NOTE 8 - SALE OF INVESTMENT IN PINEAPPLE CONSOLIDATED, INC.

On January 31, 2025, the Company entered into a Stock Purchase Agreement with Matthew Feinstein, the Company’s President, Chief Executive Officer, Treasurer, and Director, pursuant to which the Company sold its remaining 25% equity interest in Pineapple Consolidated, Inc. (“PCI”) to Mr. Feinstein. In consideration for the transfer of these shares, the Company agreed to a $3,000,000 reduction in the outstanding principal amount due to the Company under a previously issued $3,000,000 promissory note from PCI.

In connection with the disposition, the Company also transferred certain related assets and liabilities associated with PCI. The assets disposed of consisted of equipment with a carrying value of $1,495 and an intangible asset with a carrying value of $3,000,000, representing the Company’s recorded value of its investment in PCI. In exchange, the Company extinguished $2,966,714 outstanding notes payable and $20,485 of accounts payable and accrued liabilities.

No cash was exchanged in the transaction. The disposition was accounted for as a non-cash investing and financing activity and resulted in a loss of $14,296, calculated as follows:

The loss has been recorded in other expenses in the consolidated statement of operations for the year ended January 31, 2025.

This transaction was considered a related party transaction, as Mr. Feinstein was an officer and director of the Company.