FORM 9. NOTICE OF PROPOSED ISSUANCE OF LISTED SECURITIES (or securities convertible or exchangeable into listed securities)

Transcription

1 FORM 9 NOTICE OF PROPOSED ISSUANCE OF (or securities convertible or exchangeable into listed securities) Please complete the following: Name of CNSX Issuer: Wildflower Marijuana Inc. (the Issuer ). Trading Symbol: SUN. Date: May 24,. Is this an updating or amending Notice: XX Yes No If yes provide date(s) of prior Notices: April 17, and April 18. Issued and Outstanding Securities of Issuer Prior to Issuance: 61,211,929. Date of News Release Announcing Private Placement: March 19,. Closing Market Price on Day Preceding the Issuance of the News Release: $ Private Placement (if shares are being issued in connection with an acquisition (either as consideration or to raise funds for a cash acquisition), proceed to Part 2 of this form) Full Name & Residential Address of Placee Number of Securities Purchased or to be Purchased Purchase price per Security (CDN$) Conversion Price (if Applicable) Prospectus Exemption No. of Securities, directly or indirectly, Owned, Controlled or Directed Date(1) Describe relations -hip to Issuer (2) Stefan Smith 76,923 $1.30 n/a 101,149 Kenneth Young 76,000 $1.30 n/a 158,796 April 5, Qi Li 74,000 $1.30 n/a 74,000 April 5, Angelo Viani 69,230 $1.30 n/a 130,000 April 3, Page 1

2 Kale Roth 800 $1.30 n/a 700 Faith Hallett 800 $1.30 n/a 700 Jay Sinner 1,600 $1.30 n/a 1,400 Thorfin Nordli 800 $1.30 n/a 700 Brandy Leah Christianson 800 $1.30 n/a 700 Luciano Bosa 86,538 $1.30 n/a Alfredo Baldissera 230,769 $1.30 n/a BC Ltd. 86,538 $1.30 n/a Allan Tsang 16,153 $1.30 n/a 14,000 Norma Bebluk Robert Bebluk Peter Boeda Jay Bowerman Daria Dusman Charles and Helen Smith 2017 joint partner Trust Anthony Ganaye Bruce Mathers 13,500 $1.30 n/a 13,500 $1.30 n/a 11,500 $1.30 n/a 9,000 $1.30 n/a 12,000 $1.30 n/a 15,000 $1.30 n/a 7,500 $1.30 n/a 12,000 $1.30 n/a Page 2 150, ,400 16,500 9,000 62,500 15,000 7,500 16,000

3 Brenda Mathers 12,000 $1.30 n/a D. Bosa Land Corporation 153,000 $1.30 n/a Jack Yi Feng Lu Andrea Roth Christopher Quilley Patrick Melia Philip Ker Glen Kirkpatrick Christian Marriott Andrew Bousbouras Steve Jeske Steve Triance Todd Avison Omar Meghji Andrew Lawrence Lica Chui, MD Inc. 11,200 $1.30 n/a 4,000 $1.30 n/a 27,200 $1.30 n/a 6,000 $1.30 n/a 6,000 $1.30 n/a 3,000 $1.30 n/a 4,600 $1.30 n/a 20,000 $1.30 n/a 270,000 $1.30 n/a 6,600 $1.30 n/a 5,000 $1.30 n/a 50,000 $1.30 n/a 1,872 $1.30 n/a 285,000 $1.30 n/a 15,000 1,603,600 11,200 4,000 27,200 6,000 6,000 3,000 4,600 20,000 6,600 40, ,000 9, ,000 Family Page 3

4 Peter Winckler 10,000 $1.30 n/a 10,000 Nicholas Oja 30,769 $1.30 n/a 30,769 Fiona Li 7,692 $1.30 n/a 7,692 Dr. Catherine C.M. Hui Inc. 8,076 $1.30 n/a 38,076 Wendy Wong 13,999 $1.30 n/a 13,999 Lica Chui 215,000 $1.30 n/a 233,930 Timothy P. Lo 500,000 $1.30 n/a 869,600 Anne Tumbaga 3,800 $1.30 n/a 3,800 Apr. 17, Allan C. Kirschner 30,000 $1.30 n/a 380,000 Apr. 17, Daniel Caverly 10,000 $1.30 n/a 17,500 Apr. 17, Daniel Petrov Khaleel Meghji Andrew Semuschak 770,000 $1.30 n/a 40,000 $1.30 n/a 7,700 $1.30 n/a 2,103, ,000 7,700 Deposit Deposit April 9, Family TOTAL 3,327,459 (1) Indicate date each placee advanced or is expected to advance payment for securities. Provide details of expected payment date, conditions to release of funds etc. Indicate if the placement funds been placed in trust pending receipt of all necessary approvals. (2) Indicate if Related Person. Page 4

