Disposal of subsidiary

12 Months Ended

Dec. 31, 2024

Disposal Of Subsidiary

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 stockholders interest related to the Series A preferred stock in Cranberry Cove Holdings of $700,000 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, which 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.