Item
2.01 Completion of Acquisition or Disposition of Assets.
(a)
On December 13, 2019 we completed our acquisition, through our subsidiary, Elata Investments, LLC, the real property located at
4016 Dalton, Los Angeles CA (“Dalton”). The property was vacant at time of purchase. The acquisition was for $525,000
(“Purchase Price”). Terms of the acquisition as follows: (1) A first position note with payment on principal balance
of $441,995.20 issued by the Property Owner, Elata, owing to lender, Visio Financial Services, Inc, whose terms of payments due
are principle and interest, on unpaid principal at the rate of 7.2% per annum. Principal and interest payable in monthly installments
of $2,850.91 or more starting on February 1, 2020 and continuing until the 1st day of January 2050, at which time the
entire principal balance together with interest due thereon, shall become due and payable. Note: The initial fixed interest rate
will change to an adjustable interest rate on the 1st day of January, 2025, and the adjustable interest rate may change
on that day every 12th month thereafter. The date on which the initial fixed interest rate changes to an adjustable
interest rate, and each date on which my adjustable interest rate could change. (2) a $83,004.80 second position note owing by
Elata to Belladonna Lily Investments, Inc (“Bella”), whose terms of payments due were interest only, payable from
December 11, 2019 on unpaid principal at the rate of 6% per annum. Interest only payable in monthly installments of $750.00 or
more on the 11th day of each month beginning on the January 11, 2020, and continuing until December 10, 2023, at which
time the entire principal balance together with any outstanding interest due thereon, shall become due and payable. The note
to Bella in second position was increased to $150,000 at time of initial funding, with the difference of $66,995.20 being used
to fund closing costs, carrying costs and fix up costs.
The
foregoing description of the acquisition of the Dalton and the transaction contemplated thereby contained herein is qualified
in its entirety by reference to the Dalton Closing Statement, copies of which is attached hereto as Exhibit 10.1 and incorporated
into this Item 2.01 by reference.
(b)
On December 30, 2019 we completed our acquisition, through our subsidiary, Elata Investments, LLC (“Elata”),
the real property located at 1618 West 38th Street, Los Angeles CA (“38th”). The
property was vacant at time of purchase. The acquisition was for $630,000 (“Purchase Price”). Terms of the acquisition
as follows: (1) A first position note with payment on principal balance of $504,000.00 issued by the Property Owner, Elata, owing
to lender, Visio Financial Services, Inc, whose terms of payments due are principle and interest, on unpaid principal at the rate
of 6.3% per annum. Principal and interest payable in monthly installments of $3,119.62 or more starting on February 1, 2020 and
continuing until the 1st day of January 2050, at which time the entire principal balance together with interest due
thereon, shall become due and payable. Note: The initial fixed interest rate will change to an adjustable interest rate on the
1st day of January, 2025, and the adjustable interest rate may change on that day every 12th month thereafter.
The date on which the initial fixed interest rate changes to an adjustable interest rate, and each date on which my adjustable
interest rate could change. (2) A $126,000 second position note owing by Elata to Belladonna Lily Investments, Inc (“Bella”),
whose terms of payments due were interest only, payable from December 11, 2019 on unpaid principal at the rate of 6% per
annum. Interest only payable in monthly installments of $750.00 or more on the 11th day of each month beginning on January 11,
2020, and continuing until December 10, 2025, at which time the entire principal balance together with any outstanding
interest due thereon, shall become due and payable. The note to Bella in second position was increased to $150,000 at time of
initial funding, with the difference of $24,000 being used to fund closing costs, carrying costs and fix up costs.
The
foregoing description of the acquisition of 38th and the transaction contemplated thereby contained herein is qualified in its
entirety by reference to the 38th Closing Statement, a copy of which is attached hereto as Exhibit 10.2 and incorporated into
this Item 2.01 by reference.
(c)
On December 31, 2019, the Company closed on the acquisition of Kapok Investments, LLC, (“Kapok”) and its real property
asset located at 1981 Estrella, Los Angeles. Under the terms of the Kapok Agreement, the Company was to acquire 100% membership
interest in Kapok for $865,000. The property was vacant at time of purchase. Kapok was owned by a related party. The terms
of the acquisition was subject to two loans as follows: (1) A $600,000 first position note owing by Kapok to Belladonna Lily
Investments, Inc. (“Bella”) whose terms of payments due were interest only, payable on unpaid principal at the
rate of 5.00% per annum. Interest only payable in monthly installments of $2,500 or more on the 1st day of each month beginning
on the 1st day of January, 2020 and continuing until the 30th day of November, 2023, at which time the entire principal
balance together with interest due thereon, shall become due and payable. (2) A $265,000 second position note owing by
Kapok to Bella, whose terms of payments due were interest only, payable on unpaid principal at the rate of 5.00% per annum.
