Annual report pursuant to Section 13 and 15(d)

Subsequent Events

Subsequent Events
12 Months Ended
Dec. 31, 2020
Subsequent Events [Abstract]  
Subsequent Events



The Company has evaluated subsequent events from the balance sheet date through the date at which the consolidated and combined financial statements were available to be issued, and there are no other items requiring disclosure except the following:


PPP Loan


On February 25, 2021, the Company received a second loan of $2,000,000 under the Paycheck Protection Program PPP discussed in Note 7(g). The note bears interest at 1% per year, matures on February 25, 2026, and requires monthly principal and interest payments of approximately $44,660 beginning June 25, 2022 through maturity. The loan may be forgiven if certain criteria are met.


True-up payment


On February 16, 2021, the Company and the holders of the Series 2 Preferred Stock entered into a Waiver, Consent and Amendment to the Certificate of Designations (the “Waiver”). Pursuant to the Waiver, the Company filed the Second Amendment and Restated Certificate of Designations of Series 2 Convertible Preferred Stock (“Amended COD”) (i) providing for the extension of the True-Up Payment to April 1, 2021, (ii) providing for the deduction of proceeds to the original holders from sales of Series 2 Preferred for the True-Up Payment, with the Delaware Secretary of State and (iii) providing for a reduction in amount required to be held in a segregated cash account as discussed in Note 10 from $1,250,000 to $850,000. The Company is in negotiations with investors to purchase the Series 2 Preferred Stock from the original holders and convert the Series 2 Preferred Stock to Common Stock. These negotiations are ongoing and may or may not conclude in a favourable manner for the Company.


Subsequent Settlement of Delinquent Leases


After December 31, 2020, the Company has reached agreements to be released from one lease contracts for stores that have been closed due to the Covid-19 pandemic. The Company has agreed to pay approximately $26,250 to the landlords in the agreements to be released from making future lease payments.