Canna Corp (fka CNCC)

[CashBowski]

Another lawsuit filed for nearly $700,000!!


$6.2M is what they sought to borrow from Ultegra — got 1st Tranche of $350k, didn’t pay the fees and went missing. Now have a lawsuit for ~$700k + a lien on Northway mining property.

I don’t think folks that have their rigs stored there would be too happy about that!

Or, maybe the facility is purely smoke and mirrors since we have yet to see any income, just a shit load of debt.

This debt doesn’t include the $1M in convertible debt they announced from another entity (Triton) plus what was previously on the books, plus the loans from Dekel and Doron Svorai (CEO’S brothers) that’s been proven to be more toxic than any others.

Ultegra Financial Partners, Inc.

Plaintiff,

v.

Northway Mining, Inc., a New York limited liability company, Mining Power Group, Inc., a Florida corporation, and Michael Maranda, an individual,

Defendants.


Plaintiff seeks to recover more than $686,000.00 from Defendants.

On or around December 13, 2018, Defendants, in need of money, sought a $6.2 million-dollar loan from Ultegra Financial Partners, Inc. The loan would be made in two tranches. Defendants received the first tranche of $350,000.00 of the loan on December 24, 2018. The second tranche is scheduled to be made later. On that same day, Ultegra requested $66,000.00, which was the sum of a number of fees Ultegra incurred in making the loan. Defendants agreed to pay Ultegra the $66,000.00 on or before December 26, 2018. But by December 27, 2018, Ultegra still had not received the $66,000.00 and contacted Defendants. Defendants did not respond.

On December 28, 2018, and again on January 2, 2018, Ultegra demanded payment through its counsel. But, again, Defendants did not respond. Plaintiff filed this Complaint. PARTIES

A. Plaintiff:

1. Plaintiff, Ultegra Financial Partners, Inc. (“Ultegra”), is a Colorado corporation organized under the laws of the State of Colorado, with a principle place of business at 1099 18 th Street, Suite 2680 Denver, Colorado 80202.

B. Defendants:

2. Defendant, Northway Mining, LLC (“Northway”), is a New York limited liability company, with a physical corporate address at 707 Flat Road Athens, NY 12015. Upon investigation and review of corporate filings with the Securities and Exchange Commission’s Edgar System, no member of Northway is a Colorado resident.

3. Defendant, Mining Power Group, Inc. (“Mining Power”), is a Florida corporation and the parent company of Northway. Mining Power has a principle place of business at 20200 Dixie Highway Suite 906 Miami, Florida 33180.

4. Defendant, Michael Maranda, (“Maranda”), is an individual who represents himself as the CEO of Northway. Maranda may be served at 38 Oaklawn Avenue Farmville, NY 11738.


FACTUAL ALLEGATONS

1. On December 13, 2018, Defendants executed a Term Sheet with Ultegra to borrow $6.2 million dollars (the “Loan”) from Ultegra.

2. On December 19, 2018, Defendants executed Fee Agreement and a Commitment Letter.

3. The Fee Agreement and the Commitment Letter form the core of the documents that detailed the transaction between Ultegra and Defendants.

4. As part of the Loan, Ultegra was entitled to certain fees and costs.

5. Defendants agreed to pay Ultegra a due diligence fee of $37,500.00.

6. Defendants paid Ultegra $25,000.00 of the due diligence fee, leaving a balance of $12,500.

7. Ultegra is entitled to a minimum banking fee of $620,000.00, which is 10 percent of the Loan.

8. The minimum banking fee of $620,000.00 became due the moment Ultegra presented the Commitment Letter to Defendants for execution.

9. The Loan was to be made in two traches of $350,000.00 and $5,850,000.00.

10. Ultegra was entitled to certain fees on the first tranche of the Loan.

11. Specifically, on the first tranche, Ultegra was entitled to a small banking fee of $35,000.00, which represents 10 percent of the first tranche.

12. Ultegra was also entitled to a credit facility fee of $3,500.00 and a commitment fee of $3,500.00.

13. Defendants also granted Ultegra a security interest in their assets, including an interest in the real property at 707 Flats Road in Athens, NY

14. The provision granting Ultegra a security interest provides as follows: SECURITY INTEREST GRANTING CLAUSE; ULTEGRA'S LIEN.

(a) To secure the full and timely payment and performance of all of Client's obligations under and with respect to this Agreement, including without limitation, Client's obligation to pay any and all Banking Fees, any Break-Up Fees, liquidated or other damages, all costs, expenses, advances and other amounts to be paid or reimbursed to Ultegra pursuant to this Agreement, and all other amounts payable by Client to Ultegra under or with respect to this Agreement (collectively, the "Obligations"), Client hereby grants to Ultegra, a continuing security interest in, lien and collateral assignment in and to, and right of setoff against (collectively, "Ultegra's Lien") all of Client's personal and real property and all rights to such personal and real property held by Client, in each case, whether now owned or existing or hereafter acquired or arising and regardless of where located, including without limitation, all: (1) accounts; (2) chattel paper; (3) commercial tort claims; (4) (i) all deposit accounts and (ii) all cash and other monies and property of Client in the possession of, or under the control of, Ultegra; (5) equipment; (6) fixtures; (7) general intangibles (including intellectual property); (8) goods; (9) instruments; (10) inventory; (11) investment property; (12) letter- of-credit rights and supporting obligations; and (13) other personal property; and real estate; together with all books, records, ledger cards, files, correspondence, computer programs, tapes, disks and related data processing software that at any time evidence or contain information relating to any of the property described above or are otherwise necessary or helpful in the collection thereof or realization thereon; and proceeds and products of all or any of the property described above (such terms shall have the meanings ascribed in the Uniform Commercial Code as then in effect in the State of Colorado; and collectively, all of the same, the "Collateral") and includes any amounts now or hereafter held by Ultegra as advance payments, deposits or retentions paid or remitted to Ultegra by or on behalf of Client. This Agreement shall be deemed to constitute a "security agreement" under the terms of the Uniform Commercial Code in effect in the State of Colorado. Client shall be the "debtor" and Ultegra shall be the "secured party". In addition to lien, Client has granted Ultegra the right to file a Mortgage or deed of trust on the property located at 3620 Austin Peay Highway, in Memphis, Tennessee in the amount equal to the minimum banking fee described above in Schedule 1 paragraph A

