iAnthus Capital Holdings Inc. ITHUF

Did GGP abuse their position to steal the company?

[Heranthos]

Below is a transcript of a phone call with Hadley Ford

 

 

...recording starts...

 

Hadley Ford:

Social reasons because they didn't do it in a manner in which it would have forced disclosure. I can get

details from Randy, but I would guess that that's pretty much what happened. Because Randy did talk

with [] and Randy, uh, now has the incentive to get a bidding war going. He actually was very

confidentially .I think I mentioned this to both of you guys, but he was dealing with another third party

himself, even though he wasn't supposed to actually try and put together a bid. Um, but that didn't

come through either.

 

[]:

So my understanding is if you're late to the stage, I don't think there'll be able to take that bid. Um, but

the reason why I'm saying is it's important or significant because if we did approach, the hearing, the

fairness hearing and they claim that we're well, your honor, where are they? Where are the people that

are saying we're the white Knights here? And we've got 200 million. Well. Buy us out , or even here,

they're not even here to do that. So well, they're not probably not here to do that because they're not

welcome there. You know, you can't have your own, you can't set your own stage and your own rules

and say, where are they and why are they not here?

 

Hadley Ford:

Yeah. Well apparently, you can.

 

[]:

Well, that's what we're trying to do. [] that we're finding buyers, but just they want to come forward, but they don't know how to, because

they don't want to breach NDA. Now, what I will say is, um, just to, to get over this [] thing,

they said, if the plan of arrangement goes South, they'll step in, they had a small window where they

could have done something and they did do something [] just wasn't interested. I got there so

not only Roth capital burried the original bid, but now it's [] now its Canaccord not hearing

the new bid after hearing the plan of arrangement got declined. So don't they have the obligation to

disclose that?

 

Hadley Ford:

I don’t know. .

 

[]:

Well they told us. Thy told us two days ago, your man and your problem is Canaccord. We []

gave them a bid after I got declined and they didn't listen to us and they didn't forward it to the

company. So they're saying is we can't do anything from our end, but we're telling you who is causing us

to not come forward. But the real question is, do they have the cash? They say they do, but do they

actually have it?

 

Hadley Ford:

I don't know. Um, yeah, it just strikes. It just strikes me as odd that yeah, there's got to be a way to make

the bid. Uh, I know Randy spoke with [] and told them how to make the bid. Sounds like [] didn't

listen to Randy. And I just came in in a way that the bidn’t would be recognized. I don't know why. I just

there's like something odd in all them either.

 

[]:

Yeah, it doesn't add up. You don't want to spend $200 million and not make a. You know, you don't

make a bid with 200 mil and not have it get presented. Like that's not like a passive. Maybe I'll go buy a

lollipop. You know.

 

Hadley Ford:

it just doesn't make sense. It's like, you know. Randy's a smart guy like he doesn't have a monopoly on

smarts. So like if he had a way for to be able to do this, you know, could figure out a way to do

this. I mean, I had a way to do it, but it's not a tender basis. I knew would have worked, um, with the

window like that. Um, I just, I just don't know. I there's obviously something on 's side, we just don't

understand like maybe some other legal things that we don't understand. There may be some other

thing we don't understand. I just don't get, if he's got 200 million and wants to bid, he could have done

that. He had done it at pretty much any time.

 

[]:

Well, he says he doesn't want to step on any landmines that triggers a torturous liability or interference.

That’s why.

 

Hadley Ford:

Yeah. I guess

 

[]:

And also it would make his original bid disqualified because he breached confidence. So that’s. those are

his reasoning’s. But they said listen, I already told you

 

[]:

Why would you care if your original bid was disqualified if they’re not accepting it?

 

[]:

Because it would be evidence that it existed in the first place. It's just like you knowing that there's drugs

in the house, you break in, you steal it or you take it and you want to present it as evidence. But you just

say, well, yes, it's in front of me, but you obtained that and you obtained it illegally and therefore it's

inadmissible.

So yes, you did have an original bid and it is valid. But right now it's invalid and admissible to use as

evidence because it's now been disqualified because you breached your confidence and confidentiality

agreement. Do you see what I mean? And not an original one was with Roth Capital. So in other words,

like it's the perfect crime, but we're just trying to an unsolve it. And that's why I'm so confident that we

can do something about it because we know it's out there. We just have to prove it.

We just have to bring it to light and it could all start with this letter would, which would unfold a lot of

things because it would, according to them and Bonnie, that it would trash their plan of arrangement. It

would probably redo this whole process, but the appeal, I understand appeal from says Like it's

rare to win an appeal, it is rare, but it does happen. You just have to prove your case carefully.

So, and and I would be willing to do a self-represented that way we can gather all the information

we need without having to be afraid of people who we trust or we don't trust. So, um, anyway, let's put

aside, Hadley,

 

Hadley Ford:

Uh-huh.

 

[]:

let's just focus on the class action against GGP here, um, and the company and what we can do. So, um,

you want to run it to me from the top while I have here, my laptop, I have you on speaker, but I'm only

just putting you on speaker so I could type if that's okay with you

 

Hadley Ford:

ok. It’s Fine

 

[]:

And then whenever you [] need to drop out, just feel free. Don't worry about us.

 

[]:

Sure

 

[]:

Thanks. Okay. I'm all yours.

 

Hadley Ford:

All right. So going way back to the very beginning, I’ve know Jason Adler from like 2017 timeframe. Um,

don’t remember how I met him. He was introduced to him by another investor, introduced to him at a

conference or something like that, but, uh, he had offices, uh, 42nd and fifth and, uh, our offices were

kind of in the same neighborhood. So I started going over there every couple of weeks in the afternoon.

We got to know each other fairly well. Um, then I then, um, uh, we were raising money and, uh, 2017,

he looked at, uh, uh, financing us. She put in some bids and we went over the other people, other

direction, um, including, uh, in early 2018, we actually borrowed money from GTI and we used that

money to buy, uh, both, I guess to buy the Florida assets.

 

[]:

You borrowed money from GTI ? To buy Florida assets.

 

Hadley Ford:

Uh huh. Yes, buy the Florida asset, we were looking at merging with GTI and, uh, uh, we, uh, borrowed

money for them ahead of the merger. And, uh, they will never merged, but we borrowed the money. So

it was, we needed money to build all this stuff out. So we're going to raise 50 million bucks. And I called

a whole bunch of people, including, uh, uh, Adler and said, you know, to add there in particular, look,

we're raising $50 million dollars. Um, this'll be your last chance. Because after we raised this, you know,

at a compelling valuation, cause after we raised this money now, it's probably a ways out before we

raised money, obviously it would be at a higher valuation because I really want to invest in guys.

I want to be make you my number one pick really like you really like team. Um, so originally they were

going to invest, uh, all an equity and uh, early 2018. And then we went back and forth. It's Jason came

back and said, yeah, I popped my LPs and they really want us downside protection. So we said, okay,

let's make it into a kind of a units deal with, you know, 10 million of equity, 40 million of debt. And we

ran the math and the returns that people needed. And that was the first investment that was closed.

And, uh, in May of 2018 and it was like, it was called $50 million financing. But I think it was really a $45

million financing. We structured it in a way with, um, kind of an original issue discount. And maybe we

structures as a fee , I can’t remember but the actual cash I think was at 45 million bucks.

 

[]:

And who was the counsel? Who was the lead counsel for that one, in structuring that deal?

 

Hadley Ford:

Macmillan.

 

[]:

So Macmillan was lead counsel. Okay. And who from McMillan? Is it Tickle?

 

Hadley Ford:

Nah, uh, James Monroe handled all the corporate finance stuff.

 

[]:

Okay. Continue. Thank you.

 

Hadley Ford:

Um, so then we rolled forward a little bit and we're into April and, uh, I had a buddy who introduced me

to the Oasis guy. Um, actually I knew the Oasis guy , I been introduced to the Oasis guy year earlier he

had always really, he had always really wanted to invest. Um, so, you know, he's all I can't remember if

he saw the Gotham deal or, uh, actually, saw a year later

 

[]:

Was this 2019 or 2018?

 

[]Hadley Ford:

Yeah. We made the Gotham deal in May 18. I was introduced to Oasis in April of 18. And then I think we

did the Oasis deal like 2019, right. Not 2018. So I was introduced to the Oasis guy around that time

because, um, uh, you know, he either saw the Gotham deal or was interested in it or whatnot. And I

remember chatting with at the time and I actually met with them down in Florida and actually

introduced them to the Gotham guys, um, around that time.

So we have kind of, everybody knew everybody. Um, and then, uh, there were some other debt

financers that we were talking with. So as part of the Gotham deal in 2018, we carved out the ability to

put 25 million of senior debt on top of Gotham. And they had agreed to that because I had access to

some other stuff and that was part of the deal. Um, and when we roll forward yeah. And then we have a

really good relationship with them. We have weekly calls, formal weekly calls where we send them, you

know, information, financial update, marketing update, technology update, operational update.

