terms of the agreement between the Company and the other members of The Healing Tree Collective, Inc, the Company covered the costs of the permit application and Black Oak, will be responsible for managing all of the facility’s operations, including hiring decisions. The facility is located at 3222 W. Pendleton Ave, Santa Ana, California, an area of Santa Ana in which the Company did not previously have a presence.
On July 24, 2018, the Company announced it has been granted two permits by the City of Santa Ana to operate one retail dispensary on Dyer Road and one on Carnegie Avenue in Santa Ana, California. The first dispensary will be located at 620 East Dyer Road, with plans to become a fully vertical cannabis complex. The second dispensary will be located at 1815 E. Carnegie Avenue.
On July 6, 2018, MediFarm LLC, a wholly-owned subsidiary of the Company, entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Exhale Brands Nevada III, LLC (the “Purchaser”) pursuant to which the Company agreed to sell and the Purchaser agreed to purchase substantially all of the assets of the Company related to the Company’s dispensary located at 1921 Western Ave., Las Vegas, NV 89102 (the “Business”). See “Note 4 - Assets Held for Sale” for additional disclosure.
On July 30, 2018, the Company entered into Independent Director Agreements with Steven J. Ross (the “Ross Agreement”) and Alan Gladstone (the “Gladstone Agreement”).
The entire disclosure for significant events or transactions that occurred after the balance sheet date through the date the financial statements were issued or the date the financial statements were available to be issued. Examples include: the sale of a capital stock issue, purchase of a business, settlement of litigation, catastrophic loss, significant foreign exchange rate changes, loans to insiders or affiliates, and transactions not in the ordinary course of business.
Reference 1: http://www.xbrl.org/2003/role/presentationRef