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COMMITMENTS AND CONTINGENCIES
12 Months Ended
Dec. 31, 2025
Commitments and Contingencies Disclosure [Abstract]  
COMMITMENTS AND CONTINGENCIES

18. COMMITMENTS AND CONTINGENCIES

 

Contingencies

 

Litigation

 

In August 2023, the Company’s former chief executive officer, Ingo Wilhelm Mueller filed a Notice of Civil Claim in which he alleges that the Company wrongfully terminated his employment without notice, in breach of the parties’ underlying employment agreement. Mr. Mueller alleges to have suffered damages including, among other things, a loss of base salary ($473,367 CAD per annum) and damages from not receiving common shares of the Company ($468,313 CAD). The Company’s position is that Mr. Mueller was terminated for ‘just cause’ because he breached his fiduciary duty to act in the Company’s best interest by, among other things, submitting a sizeable bid for the acquisition of a company without first obtaining board approval. In doing so, Mr. Mueller misrepresented the Company’s financial standing and forged, or instructed others to forge, a document by affixing the electronic signature of the Company’s chief financial officer.

 

The parties are in the discovery stage of litigation. The Company has produced relevant documents to Mr. Mueller and is awaiting Mr. Mueller’s production of relevant documents. The parties are also in the process of scheduling examinations for discovery. Management is instructing counsel to advance the matter given the relative strength of the Company’s case.

 

The likelihood of an unfavorable outcome is not probable given the facts supporting the Company’s ‘for cause’ termination of Mr. Mueller as well as the significant expense that Mr. Mueller would have to incur to advance this matter to trial.

 

In September 2023, a vendor filed a Complaint with the Superior Court of California for Breach of Contract; Breach of the Covenant of Good Faith and Fair Dealing; and Common Count: Goods and Services Rendered in relation to the purchase and sale agreement for vacant land, known as the Coachella property. In January 2025, the Company settled the complaint and agreed to pay $250,000 in 12 equal monthly installments of $20,833 commencing on February 1, 2025 (the “Settlement Amount”). The Settlement Amount was paid in full in October 2025.

 

On March 27, 2024, BV Peeters Advocaten-Avocats (“Peeters”) summoned the Company to appear on May 31, 2024, at the First Chamber of the Dutch-Speaking Division of the Business Court in Brussels. Peeters is seeking payment for €467,249 of unpaid bills for legal services plus penalties and interest. The Company believes that Peeters performed actions that were not in the Company’s best interest. The Company does not intend to pay the outstanding legal bills and intends to vigorously defend its position in court. The parties are currently in mediation.

 

On July 11, 2024, the Company’s former general counsel filed a Notice of Civil Claim with the Supreme Court of British Columbia, in which he alleges that the Company wrongfully terminated his employment without notice, in breach of the parties’ underlying employment agreement. On January 6, 2025, the Company settled the Civil Claim with the Company’s former general counsel and agreed to pay a settlement amount of $160,000 CAD to the Company’s former general counsel. This settlement has been paid in full.