Related Parties

6 Months Ended

Jun. 30, 2022

Related Party Transactions [Abstract]

Related Parties

Note 13: RELATED PARTIES

Related party transactions

LI Lending LLC

Linchpin Investors LLC (“Linchpin”), a subsidiary of the Company, and LI Lending LLC (“LI Lending”) entered into a Construction Loan Agreement dated May 10, 2019, as amended, whereby Linchpin received an up-to $45,000 loan from LI Lending of which $48,300 was outstanding as of December 31, 2021. Mr. Gontmakher, the CEO of the Company, and Roman Tkachenko, a director of the Company, each hold a 14.28% ownership interest in LI Lending. The loan matures in May 2024 and bears interest at 10.25%, payable monthly in cash. Upon maturity, an exit fee of $9 million is payable, for a total payable at maturity of $54 million. $49,457 of the loan advanced includes the notes payable and accrued interest less debt discount of $336 that was outstanding as of June 30, 2022. Of the $49,121 outstanding at June 30, 2022, $3,381 represents interest accrued through June 30, 2022. See Note 9 for details on the outstanding note payable.

Pure Ratios

Leonid Gontmakher, Chief Executive Officer of the Company, holds an interest in an entity related to iWolf Management, LLC, an online marketing company serving the online CBD market which provided online marketing services during 2020 and 2019 for the Company’s Pure Ratios division. Pure Ratios paid $313 for the three and six months ended June 30, 2021 to this vendor for management fees, pass through marketing costs and customer service. Pure Ratios did not make any such payments during the six months ended June 30, 2022.

MP Illinois

The Company maintains a contractual relationship with entities that are wholly owned by MP Illinois, a single-member LLC owned by Mr. Joshua N. Rosen, a former officer and director of the Company. The Company holds a nominee agreement whereby the Company receives a 100% beneficial (but not legal) interest IL Grown Medicine, LLC, the holder of a cultivation license in Illinois.