|9 Months Ended|
Sep. 30, 2021
|Subsequent Events [Abstract]|
NOTE 15 – SUBSEQUENT EVENTS
Amendment to Lock-Up Agreement.
On October 1, 2021, the Company entered into a First Amendment to Lock-Up Agreement between the Company and ECOX, dated and effective October 1, 2021which amends that certain Lock-Up Agreement entered into between the Company and ECOX on February 26, 2021.
The Lock-Up Agreement was ancillary to the share exchange agreement dated February 26, 2021 between the Company and ECOX, whereby the parties exchanged common stock equal in value to $650,000, subject to the restrictions of the Lock-Up Agreement. The Lock-Up Agreement provided for an initial lock-up period of 12 months following its effective date, and a subsequent sell volume limitation of the quantity of shares equaling an aggregate maximum sale value of $20,000 per week, or $80,000 per month until all shares are sold.
The Amended Lock-Up Agreement amends the Lock-Up Agreement by amending the initial lock-up period from 12 months following its effective date to 6 months following its effective date. All other terms and conditions of the Lock-Up Agreement remain unaffected.
Salinas Diversified Ventures
On October 6, 2021, the Company, through its wholly owned subsidiary Salinas Diversified Ventures, Inc., a California corporation, entered into an Asset Purchase Agreement, Management Services Agreement, Cooperation Agreement and Employment Agreement with VBF Brands, Inc., a California corporation (“VBF”), a wholly owned subsidiary of Sunset Island Group, Inc., a Colorado corporation (“SIGO”), and Ms. Lori Livacich, individually, and as an affiliate of both VBF and SIGO (“Livacich”). No material relationship exists between the parties, other than with respect to the material definitive agreements.
VBF and SIGO agreed to sell and transfer to the Company all of VBF’s outstanding stock, and, by virtue of the Management Services Agreement, appoint Mr. Jesus Quintero as President of VBF, vesting management and control of VBF’s licensed cannabis operations in the Company. Concurrently, VBF and Livacich entered into a Cooperation Agreement, whereby VBF and Livacich agreed to cooperate to facilitate the transfer of ownership of VBF, which includes licenses issued by the City of Salinas, County of Monterey, and the State of California, to operate a cannabis nursery, cultivation facility and manufacturing and distribution operations to the Company. The Company also agreed to retain Livacich as Chief Executive Officer for a term of two years and agreed to compensate her with a salary including a signing cash bonus of $250,000, and a $250,000 performance cash bonus payable after six months after the Effective Date. The bonus is conditioned upon Livacich meeting an agreed to “Net Revenue” target of $1,000,000 from VBF’s operations during the six month period after closing of the Asset Purchase Agreement, and her compliance with the terms and conditions of this Asset Purchase Agreement, the Management Services Agreement and the Cooperation Agreement.
As consideration for the transaction, the Company agreed to assume two secured convertible promissory notes issued by SIGO with St. George. The first note was issued December 8, 2017, in the original principal amount of $170,000 (“Note 1”); and the second note was issued February 13, 2018, in the original principal amount of $4,245,000 (“Note 2”). As part of Note 2, SIGO also issued warrants to St. George to purchase shares in SIGO, and shares of Series A Preferred Stock in SIGO. St. George agreed to cancel the warrants and preferred shares upon the Company’s assumption of Notes 1 and 2 (collectively, the “SIGO Notes”). On October 6, 2021, the Company issued and sold a convertible promissory note to St. George in the principal amount of $3,455,178. As partial consideration for the purchase of the securities, St. George assigned and transferred to the Company, who agreed to receive and accept, the SIGO Notes, valued at $1,770,982. The Company agreed to pay an original issue discount of $574,196 and $10,000 in legal fees. St. George paid a cash purchase price of $1,100,000 to the Company.
Increase in Authorized Common Stock
On October 21, 2021, the Company filed an amendment to its articles of incorporation to increase the Company’s authorized common stock fromto shares.
Regulation A Offering
On October 1, 2021, the Company filed an Offering Statement on Form 1-A (File No. 024-11668) (the “Regulation A Offering”) with the Securities and Exchange Commission with respect toshares of common stock that was qualified by the SEC on October 20, 2021.
Common Stock Issued for Cash
In October 2021, the Company sold a total of 260,000, or $ per share, under its Regulation A Offering.shares of its common stock for a total of $
On October 6, 2021 the Company issued 58,453 of principal and interest on the December 2020 convertible note payable to Bucktown Capital, LLC.shares of common stock upon the full conversion of $
On October 22, 2021 the Company issued 69,111 of principle and accrued interest on the January 2021 convertible note payable to Bucktown Capital, LLC.shares of common stock upon the conversion of $
In October 2021, the Company sold a total of 370,000.shares of common stock for cash proceeds of $
Subsequent to September 30, 2021, the Company repaid approximately $435,000 on the convertible note payable with Labrys.
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/disclosureRef