Subsequent Events
Share Exchange
On August 15, 2017, the Company entered into a share exchange agreement (SEA) under which it will acquire 100
percent of the issued and outstanding securities of 10161233 Canada Ltd. (“SpeakEasy”), a federally incorporated
private entity. that has submitted an application for a license to produce under the Access to Cannabis for Medical
Purposes Regulations (Canada). Pursuant to the SEA, the Company will acquire 100% of the issued and outstanding
securities of the SpeakEasy as well as the 290 acre property to which the SpeakEasy’s ACMRP license application
relates for aggregate consideration of $2,000,000 payable in cash, which will be paid to the landowners, and the issuance
of twelve million common shares to the shareholders of the SpeakEasy pro rata (the “Transaction”).
When the application is approved by Health Canada and a license to cultivate is granted, the Company will issue a further six million shares to Marc Geen, a founder, President and Director of SpeakEasy, and one million shares to Anthony Jackson, the finder
for the Transaction. Additionally when the sales license is granted by Health Canada, the Company will issue four million
shares to Marc Geen and one million shares to Anthony Jackson. Additionally, Marc Geen shall be appointed to the
Board of Directors of the Resulting Issuer and as its President and CEO and Merv Geen, a founder and director of
SpeakEasy will be appointed as the chairman of the Board of Directors. The other members of the Board of Directors of
the Resulting Issuer will be Alexander Kaulins, Anthony Jackson, who will also be appointed as CFO and Jeremy Ross,
who will act as corporate secretary.
Financing
The Company completed a private placement offering of 22,543,350 units for gross proceeds of $11,271,675 at a price
of $0.50 per unit. Each unit consists of one common share and one-half of one common share purchase warrant. Each
full warrant entitles the holder to purchase an additional common share at the price of $1.00 per share for a period of twelve months from the closing of the Transaction. Following the completion of the Transaction, in the event that the closing price of the Resulting Issuer’s common shares is at or above $1.50 per share for a period of 10 consecutive
trading dates, the Resulting Issuer will have the option to provide notice to the warrant holders in writing or via press
release to accelerate the expiry date of the warrants to a date that is 30 days following the date such notice is provided.
