Item 1.01
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Entry into a Material Definitive Agreement
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On February 25, 2016, San Diego Sunrise,
LLC, a limited liability company 50% owned by Notis Global, Inc. (the
Company
) entered into a Unit Purchase Agreement (the
First Dispensary Unit Purchase Agreement
) with PSM Investment Group, LLC (the
PSM Buyer
), pursuant to which it sold twenty percent of the membership units of Sunrise Dispensary, LLC, an entity that owns 100% of the right to operate a certain medical marijuana dispensary in San Diego, CA that is expected to
open for business in the second quarter of 2016 (the
Sunrise Dispensary
). Following the sale, San Diego Sunrise, LLC owned 30% of the membership units of Sunrise Dispensary, LLC and the PSM Buyer owned 70% of the membership units
of Sunrise Dispensary, LLC. Through its ownership in San Diego Sunrise, LLC, the Company indirectly owned 15% of the right to operate the Sunrise Dispensary following the sale. The purchase price for the membership units sold in the sale was
$171,429.00.
On April 6, 2016, the Company entered into a Unit Purchase Agreement (the
Property Unit Purchase
Agreement
) with three individuals (the
Buyers
) pursuant to which it sold its entire 50% ownership interest in Sunrise Property Investments, LLC, through which the Company owned the real property underlying the Sunrise
Dispensary. Pursuant to the Property Unit Purchase Agreement, the Buyers paid to the Company an aggregate of $335,000, which represents a purchase price of $400,000 for the Sunrise Property Investments, LLC ownership interests, less $65,000 owed by
the Company for contractual tenant improvements on the Sunrise Dispensary property, net of the value of the transferred membership interests in Sunrise Dispensary, LLC (valued at approximately $128,000) to PSM Buyer pursuant to the Second Dispensary
Unit Purchase Agreement, described below (the
Sunrise Operating Transferred Value
).
Also on April 6, 2016, San Diego
Sunrise, LLC entered into a Unit Purchase Agreement (the
Second Dispensary Unit Purchase Agreement
) with the Buyers pursuant to which it sold 15% of the total membership interests in Sunrise Dispensary, LLC to the Buyers for the
Sunrise Operating Transferred Value. Sunrise Dispensary, LLC holds the rights to operate the Sunrise Dispensary. Following this sale, San Diego Sunrise, LLC owned 15% of the membership units of Sunrise Dispensary, LLC, the Buyers owned 15% of the
membership units of Sunrise Dispensary, LLC and the PSM Buyer owned 70% of the membership units of Sunrise Dispensary, LLC.
In connection
with entry into the Second Dispensary Unit Purchase Agreement, on April 6, 2016, the Company entered into a Withdrawal Agreement with JNO 50, LLC (
JNO
), the other member of San Diego Sunrise, LLC, withdrawing as a member thereof.
Pursuant to the Withdrawal Agreement, and as consideration for a general release from JNO and its principals, the Company agreed to issue to JNO a warrant to purchase 500,000 shares of common stock of the Company at a strike price of $0.03 for a
term of three years from the date of the Withdrawal Agreement. Following this withdrawal, the Company held no remaining membership units of San Diego Sunrise, LLC.
As a result of the transactions described above, the Company sold its entire interest in the entities that operate and own the underlying real
estate for the Sunrise Dispensary.
The foregoing descriptions of the First Dispensary Unit Purchase Agreement, the Property Unit Purchase
Agreement, the Second Dispensary Unit Purchase Agreement and the Withdrawal Agreement are not complete and are qualified in their entirety by reference to the full text of the documents, which are filed as Exhibit 10.1 through 10.4 of this Report,
respectively.