Emergence Global Enterprises Inc. (ELOAF)

[Greensmeans]

Jamaal Shaban (“Lessor”), cousin of Bill Chaaban, leased a property at 20 North Rear Road to the Company under an agreement effective January 2017 for monthly rental payments of CAD 4,000 plus taxes for a period of five years. This lease was assigned by the Lessor to Jamsyl Group, a third-party, when Jamsyl Group purchased the property from Jamaal Shaban in October 2019. Effective August 1, 2020, the Company entered into a mutual termination and release agreement with Jamsyl Group in exchange for 36,500 shares of CEN common stock, valued at $50,700, which vested immediately, based upon remaining lease payments owed. The lease had been accounted for as an operating lease. All remaining associated right-of-use assets as of August 1, 2020 of $48,110 and associated liabilities of $45,118, which had utilized an 8% discount rate, were written off in conjunction, resulting in a loss on lease termination of $53,692. During 2020, lease expenses of approximately $20,000 related to this agreement were recognized within general and administrative expenses.