Item 2.01 Completion of Acquisition or Disposition of Assets
As previously disclosed, on June 9, 2021, Unrivaled Brands, Inc. (f/k/a Terra Tech Corp.) (the “Company”) entered into a Stock Purchase Agreement with Sterling Harlan and Matthew Guild (collectively, the “Sellers”), which was amended by a First Amendment to Stock Purchase Agreement, dated July 13, 2021 (as amended, the “SPA”), pursuant to which the Company would purchase from the Sellers all of the issued and outstanding shares of common stock (the “Shares”) of Silverstreak Solutions, Inc. (“Silverstreak”), a cannabis delivery service based in Sacramento, CA (the “Acquisition”).
On October 1, 2021, the Acquisition was completed. In consideration for the Shares, at the closing of the transactions contemplated by the SPA (the “Closing”), the Company paid the Sellers on a pro rata basis a total of Eight Million Five Hundred Thousand Dollars ($8,500,000) (the “Purchase Price”). The Purchase Price is comprised of (i) One Million Five Hundred Thousand Dollars ($1,500,000) in cash, (ii) 9,051,412 shares of restricted common stock, par value $0.001 per share, of the Company (the “Purchaser Shares”), which is equal to the quotient obtained by dividing (a) $2,500,000, by (b) the volume-weighted average price of the Purchaser Shares as reported through Bloomberg for the ten (10) consecutive trading days ending on the business day prior to the Closing, (iii) $2,000,000 in unsecured promissory notes with an interest rate of 3% and due six months after the Closing (the “Six-Month Notes”), and (iv) $2,500,000 in unsecured promissory notes with an interest rate of 3% and due twelve months after the Closing (the “Twelve-Month Notes”).
The Six-Month Notes and Twelve-Month Notes contain customary events of default, including failure to pay any principal, interest or any other amount due, a breach of representations, warranties or covenants made by the Company, the commencement of bankruptcy proceedings against the Company or the entry of a judgment or decree against the Company. If an event of default occurs under either the Six-Month Notes or Twelve-Month Notes, the noteholder may declare the entire principal amount of the Six-Month Note or Twelve-Month Note, as applicable, together with all accrued interest thereon, immediately due and payable. In addition, if any amount payable under either the Six-Month Notes or Twelve-Month Notes is not paid when due, such overdue amount shall bear interest at a rate of 8% from the date of such non-payment until such amount is paid in full.
The foregoing descriptions of the Six-Month Notes and the Twelve-Month Notes are qualified in their entirety by reference to the full text of such documents, copies of which are filed as Exhibits 10.1, 10.2, 10.3, and 10.4, respectively, to this Current Report on Form 8-K (this “Report”) and which are incorporated by reference herein in their entirety.