GABY Inc. GABLF GABY has determined that consistent with and as reported in its consolidated audited financial statements for the year ended December 31, 2022, the write down of its Type 10 retail license issued by the California Department of Cannabis Control to its wholly owned subsidiary, Miramar Professional Services (MPS) renders the value of such asset below the remaining debt of $22.5 million incurred to acquire it, making the continued operation of the retail business untenable.
Further, the company has defaulted on its obligations under the amended and restated promissory note for $22.5 million issued to or to the order of the holders dated April 24, 2023 and secured by a first priority security interest in the collateral which collateral includes all of the outstanding shares of the capital stock of MPS held by the company pursuant to that certain stock pledge agreement dated as of April 5, 2021.
All efforts to cure such default, including refinancing of the debt evidenced in the promissory note have proven unavailable. The company has delivered to the holders an executed consent to strict foreclosure and release agreement as contemplated in the promissory note and in cooperation with its secured creditors the parties have exercised the reversion remedy on the terms set out in the strict foreclosure and release agreement.
The reversion remedy provides that in consideration for the transfer of the collateral to the holders, the holders release the company from any further liability for the principal and accrued interest under the promissory note on the terms and conditions set forth in the foreclosure and release agreement. Further, pursuant to the reversion remedy, the GABY shares issued pursuant to Section 2.02(1)(c) of the share purchase agreement dated April 5, 2021, between the holders on the one hand and the company on the other, shall be returned to the company and surrendered by the holders to the company for cancellation.
The foreclosure and release agreement and the reversion remedy are effective as of July 15, 2023. Effective on the same date Ebon Johnson will resign from the board of directors of GABY.
The company will consider the feasibility of continuing to operate its CBD business under the Lulu's and 2Rise brands.
Benzinga Cannabis Capital Conference
The Benzinga Cannabis Capital Conference, the place where deals get done, is returning to Chicago this Sept 27-28 for its 17th edition. Get your tickets today before prices increase and secure a spot at the epicenter of cannabis investment and branding.
Photo: Benzinga edit with photos by Matthias Zomer on Pexels and squarefrog on Pixabay
Related News
GABY To Acquire CBD Brands: Hempfusion, Sagely Naturals And Apothecanna
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
The Benzinga Cannabis Capital Conference is coming to Florida
The Benzinga Cannabis Capital Conference is returning to Florida, in a new venue in Hollywood, on April 16 and 17, 2024. The two-day event at The Diplomat Beach Resort will be a chance for entrepreneurs, both large and small, to network, learn and grow. Renowned for its trendsetting abilities and influence on the future of cannabis, mark your calendars – this conference is the go-to event of the year for the cannabis world.
Get your tickets now on bzcannabis.com – Prices will increase very soon!