MJ Holdings, Inc. (OTCMKTS:MJNE) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement.
On August 30, 2019, MJ Holdings, Inc. (the “Company”) entered into a definitive material agreement with Element NV, LLC, an Ohio limited liability company (“Element”) for Element to acquire forty-nine percent (49%) of the membership interests in Red Earth, LLC (“Red Earth), a Nevada limited liability company and wholly owned subsidiary of the Company for $441,000 and $4,559,000 of additional capital contributions for infrastructure and operating expenses. Red Earth is the holder of a State of Nevada Marijuana Cultivation Facility License and City of Las Vegas Recreational Cultivation Facility Business License. The membership interest purchase agreement (the “MIPA”) requires Element to make an additional $3,559,000 payment to be deposited into a segregated execution fund to be utilized for the improvement and build-out of the Company’s Western Avenue leasehold located in Las Vegas, NV. The payment is due within ten (10) days of the receipt by Red Earth of a special use permit (“SUP”) from the City of Las Vegas allowing us to grow marijuana at our Western Avenue facility. The Las Vegas City Council has set the matter for review and approval on October 8, 2019. Element, in conjunction with the Company, will jointly manage and operate the facility upon completion. The MIPA also requires Element to make a final payment to the Company in the amount of $1,000,000 between 90 days and 180 days of issuance of the SUP to be utilized for the on-going maintenance and use of the facility. Additionally, Element has a first refusal right to fund and build a 40,000 sq. ft. indoor cultivation facility at the Company’s Amargosa Valley farm or other mutually agreeable location, the terms of which are to be negotiated in good faith upon the exercise of any rights granted to Element in the MIPA.
Element is led by its African American founders and majority-owners, Herb Washington and Nkechi Iwomi. Mr. Washington and Ms. Iwomi formed Element to be a leader in shifting the present paradigm in license-limited, merit-based commercial cannabis markets where a truly minority-owned company can be long-term operators. Leveraging their individual successes in Ohio’s commercial cannabis industry, Mr. Washington and Ms. Iwomi bring their experienced team of engineers, and their own hard-earned capital, to develop the Red Earth indoor cultivation facility in its coveted Las Vegas location.
Item 9.01 Financial Statements and Exhibits.
| 10.1 | Membership Interest Purchase Agreement |
MJ Holdings, Inc. Exhibit
EX-10.1 2 f8k083019ex10-1_mjholdings.htm MEMBERSHIP INTEREST PURCHASE AGREEMENT Exhibit 10.1 MEMBERSHIP INTEREST PURCHASE AGREEMENT by and among RED EARTH LLC (“Red Earth”) MJ HOLDINGS,…
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