License Transfer Agreements

12 Months Ended

Dec. 31, 2023

License Transfer Agreements [Abstract]

LICENSE TRANSFER AGREEMENTS

NOTE 6. LICENSE TRANSFER AGREEMENTS

In August 2023, we entered into an Assignment of Assets (“Assignment”), pursuant to which we agreed to transfer and assign to Station 2 and Timothy Brown (“Brown” and collectively with Station 2, “Assignees”), a board member, shareholder, and executive level employee of the Company, a State of Colorado and corresponding City and County of Denver retail marijuana store cannabis license and related assets owned related to the licensed cannabis dispensary located at 468 S. Federal Boulevard. Timothy Brown is the sole owner of Station 2. In exchange for the transfer to Assignees of the transferred assets, the Assignees agreed to extinguishment and satisfaction of, and unconditional waiver by each of Station 2 and Brown of any claims in respect of, any and all debt or other obligations of the Company, Trees Colorado, and any of their respective affiliates, directors, officers or agents, pursuant to that certain Asset Purchase Agreement dated October 14, 2022, as amended, by and among the Company, Trees Colorado and Assignees, which was issued upon closing of the transaction in February 2023 (“468 Debt”). This transaction closed in October 2023, and the Company recognized a loss on this transfer of $202,397, located in loss on extinguishment of debt on the consolidated statements of operations.

A summary of the license transfer is presented as follows:

	Balance as of August 17, 2023
Asset to be transferred:
Intangible assets - License	$	590,536
Accumulated amortization - License		(31,987	)
Consideration:
Extinguishment of 468 debt	$	356,152

In July 2023, we and our subsidiaries Green Tree Colorado, LLC, Green Tree Cultivation LLC, GT Retail LLC, and Green Tree MIP LLC, entered into a settlement agreement (“Settlement Agreement”), (“GT Retail”), (“GT MIP”), with Allyson Feiler Downing (“Downing”) and Loree Schwartz (“Schwartz” and together with Downing, “Green Tree Parties”), pursuant to which the Company and the Green Tree Parties agreed to transfer and assign to new entities controlled by the Green Tree Parties, cannabis licenses and related assets owned by (i) GT Retail relating to a cultivation facility and a retail dispensary located in Berthoud, Colorado; (ii) GT MIP relating to a ‘marijuana infused product’ dispensary located in Boulder County, Colorado; and (iii) certain intellectual property in respect thereof. The Company retained accounts payable and certain cannabis inventory in respect of the transferred assets. Closing of the transaction is subject to approval of the license transfers by the Colorado Marijuana Enforcement Division as well as local regulatory authorities. In November 2023, the transfer was approved. As the transfer represented a non-reciprocal transfer between the Company and certain of its shareholders in connection with the settlement of a prior business combination, we recognized the difference between the carrying values of the assets transferred, equity redeemed, and debt exchanged as a capital contribution to the Company. See Note 14 for additional information.

In exchange for the transfer to the Green Tree Parties of the transferred assets, the Company and the Green Tree Parties agreed that upon closing, the Green Tree Parties shall transfer and assign to the Company, and the Company shall redeem, 9,917,574 shares of the Company’s Common Stock owned by the Green Tree Parties and originally issued to the Green Tree Parties in the acquisition consummated in December 2022 pursuant to that certain Asset Purchase Agreement dated September 13, 2022, as amended, by and among the Company, Downing, Schwartz and various other parties thereto (the “APA”).

The asset transfers disclosed herein did not qualify for reporting as discontinued operations, as each of these transactions did not represent a strategic shift that had a major effect on the Company’s operations and financial results.