Disposal of subsidiary

9 Months Ended

Sep. 30, 2023

Discontinued Operations and Disposal Groups [Abstract]

Disposal of subsidiary

4.   Disposal of subsidiary

On June 30, 2023, the Company entered into an exchange agreement with Leonite Capital, LLC, whereby it exchanged the 400,000 Series B shares with a value of $400,000 plus accrued dividends thereon of $61,184 for its entire shareholding in its property owning subsidiary, Cranberry Cove Holdings. The Series B shares were cancelled upon consummation of the transaction.

Immediately prior to the disposal of Cranberry Cove Holdings, the Company assumed the loan owed to a third party of $779,005 and the loan owing to Leon Developments of $1,973,837, Leon developments, a related party, owned by the Company’s CEO, Shawn Leon. In addition, the Company forgave the intercompany debt owing by Cranberry Cove Holdings of $4,566,848.

The assets and liabilities disposed of were as follows:

	Net book value
Assets
Other receivable	$	12,015
Property and equipment		2,420,499
		2,432,514
Liabilities
Accounts payable and accrued liabilities		(196,859	)
Government assistance loans		(45,317	)
Mortgage loan		(3,525,223	)
		(3,767,399	)
Disposal of subsidiary to related party – recorded as additional paid in capital	$	(1,334,885	)

The minority shareholders interest related to the Series A preferred stock in Cranberry Cove Holdings was recorded as a deemed contribution to the Company and credited to additional paid in capital, resulting in a total credit to additional paid in capital of $2,034,885.

The cancellation of the Series B shares, were owned by Leonite Capital, a related party, was deemed to be an extinguishment of debt by a related party and recorded as a credit to additional paid in capital of $461,184.