Quarterly report pursuant to Section 13 or 15(d)

NOTE 13 - MATERIAL TRANSACTION

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NOTE 13 - MATERIAL TRANSACTION
9 Months Ended
Sep. 30, 2015
Notes to Financial Statements  
NOTE 13 - MATERIAL TRANSACTION

NOTE 13 – MATERIAL TRANSACTION

 

The Company entered into a long term lease with First State Compassion Center. The company is currently subleasing the building but has signed an Agreement of Sales with the owner. Upon First State Compassion Center securing licenses and permits for the growing and sale of medical marijuana in the state, the Company will purchase the building. If the tenant is unable to secure the appropriate licenses and permits, the Agreement of Sale to purchase the building will be null and void. In addition to receiving fixed monthly rent payments, the Company will also receive as additional rent a certain percentage of the gross sales of First State with the percentage increasing as total gross sales increase.

In January of 2015, the Company issued a promissory note to First State Compassion Center Inc. in the amount of $1,100,000. The note carries a 12.5% interest rate and is due on December 31, 2019. During 2015, the note will act as a revolving credit line. Whatever the outstanding balance is eight months from the date of execution shall be fixed as the amount due and payable of the note, not to exceed $1,100,000.

In January and February of 2015, the Company issued 7,000 shares of Class A units for $350,000 in its wholly owned subsidiary, Mia Development. The shares represent less than a 2% ownership stake in Mia Development. As part of the operating agreement, the Class A members will receive seventy percent of the operating cash flow until they receive 100% of their investment back.