5 1 An issuance of non-convertible debt does not have to be reported unless it is a significant transaction as defined in Policy 7, in which case it is to be reported on Form Total amount of funds to be raised: $4,325, Provide full details of the use of the proceeds. The disclosure should be sufficiently complete to enable a reader to appreciate the significance of the transaction without reference to any other material. The proceeds shall be used by the Company for the acquisition of various California cannabis licenses and for general working capital. 3. Provide particulars of any proceeds which are to be paid to Related Persons of the Issuer: None. 4. If securities are issued in forgiveness of indebtedness, provide details and attach the debt agreement(s) or other documentation evidencing the debt and the agreement to exchange the debt for securities. 5. Description of securities to be issued: (a) Class Common. (b) Number 3,327,459. (c) Price per security $1.30. (d) Voting rights One vote per share. 6. Provide the following information if Warrants, (options) or other convertible securities are to be issued: (a) Number 1,663,730 (b) Number of securities eligible to be purchased on exercise of Warrants (or options) 1,663,730.. (c) Exercise price $2.50. (d) Expiry date One year from the date of issue. Page 5

6 7. Provide the following information if debt securities are to be issued: (a) Aggregate principal amount $2,500,000. (b) (c) (d) (e) Maturity date Two years from the closing date. Interest rate 8.5% per annum. Conversion terms Convertible into units of the Company at a price of $1.30 per unit anytime for a period of two years. Each unit will consist of one common share and one half of one share purchase warrant. Each whole warrant is exercisable for until 2 years from the date of issue of the debenture at a price of $2.50. If at any time after the date that is four months plus a day after the closing date, the daily volume weighted average trading price of the common shares is greater than $3.50 per share for any 20 consecutive trading days, the Issuer may, at its option, convert the Debentures at the Conversion Price by giving notice to the holders thereof and in such case the Debentures will be converted on the date which is the earlier of (i) the 30 th day after the date of which such notice is given by the Issuer; and (ii) the Maturity Date. Default provisions: (a) (b) Non-Compliance: the Company fails to observe or perform one or more material covenants, agreements, conditions or obligations in favour of the Debentureholder, including a failure to pay any or all of the Principal Amount, interest and other monies due under the Debenture when due, and such failure continues unremedied for a period of 15 days after the Debentureholder gives notice thereof to the Company; Ceasing to Carry on Business: the Company to carry on business; (c) Bankruptcy or Insolvency: the Company becomes insolvent or makes a voluntary assignment or proposal in bankruptcy or otherwise acknowledges its insolvency, or a bankruptcy petition is filed or presented the Company, or the Company commits or threatens to commit an act of bankruptcy; (d) (e) (f) (g) Receivership: a receiver or receiver manager of the Company is appointed under any statute or pursuant to any document issued by the Company; Compromise or Arrangement: any proceedings with respect to either of the Company are commenced under the compromise or arrangement provisions of the Corporations statute pursuant to which the Company is governed, or the Company enters into an arrangement or compromise with any or all of its creditors pursuant to such provisions or otherwise; Companies' Creditors Arrangement Act: any proceedings with respect to the Company are commenced in any jurisdiction under the Companies' Creditors Arrangement Act (Canada) or any similar legislation; and Liquidation: an order is made, a resolution is passed, or a petition is filed, for the liquidation, dissolution or winding-up of the Company. Page 6

7 . 8. 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 placement (including warrants, options, etc.): (a) Details of any dealer, agent, broker or other person receiving compensation in connection with the placement (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): PI Financial Corp Burrard Street, Vancouver, BC, V6C 3N1; Canaccord Denuity Corp. 609 Granville Street, Vancouver, BC, V7Y 1H2; Odlum Brown Limited, Howe Street, Vancouver, BC, V6C 3S9; Andrew Lawrence, th Avenue West, Suite 103, Vancouver, BC, V6J 5G3. (b) (c) Cash PI $30,754; Canaccord - $35,000; Odlum - $9,646; Andrew $2,433. Securities PI - 23,580 Broker Warrants; Odlum 7,420 Broker Warrants. (d) Other. (e) Expiry date of any options, warrants etc. One year from the date of issue. (f) Exercise price of any options, warrants etc. $ State whether the sales agent, broker, dealer or other person receiving compensation in connection with the placement is Related Person or has any other relationship with the Issuer and provide details of the relationship No other relationship with the agents. 10. Describe any unusual particulars of the transaction (i.e. tax flow through shares, etc.). None. 11. State whether the private placement will result in a change of control. No. 12. Where there is a change in the control of the Issuer resulting from the issuance of the private placement shares, indicate the names of the new controlling shareholders. Page 7

