Subsequent Events

3 Months Ended

Mar. 31, 2021

Subsequent Events [Abstract]

Subsequent Events

Note 15. Subsequent Events

Naturaleaf Acquisition

On April 30, 2021, the Company closed its acquisition of Medihemp, LLC, and its wholly owned subsidiary SLAM Enterprises, LLC, and Medical Cannabis Caregivers, Inc., each an entity organized and operating under the laws of the State of Colorado, and all doing business as “Naturaleaf.”

Previously, on March 11, 2021, the Company signed an Asset Purchase Agreement to acquire the entities. In exchange for a deposit of $20,000, a subsequent payment $1,080,000 dollars, the execution of a promissory note for $1.1 million dollars, and the issuance of three million shares of common stock Naturaleaf agreed to sell the Company the following assets:

1. Three Medical Marijuana (MMC) Store Licenses;

2. One Marijuana Infused Product Licenses (MIPS); and,

3. One Option Premises Cultivation License (OPC); and,

4. Related real property assets, good will, and related business assets.

A condition precedent to closing the transaction was obtaining the approval of the Colorado MED and City of Colorado Springs to the change of ownership over the cannabis licenses. In the event MED and City do not approve the license transfers, the asset purchase agreement will terminate, and the Company will forfeit its initial $20,000 payment. On April 30, 2021, Colorado MED and the City of Colorado Springs granted approval and the transaction closed. The Company paid $1,080,000 in cash, executed a promissory note for $1.1 million dollars and issued three million shares of restricted common stock to Naturaleaf.

PPP Loan

On March 27, 2020, the CARES Act was enacted to provide financial aid to family and businesses impacted by the COVID-19 pandemic.  In late 2020, a second round of funding was authorized and made available. The Company on April 22, 2021, the Company entered into a note payable with a bank under the Small Business Administration (“SBA”) Paycheck Protection Program (“PPP loan”) in the amount of $130,186. This loan payable matures on April 26, 2026 with a fixed interest rate of 1% per annum with interest deferred for six months. The PPP loan has an initial term of two years, is unsecured and guaranteed by the SBA. Under the terms of the PPP loan, the Company may apply for forgiveness of the amount due on the PPP loan. The Company used the proceeds from the PPP loan for qualifying expenses as defined in the PPP. The Company intends to apply for forgiveness of the PPP loan in accordance with the terms of the CARES Act. However, the Company cannot assure at this time that the PPP loan will be forgiven partially or in full. If the loan is not forgiven based on the PPP guidelines to be issued by the SBA, as defined.

In accordance with ASC 855-10, the Company has analyzed its operations after December 31, 2020 to the date these Unaudited condensed consolidated financial statements were available to be issued and has determined that there were no other significant subsequent events or transactions that would require recognition or disclosure in the unaudited condensed consolidated financial statements for the three months ended March 31, 2021.