Subsequent Events

9 Months Ended

Mar. 31, 2021

Subsequent Events [Abstract]

Subsequent Events

26. Subsequent events

Shares issued for cash

On April 5, 2021, the Company entered into a stock subscription agreement to issue 194,444,445 shares of the Company’s common stock in exchange for $350,000 in cash.

On April 15, 2021, the Company entered into a stock subscription agreement to issue 194,444,445 shares of the Company’s common stock in exchange for $350,000 in cash.

On April 26, 2021, the Company entered into a stock subscription agreement to issue 100,000,000 shares of the Company’s common stock in exchange for $180,000 in cash.

On April 27, 2021, the Company entered into a stock subscription agreement to issue 194,444,445 shares of the Company’s common stock for cash in total amount of $350,000.

Shares issued for debt conversion

Subsequent to May 14, 2021, a note holder converted approximately $52,500 of convertible notes into 40,753,063 shares of the Company’s common stock.

Lemon Glow Merger

On May 12, 2021, entered into an Agreement and Plan of Merger (the “Merger Agreement”) by and between Carnaby Spot Bay Corp, a wholly owned subsidiary of the Company (“Merger Sub”), Lemon Glow Company (“Lemon Glow”) and Ryan Santiago (the “Shareholder Representative”).

Pursuant to the Merger Agreement, the parties to the Merger Agreement agreed that, upon the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub would merge with and into Lemon Glow (the “Merger”) at which time the separate corporate existence of Merger Sub would cease, with Lemon Glow being the surviving corporation in the Merger.

As consideration for the Merger, Company agreed to provide to the shareholders of Lemon Glow (the “Lemon Glow Shareholders”), at the closing of the Merger (the “Closing”):

(i) cash consideration of $4,256,000, consisting of:

(a)	$280,000 in cash; and
(b)	$3,976,000 via the issuance of promissory notes to Lemon Glow Shareholders, which each bear interest at the rate of 5% per year 36 monthly payments commencing on June 15, 2021 (each, a “Note” and collectively the “Notes”); and

(ii)	660,571,429 shares of common stock of the Company, par value $0.001 (the “Company Common Stock”); and
(iii)	2,000,000 shares of Series B Preferred Stock of the Company (the “Series B Stock”).

The individual items of consideration above are referred to collectively as the “Merger Consideration”.

Lemon Glow is the owner of a 640-acre property located in Lake Country, California. Lemon Glow is in the process of improving 32 acres of the 640 acres for use as a regulated cannabis cultivation site. The Company and Lemon Glow expect that the annual potential cultivation yield at the property is approximately 4,000 pounds per acre of dry trimmed cannabis flower, although there can be no assurance that the property will yield this amount or any at all.

The Merger was consummated on May 14, 2021 (the “Effective Time”).

At the Closing, each outstanding share of common stock of Lemon Glow, of which there were 11,000 shares at the Effective Time of the Merger, were converted into the right to receive the Merger Consideration. The Company paid the Merger Consideration to the Lemon Glow Shareholders, paying the cash consideration, issuing the Notes, and issuing the restricting shares of Company common stock and Series B Stock.

At the Effective Time, all the property, rights, privileges, powers and franchises of Lemon Glow and Merger Sub vested in Lemon Glow as the surviving corporation, and all debts, liabilities, obligations, restrictions, disabilities and duties of Lemon Glow and Merger Sub became those of Lemon Glow as the surviving corporation. In addition, at the Effective Time, the Articles of Incorporation and Bylaws of Lemon Glow remained in place as the Articles of Incorporation and Bylaws of Lemon Glow as the surviving corporation.

At the Effective Time, each outstanding share of common stock of Merger Sub (100 shares) was converted into one share of common stock of Lemon Glow which became the only outstanding capital stock of the Lemon Glow at the Effective Time. In addition, each share of Lemon Glow common stock of the Company held in the treasury of Lemon Glow immediately prior to the Effective Time was canceled and retired. As a result, the Company became the sole owner of 100% of the issued and outstanding common stock of Lemon Glow.

In addition, at the Effective Time, the Articles of Incorporation and Bylaws of Lemon Glow remained in place as the Articles of Incorporation and Bylaws of Lemon Glow (as the surviving corporation). Also, at the Effective Time, the executive officers and directors of Lemon Glow remained in place as the executive officers and directors of Lemon Glow.

The Merger is intended to be a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”), and the Merger Agreement is intended to be a “plan of reorganization” within the meaning of the regulations promulgated under Section 368(a) of the Code and for the purpose of qualifying as a tax-free transaction for federal income tax purposes.