NOTICE OF PROPOSED SIGNIFICANT TRANSACTION (not involving an issuance or potential issuance of a listed security)1
Name of Listed Issuer: THC BIOMED INTL LTD. (the “Issuer”).
Trading Symbol: THC
Issued and Outstanding Securities of the Issuer Prior to Transaction: 103,099,459 Date of News Release Fully Disclosing the Transaction: February 10, 2017
1. Transaction
1. Provide details of the transaction including the date, description and location of assets, if applicable, parties to and type of agreement (eg: sale, option, license, contract for Investor Relations Activities etc.) and relationship to the Issuer. The disclosure should be sufficiently complete to enable a reader to appreciate the significance of the transaction without reference to any other material:
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The Issuer intends to acquire all or substantially all of the assets of Clone Shipper LLC (the “Clone Shipper Business”) for consideration of USD $1,000,000. This is an arm’s length transaction. The Issuer intends to purchase the assets with the USD $1,000,000 and then carry on the Clone Shipper Business in Canada, the U.S. and worldwide.
Clone Shipper is a private company engaged in the business of manufacturing, selling and distribution containers for the shipping of live plants. Clone Shipper is a U.S. based company, specializing in packaging products for the transport of living marijuana plants. The Issuer is currently the exclusive Canadian distributor for Clone Shipper products and is now buying Clone Shipper itself.
The Issuer has created a new subsidiary for the acquisition of the Clone Shipper Business and following the closing of the acquisition, the Issuer intends to operate the Clone Shipper Business through that wholly-owned subsidiary.
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Clone Shipper products are available for sale through www.thcbiomed.com or www.cloneshipperunit.com. They are also available for purchase at gardening supply outlets throughout the U.S. and Amazon.com.
On February 7, 2017, The Issuer and Clone Shipper entered into a purchase agreement, pursuant to which, The Issuer intended to acquire all of the issued and outstanding securities of Clone Shipper. Pursuant to a review of the applicable laws and regulations, especially those regarding intellectual property, the parties agreed to complete the transaction through the purchase by the Issuer of all or substantially all of the assets of CloneShipper.
The main assets to be purchased in this transaction are as follows:
United States Utility Continuation in Part Patent Application- Status: Pending
Title: CONSTANT ILLUMINATED TAMPER-RESISTANT PLANT SHIPPING CONTAINER
Filing Date: November 14, 2016 Assignee: CLONESHIPPER, LLC Application No: 15/351,179 Attorney File No: FENL 101CIP
PCT Application
Status: Entered National Stage in Europe and Canada (see below applications)
Title: CONSTANT ILLUMINATED TAMPER-RESISTANT PLANT SHIPPING CONTAINER
Filing Date: May 4, 2015
Application No: PCT/US15/29032
Applicant: CLONESHIPPER, LLC
Attorney File No: FENL 101PCT
European Patent Application
Status: Pending, waiting for Request for Examination EP Serial Number: EP-21086950
Applicant: CLONESHIPPER, LLC
File No: FENL 101PCT-EU
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Canadian Patent Application
Status: Pending, waiting for Request for Examination Serial Number: 2,947,752
Applicant: CLONESHIPPER, LLC
File No: FENL 101PCT-CA
United States Design Patent Application Status: Pending
Title: Plant Shipping Container Lid Application Filing Date: February 16, 2017 Assignee: CLONESHIPPER, LLC Application No: 29/594,225
Attorney File No: FENL 104D
United States Trademark Application Mark: CLONESHIPPER
Serial Number: 87/361798
Applicant: CLONESHIPPER, LLC Status: Pending
Domain www.cloneshipperunit.com Domain www.cloneshipper.com
To facilitate this transaction, the Issuer has borrowed CAD $1,000,000 as a short-term loan.
2. Provide the following information in relation to the total consideration for the transaction (including details of all cash, non-convertible debt securities or other consideration) and any required work commitments:
(a) Total aggregate consideration in Canadian dollars: $1,366,220 .
(b) Cash: $1,366,220 .
(c) Other: None .
(d) Work commitments: None .
3. State how the purchase or sale price and the terms of any agreement were determined (e.g. arm’s-length negotiation, independent committee of the Board, third party valuation etc).
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Arm’s-length negotiation
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4. Provide details of any appraisal or valuation of the subject of the transaction known to management of the Issuer:
Management reviewed the assets, financial statements and a valuation report from Clone Shipper. Management has also evaluated the business of Clone Shipper and the potential markets in Canada and the U.S. for its products.
5. If the transaction is an acquisition, details of the steps taken by the Issuer to ensure that the vendor has good title to the assets being acquired:
The good title of Clone Shipper to the Assets has been independently verified by the Issuer and also warranted by Clone Shipper and confirmed by its counsel.
6. Provide the following information for any agent’s fee, commission, bonus or finder’s fee, or other compensation paid or to be paid in connection with the transaction (including warrants, options, etc.):
(a) Details of any dealer, agent, broker or other person receiving compensation in connection with the transaction (name, address. If a corporation, identify persons owning or exercising voting control over 20% or more of the voting shares if known to the Issuer): None.
(b) Cash None.
(c) Other None.
7. State whether the vendor, sales agent, broker or other person receiving compensation in connection with the transaction is a Related Person or has any other relationship with the Issuer and provide details of the relationship. N/A
8. If applicable, indicate whether the transaction is the acquisition of an interest in property contiguous to or otherwise related to any other asset acquired in the last 12 months. N/A .
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2. Development
Provide details of the development. The disclosure should be sufficiently complete to enable a reader to appreciate the significance of the transaction without reference to any other material:
In November, 2016, the Issuer became the exclusive Canadian distributor of Clone Shipper and its patented container for the shipping of live cannabis clones. In January 2017, the Issuer began shipping live cannabis clones across Canada to ACMPR registered patients and announced its pricing and details regarding the cannabis clones that it offers. In February 2017, the Issuer announced its agreement to purchase Clone Shipper. Through its experience with Clone Shipper as its exclusive Canadian distributor and its current business, which requires using and offering containers for shipping cannabis clones, the Issuer believes that the addition of Clone Shipper to its existing business is a natural and complementary progression of its business as a Licenced Producer under Canada’s ACMPR.
3. Certificate Of Compliance
The undersigned hereby certifies that:
1. The undersigned is a director and/or senior officer of the Issuer and has been duly authorized by a resolution of the board of directors of the Issuer to sign this Certificate of Compliance.
2. To the knowledge of the Issuer, at the time an agreement in principle was reached, no party to the transaction had knowledge of any undisclosed material information relating to the Issuer, other than in relation to the transaction.
3. As of the date hereof there is no material information concerning the Issuer which has not been publicly disclosed.
4. The undersigned hereby certifies to the Exchange that the Issuer is in compliance with the requirements of applicable securities legislation (as such term is defined in National Instrument 14-101) and all Exchange Requirements (as defined in CNSX Policy 1).
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5. All of the information in this Form 10 Notice of Proposed Significant Transaction is true.
Dated May 2, 2017.
John Miller
Name of Director or Senior Officer
/s/ John Miller Signature
President and director Official Capacity
