Loans Receivable

6 Months Ended

May. 31, 2015

(a)

On June 27, 2012, the Company entered into a bridge loan agreement with D-Helix Inc. (“D-Helix”), whereby the Company agreed to lend $75,000 to D-Helix. Under the terms of the agreement, the principal amount will be due and payable on the earlier of September 30, 2012 or within ten business days of the closing of a potential share exchange agreement between the Company and D-Helix. The loan is unsecured, bears interest at 10% per annum, and is payable in quarterly installments from September 30, 2012. As of November 30, 2013, the Company recorded a full allowance on the principal amount and accrued interest due to uncertainty of future collection of the loan receivable.

(b)

On June 25, 2014, Cal-West received a secured promissory note from 20 Bear, LLC (“20 Bear”), effective as of May 29, 2014, in the principal amount of $43,418 (November 30, 2014 - $41,865) to acquire agricultural real estate in California which is secured against the promissory note. During the six months ended May 31, 2015, the Company advance additional principal of $1,553. The note bears interest at 10% per annum and is due on January 15, 2025, with monthly payments of $589 commencing on January 15, 2015. On January 12, 2015, the Company received a refund of principal amount of $200. As at May 31, 2015, Cal-West has not received any repayments from 20 Bear. As at May 31, 2015, the Company has recognized accrued interest receivable of $4,459 (November 30, 2014 - $2,157).

(c)

On June 25, 2014, Cal-West received a secured promissory note from Cal-Southridge, LLC (“Southridge”), effective as of June 2, 2014, in the principal amount of $69,323 (November 30, 2014 - $66,380) to acquire agricultural real estate in California which is secured against the promissory note. During the six months ended May 31, 2015, the Company advance additional principal of $2,943. The note bears interest at 10% per annum and is due on January 15, 2025, with monthly payments of $933 commencing on January 15, 2015. As at May 31, 2015, Cal-West has not received any repayments from Southridge. As at May 31, 2015, the Company has recognized accrued interest receivable of $7,017 (November 30, 2014 - $3,343).

(d)

On June 25, 2014, Cal-West received a secured installment note from Orange County Growers Association (“OCGA”) in the principal amount of $160,000. The installment note is secured by OCGA’s interest in machinery, equipment, fixtures, appliances and other assets, bears interest at 10% per annum commencing November 30, 2014, and is due on November 30, 2017, with monthly payments of $5,388 commencing on November 30, 2014. OCGA owns and operates a California medical marijuana dispensary properly organized under the California Attorney General’s guidelines. As at May 31, 2015, the Company has advanced $140,375 (2014 - $139,875) under this secured installment note and has not received any repayments from OCGA. As at May 31, 2015, the Company has recognized accrued interest receivable of $7,161 (2014 - $nil).

(e)

On June 25, 2014, Cal-West received a secured promissory note from Rattlesnake Pine, LLC (“Rattlesnake”), effective as of May 22, 2014, in the principal amount of $120,921 (November 30, 2014 - $122,038) to acquire agricultural real estate in California which is secured against the promissory note. The note bears interest at 10% per annum and is due on January 15, 2025, with monthly payments of $1,721 commencing on January 15, 2015. On January 12, 2015, the Company received a refund of principal amount of $1,117. As at May 31, 2015, Cal-West has not received any repayments from Rattlesnake. As at May 31, 2015, the Company has recognized accrued interest receivable of $13,062 (November 30, 2014 - $6,534).

(f)

On June 25, 2014, Cal-West received a secured promissory note from 50 Bear, LLC (“50 Bear”), effective as of May 29, 2014, in the principal amount of $99,661 (November 30, 2014 - $99,789) to acquire agricultural real estate in California which is secured against the promissory note. The note bears interest at 10% per annum and is due on January 15, 2025, with monthly payments of $1,404 commencing on January 15, 2015. On January 12, 2015, the Company received a refund of principal amount of $128. As at May 31, 2015, Cal-West has received $2,100 from 50 Bear as repayments on accrued interest. As at May 31, 2015, the Company has recognized accrued interest receivable of $8,813 (November 30, 2014 - $5,141).

(g)

On June 25, 2014, Cal-West received a secured promissory note from 3180 Dips, LLC (“3180”), effective as of June 9, 2014, in the principal amount of $79,626 (November 30, 2014 - $74,308) to acquire agricultural real estate in California which is secured against the promissory note. During the six months ended May 31, 2015, the Company advance additional principal amount of $5,318. The note bears interest at 10% per annum and is due on January 15, 2025, with monthly payments of $1,042 commencing on January 15, 2015. On January 13, 2015, the Company received a refund of principal amount of $212. As at May 31, 2015, Cal-West has not received any repayments from 3180. As at May 31, 2015, the Company has recognized accrued interest receivable of $7,746 (November 30, 2014 - $3,592).

(h)

On July 18, 2014, Cal-West received a secured promissory note from Horizons Partners, LLC (“Horizons”) in the principal amount of $146,375 (November 30, 2014 - $146,375). The note is unsecured, bears interest at 6% per annum, and is due on July 18, 2016. During the year ended November 30, 2014, the Company received payment of $1,700 against the note. As at May 31, 2015, the Company has recognized accrued interest receivable of $7,743 (November 30, 2014 - $3,303).

(i)

On May 30, 2014, the Company entered into leasing and property management agreements with each of 20 Bear, Southridge, Rattlesnake, 50 Bear, and 3180 (collectively, the “Owners”). Under the terms of these agreements, the Company agreed to manage various properties on behalf of the Owners in consideration for monthly management fees of $1,167 per month for an initial term of five years, and advances for leasehold improvements. Management fees may be payable pursuant to revolving promissory notes entered into with each Owner. During the six months ended May 31, 2015, the Company has charged management fees of $35,000 (November 30, 2014 - $35,000), advanced $4,500 (November 30, 2014 - $14,060) for leasehold improvements secured under these notes, and received repayments of $10,500 (November 30, 2014 - $nil), of which $8,847 was applied to the principal amount and $1,653 was applied to interest receivable. During the six months ended May 31, 2015, the Company recorded a $35,000 (November 30, 2014 - $24,500) provision for loans receivable due to the future uncertainty of collection. As at May 31, 2015, the Company is owed $20,213 (2014 - $24,560) with respect to the agreements. The amounts owing are due in June 2016.

(j)

On July 8, 2014, the Company entered into lease agreements with each of 2131 Inc., 3231 Inc., 5301 Inc., 7141 Inc., and 5621 Inc. (collectively, the “Tenants”) on behalf of each the Owners. Under the terms of these agreements, the Company agreed to lease out the Owners’ various properties on behalf of the Owners to the Tenants for an initial term of five years. Beginning as of the effective date of the agreements and continuing for a period not exceeding 24 months, rent may be payable pursuant to revolving promissory notes entered into with each Tenant bearing interest at 10% per annum. During the six months ended May 31, 2015, the Company received payments of $10,900 against the notes. As at May 31, 2015, the Company has advanced an aggregate of $83,100 (November 30, 2014 - $94,000) for leasehold improvements secured under these revolving promissory notes.

CHUMA HOLDINGS, INC. 10-Q