FORM 7 MONTHLY PROGRESS REPORT Name of Listed Issuer: Gunpowder Capital Corp. (the Issuer ). Trading Symbol: GPC & GPC.PR.A Number of Outstanding Listed Securities: (As At November 1 st, 2018) 35,095,084 Common Shares, 473,020 Class - A Preferred Shares, 33,550 Class-B Preferred Shares Date: November 1 st, 2018 This Monthly Progress Report must be posted before the opening of trading on the fifth trading day of each month. This report is not intended to replace the Issuer s obligation to separately report material information forthwith upon the information becoming known to management or to post the forms required by Exchange Policies. If material information became known and was reported during the preceding month to which this report relates, this report should refer to the material information, the news release date and the posting date on the Exchange website. This report is intended to keep investors and the market informed of the Issuer s ongoing business and management activities that occurred during the preceding month. Do not discuss goals or future plans unless they have crystallized to the point that they are "material information" as defined in the Policies. The discussion in this report must be factual, balanced and non-promotional. General Instructions (a) (b) Prepare this Monthly Progress Report using the format set out below. The sequence of questions must not be altered nor should questions be omitted or left unanswered. The answers to the items must be in narrative form. State when the answer to any item is negative or not applicable to the Issuer. The title to each item must precede the answer. The term Issuer includes the Issuer and any of its subsidiaries. (c) Terms used and not defined in this form are defined or interpreted in Policy 1 Interpretation and General Provisions. Report on Business 1. Provide a general overview and discussion of the development of the Issuer s business and operations over the previous month. Where the Issuer was inactive disclose this fact. The Corporation is a Merchant Bank which offers Debt financing (Mezzanine, Bridge, Convertible Debentures, and Loans), Equity financing and Advisory services to its clientele. For the month stated in this report, Page 1
the Corporation continued its business development objectives of attracting new clientele and raising the Corporation s corporate brand awareness to the market and to potential new clientele. 2. Provide a general overview and discussion of the activities of management. The Management Team continued its corporate and business development endeavours as stated in point #1 of this form. Furthermore, in the month stated in this report, the Corporation s Management Team completed the following transactions as stated, and as outlined below: October 24 th, 2018 Gunpowder Capital announced that it s investee company, BitBlox Technologies Inc., ( BitBlox ), a leading-edge cryptocurrency technology company, that focuses on both the mining of cryptocurrencies and the development of next generation cryptocurrency technologies, has secured its primary hosting facility located in the Province of Quebec. Gunpowder Capital Corp., has increased its stake in BitBlox by loaning BitBlox Forty Thousand Dollars ( $40,000.00 ) CDN at a rate of Eighteen Percent (18%) per annum. The loan has a term of Eighteen Months. Furthermore, as part of the terms of the loan agreement, BitBlox has issued Five Million ( 5,000,000 ) Common Shares of BitBlox to Gunpowder Capital Corp. As of the date of this press release, the issuance of the 5,000,000 BitBlox Common Shares to Gunpowder, has increased Gunpowder s holdings in Bitblox to Fifteen Million ( 15,000,000 ) Common Shares which represents approximately an 19% ownership stake in the entity. October 17 th, 2018 Gunpowder Capital announced that it had closed the first and final tranche of its previously announced non-brokered private placement raise. In total One Hundred and Fifty-Four Thousand, Two Hundred and Forty-One Dollars ( $154,241,00 ) CDN was raised in this tranche via the sale of Three Million, Eighty-Four Thousand, Eight Hundred and Twenty-Eight ( 3,084,828 ) Units at a price of Five Cents ( $0.05 ) CDN per Unit. Each unit is comprised of one common share of the Corporation, and one common share purchase warrant. This placement was previously announced, via press release, back on August 24th, 2018. Each whole warrant entitles the holder to acquire one common share of the Corporation for Seven and a Half Cents ( $0.075 ) CDN for a period of 24 months from the closing date. All common shares issued in connection with this placement will be subject to a four month plus one day hold period under applicable Canadian securities laws. In connection with the closing of this private placement offering, Gunpowder Capital Corp., paid a finder's fee totaling Twelve Thousand, Three Hundred and Thirty-Nine Dollars ( $12,339.00 ) CDN in connection with certain subscriptions for the Corporation s Units. The Corporation also announced today that it has conducted, and that it has closed, a non-brokered private placement raise where Fifty-Seven Thousand, Five Hundred Dollars ( $57,500.00 ) CDN was raised by issuing Five Thousand Seven Hundred and Fifty ( 5,750 ) of the Corporation s Class A Preferred Shares at a price of $10.00 CDN per Page 2
