FORM 7
MONTHLY PROGRESS REPORT
Name of Listed Issuer: VODIS PHARMACEUTICALS INC.(the “Issuer”).
Trading Symbol: VP
Number of Outstanding Listed Securities: 65,170,428
Date: September 30, 2015
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)
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.
(b)
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 Issuer seeks to produce and distribute cannabis product in Canada as part of the new MMPR program, and is currently awaiting a date for inspection from Health Canada to become a Licensed Producer under the new Marihuana for Medical Purposes Regulation.
The Issuer has formed a Washington State wholly owned subsidiary, Vodis USA, Inc., to invest in and develop real estate in Washington State for the purpose of serving licensed I-502 production and processing businesses. Vodis USA intends to acquire real estate, retrofit buildings and provide production ready facilities to qualified I-502 cannabis production and processing license holders. During the month of August, Vodis USA received a permit to operate from the City of Bellingham at its 17,000 square foot facility. Vodis USA has completed the installation of its air flow system and upgraded the plumbing and mechanical infrastructure.
Vodis USA previously signed a sub-lease agreement with a I-502 tenant, which will grow within that facility. Vodis USA will provide the tenant with a turnkey solution including lighting, cooling, security, and environmental controls. In addition, Vodis USA will provide the tenant, on a license basis, access to its Quality Assurance Program (QAP), Good Manufacturing Practices (GMP), Generally Accepted Agricultural Practices (GAAP), along with Vodis USA's expertise and production service. During the month of August, Vodis's I-502 tenant passed all of the 27 components of the required traceability test.
Vodis USA’s tenant has received a license from the Washington State Liquor and Cannabis Board (“WSLCB”) to begin its marijuana production and processing operations. The tenant, using the turn key indoor grow facility designed, engineered and built by the Issuer, will start production immediately and expects its first sales in January 2016.
2.
Provide a general overview and discussion of the activities of management.
Continued to wait for an inspection at its facility from Health Canada.
On September 1, 2015, the Issuer appointed Tammy Gillis, CPA, CMA as the CFO of the Issuer. Brian Gusko stepped down as CFO. Issued 200,000 stock options at a rpcie fo $0.10 per share for a period of five years in connection with the appointed.
Issued 1,135,214 common shares of the Issuer (the “Shares”) at a deemed price of $0.18 per Share to settle an aggregate of $204,338 in outstanding debt owed to insiders of the Company for accrued salary, consulting fees and loans to the Issuer. The Shares will be subject to four month hold period. This deemed price is at a 100% premium to where the stock closed on today.
Closed a non-brokered private placement for 3,409,200 units (the “Units”) for gross proceeds of $340,920. Each Unit consists of one common share of the Issuer and one common share purchase warrant (“Warrant”). Each Warrant will entitle the holder to purchase one additional common share at a price of $0.15 for 24 months. If at any time after January 16, 2016, the Company’s shares have traded for 10 consecutive trading days above $1.00, the Issuer may give an expiry acceleration notice to the holders of Warrants and, if it does so, the Warrants will, unless exercised, expire on the 30th day after the expiry acceleration notice is given. The proceeds of the private placement will be used for expansion in Washington State, USA and general working capital purposes.
The Issuer’s turnkey indoor grow facility in Washington passed the requirements of the WSLCB through its subsidiary, Vodis USA’s tenant receiving a licence to begin its marijuana production and processing operations from the WSLCB.
The Issuer, through its subsidiary, Vodis USA, has effected and signed a 25 year lease with its tenant, Our Church International, LLC, a WSLCB licensed recreational marijuana production and processing business (“OCI”). In addition to leasing the “turnkey” facility to OCI, the Issuer will also provide consulting services. Specifically, the Issuer will advise OCI on growing systems and technologies used to maximize yield and facilitate best practices relative to marijuana growing techniques. The Issuer has agreed to design and develop and lease to OCI a facility that will house the OCI “genetic library”, which will enable OCI to develop genetic-specific strains of marijuana.
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.
The Issuer entered into agreements with OCI in connection with its facility in Washington State. Please see Section 2.
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.
150,000 stock options with an exercise price of $0.60 expired unexercised during the month of September 2015.
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.
None
8.
Describe the acquisition of new customers or loss of customers.
None
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.
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.
None
14.
Provide details of any securities issued and options or warrants granted.
The Issuer issued 3,409,200 units by way of a non-brokered private placement for gross proceeds of $340,920. The Issuer granted 200,000 stock options with an exercise price of $0.10 for five years on appointment of the CFO. Please see Section 2.
15.
Provide details of any loans to or by Related Persons.
None
16.
Provide details of any changes in directors, officers or committee members.
The Issuer appointed Tammy Gillis as CFO. Please see Section 2.
17.
Discuss any trends which are likely to impact the Issuer including trends in the
Issuer’s market(s) or political/regulatory trends.
In addition to making significant investment in the application, construction and training the Issuer will be required to pass an inspection upon Health Canada’s arrival. The company cannot make any statement as to when—or if—Health Canada will arrive. The process is as follows:
Step 1: Preliminary screening Step 2: Enhanced screening Step 3: Security clearance Step 4: Review
Step 5: Ready-to-build letter Step 6: Pre-licence inspection Step 7: Licensing
Investors are advised to view the Health Canada website at: http://www.hc-sc.gc.ca/dhp-mps/marihuana/info/index-eng.php
In November 2012, the Washington State Liquor Control Board (WSLCB) passed Initiative 502 (I-502), pursuant to a vote by the people of the State of Washington. I-502 authorized the WSLCB to regulate and tax recreational marijuana products for persons over 21 years of age and thereby created a new industry for the growing, processing and selling of recreational marijuana products regulated by Washington State. A recent WSLCB-commissioned report by the Rand organization suggests that there are currently up to 700,000 recreational marijuana users in Washington State worth approximately $1.25-billion (U.S.) to $1.5-billion (U.S.) in annual sales.
In Washington State, the Issuer’s turnkey indoor grow facility in Washington passed the requirements of the WSLCB through its subsidiary, Vodis USA’s tenant receiving a licence to begin its marijuana production and processing operations from the WSLCB.
While the Issuer and its subsidiaries cannot have any interest whatsoever in any proceeds as a result of production, processing or retail activities in the United States, it can license its brand, production and consulting services to approved Washington State license holders to ensure that all products produced under the Issuers program and/or associated under the VIP brand meet or exceed the Issuers brand quality standards.
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 October 8, 2015.
Otto
Folprecht
Name of Director or Senior Officer
“Otto Folprecht”
Signature
CEO and Director
Official Capacity
Issuer Details Name of Issuer
VODIS PHARMACEUTICALS INC.
For Month End
September 2015
Date of Report YY/MM/D
15/10/08
Issuer Address
8788 River Road, Delta, BC V4G 1B4
City/Province/Postal Code
Vancouver, BC V6B 1H7
Issuer Fax No.
604 648-9568
Issuer Telephone No.
1-866-210-1420
Contact Name
Otto Folprecht
Contact Position
CEO
Contact Telephone No.
1-866-210-1420
Contact Email Address
Web Site Address
