How much do shareholders owe on APRIL 1st 2017 for the purchase of BlumOak ?
" The aggregate fair market value of the securities issued in the Merger was approximately $22.9 million. The securities issued, and to be issued upon conversion of the preferred stock, are exempt from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act") in reliance on Sections 3(a)(9) and 4(a)(2) of the Securities Act. The Group B Shareholders may also receive cash consideration equal to approximately $2,088,000."
Black Oak operates a medical marijuana dispensary under the name Blüm at 556-578 West Grand Avenue, Oakland, California (the "Dispensary"). Black Oak subleases the property at which the Dispensary is located pursuant to that certain Sublease dated March 29, 2016, by and between CCIG Properties, LLC and Black Oak (the "Lease"). The term of the Lease is six years commencing April 1, 2016 and terminating March 31, 2022, with an option to extend the Lease for an additional four-year term. The monthly Lease amount is $28,000 (the "Base Rent Amount"). The Base Rent Amount is subject to an approximately 3% increase per year
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx 556 W Grand Avenue, Oakland, CA 94612
Summary
Owner & Mortgage
Owner & Mortgage History Event Sale (Arm's Length) APN/Parcel ID 008 -0660-009-02 Owner Mksi Investments Llc Address 320 Lee St #1101, Oakland, CA 94610 Rights Corporation Sale Price
$2,500,000.00 Mortgage Date 3/18/2016 Mortgage Details (at time of loan) $2,400,000 Private Party Lender Mortgage Deed Type Deed of Trust
In connection with the Merger, we also entered into an Operations and Asset Management Agreement dated March 31, 2016, by and among Platinum Standard, LLC (the "Operator"), Black Oak, and us (the "OMA"), whereby the Operator has agreed to operate and maintain the Dispensary and provide certain asset management services related to the "Blüm" brand, real estate matters, and industry developments as to products and best practices related to all aspects of the Dispensary. The Operator is comprised of those individuals who operated the Dispensary immediately before the Closing Date. Pursuant to the terms of the OMA, we agreed to pay the Operator an annual fee of $500,000 per year. If, between April 1, 2016 and March 31, 2017, the revenue projections for the Dispensary are met, the annual fee increases to $550,000 for the next 12-month period, and, if after that second 12-month period, the revenue projections are again met, the annual fee increases to $600,000 for the third 12-month period. Commencing on the fourth 12-month period, the annual fee will be equal to 3.5% of the gross revenues from the operation of the Dispensary. The Operator is also entitled to additional fees in connection with the operation of a cultivation center located at the Dispensary equal to 50% of the net profits for the first three of the 12-month periods that the OMA is effective. The OMA has a term of ten years, with an option to renew for another ten-year period upon mutual agreement of Platinum and us. The OMA will automatically terminate if the Dispensary's operating revenue drops 20% from one year to the next after the first three-year period or if we cease operations at the Dispensary. The foregoing description of the OMA is only a summary and is qualified in its entirety by reference to the full text of the OMA, which we currently expect to file as an exhibit to our Quarterly Report on Form 10- Q for our quarter ended March 31, 2016.
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