Uh, I get on with them sometimes Jason's off sometimes not, but Alex Wang and Michael Anderson

Cohen are on pretty much every week, their team continues to grow. Um, and it's a very strong

relationship. They make introductions to us on the strategic side. I talk with their potential LPs and talk

up as great guys they are so they can raise more money. I talk with companies that are going to invest

in, tell them they'll what great investors they are . Very strong. And I probably talking with the guys

formally once a week or sometimes two or three times a week on all sorts of stuff, finance, strategy,

industry stuff.

Um, and then, uh, uh, we, uh, you kind of roll forward into 2019 and we do, uh, the $60 million of the

junior convertible guys and that's, you know, basically priced by Oasis. And then we get introduced to

Senvest, then Hadron, and, uh, Dr. Singh and they all come into that junior piece as well. Um, then I'd

say, you know, that stock market continues to slide. Oh, I guess, uh, we also redeem the MPX

convertible securities at that time.

And the, we were hopeful to force convert do some Gotham securities because the stock was high

enough but the whole sector starts to slide. And we miss being able to force convert Gotham by like two

weeks. All of this, none of this ever would have happened. The stock market had stayed strong for an

extra two weeks, but you know, the entire center slides that spring into the summer, uh, and we can't

force convert them.

Um, interestingly back when we originally did, uh, negotiated the original deal in May, the original deal

had a forced conversion needed upon the deal being priced. So we could have force convert at a time,

right before we did the deal, Adler calls me up and he goes, you know, I feel like a smuck, I probably

need more protection, you know, blah, blah, blah, blah, blah. So, uh, we added in that forced

conversion thing for urgent year holiday. So we couldn't do the forced conversion for a year and I'll

head, I made it nine months and I made it six months. Had I not agreed to it. And you never would have

had any problems.

So we had that forced conversion piece. You couldn't force the conversion until May 18, 2019. I think

you had to have the price be above something for like 20 days and literally missed it by a couple of days.

Um, now, so pain in the butt. .

So then we get to June of 2019 and I get this phone call from, uh, Alex Shoghi at Oasis saying, Oh, you're

in violation of your maintenance covenants. I'm like, what are you talking about? Well, the stock price is

so low. Um, you know, you violated the maintenance component, so there are no maintenance

covenants of the deal. Uh, there's only a current test. And he said, nah, that's not the way I read it. I

don't care how you read it.

You and I negotiated the deal. We both know there's no maintenance covenant. Like it's not in any of

my notes. It's not in any of the language and any of the usual things. So yeah, he tried to stick us up for

some better economics, but he had his lawyers involved and there wasn't a maintenance covenant. So

he went away. We at the time were talking with a company called Torian capital, um, about, about

doing a $50 million senior secured deal. Um, I spoke with some of their LPs, uh, spoke to Torian guys,

really good terms, uh, Gotham agreed to have a waiver to break that 50 million in.

But the market kept getting pummeled pummeled pummeled, through the summer Torian wasn't able

to close their deal. They did some real screw-ups in their math, which spooked some of their investors

and they couldn't get their fund to close. Uh, we had been counting on that money, but sort of in the

August timeframe, um, uh, it was clear they weren't going to be able to get the money. So I went back to

Jason and said, look, these clowns at Torian, aren't going to come up with 50 million. Um, and all I need

some dough or we just got shut down our build-out because … he said don't shut down the build out.

And I'm always here for your money to know that it's going to be expensive, but I'm always here if you

need the capital.

And he said, by the way, don't think small, think big, you know, you need a hundred, you need 150. You

just tell me what number you need. Uh, come up with a plan that gets you to cash flow breakeven and

I'll commit to you I'll get that money. I said, great. So we circled up and we came up with a hundred

million dollar plan and we went back to Adler and his team that said, if we get a hundred million dollars,

here's what we're going to spend it on. Here's what the return looks like. And we should be cash flow

breakeven, you know, sometime next June timeframe like June, 2020, if we can spend that a hundred

million on viable assets. And he said, you sure you don't want more? I said a a hundred should do it.

Um, I said, you know… let's go. So we made that announcement in September. They didn't have enough

money in their fund to write the whole hundred million dollar check.

So I think they committed to like, yeah, yeah, whatever, whatever that number ended up being, um,

they committed to that amount, but they said the rest of it essentially be best efforts, but they said,

don't worry. We're going to go out to our LPs. We just need to raise the money. We, we know we have

concentration issue, a bond; we got to raise more money, blah.

 

[]:

So the first 40 million. So just to pause there. So the first 40 million that you got in, in the first secure

debenture, um, that was all exhausted, correct?

 

Hadley Ford:

Well, here's what happened. I think they committed 20 out of their original fund because they had

concentration concerns with as much as they could write a check out of the fund. And then they went

and raised an additional fund for like another 20 something million, which got us to 40. Um, and they

said, no, I think we've closed that. What did we do? I think we did 20 first on announcement in

September. And then they said, okay, we're going to go out and we're going to get you like the rest of

the 80. And they started going out marketing and I get up and bum with LPs, breakfast , phone calls, the

whole bit. Then they started looking at, we had targeted to raise the additional 80 before Thanksgiving.

Um, at the same time, uh, Gotham was trying to raise a billion or a billion and a half fund. Um, and they

actually would get me on the phone with some of those investors as well. And I'd talk with them about

why they're the best investor in the sector, or they had tremendous deal flow.

We can get great returns. So he was trying to raise that money and he had some serious well-known

names like, you know, I’m under NDA with him for that sort of s**t. . But you know, names that had he

closed those deals and announced them, stuff would have been in the sector where, Oh, my god would

have been . I mean, if I told you these names, you'd be like no foking way. Um, he was flying high, we

were flying high

 

[]:

Like the Peter Lynchs of this world?

 

Hadley Ford:

No, Peter couldn't actually make that type of investment. I mean, I was talking with Peter separately and

Peter did invest quite a bit of dough into us. Uh, but he was, uh, he had to do public securities. Uh, he

couldn't do private investment into Jason. I mean, he probably could have personally, but he didn't have

a billion dollars personally, uh, or nor would he give it to Jason. He would hope that

 

[]:

Peter actually did invest in Ianthus.

 

Hadley Ford:

Oh yeah. Yeah. He was a shareholder. I met with them all the time. I used to work for him.

 

[]:

Oh, I didn’t know that.

 

Hadley Ford:

Yeah. But . So that fall, we raised. you know, he starts circling up, but he's not as focused on it as

possible. And I said, you know, we got to have objectives. He goes, my number one objective is to raise

a billion dollars for my fund. My number two objective is to ensure that you're fully financed. My

number three objectives to make sure that Medmen doesn't blow up and loose everybody a lot of

money and that's how he described his clean objectives to me. And, uh, he always used to say, look,

when I raise a billion. … 200 million of that's going to be for you to sort of roll up the industry. You're

going to run the industry. We're going to finance industry. So that's a great plan. You know, we'd have

breakfast dinners, uh, phone calls all the time.

 

[]:

Was anyone else with you on these calls or like, was anyone involved on those calls or those dinners or

is it just one-on-one?

 

Hadley Ford:

And then we on the weekly and I'd have, my COO would be on there and Randy would be on, Julius

would be on, it was for variety, but it was always me and it was always someone from the Gotham team.

But yeah, when I called Jason, I didn't get anyone else on the phone. And if I had dinner with them, I

mean, there were some group dinners, Jason and Randy and I had dinner in the fall, along with Michael

Gorenstein. Um, there was a dinner in Vegas where there was like me and Jason's whole team. Um, but

I mean, it was a system, very strong, uh, solid relationship.

And then, uh, but yeah, they came up with 40 million that we closed. And I want to say just after

Thanksgiving, before Christmas, right. So that got us to 60. Um, and they said, they said, Oh, originally

they were supposed to close eighty and they said, well, a bunch of, a couple of the funds. Two of the big

funds. One of them I spoke to, uh, said, you know, they are, they've got some year-end stuff. They're

not going to be able to close before Christmas.

We'll close the additional 40 in January. I'm like, I'm cool with that and actually in December and over

Christmas, we were looking at doing joint acquisition together with Gotham. It was a manufacturer and

distributor company, uh, with good software and, uh, California that we always, uh, uh, coveted . They

looked at investing init, our COO, used to be their CEO, a lot of good overlap. They were in financial

distress. Gotham was going to step in and provide a bridge financing. We're going to have 90 days to do

due diligence. If we liked it, we buy them out of the bridge. If we didn't like it, Gotham, we're just going

with the bridge and take the company over. So they were willing to commit capital. We were doing a lot

of work here. We did that all over the Christmas holidays.. kind of ruined my Christmas, but it was going

to be a good acquisition.

 

[]:

So tranche one and tranche two were paid out?

 

Hadley Ford:

Yeah. Yep…. And then importantly, importantly is.. when we closed tranche two, which was, you know,

40 million. . Um, we had some discussions because uh, Beth was owed $11 million dollars in January.

