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”. QVI is currently refitting its 8,300 square foot facility with dedicated spaces for a large-scale commercial kitchen for baked goods, chocolate products and a hard candy and gummy line. The facility will also have a designated area for contract manufacturing for additional products. Upon completion of funding, FinCanna will earn a perpetual royalty ranging from 15% to 6% of QVI’s annual revenues, subject to certain buy-back options.
Green 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 33 states in the U.S. which have legalized medical cannabis. 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, based in Oakland California, is a cannabinoid research and refinery company that will provide B2B and B2C products and services to licensed dispensaries and distributors in the medical cannabis supply chain. Upon completion of funding, FinCanna will earn a perpetual royalty ranging from 16% to 7% of Refined Resin’s consolidated annual revenues, subject to certain buy-back options, with an effective royalty rate of 11.75% on the first US$160 million of Refined Resin’s consolidated annual revenues.
On May 1, 2019, the company acquired all of the rights and interests of Cultivation Technologies Inc. (“CTI”) in substantially all of the existing property of CTI, including but not limited to all accounts, contract rights, general intangibles including trade marks, service marks and trade names, furniture, fixtures and equipment and the economic benefits of CTI’s membership interests in its subsidiaries.
The acquisition of property was made through a foreclosure at public auction pursuant to California Commercial Code section 9610. The consideration paid by FinCanna was a partial offset against total amounts owing to FinCanna by CTI and the amount of the remaining balance is still owed to FinCanna. FinCanna and CTI are in discussions towards the best path forward for the underlying businesses of CTI.