FORM 7
MONTHLY PROGRESS REPORT
Name of CNSX Issuer: MARAPHARM VENTURES INC. (the “Issuer”).
Trading Symbol: MDM
Number of Outstanding Listed Securities: 38,032,573 Date: April 5, 2016
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 the CNSX 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 CNSX.ca 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 CNSX 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 is a public Company established to invest in emerging markets in the medical and recreational marijuana industry. The business model if to apply for and purchase licenses and facilities in strategic locations. The Issuer intends to create a global entity by pursuing commercial venture in the medical marijuana
business. Pursuant to the share exchange agreement, the Issuer acquired all of the issued and outstanding shares of Marapharm Inc. Marapharm Inc. has a medical marihuana license department whose function is to research and obtain licenses and development permits for medical marihuana in 23 states in the U.S.
where medical marihuana can be sold. Through Marapharm Inc., a wholly owned subsiderary, the Issuer has acquired Maragold, committed to providing other synergies and products for people to increase their overall quality of life. intends to re-brand and repackage the product line with the goal of marketing and selling them online.
During the month of March 2016, the Issuer announced the following:
The Issuer has furthered its interests in Nevada and entered into an agreement for the acquisition of two provisional medical marijuana licenses (the “Interests”) from a private Las Vegas, Nevada based medical marijuana enterprise. The private Nevada Company holds two provisional licenses for the cultivation and extract production of medical marijuana granted by the State of Nevada.
The acquisition complements the Issuer’s business strategy to expand its business footprint within the U.S. emerging marijuana markets and the rapidly increasing number of legalized medical and recreational jurisdictions in the United States.
The terms of the agreement are for the initial acquisition of 75% of the Interests from a third party acting as agent. The provisional medical marijuana licenses consist of a 199,862 square foot cultivation approved license and a 16,320 square foot approved extract production license for edibles and all marijuana infused products. The purchase price is for USD
$600,000, comprised of a cash portion of USD $300,000 principal due within one year at 4.5% interest payable monthly, and the balance of the purchase price to be paid from the issuance of USD $300,000 treasury shares of the Issuer to be issued at CDN $0.24 per share, with exchange calculated effective February 17, 2016 and subject to applicable regulatory hold periods.
The Issuer has advanced approximately CDN $300,000 to the agent that will be offset to the purchase price on closing. The Issuer intends to complete negotiations on acquiring the remaining 25% Interests from the private corporation in the near future. The transaction is also subject to applicable statutory, regulatory, and compliance laws, and approvals, transfers and State security deposits as required.
The Issuer, through its wholly owned subsidiary, Marapharm Las Vegas LLC,(“Marapharm LLC”) intends to integrate both the acquired cultivation and production Interests, subject to conditional use permits from the City of North Las Vegas, on its recently purchased 5.9 acre land parcel in Apex Business Park, North Las Vegas, Nevada. Pursuant to the Issuer’s press release issued February 19, 2016, the subsidiary already holds an assigned option agreement for a provisional marijuana license, on this land, pursuant
to an offer to purchase agreement with the Issuer dated May 11, 2015 in the amount of USD $1,000,000.
The Issuer has also furthered its interests in the United States marijuana space and entered into an agreement for the acquisition of a licensed operating, production (cultivation) and processing (production) marijuana business located and operated in Whatcom County, Washington State. The acquisition includes two marijuana licenses for production and processing, inclusive of all operating assets (the “Interests”) from a private Washington State licensed marijuana enterprise. The licenses were granted to the Washington private company and the designated license holder by the State of Washington under Washington State initiative I502 in regards to the acquisition of a tier 3 production and processing license. The transferring of the licenses will be initiated to Marapharm LLC designated license holder on closing, expected on or before April 29, 2016, in accordance with Washington State marijuana legislation and regulatory requirements. Medical and recreational marijuana use is legal in Washington State.
The acquisition complements the Issuer’s business strategy to expand its business footprint within the U.S. emerging marijuana markets and the rapidly increasing number of legalized medical and recreational jurisdictions in the United States. Pursuant to press releases, February 19 and March 8, 2016, the Issuer has acquired two medical marijuana licenses, and an option to purchase an additional medical marijuana license, and owns 5.9 acres of land associated with the option in Nevada. The portfolio combined with the Washington State acquisition will result in approximately 303,000 square feet of U.S. marijuana licenses.
The terms of the agreement to acquire the Interests are from a third party acting as agent and a Washington State resident acting as a finder. The marijuana production license consist of a 21,000 square foot of marijuana canopy licence, with an additional option that can be received from the State for an additional 9,000 square feet of approved marijuana canopy coverage.
