Form 7
MONTHLY PROGRESS REPORT
October 2015
Veritas Pharma Inc. (the “Issuer”)
Name of CSE Issuer:
Trading Symbol:
Number of Outstanding Listed
Securities:
Date:
VRT
19,900,000 common shares and 8,000,000 common shares
reserved for issuance
December 30, 2015
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 Issuer continues to await Ready-to-Build approval from Health Canada as the
first step in the approval process to become a licensed producer of medical
marijuana under the Marihuana for Medical Purposes Regulations. The Issuer is
considering selling the Ready-to-Build approval and continue to invest in marijuana
based remedies through C
2.
Provide a general overview and discussion of the activities of management.
See Item 1 above.
3.
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.
None.
4.
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.
None.
5.
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.
None.
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6.
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.
None.
7.
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 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.
On December 21, 2015, the Company’s On December 21st, 2015, the Company
announced that it has entered into an amended and restated share purchase
agreement with Cannevert Therapeutics Ltd. ("CTL") (the "Agreement"). Under the
Agreement, the Company will invest a total of $1,500,000 into CTL in consideration
for 6,001 common shares of CTL (the "CTL Shares"), in six separate tranches over
the period of 15 months from the date of the Agreement (the "Private Placement"),
after which the Company will hold 80% of the total issued and outstanding CTL
Shares. The proceeds will be used for joint research with SOM to develop and
assess specific cannabis cultivars that are selective in action on specific medical
disorders. The Company advanced on December 15, 2015 the first $250,000 tranche.
In connection with the Agreement and the transactions contemplated therein, CTL,
its shareholders, and the Company will enter into a voting trust agreement (the
"Voting Agreement"). Pursuant to the Voting Agreement, the Company will grant a
representative of CTL the right to vote the CTL Shares held by the Company until
the completion of the Private Placement. CTL and the Company will jointly engage
a qualified independent business valuator on or about the date that is 18 months
from the closing of the first tranche (the "Valuation Date"), or such other date as
may be mutually agreed upon by the parties, to prepare a written report as to the
total value of CTL as of the Valuation Date.
Concurrent with the closing of the first tranche of the Private Placement, the
Company and CTL will also enter into a shareholders’ agreement, pursuant to which
the Company will, so long as it holds shares in CTL, have the right to appoint one
director to the board of CTL (the "Board"), and will, upon holding 80% of the total
issued and outstanding CTL Shares, have the right to appoint a majority of directors
to the CTL Board. Each other shareholder of CTL, except the Company, will be
granted a right for a period of 3 months following the receipt of the valuation of CTL
to give notice to the Company to require the Company to purchase the CTL Shares
that each shareholder holds.
8.
Describe the acquisition of new customers or loss of customers.
None.
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9.
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.
None.
10.
Report on any employee hirings, terminations or lay-offs with details of anticipated length
of lay-offs.
None.
11.
Report on any labour disputes and resolutions of those disputes if applicable.
None.
12.
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.
None.
13.
Provide details of any indebtedness incurred or repaid by the Issuer together with the
terms of such indebtedness.
On December 8, 2015, the Company entered into a loan agreement, as amended,
with an arm's-length lender to borrow an aggregate of $300,000. The proceeds of
the loan will be used for general working capital.
The company may, on three days notice to the lender, draw down any amount from
the loan. Each time the lender provides an advance to the company, in addition to
the advance being added as an amount owing under the loan, 15 per cent of the
advance (the bonus) shall immediately be added to the amount owing under the
loan. The parties agree that the bonus is consideration for the lender providing the
advance to the company.
There is no interest payable on the amount outstanding under the loan. The loan
and the bonus shall be repayable by the company to the lender on the earlier of: (a)
one year from the date of the first advance; and (b) the date the company first raises
capital after the execution of this agreement.
Pursuant to the agreement, the lender and the company agree that the company
may, in its sole discretion but without obligation, repay all amounts outstanding
under the loan by way of issuing common shares in its capital to the lender, at a
price per share to be determined at the time of settlement in accordance with the
applicable policies of the Canadian Securities Exchange.
The agreement and the transactions contemplated therein are subject to CSE
approval.
14.
Provide details of any securities issued and options or warrants granted.
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None.
15.
Provide details of any loans to or by Related Persons.
The Issuer entered into two separate loan agreements both dated March 10, 2015
(the "Loan Agreements") with each of Vlad Voskoboinikov ("Vlad") and a private
company controlled by Alex Polevoy ("Numco"), under which the Issuer borrowed
$100,000 from each of Vlad and Numco for an aggregate total of $200,000 (the
"Loans"). Messrs. Voskoboinikov and Polevoy are former directors of the Issuer,
and Mr. Polevoy is the former CFO of the Issuer. These Loans accrue interest at 5%
per annum, a 6-month term, and are convertible into common shares of the Issuer
at a conversion price equal to the 30-day average trading price of the shares less
20%, to a minimum of $0.10 per share.
The Issuer entered into two loan agreements dated August 14, 2015 (the “Loan
Agreements”) with each of Vlad Voskoboinikov (“Vlad”) and a private company
controlled by Alex Polevoy (“Numco”), under which the Issuer borrowed $25,000
from each of Vlad and Numco for an aggregate total of $50,000 (the “Loans”).
Messrs. Voskoboinikov and Polevoy are former directors of the Issuer, and Mr.
Polevoy is the former CFO of the Issuer. These Loans accrue interest at 5% per
annum, a 6-month term, and are convertible into common shares of the Issuer at a
conversion price equal to the 30-day average trading price of the shares less 20%,
to a minimum of $0.10 per share.
16.
Provide details of any changes in directors, officers or committee members.
Vlad Voskoboinikov and Alex Polevoy resigned as director and director and CFO
respectively on November 4, 2015. On this date Dr. Luigi Franciosi was appointed a
director and CFO of the Company. On December 7, 2015, the Len Werner resigned
as CEO and President; and Dr. Luigi Franciosi was appointed President and
Director.
17.
Discuss any trends which are likely to impact the Issuer including trends in the Issuer’s
market(s) or political/regulatory trends.
None.
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.
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3.
The undersigned hereby certifies to CSE 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 CSE Requirements (as defined in CSE Policy 1).
4.
All of the information in this Form 7 Monthly Progress Report is true.
Dated: December 30, 2015
Lui Francosi
Name of Director or Senior Officer
Signature
CEO & Director
Official Capacity
Issuer Details
Name of Issuer:
Veritas Pharma Inc.
For Month End
September 2015
Date of Report:
YYYYMMDD 2015/12/30
Issuer Fax No.:
778.262.0121
Issuer Telephone No.
778.968.6260
Contact Name:
Dr. Luigi Franciosi
Contact Position:
CEO
Contact Telephone No.
778-968.6260
Contact Email Address:
info@veritas.com
Web Site Address:
www.veritas.com
Issuer Address: 101 – 2386 East Mall,
University of British Columbia,
City/Province/Postal Code:
Vancouver, BC V6T 1Z3
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