8 . 13. Each purchaser has been advised of the applicable securities legislation restricted or seasoning period. All certificates for securities issued which are subject to a hold period bear the appropriate legend restricting their transfer until the expiry of the applicable hold period required by Multilateral Instrument Acquisition 1. Provide details of the assets to be acquired by the Issuer (including the location of the assets, if applicable). The disclosure should be sufficiently complete to enable a reader to appreciate the significance of the transaction without reference to any other material: On March 14,, the Issuer entered into a letter of intent with a California company to purchase 15 cannabis licenses for retail storefront and delivery, indoor cultivation, manufacture and distributor for each of adult use and medical and for each of the City of Los Angeles and the State of California. The acquisition includes a property in Los Angeles with an operating cannabis retail store and cultivation facility and all the fixtures and equipment associated with the dispensary and cultivation operation. 2. Provide details of the acquisition including the date, parties to and type of agreement (eg: sale, option, license etc.) and relationship to the Issuer. The disclosure should be sufficiently complete to enable a reader to appreciate the significance of the acquisition without reference to any other material: On March 14,, the Issuer entered into a letter of intent with a California company which will be superseded by a final agreement with certain vendors for the purchase 15 cannabis licenses for retail storefront and delivery, indoor cultivation, manufacture and distributor for each of adult use and medical and for each of the City of Los Angeles and the State of California. The acquisition includes a property in Los Angeles with an operating cannabis retail store and cultivation facility and all the fixtures and equipment associated with the dispensary and cultivation operation. The transaction is an arm s length transaction, 3. Provide the following information in relation to the total consideration for the acquisition (including details of all cash, securities or other consideration) and any required work commitments: (a) Total aggregate consideration in Canadian dollars: approx.. CAN$12,520,000. (b) Cash: US$9,250,000 approx. CAN$12,000,000. Page 8

9 (c) Securities (including options, warrants etc.) and dollar value: 400,000 common shares Iest. Value CAN$520,000). (d) Other: N/A. (e) Expiry date of options, warrants, etc. if any: N/A. (f) Exercise price of options, warrants, etc. if any: N/A. (g) Work commitments: N/A. 4. State how the purchase or sale price was determined (e.g. arm s-length negotiation, independent committee of the Board, third party valuation etc). 5. The sale price was an arm s length negotiation between issuer management and the vendor. 6. Provide details of any appraisal or valuation of the subject of the acquisition known to management of the Issuer. The Issuer is aware of various cannabis licenses for sale in both the City of Los Angeles and the State of California and the purchase price was consistent with this pricing. To date, no one has seen this number of licenses for sale by one party. 7. The names of parties receiving securities of the Issuer pursuant to the acquisition and the number of securities to be issued are described as follows: Name of Party (If not an individual, name all insiders of the Party) Maria and Juan Comacho Number and Type of Securities to be Issued 400,000 common shares Dollar value per Security (CDN$) Conversion price (if applicable) Prospectus Exemption $1.30 N/A NI , s.2.12 No. of Securities, directly or indirectly, Owned, Controlled or Directed by Party Nil Describe relationship to Issuer (1) Arm s length (1) Indicate if Related Person 8. Details of the steps taken by the Issuer to ensure that the vendor has good title to the assets being acquired: The Issuer has retained California counsel who is knowledgeable about the cannabis industry and regulations to conduct Page 9

10 the due diligence. Further, management of the Issuer has spent considerable time with the vendors at their retail location reviewing operations and financial situation. 9. 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 acquisition (including warrants, options, etc.): (a) (b) (c) (d) (e) (f) Details of any dealer, agent, broker or other person receiving compensation in connection with the acquisition (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): Green Life Business, a broker for cannabis businesses for sale based in California. Cash US$950,000 10% (est. CAN$1,235,000). Securities N/A. Other N/A. Expiry date of any options, warrants etc. N/A. Exercise price of any options, warrants etc. N/A. 10. State whether the sales agent, broker or other person receiving compensation in connection with the acquisition is a Related Person or has any other relationship with the Issuer and provide details of the relationship. party. 11. If applicable, indicate whether the acquisition is the acquisition of an interest in property contiguous to or otherwise related to any other asset acquired in the last 12 months. Not applicable. 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 on behalf of the Issuer. 2. As of the date hereof there is not material information concerning the Issuer which has not been publicly disclosed. 3. The undersigned hereby certifies to CNSX that the Issuer is in compliance with the requirements of applicable securities legislation (as such term is Page 10

11 defined in National Instrument ) and all CNSX Requirements (as defined in CNSX Policy 1). 4. All of the information in this Form 9 Notice of Private Placement is true. Dated May 24, William MacLean Name of Director or Senior Officer Signed William MacLean Signature Chief Executive Officer Official Capacity Page 11