Quarterly report pursuant to Section 13 or 15(d)

Subsequent Events

Subsequent Events
9 Months Ended
Sep. 30, 2022
Subsequent Events [Abstract]  
Subsequent Events Subsequent Events
Loan Agreement with EHT
On October 17, 2022, Skye and EHT entered into a loan agreement (the “Loan Agreement”) pursuant to which EHT loaned Skye USD$700,000 (the “Loan”) in accordance with the terms of a promissory note (“Note”). Skye intends to use the proceeds from the Loan for general working capital purposes.
The Loan is unsecured and will accrue simple interest from October 17, 2022, until paid at an interest rate of 12% per annum, provided, however, that upon closing of the Acquisition, such interest rate has been reduced to 5% per annum.
The entire outstanding principal amount of the Loan and applicable interest accrued matures in full on October 17, 2023.
As required under the Skye's amended and restated multi-draw credit facility, Skye has obtained a waiver from Emerald Health Sciences, Inc. to incur debt under the Loan.
Acquisition of EHT
On November 7, 2022, EHT agreed to waive the requirement to obtain a conditional letter from the CSE and the Acquisition closed on November 10, 2022. The Company has covenanted to use its best efforts to continue to pursue the CSE listing subsequent to the closing date. (See Note 3 Acquisition of EHT for more information).
Sale of Verdélite
On November 10, 2022, EHT, C3 Souvenir Holding, Inc., a corporation governed under the Canada Business Corporations Act ("Purchaser"), Verdélite Sciences, Inc. ("Verdélite"), Verdélite Property Holdings, Inc. ("VPHI") entered into a stock purchase agreement (the "Verdélite SPA") effective November 8, 2022, pursuant to which Purchaser will acquire all of the outstanding shares of Verdélite, the holder of EHT's most significant real estate asset, for an aggregate purchase price of approximately USD$9,312,000, subject to certain adjustments. Prior to the closing of the Acquisition, VPHI was wound up into Verdélite and Verdélite is a wholly owned subsidiary of EHT. The terms of the Verdélite SPA provide for an upfront, non refundable deposit, except in the case of material breach, in the amount of approximately $548,000, which as already been received by EHT. The remainder of the purchase price will be paid as follows, (i) approximately $6,026,000 to be paid on the closing date of the Verdélite SPA, (ii) three equal installments of approximately $913,000 to be paid on each of the 18-month ("Term 1"), 30-month ("Term 2"), and 42 month ("Term 3") anniversaries of the closing date.
Annual compounded interest on the loan receivable will be payable at the end of Term 3 and will accrue at a rate equal to the Prime Rate set by the Bank of Montreal plus 1.55%, 3.55% and 5.55% per annum for Term 1, Term 2 and Term 3, respectively. The Purchaser has the option to prepay the principal term payments in full at any time during Term 1 or Term 2. If prepayment occurs, the interest rate will be retrospectively adjusted to the Prime Rate plus 1.55%, compounded annually, until the installment payments are paid in full.
The balance of the purchase price after closing will be secured against the assets and stock of the Purchaser.
The Verdélite SPA contains customary closing conditions including, but not limited to, the completion of an environmental audit by EHT.
The foregoing description of the Verdelite SPA do not purport to be complete and are qualified in their entirety by reference to the text of the Verdelite SPA which is attached as exhibit 10.3 to this Quarterly Report on Form 10-Q and is incorporated herein by reference.
Management Conflicts
On October 28, 2022, the Company's CEO, Punit Dhillon, tendered his resignation as principal executive officer of EHP. As such, Mr. Dhillon is no longer affiliated with EHP.