And then we had some discussions where, uh, you know, should Beth restructure her deal, you know,

was it a good use of proceeds to have 10 million or $11 million of that 40 go right out the door to Beth at

the end of the day you know Beth’s like “I need the money” and Gotham say, yeah, we're not that

concerned. It's always been in your forecast and we're pretty confident we're going to get the rest of the

dough. So, well, I actually took that as a positive side because what lender gives you $40 million knows

that 25% of us going out in five weeks to some other lender who happens to be an officer of the

company, probably I assume has more information than you do so

 

[]:

Yeah but the 10 million was paid out because there was a maturity date on it. Correct? Like it was due at

that time?

 

[]:

Yeah. But they could have restructured that.

 

Hadley Ford:

Yeah. Gotham could have said I got 40 million bucks here for you. Well, you're not getting a dime of it

unless that 11 gets pushed out past our maturity. And we actually had had some discussions with Beth

in the past about restructuring that or

 

[]:

partial payments instead of the whole 11 or something.

 

Hadley Ford:

Yeah. Exactly. And she had agreed to that early on and then she reneged on that deal, but you know, it

was her husband’s money.

 

[]:

Yeah. My understanding is she didn't want to be an unsecured debt if she was going to restructure it

would be secured. That's what she tried to do. But Gotham didn't like it. Is that correct?

 

Hadley Ford:

No, she's an idiot. The way to deal originally. she's a nice woman. I like her personally, but she just

doesn't understand all this structure stuff. And you explain it to her zillion times and like she asks the

same question the next day. I don't know.

 

[]:

Yeah. You need consent from the secured lender. If you want to be joining with them because the other

ones are going to say, well, why can't I be secured as well?

 

Hadley Ford:

When we did the original MPX deal, the absolute original when we acquired a MPX, a condition of that

deal with any, any borrower or any lender had to put themselves below Gotham. We paid everybody a

fee for that. We paid the MPX, debenture guys just be like a 7% fee and we paid Beth the fee and that

was the deal.

This is a different issue. Um, which is she was owed the money. And we went to her, actually, I forget

when.. probably in the summertime and said, Hey, Beth. because you know, we got 12 months, 24

months, three-year forecasts, and you want to have as much cash as you can to build a business. We

said, Hey Beth.. You got this note.. we're happy to restructure the note into a convertible security.

We're happy to convert it into equity at a discount. We're happy to give you a partial payment and

restructure what we'd love to talk to you about restructuring it and push it out past the maturity of the

junior guys, senior guys. So turn it into convert with warrants or whatever, but just push the maturity

out. And she was like, yeah, sure. I'd be happy to consider that. . And we actually discussed with her

advisor, a guy named Lonnie and we had agreed something. I can't remember what, but then she

changed her mind.

Like her husband. It was really her husband Jack's money and his business. He's got like, all his brothers

or partners in it and they decided not to make any distributions for one year. I don't know why. So he

needed like 7 million bucks to live on. pretty big burn Right. But he did 7 million bucks to live on. He

said, yeah, just give me back all the money. And we're like, okay. So here's what it is. Uh, you know, we

shared that information with Torian. They were comfortable putting in 50 and a 10 go out in January

and Gotham. when we closed the deal at the September, they were comfortable with having 11 of that

go out the door in January.

So think about that from my perspective, I'm sitting there. I have a guy who gave me twenty just gave

me 40. He's going to give me another 40, uh, in, uh, January. And he's willing to say, I'm going to have

$11 million go out the door without restructuring, without partial payment. That's a pretty bulliish sign

that he's confident he's going to raise the rest of the money because if he didn't think he was going to

raise it, he would say in December a condition of this investment is that that note gets restructured as a

corporate finance 101 and we had some discussions with Gotham and they said, well, can you ask Beth

again? And Bob Galvin, who's got a good relationship with Beth asked Beth and Jack. And they said NFW

. we came back to Gotham and said, they want to get paid and got them said, okay, I made the point to

them. It's always been our numbers. You've never had a problem with it. So the positive indication to

me, plus, you know, we're looking at doing acquisitions together, which take cash. So everything in

December and we had taken 20 down, taken 40 down.

 

[]:

Yeah. Uh, when you took that 40 down, I think it was around 36.8 million, something like that. So from

what I remember, but yeah.

 

Hadley Ford:

Yeah, it was.

 

[]:

So when you took it down from the, um the special investigations committee, they said that you took a

hundred thousand dollars after, like, is it like, why, my ques, there's a reason why I'm touching on it. And

I'm not trying to say it's a bribe or anything like that. Okay. The reason why I'm bringing it up it's because

you know, me and we had this open discussion but the reason why

 

Hadley Ford:

Let me explain all that to you

 

[]:

Yeah. Because my understanding is that was like were people aware of it? Because, or was it just

between you and Jason.

 

Hadley Ford:

So here's like how you fund yourself when you're the CEO of an acquisition company.

 

[]:

Yeah. Go for it.

 

Hadley Ford:

You know, from day one, even before we were public, I wasn't paying myself a salary or bonus or

anything. So you take your stock and you use that as collateral and you borrow money from people.

Um, and then you say, look, I'll post my stock against that. And I'll pay you back in the future. I did that

as a private company, but I actually sold stock to Alex Shoghi sold him a boatload of stock. Um, then, uh,

I had lots of loans out to lots of people. I was trying to structure and actually had a lot of conversations

with guys about so that the whole industry needed to have this solved because every officer at every

cannabis company had the same issue.

Uh, I was trying to negotiate and create stock borrow facilities cause no brokerage house would do it

because there was no margin ability of cannabis stocks. So I was trying to set that up on a private basis.

So I spoke with probably three or four institutions. I also spoke with GothamGreen about doing Stock

well and facilities. And they actually looked at doing that. And then Jason said, well, you know, it's not

really our core business now that we're not going to get into that buiness. But if you ever get into a jam,

give me a call. I'm like, okay. So that every stock loan I ever done, uh, outside counsel reviewed, um, and

they're disclosed.

So now we get into the December timeframe. Um, and I actually do get jammed. So I wait to the deal

closes and I call Jason and say, Hey, remember we were talking about stock loan facilities, you know,

back September, October timeframe. They said, yeah. He said, you know, you guys decided not to do it

by institutional basis, but I got jammed and you'd take a hundred grand to get through the year, I got a

school bill and stuff that came up that I wasn't anticipating. Uh, he goes, yeah, no problem. So he says,

just call my secretary and she'll like, send ya money. So I sent her an email, she sent me a hundred grand

and that was basically it. Um, then we roll into the new year. Um, and since January and the other six,

the other 40 million, we're like, it doesn't start, it doesn't close.

In the beginning of January, like there's just no movement. And then we get this phone call from Alex

Shoghi beginning of January saying hey, you know, the stock is down some more, uh, you know, you've

raised this 60 million bucks with a 56 or whatever it is. And you know, it's, you know, you're in violation

of the covenant. I said, if we don't have a maintenance covenant. he said, no, no, this is an incurrence

test that you should not have been able to incur the Gotham money. And I said, well, Alex, in

September, I sent you a spreadsheet showing you that, that met the incurrence test. I said, in December,

I sent you a spreadsheet that read we met the incurrence test. We meet the incurrence test. And he

goes, well, current stuff,

 

[]:

What is the incurrence test. like my understanding is this is permitted secured debt, is it not?

 

Hadley Ford:

Yeah.

 

[]:

So if it's permitted secured debt,

 

Hadley Ford:

this permitted secure debt, but there was a denominator to how much permitted secure debt you can

take, which was at a certain

 

[]:

Which was?

 

Hadley Ford:

, uh, there was a bunch of stuff in the numerator and denominator. You had to have a, uh, a liberate

market value, which meant you had to have your debt plus the market cap of their equity. And then that

ratio at the date you incurred, it had to, uh, be over a certain level. So as your stock price goes lower,

then it had to go pretty foking low, like down 30 cents or something. Um, you know, at some point they

can't incur the debt. So there's two arguments that get made. One is, uh, you know, have you at the

date of incurrence, you know, what that ratio is. But then the other argument is what is included in

those buckets in the new numerator is committed, secured debt.

So we had a spreadsheet that calculator all that, and we would send it out to, uh, uh, lenders and they

would be copacetic with it. Except for Shoghi. And then so Shoghi and I go back and forth. He sends a

letter, I share it with Gotham. Adler says, you know, we're not going to go negotiate with terrorists, you

know, You know, let's play hardball, I could play hardball with my board and play hardball with Shoghi

and say that he did say this to me.

When I spoke to him, he was like, you know, The market is not going to, you know. . And we're going to

send this letter to you. How do you think the market's going to respond to that? Do you think Gotham’s

financing will close? You know, if that happens, it's going to put everything at risk. You need to sit down

and rertrace your deal with me or I'll fok up everything for you. So pretty close to torturous

interference and they have, some guys would say he crossed a bright line with that. So we got very

aggressive and, you know, basically put out that suit against him saying he's interfering with our

financing.