share. The Class - A Preferred Shares will pay up to an 8% annual dividend to the holders of the preferred shares. The shareholders of the Class A Preferred Shares will also see a 25% of after tax realized gains on any capital dispositions. No special voting rights will be granted to the holders of the Class- A Preferred Shares. In connection with the closing of this Class - A Preferred Shares private placement offering, Gunpowder Capital Corp., paid a finder's fee totaling Four Thousand, Six Hundred Dollars ( $4,600.00 ) CDN in connection with certain subscriptions for the Corporation s this Class - A Preferred Shares. The Corporation has entered into a debt settlement agreement where the Corporation will issue Five Hundred Thousand ("500,000") common shares at a deemed price of Five Cents ( $0.05 ) CDN per common share, to settle Twenty-Five Thousand Dollars ( $25,000.00 ) CDN of debt due to one creditor. All shares issued in the debt settlement agreement will be subject to a four month plus one day hold period under applicable Canadian securities laws. All proceeds from the two financings will be used for general working capital purposes. As of the date of issuance of this press release, the Corporation now has 35,095,084 common shares outstanding and 473,020 Class A Preferred shares outstanding. October 11 th, 2018 Gunpowder Capital announced that Viribus Structural Connectors Inc., ( Viribus ) had retained Gunpowder to act as financial advisor to Viribus and to assist Viribus in its proposed go public transaction. As compensation to Gunpowder for the services Gunpowder will provide Viribus in both the financial advisory and go public endeavors, Viribus will immediately pay Gunpowder a one-time advisory fee of Thirty Thousand Dollars ( $30,000.00 ) CDN. In addition, Viribus will also issue Two Hundred Thousand Dollars ( $200,000.00 ) CDN worth of Viribus Common Shares to Gunpowder. The Viribus Common Shares shall be issued to Gunpowder upon completion of Viribus being listed onto a Canadian based Stock Exchange. October 10 th, 2018 Gunpowder Capital announced that the Corporation s wholly owned subsidiary, GP Financial Services Corp., had acquired Alpha Invoice Inc. ( Alpha ) an online portal providing short term financing solutions to business by factoring invoices. Alpha has an existing customer base and had unaudited revenues of approximately Three Hundred Thousand Dollars ( $300,000.00 ) CDN last year. Total consideration paid for this acquisition was Five Thousand Dollars ( $5,000.00 ) CDN. October 9 th, 2018 Gunpowder Capital announced that it had acquired Six Hundred and Fifty-Eight Thousand, One Hundred and Eighty-Two ( 658,182 ) Units of Harbour Star Capital Inc., dba EastWest Biosciences (TSX.V: EAST), ( Harbour Star ). As At the date of this press release, and due to the completion of this announced transaction, Gunpowder in total now owns Seven Hundred and Seventy-Four Thousand, Eight Hundred and Page 3
Forty-Nine ( 774,849 ) Common Shares of Harbour Star. The Units were issued to Gunpowder at a price of Twenty-Seven and a Half Cents ( $0.275 ) CDN per Unit. Each Unit that Gunpowder acquired consists of one Common Share of Harbour Star and one-half of one Common Share Purchase Warrant of Harbour Star. Each whole Warrant shall entitle Gunpowder the ability to acquire one additional Common Share at a price of Fifty Cents ( $0.50 ) CDN per Common Share for a period of 12 months from the date of issuance, subject to an acceleration clause whereby if, following the Closing Date, the 10-day volume weight average trading price of the Common Shares of the Corporation on the principal market on which such shares trade is equal to or exceeds Seventy-Five Cents ( $0.75 ) CDN. On October 4th, 2018 Harbour Star announced, via press release, that it had closed a private placement offering of which the units issued to Gunpowder were part of that offering. The Corporation acquired the Units by retiring the remaining principle amount of One Hundred