COMMITMENTS AND CONTINGENCIES |
9 Months Ended | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2025 | ||||||||||||||||
| Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||
| COMMITMENTS AND CONTINGENCIES | 16. COMMITMENTS AND CONTINGENCIES
Debenture principal repayments
The following table summarizes the future principal payments related to our outstanding debt as of September 30, 2025:
Contingencies
Litigation
On August 11, 2023, the Company’s former CEO, Ingo Wilhelm Mueller filed a Notice of Civil Claim in which he alleges that the Company wrongfully terminated his employment without notice, in breach of the parties’ underlying employment agreement. Mr. Mueller alleges to have suffered damages including, among other things, a loss of base salary of $473,367 CAD per annum and damages from not receiving common stock of the Company equivalent in value to $468,313 CAD. The Company’s position is that Mr. Mueller was terminated for ‘just cause’ because he breached his fiduciary duty to act in the Company’s best interest by, among other things, submitting a sizeable bid for the acquisition of a company without first obtaining Board approval. In doing so, Mr. Mueller misrepresented the Company’s financial standing and forged, or instructed others to forge, a document by affixing the electronic signature of the Company’s CFO.
The parties are in the discovery stage of litigation. The Company has produced relevant documents to Mr. Mueller and is awaiting Mr. Mueller’s production of relevant documents. The parties are also in the process of scheduling examinations for discovery. Management is instructing counsel to advance the matter given the relative strength of the Company’s case.
The likelihood of an unfavorable outcome is not probable given the facts supporting the Company’s ‘for cause’ termination of Mr. Mueller as well as the significant expense that Mr. Mueller would have to incur to advance this matter to trial.
On September 30, 2023, Stronghold filed a Complaint with the Superior Court of California for Breach of Contract; Breach of the Covenant of Good Faith and Fair Dealing; and Common Count: Goods and Services Rendered in relation to the purchase and sale agreement for the Coachella property. On January 17, 2025, the Company settled the complaint with Stronghold and agreed to pay Stronghold $20,833 monthly for 12 months beginning February 1, 2025. As of September 30, 2025, a balance of $83,233 remained and this was paid in full on October 31, 2025.
On March 27, 2024, BV Peeters Advocaten-Avocats (“Peeters”) summoned the Company to appear on May 31, 2024 at the First Chamber of the Dutch-Speaking Division of the Business Court in Brussels. Peeters is seeking payment for €467,249 of unpaid bills for legal services plus penalties and interest. The Company believes that Peeters performed actions that were not in the Company’s best interest. The Company does not intend to pay the outstanding legal bills and intends to vigorously defend its position in court. The parties are currently in mediation.
On July 11, 2024, the Company’s former General Counsel filed a Notice of Civil Claim with the Supreme Court of British Columbia, in which he alleges that the Company wrongfully terminated his employment without notice, in breach of the parties’ underlying employment agreement. On January 6, 2025, the Company settled the Civil Claim with the Company’s former General Counsel and agreed to pay a settlement amount of $160,000 CAD to the Company’s former General Counsel. This settlement has been paid in full.
|