 

[]:

No. Hold on. you jumped to February from January, did you. So you got an injurious letter on January

17, correct?

 

Hadley Ford:

The exact time we got the letter from, but yeah, we got a letter from around that somewhere.

 

[]:

Because it says here in the, uh, reading the old statement of claim, I'm just trying to build our case

against the oppression from the lenders. So, um, this is a good step because now it showing Oasis is

acting in bad faith. And at the same time, they're oppressive because they're trying to force you to do

something that hurts the company. And when there really wasn't, because if there was,

 

Hadley Ford:

They sent us. First Shoghi, you and I had a series of phone calls and he was just basically saying, I'm

going to screw up your financing If you don't like redo my deal. And he wanted his deal, which has

options struck at like six bucks. He says, I want them struck at market. And I'm like, there's no way I'm

doing that. I said, I could restrick your conversion and your options to be in the three’s somewhere so

long as it's above the original deal with did with Gotham. But the instant I go below Gotham. They're

going to want to reprice all their stuff. And we're just going to be chasing our tail all the way down. And

he's like, uh, you know what, um, you're not going to be able to raise any money. Because I'm going to

like put out this press release with this letter and it's going to tank your stock. And then even on your

own math, you're going to read, you can't raise that money. So he was very aggressive and he sent us

the claim.

 

[]:

So he was trying to, so he was trying to push you into a default by making you break those covenants. So

he was trying to like push you below that rate?

 

Hadley Ford:

No, Shoghi wasn't trying to push us into the default. He was doing exactly what, uh,

 

[]:

trying to get better terms.

 

Hadley Ford:

Trying to get better terms is what an activist investor does. He looks at us and says, you know, we were

out publicly saying, we're going to raise the rest of the hundred million in January. So Shoghi obviously

reads that. Like I started like on my calls with investors, they're like, what's going on with your money?

Oh, well, you know, end of year.. we'll be raising it in the, uh, in the January, February timeframe. So

Shoghi’s like, huh? You know, I couldn't, I couldn't sit claim they had a maintenance test. I haven't won

anything with the occurrence tests because the math clearly shows that they can incur the debt. But if

the stock price goes low enough, they can't incur that $40 million of debt, which means then they don't

have enough financing. So if he can. So that's why I said to you in that little test there Shogi probably

was having people short our stock or he was shorting our stock already because he's not a good guy.

 

[]:

Well, that's what I mean. But so he's attacking you guys because wait, okay. But that's an act.

 

Hadley Ford:

It's nothing to do with default it has to do with terms

 

[]:

Not defaulting. I'm not saying you were in default , I’ll withdraw that statement. But what I'm trying to

say is I was just, sorry, that's my lawyer speaking, talking.

 

Hadley Ford:

Your just so formal.

 

[]:

It's just because I always like to correct myself. So what I'm trying to say is they're being oppressive. That

it's like, this is conduct of oppressiveness because they're, they're trying to push you one way to give it

in there and they get the terms in their favor, or you're going to be pushed so low to the point where

you can't to be taking more financing Because if you do, you will, you will, you will be in breach. That's

what I'm saying. That's what I'm trying to get at.

 

Hadley Ford:

Exactly. Yeah. That's exactly what Shoghi was, uh, doing . That was his game plan. I told him that was his

game plan. He was saying, well, you can deal with me or I'm going to , I'm going to release this file. And

that you sent us a copy of what he was going to put on file. And it was just filled with lies. And he

basically claimed that in this letter that we had been having discussions with him all through December

and not one person in Ianthus had a discussion phone call meeting and email with him since last

September. So he just made up a bunch of s**t he was going to put into the public forum.

 

[]:

Yeah. But then he'll be liable for defamation for lying, and misrepresentation.

 

Hadley Ford:

So, yeah, but think about it. He doesn't care. He hasn't done it yet. He's only threatening it. The question

is, will he do it? So I started looking into his background and there's like 29 pages of him throwing s**t

like this. So yeah, I know he's, he's probably, and he’s probably going to do something like this.

So I go to Gotham and I go to my board and I say, this guy is going to do this. We have to move first.

Cause if he puts this type of lies and disinformation in the marketplace, it doesn't matter it’s a lie. Our

stock's going to get hammered and we're not going to be able to incur the $40 million of debt that we

need to meet our plan. And we've made commitments at this point, right? Because Gotham has told us,

don't worry about it. You're going to have the money. We believe we're going to have the money. So

we've hired contractors. We've hired, uh, you know, people left right and center to build out these

things, Florida, primarily Florida, as fast as we can.

So, you know, our view is like, look if this guy, Shoghi throws this cr*p into the public market. We're

going to get hosed. So we have to move first and claim that he's doing exactly what it's doing, which is to

be oppressive and try and get it shaped down, which is what that lawsuit that we filed that said He's

trying to jam our stock, now that took our stock down. But it took it down to less than if you would put

those lies in there, because the lie is basically made it look like we were a bunch of liars. You said that

we had this long series of meetings, as we promised him all these better economics and that then we

reneged on it. And they were just like, it was completely made up as like I never seen them. Maybe I'm

just a naive guy who conducts themselves business-wise this way because if they just say, I'm going to

just lie. I'm just going to put out a document that says, all this stuff happened. And none of it happened,

then it's like a, he said, she said, blah, blah, blah.

It was almost like, like he had mistaken us for like a different client or something. It was a different

company. It was like bizarre. So we put out that file. But during that time period, you know, we're in

close conversations with Gotham and they agree with the strategy because, you know, they say we want

to put $40 million into you, and we need to keep the ratio up. We need to keep your stock price up so

we can write these checks . I’m like great. So, you know, all through December, all through January, into

February, even, uh, like the middle of February, I pull another few notes I have saved on my other

computer..pull up what the actual date was, uh, hold on. it was right so, you know, on February 6th I

have a phone call with Alex Wang. Who's like the main point guy for us, he says, we're going to have $20

million dollars for you next week. So, you know, we're dealing with Oasis. there on our side, we're

dealing with (inaudible) looked at doing an acquisition together. They're on our side. They gave us 40

million bucks in December. I let Beth take $11 million out. there on our side. I honestly think they

actually were on our side. I don't think that they came up with this other idea until COVID hit. They knew

that we would have no access to any other money. Um, and then they said, Hey, the stock is pretty low.

Uh, they can't incur more debt.

They knew that we couldn't issue equity because of the fok-up from MPX that kept us from filing with

the SEC because they basically a complete fraud in the, the, uh, last quarter that we needed to be able

to file go back two years when you filed, when you register with the SEC. So I can actually back up from

that. We have been an FPI filer, which meant that we had more shareholders outside of us than in the

US so the SEC allowed us to register our statements under the OSC. We lost that status. We had to file

with the SEC. We filed with the sec.

But yeah, the show two years of audit, we couldn't get a clean audit from our accountants, uh, from the,

uh, quarters eight quarters ago, because MPX, uh, had done something that Deloitte wouldn’t share

their work papers on. So no one could review the work paper was so we couldn't get the SEC. So we

couldn't issue public equity. So Gotham knew all this, right? It wasn't publicly available. They knew we

couldn't issue public equity. They knew that we didn't have access to debt because the stock price had

been hammered. Um, there were the, so, you know, I don't think that they were, I don't think they came

up with their idea until some time in February ato really screw us . I don’t think it was part of a .

 

[]:

That's why you didn’t, dillute at like six bucks. Like that's why you just issued new equity. Like when the

share price was up at like the six dollar mark, that's why he kept taking debt instead of doing a public

offering, right?

 

Hadley Ford:

Yeah. Well, if the stock, when the stock was up at six, I think we probably still could have issued was out

for .. Yeah.

 

[]:

No, because that was before MPX.

 

Hadley Ford:

That was before MPX. And we did issue some equity back then. 40 or 50 million in equity. Um, so

anyway, where we get into the February timeframe, then I'll look in here and then I have a call on the

11th.

Um, and so I'm talking with one of the big investors that's supposed to come in. Um, and even on the

11th, like on the sixth, Alex says you have 20 million next week, then on 11, February, February. So, um,

the, uh, on February six, Alex says, yeah, next week we should close up 20. Then it's the next week. And

there's an investor. Um, who's going to write this $20 million check, one of the big investor in it. And I

meet with him in person, I talked to him on the phone, um, multiple phone calls. disclosed to that, this

whole Shoghi thing, they're comfortable with it. They were comfortable with it. Uh, they need to amend

it, but then Alex starts like on the 11th. I'm like, well, why aren’t we closed? And he says, Oh, we need to

amend some language in the GGP documents. I'm like, okay. So he comes up with it technical thing, and

then I've got a call. I’ll see what the date is on that.