The processing license has no limitations. The business has its operations in a 28,000 square foot building. The purchase price is for USD $1,500,000, comprised of a cash portion of USD $1,300,000, and the balance of the purchase price to be paid from the issuance of USD $200,000 treasury shares of the Issuer to be issued at CDN $0.28 per share, with exchange calculated effective March 10, 2016, and subject to applicable regulatory hold periods.
The Issuer intends to finance the acquisition through a proposed debenture financing with a third party, subject to completion of financing negotiations.
The Issuer has also advanced negotiations with the property owner of the Washington private business by way of a term sheet for a long term lease which includes a six month option to purchase the entire property which includes the private marijuana business and multiple buildings for USD
$4,500,000. The transaction and financings are subject to applicable
Canadian and U.S. and State statutory, regulatory, and compliance laws, and approvals, transfers and State security deposits as required.
2. Provide a general overview and discussion of the activities of management.
The Issuer began the process of securing a medical marijuana license and assembling people and the proposed build out and property, located in Kelowna, British Columbia for the MMPR application in 2014. The proposed 11 acre parcel in Kelowna, British Columbia was confirmed by the Provincial government to be legally zoned as proper use for medical marijuana production. The Issuer continues in ongoing discussions with the City of Kelowna which has of yet to establish bylaws for this new emerging industry, which reflects and integrates the Provincial governments order regarding medical marijuana facilities. As a result of these discussions and the City of Kelowna’s progress to date, the Issuer is investigating other jurisdictions, for a potential change of venue application to Health Canada should it be deemed necessary to expedite the process.
The Issuer continues to pursue a Canadian medical marijuana licence.
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.
There were no new products or services developed or offered in the month of March 2016.
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.
No products or services were discontinued in the month of March 2016.
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 in the month of March 2016.
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 in the month of March 2016.
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 in the month of March 2016.
8. Describe the acquisition of new customers or loss of customers.
There were no acquisition of new customers or loss of customers in the month of March 2016.
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.
There were no new developments or effects on intangible products such as brand names, circulation lists, copyrights, franchises, licenses, patents, software, subscription lists and trade-marks in the month of March 2016.
10. Report on any employee hiring, terminations or lay-offs with details of anticipated length of lay-offs.
The Issuer did not hire, terminate or lay off any employee during the month of March 2016.
11. Report on any labour disputes and resolutions of those disputes if applicable.
None during the month of March 2016.
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.
There were no legal proceedings during the month of March 2016.
13. Provide details of any indebtedness incurred or repaid by the Issuer together with the terms of such indebtedness.
None during the month of March 2016.
14. Provide details of any securities issued and options or warrants granted.
Security Number Issued Details of Issuance Use of Proceeds(1)
N/A
(1) State aggregate proceeds and intended allocation of proceeds.
15. Provide details of any loans to or by Related Persons.
None during the month of March 2016.
16. Provide details of any changes in directors, officers or committee members.
There were no other changes in directors, officers or committee members during the month of March 2016.
17. Discuss any trends which are likely to impact the Issuer including trends in the Issuer’s market(s) or political/regulatory trends.
The Issuer has no history of operations. Even if the medical marihuana licenses are issued to the Issuer by Health Canada and/or state regulatory agencies in the United States, there is no guarantee that the production facility will be constructed nor is there any guarantee that the business model of producing and selling marihuana will be a viable business.
Significant funds are required to construct the facility, to obtain the license, and to market and sell medical marihuana to the public. Other companies are already either licensed to produce medical marihuana or are in a more advanced state in achieving their license.
The market for medical marihuana in Canada is tightly controlled. The Issuer's ability to grow, store and sell medical marijuana in Canada is dependent on the Issuer obtaining “licensed producer” status from Health Canada and the financial condition of the Issuer. There is potential that the Issuer will face intense competition from other companies, some of which can be expected to have longer operating histories and greater financial resources and manufacturing and marketing experience than the Issuer.
Because of the early stage of the industry in which the Issuer intends to operate, the Issuer expects to face additional competition from new entrants.
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 CNSX 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 CNSX Requirements (as defined in CNSX Policy 1).
4. All of the information in this Form 7 Monthly Progress Report is true.
Dated: April 5, 2016
Les Kjosness
Name of Director or Senior Officer
“ Les Kjosness”
Signature
President/CEO Official Capacity
Issuer Details Name of Issuer
MARAPHARM VENTURES INC.
For Month End
Mar 2016
Date of Report YY/MM/DD 2016/04/05 Issuer Address
Unit 12 – 7621 Vantage Way City/Province/Postal Code Delta, BC V4G 1A6
Issuer Fax No.
(604)952-0988
Issuer Telephone No.
(604) 952-6676 Contact Name
Les Kjosness
Contact Position President
Contact Telephone No.
(604) 952-6676 Contact Email Address
Web Site Address
www.marapharmventures.com