SUBSEQUENT EVENTS

3 Months Ended

Jan. 31, 2018

On February 1, 2018, the Company issued a convertible promissory note for $220,000. The note is repayable in six months and bears interest at 12% per annum. The note is convertible into common shares at the option of the holder at issuance based on the discounted (50% discount) lowest trading prices of the Company’s shares during 25 days prior to the conversion. On February 20, 2018, Auctus Fund was repaid for the loan and as such it is no longer outstanding and has been retired. The Company had the right to prepay the note at 135% or negotiated the rate down to 125% plus 15,000 shares of restricted stock. The repayment amount was $276,627 plus 15,000 shares of restricted stock.

On February 13, 2018, the Company has executed an agreement with St George Investments for $4,245,000 with the initial tranche being $850,000. This note carries an original issuance discount of $385,000 and the Company agreed to pay financing fees of $10,000. The note is repayable in one year and bears interest at 10% per annum. The note is convertible into common shares after six months from the issuance based on the discounted (50% discount) lowest trading prices of the Company’s shares during 25 days prior to the conversion. This Note shall be comprised of thirteen (13) tranches (each, a “Tranche”), consisting of (i) an initial Tranche in an amount equal to $945,000 and any interest, costs, fees or charges accrued thereon or added thereto under the terms of this Note and the other Transaction Documents (as defined in the Purchase Agreement) (the “Initial Tranche”), and (ii) twelve (12) additional Tranches, each in the amount of $275,000.00, plus any interest, costs, fees or charges accrued thereon or added thereto under the terms of this Note and the other Transaction Documents (each, a “Subsequent Tranche”). The Initial Tranche shall correspond to the Initial Cash Purchase Price, $85,000.00 of the OID and the Transaction Expense Amount, and may be converted into shares of Common Stock (as defined below) any time subsequent to the Purchase Price Date.

On February 20, 2018, the Company received the first tranche from St. George Investments, for net proceeds of $850,000. As part of the initial tranche, the Company repaid Auctus Fund. On February 20, 2018, the Company issued 15,000 shares of common stock to Auctus Funds, LLC as partial repayment for the convertible note issued on February 13, 2018. The total repayment amount was $276,627 and 15,000 shares of common stock.

On February 26, 2018, the Company’s Board of Directors approved a cash dividend. The record date for the dividend is March 31, 2018 at a rate of $0.001 per share.

On February 28, 2018, the Company issued 360,006 shares of common stock to Greg Tucker for consulting services. The shares were cancelled on July 18, 2018.

On March 2, 2018. the Company has agreed to terms with REI Extracts regarding an extraction and distribution joint venture. Equipment has been ordered and is being shipped to the Company’s location in Salinas, California. The operations of the joint venture will be conducted under the Company’s licenses. Additionally, the Company has retained REI Extracts to provide consulting services related to cultivation and to provide a master grower. The new master grower has been working with the Company since January 2018. The grower will be paid based on the yield of sellable flower per bay. The incentive pay shall be paid as follows:

Harvested pounds per bay of sellable flower		Incentive Bonus
0-40		$0
40-60		$40 per pound in excess of 40 pounds
60-80		$70 per pound in excess of 40 pounds
80-100		$100 per pound in excess of 40 pounds
100+		$120 per pound in excess of 40 pounds

On November 30, 2018, the Company issued 333,000 shares of Series C Preferred Stock, valued at $1,000,000, to Job Growing Inc. (“Job Growing”), for 50% of the profits of Job Growing. In the event that Job Growing either: (i) files a Registration Statement to become a reporting company under the Securities Exchange Act of 1934 which becomes effective, or (ii) is acquired by an unrelated third party, then Sunset Island Group has the right to buy a Fifty Percent (50%) equity interest in the Job Growing for One Dollar ($1.00).

On February 11, 2019, the Company issued 333,000 shares of Series C Preferred Stock, valued at $1,000,000, to Cicero Travel Group Inc. (“Cicero Travel”) for 33% interest in the net profits of Cicero Travel, 19% equity interest in the common stock of Cicero Travel and the right to purchase an additional 14% equity interest in the common stock of Cicero Travel.

Sunset Island Group 10-Q