RELATED PARTY TRANSACTIONS

6 Months Ended

Jun. 30, 2020

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS

NOTE 13. RELATED PARTY TRANSACTIONS

On June 3, 2020, the Company entered into a consulting agreement with Adam Hershey, a board member and investor, pursuant to which he would act as a strategic consultant for the Company, including providing assistance with the sourcing and evaluation of M&A deals, strategic capital and strategic partnerships or joint ventures. Mr. Hershey is paid an initial monthly rate of $8,333 for the services, subject to certain adjustments.  We have spent $8,333 for the three and six months ended June 30, 2020.    In addition, the subscription agreement between the Company and Hershey Strategic Capital, LP and Shore Ventures III, LP (the “Investor”) provides that the Company shall, during the 90-day period ending September 1, 2020 endeavor to cause the existing holders of the promissory notes of the Company having an outstanding balance in the amount of approximately $2,331,000 as of June 1, 2020 that are due on or about January 31, 2021, to extend the maturity date of such notes to a date that is not earlier than January 31, 2022.  If, at the end of such 90-day period, all of the existing notes have not been amended to extend the maturity dates thereof, then, in the absence of a waiver from the Investor to the contrary, the Company shall issue to the Investor additional warrants to purchase shares of common stock. See Note 12, “2020 Capital Raise”.

We currently have a lease agreement with Dalton Adventures, LLC in which we rent 17,000 square foot of greenhouse space in Boulder, CO for $33,680 a month, of which $30,000 is base rent and $3,680 is in relation to property taxes.  The owner of Dalton Adventures, LLC is a principal shareholder of the Company.  We have spent approximately $81,000 for the three and six months ended June 30, 2020.

We currently have a note payable to one of our board members in the amount of $100,000. This note is included in the 15% Notes discussed in Note 9. We have paid approximately $4,000 in interest for the three and six months ended June 30, 2020.