(b) In furtherance of the foregoing grant, Client hereby authorizes and, until such time as the Obligations are paid in full, in cash, shall continue to authorize Ultegra to (i) file one or more financing or continuation statements, and amendments thereto (or similar documents required by any laws of any applicable jurisdiction), relating to all or any part of the Collateral, and/or (ii) file a copy of this Agreement with the ultimate loan disbursement agent and/or the accounts receivable disbursement agent for the contemplated funding, which shall serve for all purposes as Client's authorization and instruction to such agents to pay to Ultegra the amount of all Banking Fees owed by Client to Ultegra and the amount of any costs, expenses, or advances or other Obligations owed to Ultegra; in each such case, without the signature of, or further authorization by, Client, and Client hereby specifically ratifies all such actions previously taken by Ultegra. An invoice for such Banking Fees, costs, expenses, and advances shall be delivered by Ultegra to Client and the applicable disbursing agent within five (5) business days before the scheduled closing. Payment of Banking Fees, costs, expenses, and advances owed by Client to Ultegra shall be made by the trustee or disbursing agent at the time of funding.

15. Defendants agreed that the Loan would be released to it in two tranches.

16. In addition, before the loan closed, but after Defendants learned about the closing costs, Defendants requested the first tranche of the loan be increased to $350,000.00 to allow Defendants to repay the closing costs.

17. On December 24, 2018, Northway received the first tranche of the Loan of $350,000.00.

18. On December 24, 2018, Ultegra requested payment of $66,000.00.

19. The $66,000.00 is the sum of: $12,500.00, which is the balance of the due diligence fee; $35,000.00, which is the small banking fee of on the first tranche; $15,000.00, which is the commitment fee; $3,500.00, which is the credit facility fee.

20. Maranda, via text message, promised to pay Ultegra the $66,000.00 on or before December 26, 2018.

21. On December 27, 2018, Ultegra sent an invoice to Maranda and again requested payment.

22. Maranda did not respond to Ultegra’s December 27, 2018, communication and no one from Northway or Power Mining responded.

23. On December 27, 2018, Ultegra emailed its invoice to Northway, Mining Power, and Maranda.

24. Neither Northway, Mining Power, nor Maranda responded to Ultegra’s December 27, 2018 invoice.

25. On December 28, 2018, through its counsel, Ultegra emailed Maranda, Donald D’Avanzo (“D’Avanzo”), Northway Chief Operating Officer, and Dror Svorai (“Svorai”), the Chief Executive Officer of Mining Power.

26. Neither Maranda, D’Avanzo, nor Svorai responded to Ultegra counsel’s email.

27. On January 2, 2018, Ultegra sent Northway, Maranda, D’Avanzo, and Svorai a Demand Letter and requested immediate payment of all fees owed to Ultegra, including Ultegra’s minimum banking fee, Ultegra’s due diligence fees, and all other fees owed to Ultegra.

28. Northway, Maranda, D’Avanzo, and Svorai did not respond.

29. Upon information and belief, neither Northway, Mining Power, nor Maranda intended to pay Ultegra its fees.

30. Rather, Northway, Mining Power, and Maranda lured Ultegra into making the Loan on the false pretense that Northway would immediately pay Ultegra all of its fees and costs. FIRST CAUSE OF ACTION (Breach of Contract—All Defendants)

31. Ultegra incorporates the previous allegations as if fully set forth in this paragraph.

32. Defendants entered into a number of agreements for Ultegra to loan them $6.2 million dollars.

33. Under the various agreements with Ultegra, Defendants agreed to pay Ultegra its banking fees, its due diligence fees, its attorney fees, and other fees and costs Ultegra incurred in the Loan.

34. Ultegra performed under the terms of the agreements in that Ultegra delivered the first tranche of the Loan to Defendants.

35. Defendants breached the Term Sheet, the Commitment Letter, and the Fee Agreement when they refused to pay Ultegra its fees, even after multiple demands from Ultegra.

36. Ultegra suffered damages because of Defendants’ breach.

37. Ultegra is entitled to damages in excess of $686,000.00, not including Ultegra’s attorney fees and costs.

SECOND CAUSE OF ACTION (Promissory Estoppel)

38. Ultegra incorporates previous allegations as if fully set forth in this paragraph.

39. Defendants promised to pay Plaintiff fees including due diligence fees, banking fees, and other fees and costs.

40. Defendants should have reasonably expected that their promises would induce action by Plaintiff.

41. Defendants’ promise induced action by Plaintiff in that Plaintiff incurred substantial costs in anticipation of the transaction.

42. Justice requires that this Court enforce the promise.

43. Plaintiff is entitled to damages to be proven at trial.