I have a call on the 19th, um, to change some language in the documents. There's like all this technical,

s**t but it's all in like Gotham’s favor. So they started like trying to change the documents. And then on

the 21st, um, uh, Gotham guys come back to us, comes back and says, Oh, okay. The documents are

moving forward , investors ready. Meanwhile, our stock is coming down down down. Uh, 21st they say,

you know, maybe we should start looking at where the, uh, if you, if we don't raise the additional 20

million, you know, can we still get the cash flow breakeven I.E. if this is the last 20 that we raised

instead of 40, you know, does the company have any problems. So we start putting together all this

analysis of how we could cut expense to make 20 million get us to cash flow breakeven rather than 40.

Um, then, uh, the next week or shortly around the, let me see, like the 22nd, 23rd sometime there, I had

dinner with Adler. Um, and, uh, you know, Adler starts saying, well, you know, the money raising it's a

little bit tougher than we thought. Um, he thinks, uh, you know, maybe the 20 cart turns into 15. So

now, you know, what if we only reached 15 instead of 40, um, and, uh, you know, maybe we ought to be

speaking about some other protections. We can put the money or into the deals, maybe liquidity test,

things like that. Uh, so we started talking about ways in which we can make the, uh, uh, kind of more

compelling so we can raise the money then on the, uh, let's see the 27th, um, you know, they'd come

back and I say, Oh yeah, the big investor wants to talk with, uh, McMillan and, you know, have a better

appreciation for the Shoghi situation.

So this Shoghi thing is really causing issues at this point, but I don't know how much of that is actually

causing issues or are they making it up because you're just dragging it out as our stock price goes down

so they can claim that they can't put the money in. And I started thinking maybe these guys don't have

the money. So I go to my team, I'm like, now let's open up a diligence room and start get people in

there. I started looking at other financings, like silo, financings finance equity, just into the Jersey equity

of New York. This is looking at other junior securities. That's looking at private placements convert to

public in six months, like, let's start looking at a bunch of stuff. So we opened up a data room. I started

smiling and dialing. We start getting a lot of other people involved. Um, maybe whoever I'll look at

falling back, Oh yeah, we were having a sale leaseback conversations, but we needed, needed to release

because you know, the, the property is part of the right collateral package for Gotham. So we need to

release that. And actually we had a meeting in late when it was in February or March, where I suggested

that we could get 40 million of sale back money. And Jason was very excited by that and then Alex

talked Jason out of that idea. So sometime initially February early March says they start thinking about

how they can fok us. That would be my guess. Soo.

 

[]:

Who's Alex again, can you remind me who's Alex?

 

Hadley Ford:

Yeah. Alex is the, uh, point person from Gotham who's responsible for our account. So he's the guy.

 

[]:

Do you want to read the observer status or

 

Hadley Ford:

Yeah, I mean, exactly.

 

[]:

Well, you know what I mean by observer status? Like overseeing operations and so on.

 

Hadley Ford:

So, um, March 2nd and now Alex starts talking about, maybe there should be some consent payments

and uh, you know, starts changing the deal. And so I called my guys, we got to like find some backups

financing. Um, then on, uh, the 11th, you know, Alex comes back and says again, well, the situation’s

changed. We're going to need to reprice things. Uh, we're going to need to do all this. And basically, I tell

them, you know, NFW, I'm on the phone for a couple hours, you know, we're not repressing it, it's just a

reneg, you’re our partners , this is not how partners work with each other. Um, and, uh, then he started

saying, well, you know, maybe Shoghi me was right. Maybe, uh, uh, you know, maybe there is a breach

with the stock falling down. Like, you know, you're just, you're just making stuff up, Alex. We already

went through all this together.

 

[]:

Yeah. Because if there was a default, they would have active it back in January. Not now.

 

Hadley Ford:

Exactly. Yeah. Um, so you know, the discussions go on kind of like day to day. Uh, and you know, they're

saying, they're saying, yeah, we'll work with you. We'll work with you or give you interest deferment.

You know, if we don't raise any money, we're not sure we can give you any money. Um, so all this

happens then on the 24th of March, um, I have a, uh, a call with Alex and Jason. Um, and I say, and I

said, guys, you know, we got an interest payment in a week. You guys have said that you were going to

forbear that, or, you know, push that off for us. I haven't seen any paperwork. I need to get the

paperwork. And Alex says, and Jason let’s Alex talk, And Alex says, oh, we're happy to continue to have a

conversation on forbearances but there's nothing that I ask this to give us that would make them

forbear. And then Jason says, I had a thought. More of a Gotahm led action. We're going to take the

company private. I'm like, well, that's interesting. I said, you know, stocks low enough. Um, and I've got

some ideas on that. You could, uh, offer a warrant and all these other things, and you could actually

make it a very shareholder friendly, uh, going private transaction. You could have guys showing more

than 1% roll into it and keep the cash need down. And the stock guys with less than that could get a long

day warranted. Um, you know, give some upside when the company comes back public again, and

there's enough juice for everyone to make a lot of money.

And Jason says, well, actually had different concepts are going private. Um, uh, we're going to take out,

we're going to wipe out the public shareholders and the junior guys, and then we're going to recharge

the management team. Uh, and are you going to make more money if I go along with it? Um, and uh, I

said, uh, and we went back and forth. I said, look, I get what you're trying to do, but I've got a few

shared responsibilities. I've raised hundreds of millions of dollars. Uh, but you know, he, issued even

more than that in acquisitions. Uh, I've got a responsibility to the public shareholders. I agree to like

hose the public shareholders and junior guys and enrich myself and Jason's well, think about it. Don't

send any texts, don't send any emails. Um, and, um, you know, we'll talk about it. Um, and I went and

spoke with our outside counsel, spoke with my board and they're like, well, Gotham’s not your friend.

And we said, okay, let's go to the mattresses. You know, we got a lot of people already in the data room

booking to, uh, finance this, we'll hire an outside advisor, which ended up being canaccord to do kind of

a strategic review. We will start to hoard cash. We’ll start to lay people off. we'll stop all our spending.

We won't pay any interest. Um, and we'll fight these bastrdds and there's enough assets value here that

will emerge successful .

so that we did that. Um, then Beth decided and I told the governance committee that, uh, I had this a

hundred thousand dollar loan with Jason. So I should recuse from any further negotiations with Gotham,

because we're going to go hostile with them. They said, okay. And then Beth decided that she ought to

leak that information to the public because Beth wanted to try and become CEO of the company. So she

leaks that information, which ironically ends up foking Adler because now the junior guys thinks that

there's some untoward behavior going on and you know, frankly, it's kind of amusing because it ended

up costing Adler. He probably would have been able to wipe out the junior guys quickly, but he ended

up having to give . They ended up having to give them 49% or whatever because of this other, uh, fact

pattern hanging out there.

So, uh, anyways, all that happened, I looked at the whole situation. I'm like; I got this brand new board

who are just worried about their own personal balance sheets. I got Canaccord, just worried about

making them, see I've got Gotham who wants to hose us, like got junior guys who want to hose this. And

I'm like, no, one's looking out for the shareholder in this. So I make a couple of phone calls to guys I

know, say, look, this could be a great going private transaction and a shareholder friendly manner with,

you know, um, rrolling guys in and using warrents. . I work with, uh, hire a law firm. Uh, I work with, uh,

Cormark is the bankers, um, get everybody to a role in, uh, the cat just jumped on my, okay, I got to fix

that.

Okay. Um, I fought with Randy knows about their shareholders. Uh, we can raise the money and we

have a shareholder funding bid and we can take Gotham out and we can take the juniors out and there's

any number of ways this could work. And so I go, but you know, if it's out of our control, which it will be,

because I got to be recused because of this, uh, situation. There's no one else leading it. So everyone

was just going to roll over. Randy agrees. He and I decided to step out of the canaccord process and

work a parallel process, uh, to try and find a shareholder friendly bidder.

Um, and we go. This cat’s driving me up the wall. Alright. We're talking about uh, Um,

 

[]:

Who’s Gretta, by the way.

 

Hadley Ford:

Uh, yeah, that's from, um, uh, the old silent film star, um, who said I want to be alone. We want it, we

want it to be alone. So we, we didn't want to work with all these dicks. So, uh, we told the board on

April 6 that were, we’re rercusing ourselves from the canaccord process and Randy and I are going to

put together a bid and I've got a guy lined up and he's like, I'm good for 200. I bet him he's spending it.

It's all great. Then he comes back and he says, you know, I'm not sure I want to spend 200, I want to

spend a hundred. I'm like, okay, that's great. Well, you could, you should give Jason Adler a call and talk

with him about what that deal looks like. And we'll take out the junior guys, uh, Gotham can convert and

we'll have something shareholder friendly. And then he starts doing research and he comes back and he

goes, you know, there's no way I want to be partner with gotahm. They're a bunch of dicks, bad

reputation. I'm not going to do that deal and I don't want to give them any cash because I think they

should get sick, so that the lead horse backs away from the deal. I had a couple of fallbacks to it, but we

all know what happened end of the day.

