Our royalty investment forms part of a whole capital solution for our investee companies. We provide capital investment for a percentage of future revenues or profits and currently have invested in the following four companies.
QVI, Inc. is a cannabis infused product manufacturer located in Sonoma, California and operating as “The Galley.” The Galley is a fully licensed 8,300 square foot facility and built to the high standards of both the Food and Drug Administration and the California Dept. of Public Health. The Galley is focused on high demand areas of production: Edibles, Topicals, Tinctures, Chocolates, Hard Candies, Gummies, Beverages, Vapes, Pre-Rolls and Flower Packaging. Under the Royalty Agreement (fully funded), FinCanna receives a tiered corporate royalty, adjusted based on revenues, ranging from 15% to 6% of QVI’s total revenues, with the top royalty rate of 15% on the first US$20 million of annual sales until cumulative royalties to FinCanna of US$10 million are achieved. Additionally, FinCanna will receive a Supplemental Payment, that when coupled with the royalty, will ensure FinCanna receives a minimum of 35% of the annual after-tax net income from QVI.
Cultivation Technologies Inc. (“CTI”) is a multi-award winning extraction and manufacturing enterprise located in Palm Desert, California that provides high quality Butane Hash Oil (BHO) concentrates for white label manufacturing, toll processing and packaging to hand-selected brands and cultivators in California. Under the Royalty Agreement (fully funded), FinCanna earns a perpetual royalty of 10% of CTI’s consolidated revenues, of which 5% is paid in cash monthly and 5% deferred until certain triggering events, subject to certain buyback options. Additionally, FinCanna will be entitled to 25% to 50% of the sale proceeds of any change of control.
ezGreen Compliance offers a state-of-the-art enterprise compliance and point-of-sale software solution (“ezGreen”) for licensed medical cannabis dispensaries and cultivators. Their target market consists of the 11 states plus Washington DC where cannabis is fully legal, and the 23 additional states where medicinal cannabis is legalized. Upon completion of funding, FinCanna earns a perpetual royalty equal to 10% of consolidated gross revenues of ezGreen, subject to certain buy-back options.
Refined Resin Technologies
Refined Resin Technologies is a cannabinoid research and refinery company that intended to provide B2B and B2C products and services from its facility in Oakland, California to licensed dispensaries and distributors in the licensed cannabis supply chain. Refined Resin was not able to raise the additional capital it needed to become operational. As a result, FinCanna has written down its investment in Refined Resin to the amount of $1,235,823 (US$933,895) comprised of US$790,703 in recently purchased equipment and a US$143,192 deposit with an equipment manufacturer. FinCanna is working to maximize the recoverable amount from these assets, which will likely be via a sale to a third party.