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SUBSEQUENT EVENTS | 3 Months Ended
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Mar. 31, 2023
SUBSEQUENT EVENTS |
Subsequent Events | 18. SUBSEQUENT EVENTS CHANGE IN MANAGEMENT AND DIRECTORS On April 12, 2023, Luis Merchan tendered his resignation as both Chairman of the Board of Directors (the “Board”) of the Company and as the Company’s Chief Executive Officer, with such resignation becoming effective on such date (the “Merchan Separation Date”). Mr. Merchan’s resignation from the Board was not due to any disagreement with the Company on any matter relating to the Company’s operations, policies or practices. In connection with Mr. Merchan’s resignation, on the Merchan Separation Date, the Company entered into a Separation Agreement and Release with Mr. Merchan, pursuant to which Mr. Merchan will be entitled to the following benefits:
| · | a cash severance payment in the amount of $0.4 million, representing one years’ base salary, paid in eight equal monthly instalments commencing May 1, 2023;
| · | a cash payment of less than $0.1 million to cover health insurance premiums for a period of twelve months, payable on December 1, 2023; and
| · | 1,600,000 newly privately issued shares of the Company’s common shares, no par value, issued on April 26, 2023.
On April 16, 2023, the Board appointed Hussein Rakine, the current President of the Company’s subsidiary, JustCBD, as the Company’s Chief Executive Officer (principal executive officer) and as a Director, in each case effective on April 16, 2023. The Board appointed Dr. Rakine as a Director to fill the vacancy created by Mr. Merchan’s resignation, as described above, and Dr. Rakine will serve as a Director until the next election of directors at the Company’s 2023 annual meeting of shareholders and until his successor shall be elected and qualified, or until his earlier death, resignation, retirement, disqualification or removal. As part of the employment agreement between the Company and Dr. Rakine, 1,200,000 restricted stock awards were granted to Dr. Rakine on April 16, 2023 under the Company’s 2022 Plan. These restricted stock awards will vest on June 7, 2023. GOVERNMENT ASSESSMENT IN COLOMBIA In April of 2023, the National Directorate of Taxes and Customs of Colombia (“DIAN”) initiated an inquiry for potential non-compliance of local customs and exchange regulations at one of the Company’s Colombian entities. The transactions in question mainly occurred prior to the Company’s acquisition of this entity in December 2020. The Company is currently working to obtain supporting documentation for this matter and the Company will continue to cooperate with DIAN to resolve this issue. However, the Company believes a loss is reasonably possible and cannot currently estimate the amount of the loss. OTHER Subsequent to March 31, 2023, a total of 898,483 restricted shares were forfeited and a total of 367,347 options were forfeited.

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- Definition The entire disclosure for significant events or transactions that occurred after the balance sheet date through the date the financial statements were issued or the date the financial statements were available to be issued. Examples include: the sale of a capital stock issue, purchase of a business, settlement of litigation, catastrophic loss, significant foreign exchange rate changes, loans to insiders or affiliates, and transactions not in the ordinary course of business. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 855 -URI https://asc.fasb.org/topic&trid=2122774 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 855 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=6842918&loc=SL6314017-165662 + Details
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