But you know, I never get anyone to actually close on a deal, whether it's just a teacher player or a

financial player or combinations, a lot of guys do a lot of work and burn the midnight oil. I got guys out

of Florida. I got guys out of Chicago. I got guys out the LA got guys out of London, but then with end of

the day, nothing happens. Um, and then, uh, uh, I guess you saw at some point [inaudible] into April.

something like that. Um, as we, as a board and Randy take over the process, you know, I can guarantee

you, they didn't run a process the same way I would’ve flown it. , aggressive creative, like push stuff

forward. They're all basically what I would call price takers. They're going to, they canaccorrd run the

process and whatever shows up, they're going to take, like, I guarantee you, there's not one proactive

phone call to the richest guy in the UK who I've been talking with. And I gave that name to canaccord. I

guarantee no one called him.

 

[]:

It seems like Canaccord didn’t want to find a buyer like was it to their benefits and not to do anything,

basically like keep their fees low. Because the knew the would be taking payments anyways. The’d

rather

 

Hadley Ford:

I'll say they're saying it's about, it's probably not a fair comparison because you know, I I'm really good at

doing this stuff. You know, one of the top guys in the world having put all these things together, going

through my previous career and in this career, you know, $50 billion dollars worth of deals.

Canacord are a bunch of nice guys, but they're not me, Randy is a nice guy, super smart, but he's not

me. Maybe it's just my arrogance. But I think, you know, had I been involved within the canaccordr

process, there probably would've been a different outcome. Like you didn't have to say yes to Jason

Adler and he said, Oh, 2.75% to just said, yeah, we'll go to bankruptcy. we'll go to bankruptcy . I mean,

there there's so much negotiation.

I don't think that there was negotiated with the canaccord guys. They're nice guys, but it put me at a

poker table with them and they’d lose their foking house.

And if he was there, my view is that they ran with a, with everybody because no one cared because

there was not a public shareholder around that table. There wasn't a Hadley Ford as a founder, there

was a Randy, but he just looks at the world differently now. But there wasn't someone saying like a

bunch of people got hosed. They're saying, what’s my liability going forward or saying the board is not

going to get rich on a shareholder friendly outcome. They're just going to, don't the only outcome for

boards because they got foked. If there's a lawsuit and somehow their DNO insurance got (inaudible)

and the DNO insurance is pretty slim. And the rest of the liability is covered by the company. But the

company goes into bankruptcy and can't pay other things. It gets at them. And there's like a $20 million

check against the board and the company can't handle the insurance. So I got to come up with 10 of it

and help them cover the other 10. If the company can't cover it, those board members are on the hook

for it.

So I'm sure there were a lot of conversations around that. So the optimization was never about getting

the best deal for the shareholders, although they will claim that, but I know the optimization was

around getting something that looked prudent and thoughtful. So what's that mean? We want someone

to run processes where T's are crossed and I's are dotted. There's a lot of numbers you can get in front

of a judge with where they didn't say let's spend 40 hours trying to get the richest guy in the UK that you

can to buy the company, lets spend 40 hours, trying to get a couple of guys out of Hong Kong to buy the

company. Lets spend 40 hours trying to get this $260 million SPAC, exceptionally interested in your deal.

Structured so there was a lot of hair on it, but you know, I'm sure I know how these processes work.

Canaccord sits there. So I could spend a lot of calories going down that path, but there's not a high

probability and I'm going to get paid anyway. So unless there's a champion at the board level or

management level saying, hey, this means this SPAC deal work. And most people just don't want to try

and push the art of the possible. They just get into it. And they say, wow, that's a lot of hard work and

there is a low probability, but guess what? There never would have been an Ianthus if that was the mind

set. I mean, everything that we did, we just meet up and then we put this and made it happen. So, you

know, that's what happened was I decided to step outside the company, the money guys fell away. I'm

not in the process anymore. Um,

 

[]:

do you think Randy was bought off by Adler and them or do you think No

 

[]:

It’s possible

 

Hadley Ford:

I don't think it it’s implicit , but you know, Randy, you know, Randy's view of the world is probably, you

know, I'm tired. Uh, this is painful. Um, you know, if I go along and ge; he's not a dumb guy Randy. So

you might, if I go along to get along and you know, at some point I may get a reloaded option package,

basically what Adler told me I was going to get. .

 

[]:

That’s what I mean by getting bought off

 

Hadley Ford:

I mean like, you know, I doubt Adler went to him and explicitly said, I give you this that and other thing.

Because Randy would tell me, I think like, you know, I think what Randy smart off to say like, Hey, if I'm

going to be doing all this work, I got to get paid for it. So I'm sure that, you know, he went to the board

or whatnot, he's getting some type of option piece . And you know, I'm sure Juliass just thinking, you

know, the company needs the CFO. Um, and you know, there's no way I'm going to work here for

nothing. So I know I get reloaded. I don't think anyone explicitly went to them the way Adler cam to me

explicitly.

Um, but you know, they're smart enough to figure out if they stick around, they're going to get

reloaded. You know, everyone's a company she's smart enough to figure that out now. That's why all

the lawyers and corporate finance guys ever sticking arround, uh, you know, they, they know that

they're going to be taken care of and that's, you know, that's, that's what Adler’s counting on right?

 

[]:

Do you think? Do you think it does go private now?

 

Hadley Ford:

Well, essentially it's gone private with this tiny little piece, right? Because Adlers stock isn’t going to

trade, junior guys stock isn’t going to trade. So when Adler said we're going to go private, that's what he

meant. my guess is they keep it as a public company. Um, because if they take a private, uh, go be a

change of control piece, which then triggers all kinds of licensure issues. I mean, I was just a licensed

transferr, so my guess is they're going to keep themselves below 50%. If the public piece out they'll

probably do reverse stocks split, but it also gives them a currency to go acquire things with.

 

[]:

Yeah, but my question is like, what really is there for the company to trade? Like if we're going to be

doing a reverse split, it's going to be like a hundred to one or a thousand to one, like you're going to get

wiped out.

 

Hadley Ford:

That's just, that's just a mathematical change, right?

 

[]:

I don't see any upside. There's no upside for me or not even for 5, 10 cents. I don't see any upsides at all.

 

Hadley Ford:

Uh, from here there will be some great updates. when they release the second quarter numbers, it's like

tremendous amount. If you're back out all the legal expenses Randy was telling me it’s like the second

best EBITDA number in the market.

 

[]:

What the fok, honestly.

 

Hadley Ford:

It pissed the hell out of me because we were doing everything very way

 

[]:

And how was he OK? How are you seeing we have the best EBITDA numbers? How is he ok watching

shareholders get foked? Like how was he okay with that?

 

Hadley Ford:

I don't think that is okay.

 

[]:

I just think he feels like he has no option:

 

[]:

Why doesn't he cooperate with us and try to fight back? Like I don't get it.

 

Hadley Ford:

Of course, according to him, he has, right. According to him, I mean, he called and told what to do.

He says, didn't do what he said to do. So now he said he spoke with that. I mean, he spoke with all

these strategic guys as part of the process. Uh, he was, uh, he was, he was incented to do the right

thing. You know, if he's also got to run the process. So, you know, he's stuck in the middle, around the

process

 

[]:

Or I don’t know why he didn't step down.

 

Hadley Ford:

Well, remember he did step down and then he went back in, he and I decided it would be best to have

one guy outside and work the inside. So we made that proactive decision because he stepped out on

April 6. He and I stepped out together. And then on April, whatever it was whenever I rersigned, uh, he

stepped back in again and then had the conclusion that he would be allowed to do that.

But it would have been a complete utter disaster if Pat Tiernan was named the interim CEO, because

he's Gotham’s guy

It been a complete utter disaster If Beth had been interim CEO, because, because she's Beth.

 

[]:

Are you still holding all your shares? Are you unloading now?

 

Hadley Ford:

Uh, this week? Because I got some bills to pay, uh, I sold a hundred thousand shares for like 6 cents a

share or something like that US. So like six grand out this week, but I've been hanging on by my

fingernails Because if something happens now, then my stocks worth something. But yeah, I look on

that. I had a hundred percent of my net worth in this thing. 18 months ago I was worth $20 million, you

know, now it's like 120 grand. Um, I was counting on a making that, uh, atleast 20. maybe more and

more. Yeah. Um, so, you know, meantime, I got to, you know, kind of were kind of look at a couple of

the things we I don’t really want to go get a job when I'm working on those things So I got rent to pay

school bills and s**t like that. So try not to sell anything, but you know, kind of, what you got to do by

month. They're going to drip a little bit out as much as it pains me because the worst thing would be to

sell a hundred thousand shares and then next week I'm going to jump in and triple.

 

[]:

But my question is like the only catalyst I see is obviously from what she said from the presidential

debate that that should decriminalize if things were to proceed and then the Democrats way, and then

on top of that would be Q2 numbers, but are they really going to release it? Because my understanding

is they could just hold it like they did before?

