ITEM 2.01 Completion
of Acquisition or Disposition of Assets
Reference is made
to the disclosure in Item 1.01. On May 13, 2020, the Exchange was consummated.
Background
As an interim step
to assure the acquisition of GPS by MYHI, pursuant to an Exchange Agreement dated as April 10, 2020 between Trilogy and the shareholders
of GPS (the "GPS/Trilogy Transaction"), Trilogy purchased all of the capital stock of GPS for $300,000 and 5,000,000
shares of the common stock of MYHI (subject to adjustment based on the future value of the MYHI shares and the EBITDA of GPS).
The 5,000,000 shares were to be delivered to the GPS shareholders upon the consummation of the Exchange referred to in Item 1.01.
Subsequent to the closing of the GPS/Trilogy Transaction, Trilogy provided financing to GPS for the acquisition of equipment and
the purchase of raw material inventories. Among other things, the financing enabled GPS to increase its revenues from the sale
of hand sanitizers as discussed below under "Description of GPS" which in turn increased the valuation of GPS used by
MYHI in its purchase of GPS.
Description of GPS
GPS
is a California based company engaged in the formulation, manufacturing, branding, fulfillment and distribution of hemp-derived
CBD products at its cGMP, FDA-registered facility in Santa Ana, California. GPS's team of professionals includes physiologists,
chemists, herbalists and botanists committed to combining high-quality organic CBD with
synergistic organic, raw herbs to produce pure, premium consumer products. All products manufactured
by GPS are tested at independent, third party laboratories to prove potency and purity.
GPS's continually
expanding product offering is sold directly to consumers online as well as through wholesale partners (both online and brick and
mortar stores) under its retail brand name, Zen Drops. The product offering includes tinctures, salves, gummies, transdermal patches
and oral thin films.
However, GPS's primary
focus is manufacturing products for its white label clients nationwide. In this regard, GPS acts as a contract manufacturer. The
labeling is with the client company's logo and branding and sold through the client's channels to its customers.
The GPS product development
team blends organic raw herbs with CBD isolate and CBD distillate extracted from organically grown hemp to ensure safety, potency
and purity. Also, the graphic design team creates logos, labels and other marketing assets to assist its white-label clients,
the objective being to provide the client’s CBD brand with maximum visual impact in the market.
Once a white
label client has approved the custom formulation and branded art work developed by GPS, the client’s new CBD product
goes into production at GPS’s facility. All batches come with a certificate of analysis of the cannabinoid breakdown
from a third-party testing facility. After testing, the products are bottled, capped, sealed and labeled with the
client’s custom labels. The entire order is then packed and shipped to the white label client.
To meet the demand
created by the Coronavirus pandemic, GPS has expanded its operations to produce medical grade, alcohol-based hand sanitizer - proven
to be 99.9% effective against germs. Additional production and bottling equipment has been acquired to rapidly expand GPS’s
manufacturing capacity for this product line. The hand sanitizer line is formulated to include powerful botanical constituents
such as red thyme oil, which has exceptional antiviral, antimicrobial and antiseptic properties.