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Subsequent Events
9 Months Ended
Mar. 31, 2023
Subsequent Events [Abstract]  
Subsequent Events


13. Subsequent Events

 

Subsequent to the period end, the Company conducted a private placement for up to $5,000,000, or 200 Units of $25,000 each, on terms that are substantially similar to the Share Purchase Agreement executed on March 29,2023 (see Note 9 – Shareholders’ Equity). Each $25,000 Unit consists of 35,714 common shares of the Company and 35,714 Series A warrants that are exercisable into one common share of the Company at $0.80 per share for a period of five years from the date of issuance and 35,714 Series B warrants that are exercisable into one common share of the Company at $0.70 per share for a period of eighteen months from the date of issuance. As of the date of this filing, the Company has received net proceeds of $3,425,000. The Company expects the final closing of the transaction to occur in the fourth quarter of its fiscal year. The Company’s offering of the Units was made in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act. The Company relied on this exemption from registration based in part on representations made by the purchasers, including that such purchasers are “accredited investors” (as defined under the Securities Act) and will resell such securities only if registered under the Securities Act or pursuant to an applicable exemption from registration requirements.

 

On May 12, 2023, the Company entered into the First Amendment to Second Amended and Restated Membership Interest Purchase Agreement (see Note 3 – Other Deposits) for the purchase of a commercial recycling facility in the Tahoe-Reno Industrial Center located at 2500 Peru Drive, McCarran, Nevada and related industrial equipment. As of the date of this filing, the Company has made payments of $13.0 million in cash and issued 11,000,000 shares of common stock as part of the purchase price under the agreement. The remaining cash payment of $2.0 million is due on May 26, 2023. The Company agreed to register the shares received as consideration for resale by an affiliate of Linico and the acquisition transaction is expected to close once such selling stockholder has received net cash proceeds of at least $6.6 million from the sale of such shares. The Company’s issuance of such shares was made in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act. The Company relied on this exemption from registration based in part on representations made by the recipient of such shares, including that such recipient is an “accredited investor” (as defined under the Securities Act) and will resell such securities only if registered under the Securities Act or pursuant to an applicable exemption from registration requirements.

 

Contemporaneously, the Company entered into a separate contingent sales-leaseback agreement with another third-party buyer to purchase the property for an aggregate purchase price of $15.0 million and lease back the property to the Company, subject to the Company’s successful consummation of the First Amendment to Second Amended and Restated Membership Interest Purchase Agreement and successfully acquire fee simple title to the Property. The buyer of the sale-leaseback transaction shall lease the Property back to the Company pursuant to the lease agreement to be entered between the buyer as landlord and the Company as a tenant.

 

The Company has evaluated subsequent events through the date the financial statements were available to be issued and has not identified any additional subsequent events requiring adjustments to, or disclosures in the accompanying condensed consolidated financial statements.