 

Hadley Ford:

Julius told me a couple of weeks ago; they're going to release them. So I don't know what the timing is,

but

 

[]:

They said October 15. They already used exemption and it gets them to October 15. So if they don't file

it by then it gets halted and I don't want it to get halted. And then they take a private and we get paid s**t, but they can't do that because they still have to implement the process in the U S and for them to

do that and to enforce it takes some time. So I'm just trying to fight here for the shareholders, um, and

knows that very well. And I've, I've been sleeping at four or five, 6:00 AM every day, trying to get

something going here. Um, so we, we just figured to see what went on with Randy and, um, you know,

hopefully you got something, but so-so all I'm getting from you is I just want to touch

upon something. Why did you disclose that you had a hundred K loan? I thought that was confidential,

that no one knew about it.

 

Hadley Ford:

Ya. Beth disclosed it to the market or whatever. Oh. Why did I disclose it to the governance committee.

There's a conflict at that point. It was a conflict, right? I was, uh, um, we were going to go adversarial

with gotham. So I went to the governance committee and said, we're going to be going against these

guys at, uh, last December. Uh, they handshake deal. I need to recuse myself from any negotiation with

Gotham. I mean, if things are going in a positive manner and like, who cares, but things are clearly going

in a negative manner. And I don't want everyone to think that, um, there's anything untorn going on

because there's going to be negotiations with Gotham and deals are going to get cut with gotham. And,

you know, I can't be involed in that if I owe Jason a hundred grand.

 

[]:

Okay. So pretty much they told you on that day, that on March 26, or just prior to that, um, their day

plan to take it out, take it out from the company like this was their intention and here they are pretty

much doing it, except they don't own 90% of it. They own only 48 while the junior debenture holders

managed to somewhat come out of It

 

Hadley Ford:

Yeah.

 

[]:

Now we wanted to push for CCA and we're still trying to figure out a way where we can go to CCA. So

what can is there, is there any way where I want this can somehow breach or terminate their clause now

that now that it wasn't done by the September 28th, is there a way to get out of that and go to CCAA

and to get to step in.

 

Hadley Ford:

To get any, I don't know how you go to see

 

[]:

He means to cancel the PLA.

 

[]:

Is there a way where they can kind of like, say I changed my mind. I don't like this POA and we're going

to back out.

 

Hadley Ford:

Who? The company. No, the can't do that.

 

[]:

I couldn't imagine that they could do that.

 

[]:

So that that's, so that's everything that GGP did. They kept on saying, we'll give you the 20. They didn't,

and then they bumped it down to 15. And then when they realized it wasn't that much money really

needed to be positive. I want to say positive at about like, you know, good numbers. Yeah. Positive cash

flow. Um, they were like, oh, well, why give you the 20? Then when we could just not give it to you, you

default; we take it from you and just put into 10 million ourselves and just take it. And I think that's what

they did because they gave it interim financing of, I think, 12 million.

 

Hadley Ford:

Um, yeah, that was the other thing that happened. I mean, they claimed, Oh, I know what I was talking

to them on the 24th. I said, well, how are you going to make this work? You don't have any money to

put into the company. You're not going to be able to do all this. Because we need money to get through,

you know, if we don't pay the interest and still capital or, uh, you know, to get to cash flow breakeven

on there. Oh no, we got there for operations. We got plenty of money. We got 20 million bucks.

 

[]:

We just don't want to give it to you.

 

Hadley Ford:

We just don't want to give it to you on there. What I said, yeah, we've got, uh, uh, 13 million in our fund

and I said, Oh, I thought you had a concentration. We don’t have a concentration issue. when they said

that, I knew that they'd been for, like, they started lying at some point too, because they'd always said,

Oh, we have concentration issue. we have to raise all the money outside and they said, we got 7 million

from our LPs, the fund specifically for this based on conversations you have had with them. So they had

20 million bucks. It couldn't put into us.

 

[]:

But,Sorr. won't that be a breach though, of their contract because they have to act in good faith with

the company because it's best efforts. Meaning like, if I have the money, I'll give it to you as a loan.

 

Hadley Ford:

That's why I met Randy and always thought there could be lender oppression.

 

[]:

Well. There is. there is, I don't know why he didn't pursue it. He's talked at great length. And I was

actually, uh, talkied with Duane Morris guys. I talked with McMillan guys. Yeah. And actually, I've never

asked them why just pursue that when you became interim CEO, but it was under lender oppression

suits typically extremely difficult to bring and prove, but you know, well, you have the evidence, you

know, I don't have that conversation recorded. I had it in my notes.

 

[]:

But still. It's your word against theirs? Cause you've always had week to week calls.

 

Hadley Ford:

Yeah. Well, I'm sure the lawyers said, yeah, you could do that, but your chance of winning is not high .

So there was probably some reasons, but yeah, look, they, they made the decision and they did it. And I

don't know that I don't, they didn't break any laws. Right. I mean, they're allowed to , you know, not

give us the money. but it's the idea that they promised that they were, you know, there's that, you

know, you have to got to the judge to say, yeah, you can't promise, promise, promise, but then they can

look at me and say, well, you should have gotten it.

 

[]:

What I'm trying to say is they, they knew that you were able to complete it and then they act in an

oppressive conduct where they just led you to believe that you will get it, but you didn't. And then they

just cut you off. Like you see where I'm coming from? Like I'm saying is how is that not oppression that

that is considered oppression.

 

[]:

I think the thing is, we agree with you, but I think both of us agree with you, the thing is like, will a

judge agree at, is there enough to actually like evidence to actually get that Oh, over the hurdles that a

judge would have to get over? And I think a judge would just go hell, that’s business. That's hardball, you

know, that's the problem. This world is not a fair place.

 

[]:

No, it isn’t. Yeah. But it's just, I've never seen such kind of behavior like that.

 

[]:

No, neither have I.

 

[]:

Um, That's why, I'm puzzled. I'm really, yeah. I'm puzzled as well.

(Inaudible)

 

[]:

Okay. Well, the side conversation, like, uh, sorry, um, different topic here, like side topic. Um, I don't

know if you're aware of med men in their position. Um, but they continue taking financing and it just

pisses me off seeing that they're getting the financing when we're not getting it, number on. Number

two, it also shocks me to see that, you know Adam and Andrew Modlin and those guys are selling it alltime

lows, you know what I mean? Um, which shocks me because why would they be selling out all-time

lows now? I know they're lenders are foreclosing on their homes if they don't pay up. So is that a reason

why they're selling at all-time lows?

 

Hadley Ford:

Uh, I was. [inaudible]. I'm selling stock all the time, so I don't pay, uh, bills. So I'm sure if someone says

they're going to take their house.

 

[]:

I just want to make sure, like, because it doesn't make sense to me. They own so much in the company

and here they are literally selling out all-time lows.

 

[]:

They probably tried to wait it out, hope that it would recover. It just can't wait any longer. Certain

points, like it's like what Hadley was saying about holding off by his finger nails

 

[]:

Yeah, that's very true. Okay. All right. Um, is there anything else with regards to that conversation that

you think would be able to, you know, help in any way in our arguments and pleading oppression? Is

there any other, any other information or data that can come out of? Like, do you recall anything else

out of that conversation?

 

Hadley Ford:

Um, you know, I mean, it was a great relationship until it wasn't, these guys were supportive until they

weren't and then they came up with this idea, uh, at some point I would guess in February, early March,

and then they fleshed it out and then they told me about it on March 24. And they sai, even then they

still wanted to have me involved. So they were still very bullish on the company and still verr bullish on

me but they didn't count on me just saying, screw you guys. It caused a big mess. Now they ended up

taking 97.25% two, five of the company. Um, but they didn't get a hundred percent like they want it and

Gotham didn't end up with a hundred percent of it. They had to split it with the junior guy. So, you

know, it wasn't a great outcome for me or the shareholders by any stretch of the imagination.

 

[]:

What's uh, how much of himself and how much of a, like, like say, uh, say Ianthus is eventually is worth

a billion dollars.. Gotham’s position that is worth what, 500 million, right. Basically, in rough numbers.

Um, how much would Adler personally get off of that.

 

Hadley Ford:

I think his stuff is a point plus 10. So, you know, if he took the value of the company from a hundred to a

billion, which they probably will, Gotham gets 500, he did 10% of that. So he'd have 50 million to split

with his guys. He probably keep 40 million of it with those guys. Well, that was basically my money. He

basically took Jason Adler and turned him into Hadley Ford. Is basically what he did. Foker.. And we

did it by screwing the sharerholders rather than making money for shareholders. Totally.

 

[]:

Was he a Google guy?

 

Hadley Ford:

No, he has his, um, previous small hedge fund was called alphabet or alphabet city or something. Oh, it

wasn't. Oh, because I saw alphabet and I know that's the parent company of Google.

 

[]:

I saw that too. Made me. question I'm like, where's this coming from?

 

Hadley Ford:

Yeah, that's a completely different entity, like alphabet city in New York. Yup. Yup, exactly.