Interest only payable in monthly installments of $1,200.00 or more on the 1st day of each month beginning on the 1st
day of February 2020 and continuing until the 30th day of November, 2023 at which time the entire principal balance together with
interest due thereon, shall become due and payable.
The
foregoing description of the acquisition of the Kapok and the transaction contemplated thereby contained herein is qualified in
its entirety by reference to the Kapok Closing Statement, copies of which is attached hereto as Exhibit 10.3 and incorporated
into this Item 2.01 by reference.
(d)
On December 31, 2019, the Company acquired 100% membership interest in Trilosa Investments, LLC, a Wyoming Limited Liability
Company (“Trilosa”) which was owned by a related party. Trilosa’s sole asset was the real
property located at 717 W. 42nd Place, Los Angeles CA. Under the terms of the Trilosa Agreement, the Company acquired
100% membership interest in Trilosa for $471,000.00 (“the Purchase Price”) payable as follows: (1) subject
to a $337,167.43 first position mortgage with payment on principal balance of $337,167.43 owing to lender, Fay Servicing,
Inc., interest only from January 1, 2020 on unpaid principal at the rate of 6.85% per annum in monthly installments of $1,924.66
or more on the 1st day of each month, beginning with the first payment on the 1st day of February 2020 and
continuing until 31st day of October 2025. (2) A $133,500.00 second position note owing by Trilosa to Belladonna Lily
Investments, Inc (“Bella”), whose terms of payments due were interest only, payable from January 1, 2020 on unpaid
principal at the rate of 6.85% per annum. Interest only payable in monthly installments of $762.06 or more on the 1st day of each
month beginning on the February 1, 2020, and continuing until April 30, 2022, at which time the entire principal balance together
with any outstanding interest due thereon, shall become due and payable. Balance of purchase price paid in cash.
The
foregoing description of the acquisition of the Trilosa and the transaction contemplated thereby contained herein is qualified
in its entirety by reference to the Trilosa Closing Statement, a copy of which is attached hereto as Exhibit 10.4 and incorporated
into this Item 2.01 by reference.
(e)
On December 31, 2019, the Company acquired 100% membership interest in Boabab Investments, LLC, a Wyoming Limited Liability
Company (“Boabab”) which is owned by a related party. Boabab’s sole asset was the real property located
at 2115 Portland Street, Los Angeles CA. Under the terms of the Boabab Agreement, the Company was to acquire 100% membership interest
in Boabab for $942,000 (“the Purchase Price”) payable as follows: (1) a $ first position mortgage with payment
on principal balance of $616,899.15 owing to lender, Nexera Holding, LLC dba Newfi Lending, a Delaware Corporation. interest
only from July 1, 2019 on unpaid principal at the rate of 6.00% per annum in monthly installments of $3,721.13 or more on the
1st day of each month, beginning with the first payment on the 1st day of January 2020 and continuing
until 1st day of June 2049. Note: The initial fixed interest rate will change to an adjustable interest rate on the
1st day of June, 2024, and the adjustable interest rate may change on that day every 12th month thereafter.
The date on which the initial fixed interest rate changes to an adjustable interest rate, and each date on which my adjustable
interest rate could change. (2) A $325,000.00 second position note owing by Boabab to Belladonna Lily Investments, Inc (“Bella”),
whose terms of payments due were interest only, payable from December 31, 2019 on unpaid principal at the rate of 5.00% per annum.
Interest only payable in monthly installments of $1,354.17 or more on the 1st day of each month beginning on the 1st
day of February, 2020, and continuing until 30th day of April 2024, at which time the entire principal
balance together with any outstanding interest due thereon, shall become due and payable.
The
foregoing description of the acquisition of the Boabab and the transaction contemplated thereby contained herein is qualified
in its entirety by reference to the Boabab Closing Statement, a copy of which is attached hereto as Exhibit 10.5 and incorporated
into this Item 2.01 by reference.
The
Company intends to amend this Form 8-K to include the required Item 9.01 financial statements prepared pursuant to Rule 3-14 of
Regulation S-X relating to the acquisition of Elata, Kapok, Boabab and Trilosa, which is significant within the meaning of Rule
3-14.