and Eighty-One Thousand Dollars ( $181,000.00 ) CDN that EastWest Biosciences owed Gunpowder via a secured promissory note. The note was previously secured by a 2nd Mortgage charge in favor of Gunpowder on a building owned by EastWest Biosciences. Gunpowder has removed the 2 nd Mortgage on the aforementioned property. Describe and provide details of any new products or services developed or offered. For resource companies, provide details of new drilling, exploration or production programs and acquisitions of any new properties and attach any mineral or oil and gas or other reports required under Ontario securities law. 3. Describe and provide details of any products or services that were discontinued. For resource companies, provide details of any drilling, exploration or production programs that have been amended or abandoned. 4. Describe any new business relationships entered into between the Issuer, the Issuer s affiliates or third parties including contracts to supply products or services, joint venture agreements and licensing agreements etc. State whether the relationship is with a Related Person of the Issuer and provide details of the relationship. For complete details, please refer to the disclosure dated October 11 th, 2018 in section #2 above. 5. Describe the expiry or termination of any contracts or agreements between the Issuer, the Issuer s affiliates or third parties or cancellation of any financing arrangements that have been previously announced. 6. Describe any acquisitions by the Issuer or dispositions of the Issuer s assets that occurred during the preceding month. Provide details of the nature of the assets Page 4
acquired or disposed of and provide details of the consideration paid or payable together with a schedule of payments if applicable, and of any valuation. State how the consideration was determined and whether the acquisition was from or the disposition was to a Related Person of the Issuer and provide details of the relationship. 7. For complete details, please refer to the disclosure dated October 10 th, 2018 in section #2 above. 8. Describe the acquisition of new customers or loss of customers. Describe any new developments or effects on intangible products such as brand names, circulation lists, copyrights, franchises, licenses, patents, software, subscription lists and trade-marks. 9. Report on any employee hirings, terminations or lay-offs with details of anticipated length of lay-offs. 10. Report on any labour disputes and resolutions of those disputes if applicable. 11. Describe and provide details of legal proceedings to which the Issuer became a party, including the name of the court or agency, the date instituted, the principal parties to the proceedings, the nature of the claim, the amount claimed, if any, if the proceedings are being contested, and the present status of the proceedings. 12. Provide details of any indebtedness incurred or repaid by the Issuer together with the terms of such indebtedness. 13. Provide details of any securities issued and options or warrants granted. For The Month Stated In This Report Security Number Issued Details of Issuance Use of Proceeds (1) Units 3,084,828 $154,241,00 CDN raised Working Capital via the issuance of 3,084,828 Units issued @ $0.05 per unit Preferred Shares 5,750 57,500.00 CDN raised via the issuance of 5,750 Class A shares @ $10.00 per share Working Capital (1) State aggregate proceeds and intended allocation of proceeds. Page 5
14. Provide details of any loans to or by Related Persons. 15. Provide details of any changes in directors, officers or committee members. 16. Discuss any trends which are likely to impact the Issuer including trends in the Issuer s market(s) or political/regulatory trends. 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. As of the date hereof there were is no material information concerning the Issuer which has not been publicly disclosed. 3. 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). 4. All of the information in this Form 7 Monthly Progress Report is true. Dated: November 1 st, 2018. Frank Kordy Name of Director or Senior Officer /s/ Frank Kordy Signature CEO, Secretary & Director Official Capacity Issuer Details Name of Issuer Gunpowder Capital Corp. Issuer Address 8 King Street East, Suite 1005 For Month End October Date of Report YY/MM/DD 2018/11/01 Page 6
City/Province/Postal Code Issuer Fax No. Issuer Telephone No. Toronto / Ontario / M5C 1B5 Contact Name Frank Kordy Contact Email Address frank.kordy@gunpowdercapitalcorp.com ( N/A ) (647) 466-4037 Contact Contact Telephone No. Position CEO (647) 466-4037 Web Site Address www.gunpowdercapitalcorp.com Page 7