 

[]:

Okay. Well, I think we got the, uh, the information we need. Um, we'll try to work with it and build our

case. Hadley, if you can get us that side letter or that information about that side deal, that was

supposed to be part of the documents or was, I guess if you want to say, um, if you can get us out, that

would be great because it would help our case. Hadley: OK. And, um, and if you can contact Randy and

ask him about Canaccord, um, if they actually got like, I want him to go to canaccord and say, Hey, did

you guys get any bids in the last two weeks between September 20th to September till now? And I just

want to see what he's going to say, you know, from, from, from October, from October 5th or sorry,

from October 3rd or from October 5th, until September 20th, between that whole time, that, that range

of period. Did they get any bids to canaccord. Uh, sorry. Um, did canaccord get, receive any bids if the

answer is yes, I would be very interested in how to approach canaccord to get it out of them.

 

Hadley Ford:

Sure. I’ll ask

 

[]:

So I asked Hadley if it was, it was you, would you, if you had cash, would you be buying down here?

Yeah, yeah, yeah, yeah. I would. You’d have to have a strong stomach and a long view. The stock goes

up from here. You're going to have, uh, good numbers. It's just very volatile, pretty low. Cause I was like,

do I start dumping it at 10 cents and move it over to Curaleaf? And those guys are, or should I just stay

where I am?

 

Hadley Ford:

Yeah. Uh, yeah. Well my guess is once it's, you know, a getting reverse split and stabilizes that I'll be very

thinly traded, but I think it will be, uh, create a lot of value. Unfortunately, we're only going to get a

small piece of that.

 

[]:

Yeah, because I think this election and all that stuff too, and you never know if a blue wave comes across

the US which the betting odds look like it's going to happen, uh, you know, could this become a billion

dollar company again really fast? I mean,

 

Hadley Ford:

Yeah. But the trouble is yeah, It’ll be a billion dollar company. Would show up having $30 million in

value as opposed to having 600 million of value.

 

[]:

Okay. All right Hadley. I appreciate your time? I took a lot from your time and I appreciate you trusting

us and, uh, trying to make something work here for everyone.

 

[]:

My other thing is Hadley, do I just sell it and give it to you for other your other ventures?

 

Hadley Ford:

Uh, well, the testing on, if I can pull that, I mean, uh, the brand one will be fun and exciting, but the

testing one, I think it's going to be a monster return, but if those things come together, I've already told,

guys that I have, guys are going to have their little friends and family piece. So if they come together, I'll

show them your way and make a decision at that point. But, uh, they should be pretty good

opportunities

 

[]:

What is this, if you don't mind me asking?

 

Hadley Ford:

Well, you know, I'm always, uh, I've always got something the next deal working. So I was telling .

I've got a couple of things. I've been working on a roll up retail growing brand in Colorado. The guys

actually made cash and I got them at a reasonable valuation. Um, and then we'll take that model to

other States. And then the other one, which is even more interesting as a testing opportunity, uh, the

guy's generating a boat load of cash, and he's got equipment financing, uh, in the single digits, uh, takes

2 million bucks to open up a testing facility. The testing company can probably get 70% against that and

600 grand. He can probably open two centers a year without having to raise more equity dollars. So you

could probably have seven, um, centers open three years old. When I'm reading on 10 million of

revenue, I'll do it about 30% EBITDA margins. You got $20 Million of EBITDA probably with worth 10

times. So there's 200 million less, you know, 6-7 million of debt. So call it 190 million of equity value

created three years and wants to be valued today at 10 million. So I’m doing diligence when I got to see

a 20 X, I guess they've got the CEO hired, I've got, uh, uh, actually putting in materials next couple of

weeks to see what kind of interest we get. But now my guess is we'll get some pretty good interest in it.

I got someone could come in and run it.

 

[]:

Uh, so like 20 grand in that gets me almost back to even on my Ianthus

 

Hadley Ford:

if it works, which, yeah, there's a lot of attribution that they're only doing testing in one state today, but

they've got a great process. The guy who was founded the company is 67, he had done drug testing for

the state of Massachusetts. They proactively came to him a couple of years ago and said, Hey, can you

set up a test, a cannabis testing? Cause everyone's sucks. So he wrote me a $2 million check out of his

own bank account, set this thing up. And now he's doing 6 million run rate or revenue doubling every

year. And he's probably doing a million .2 to have after tax cash flow. And I sat down and we go, so there

should be a national thing. My model, my methods, my science can be replicated very simply. Um, he

says I'm 67. I like to play golf four days a week. I got a house in Florida and a house in Mass, and I don’t

really want to work that hard, but if you could cash me out at 80%, you know, I'll stay on the board. And,

uh, you know, I'd love to be involved a little bit because it's fun. Um, but someone else could go grow

this. So I'm like, okay. So I found the CEO, she's doing diligence now. And I find 8 million bucks, which

won't be that hard. I don't think, um, you know, we'll get off to the races.

Typically what I'll do is I'll typically get one check writer for the balance of it. I'll typically have a small

side pool for people who've been, uh, supportive and kind of understand the position. You know,

obviously, uh, I've talked with , he's one of those guys, so there's no pressure, but I always have a

friends and family piece and just say, look, we'll take a look if you like it. Great. If you don’t. no harm, no

foul, but you've been supportive. So, um, a opportunity,

 

[]:

I always say, you know, you're not betting on a company you're betting on the people. Yeah, exactly.

Right. And you know, uh, I think, you know, the Ianthus , didn't go the way you wanted it to go. But I

know I truly believe that your heart has been in the right place the whole time. And, uh, and you just got

caught in the perfect storm and, uh, you know, most, most people, most billionaires have gone bankrupt

more than once, you know? So I'm not saying you went bankrupt in order to hit it big , You got to fail big

a few times, but you just got to have that. You got to; you're going to do the non-fatal fail. Yup. Yup.

 

Hadley Ford:

I appreciate those sentiments. I agree with them too.

 

[]:

No, I agree with . Um, I do think he built out something great and you know that's why also [] and I hopped in on this and we bought when we thought it was a great price. Um, and I agree,

um, I think you were robbed of the opportunity, but you know, you know what, they always say If a

company continues to succeed and, you know, they kind of stole it from you while this, we know the

foundation was big and the foundation came from you. You are the foundation of this company. So, um,

and that's why I found it hard to believe that, you know, you were in on this from the beginning. Um, so

there's no way it's just, I honestly feel you were just tricked by someone, um, thinking that

 

Hadley Ford:

I was. Shame on me for not seeing it.

 

[]:

I wouldn't. No. . I wouldn't blame you for it. I wouldn't. Absolutely. Um, because we all saw that GGP

was in this, and we all heard the bad rumors about what happened with med men and other companies.

But, um, what I'm trying to say is, I think it's the cannabis industry needs the safe banking act. And this is

the perfect example. It keeps away predatory lenders from doing dirty business with companies that

have good intentions, um, which is what something you were trying to do. Um, and, and, and this, and

this is a wake-up call for the, for the regulators and the regulations that they have to bring in something

like the safe banking

 

Hadley Ford:

Should be. But probably won’t be. That’s the problem .

 

[]:

Well, because that's what I want to do but I want to, I kind of want to like go to the sec or the securities

commission here in Canada and say, Hey, listen, like, how can you allow such predatory lending? Like

this should, be this is like some illegal that they're doing here. How can they get away with this? So like,

um, like even though I'm trying to build a case for the oppression lawsuit, like there's a lot of

information here that, you know, that needs to be kind of like, say, Hey, like, are our lenders allowed to

do something else? Because my understanding is they're not, you can just because there are no rules to

the game. Doesn't mean you can make up your own rules and say, Oh, if you don't get me what I want,

I'm not going to give you your money. Like, well, then you pretty much, you pretty much influence and

control the company. And that, that hurt, that hurts shareholders and the board, it hurts both of them.

 

Hadley Ford:

Well, they had insider information and they used it.

 

[]:

There you go. So it's that and that's why I encourage Hadley. I'm like, Hey, I think you have a case here

for like, bringing something to the sec and I'm sure they will look into it. But I don’t know if he.

 

Hadley Ford:

Yeah, I was talking to my lawyer about that yesterday.

 

[]:

And what did he say? You said, it's a good idea or bad.

 

Hadley Ford:

He said, it's about timing because there are all these other lawsuits that exist right now. And, you know,

there's, they basically named Gotham, the board, me, all these other people. And they said, but you

want to make sure that you get all those dismissed first, if you don't want to start fighting, you don't

want to all the defendants fighting with each other while you're trying to defend against all these other

things. So he said, no, my advice would be let's defend against the first enemy. And then when that's

won and put out of the way that you can pick up the sword. All right.

 

[]:

All right. Well, thank you so much. I appreciate your time. Um, and we'll keep in touch. And once again if

the sooner the better, because, um, for the, with regards to that side letter, because we need to act

quickly in terms of the appeal. And we only have, I think 26 days left to my knowledge. So, uh, the

sooner, the better please,

 

Hadley Ford:

I will, uh, I'll see what I can find out. Okay.