The Company may, at its election, directly invest in private entities within the cannabis sector either through stock purchase agreements, debentures, joint ventures or a hybrid of each. The Company’s planned investments will focus on those entities whose near-term goals are to maximum shareholder value through the filing of an initial public offering or a corporate event that takes the entity from private to public.
On July 17, 2017, the Company entered into a Convertible Promissory Note and Warrant and Subscription Agreement with Xeraflop Technologies, Inc. (“Xeraflop”). Under the terms of the Agreement, the Company is to invest a total of One Hundred Thousand and NO/100 Dollars ($100,000) upon a successful going public event. The Note accrues interest at 12% annually and matures on June 30, 2018. At the Company’s election, the principal and interest can be converted into Series 2 common shares of Xeraflop with written notice. The Company is also granted the right to purchase 20% warrant coverage based on the Company’s principal investment with a strike price equivelant to the equity round financing. The Company’s investment in Xeraflop is dependent on the Company obtaining an effective Registration Statement and successful 15C211 filing prior to the Closing of the financing round by Xeraflop. In the event neither of these events occur, the Company will not be able to participate in this round of financing with Xeraflop.