NOTE 6 – INVESTMENTS

Edible Garden

On May 3, 2022, Edible Garden Corp. ("Edible Garden"), an entity in which the Company had an investment of common stock, completed a 1-for-5 reverse stock split of its outstanding common stock. As a result, the Company held 1,000,000 shares in Edible Garden. On May 5, 2022, Edible Garden announced the pricing of its initial public offering of 2,930,000 shares of its common stock and accompanying warrants to purchase up to 2,930,000 shares of common stock for an exercise price of $5.00 per share. Each share of common stock was sold together with one warrant at a combined offering price of $5.00, for gross proceeds of approximately $14.70 million. During the fiscal first quarter ended March 31, 2023, the Company sold all its shares in Edible Garden and received $0.15 million. As a result, the Company recorded a realized loss on the sale of investments of $0.06 million during the year ended December 31, 2023.

Mystic Holdings

On September 12, 2023, the Company entered into a settlement agreement to resolve the outstanding litigation with Mystic Holdings, Inc. (“Mystic”) which confirmed the Company's ownership of 8,323,764 shares of common stock in Mystic and 8,332 shares of Series A preferred stock in Mystic. In accordance with ASC 321, “Investments - Equity Securities” (“ASC 321”), the Company recorded the investment in equity securities at fair value based upon the quoted price of the shares in active trading markets (Level 1). As of and for the year ended  December 31, 2023, the fair value of the investment was $0.67 million and the Company recorded an unrealized gain on investment of $0.67 million. On November 6, 2024, the investment in Mystic was deconsolidated as part of the bankruptcy petition filed by Unrivaled. As of and for the year ended December 31, 2024, the fair value of the investment was $0.0 million and the Company realized a gain on investment of $0.17 million. Refer to “Note 26 – Commitments and Contingencies” for further details on the litigation matter.

IVXX Gardens I, Inc.

On December 15, 2023, the Company entered into a management services agreement with a third-party to manage and operate the Company's second cultivation operations in Oakland, California (the "MSA"). The MSA included an option to purchase the licensed entity at its fair value or a negotiated price. In conjunction with the MSA, the parties entered into a binding letter of intent to sell 100% of the stock and assets of the licensed entity for a purchase price of $1.40 million, which $0.10 million was received as a deposit as of December 31, 2023. As a result of the MSA, the Company deconsolidated IVXX Gardens I, Inc. on December 15, 2023 and recorded its retained noncontrolling interest as an investment in equity at fair value of $1.40 million as of December 31, 2023. On January 28, 2024, the purchase option contained within the MSA was exercised and the sale was completed. The Company no longer retains any noncontrolling interest as of December 31, 2024.