Aurora Cannabis Inc
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AURORA CANNABIS INC. FORM 2A AMENDED LISTING STATEMENT DATE: December 9, 2014 {W0264474.DOC} 1. TABLE OF CONTENTS 1. GLOSSARY OF TERMS ......................................................................................................... 3 2. CORPORATE STRUCTURE ................................................................................................... 7 3. GENERAL DEVELOPMENT OF THE BUSINESS .................................................................. 8 4. NARRATIVE DESCRIPTION OF THE BUSINESS ............................................................... 11 5. SELECTED CONSOLIDATED FINANCIAL INFORMATION ................................................ 20 6. MANAGEMENT’S DISCUSSION AND ANALYSIS ............................................................... 22 7. MARKET FOR SECURITIES ................................................................................................ 22 8. CONSOLIDATED CAPITALIZATION .................................................................................... 22 9. OPTIONS TO PURCHASE SECURITIES ............................................................................. 22 10. DESCRIPTION OF THE SECURITIES ............................................................................. 25 11. ESCROWED SECURITIES ............................................................................................... 28 12. PRINCIPAL SHAREHOLDERS ......................................................................................... 29 13. DIRECTORS AND OFFICERS .......................................................................................... 30 14. CAPITALIZATION .............................................................................................................. 35 15. EXECUTIVE COMPENSATION ........................................................................................ 40 16. INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS ................................. 44 17. RISK FACTORS ................................................................................................................ 44 18. PROMOTERS .................................................................................................................... 50 19. LEGAL PROCEEDINGS ................................................................................................... 51 20. INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS .......... 51 21. AUDITORS, TRANSFER AGENTS AND REGISTRARS.................................................. 51 22. MATERIAL CONTRACTS ................................................................................................. 51 23. INTEREST OF EXPERTS ................................................................................................. 53 24. OTHER MATERIAL FACTS .............................................................................................. 53 25. FINANCIAL STATEMENTS ............................................................................................... 54 {W0264474.DOC}FORM 2A – LISTING STATEMENT December 9, 2014 Page 2 GLOSSARY OF TERMS Aurora means Aurora Marijuana Inc., a corporation existing under the laws of the Province of Alberta, with an office at 14613-137 Avenue, Edmonton, Alberta, T5L 4S9 which operates through its two wholly-owned subsidiaries, Aurora Cannabis Enterprises Inc. (formerly “1755517 Alberta Ltd.”) and 1769474 Alberta Ltd.; Aurora Class A Warrants means the aggregate of 15,000,000 share purchase warrants of Aurora held by certain holders as set out in the Share Exchange Agreement, that were exchanged for the Pubco Class A Warrants and Pubco Performance Class A Warrants on a pro rata basis; Aurora Class C Warrants means the aggregate of 10,200,000 share purchase warrants of Aurora held by certain holders as set out in the Share Exchange Agreement, that were exchanged for 10,200,000 warrants of Pubco exercisable at a price of $0.50 per Pubco Share for a period of three years; Aurora Options means the 4,000,000 outstanding stock options of Aurora granted to an employee which options are exercisable for 4,000,000 Class "D" Shares of Aurora at a price of $0.001 per Class "D" Share of Aurora, replaced with the Pubco Options; Aurora Shareholders means the all of the shareholders of Aurora subject to the Share Exchange Agreement; Aurora Warrantholders means the all of the holders of Aurora Class A Warrants and Aurora Class C Warrants subject to the Share Exchange Agreement; BCBCA means the Business Corporations Act (British Columbia); Computershare means Computershare Investor Services Inc.; CSE means the Canadian Securities Exchange; Finder’s Fee Shares means 3,000,000 Pubco Shares that were issued immediately upon closing of the Share Exchange to an unrelated third party as consideration for assistance in closing the Share Exchange; Funding Milestone means when: 1. the holders the Pubco Performance Class A Warrants raising the following amount of equity or debt financing for Pubco: a. $1,500,000 on or before November 28, 2014; and b. $8,500,000 on or before the 60th calendar day after Aurora Cannabis Enterprises Inc. receives a licence from Health Canada to allow it to produce seed to dried marijuana, which does not include any financing prior to October 30, 2014. For clarity, the licence may be received by Aurora Cannabis Enterprises Inc. prior to receipt of an unconditional Production License; (collectively, the “Raises” and, each, a “Raise”); 2. Aurora has been provided with access to the records of Pubco and independently verified each Raise and verified the source of such funds for each Raise; and {W0264474.DOC}FORM 2A – LISTING STATEMENT December 9, 2014 Page 3 3. for any Raises prior to the closing of the transaction contemplated by the Share Exchange Agreement, upon the written request of Pubco, the funds from such Raises are lent from Pubco to Aurora on the same terms and conditions as previous loans between Pubco and Aurora. For clarity: 4. the Raises may be achieved by a combination of funds raised by the holders the Pubco Performance Class A Warrants. Additionally, funds raised from parties introduced to Pubco by the holders the Pubco Performance Class A Warrants, and their respective representatives shall contribute towards the Raises; 5. when determining the amount of each Raise, Pubco shall count the gross proceeds of the Raises. Notwithstanding the foregoing, the maximum amount of the costs for finders’ fees, commissions, or warrants that may be associated with each Raise are expected to be 8% or less of the Raise. If such finders’ fees or commissions are greater than 8% of the Raise, then the amount that the costs are greater than 8% shall be deducted from the Raise; and 6. funds raised prior to October 30, 2014 shall not be counted towards the funding milestone. Listing Statement means this CSE Form 2A; MMPR means the Marihuana for Medical Purposes Regulations pursuant to the Controlled Drugs and Substances Act (Canada); NEO’s means a Named Executive Officers of Pubco. The NEO’s are identified as the individual who acted as a Chief Executive Officer (“CEO”) or Chief Financial Officer (“CFO”) or each of the three most highly compensated executive officers, or the three most highly compensated individuals acting in a similar capacity, other than the CEO and CFO, at the end of the most recently completed financial year whose total compensation was, individually, more than $150,000, for that financial year; Performance Milestone means the: 1. receipt by Aurora of the Production License; and 2. registration of 2,000 patients under the Production License of Aurora. Performance Shares means an aggregate of 20,000,000 Resulting Issuer Shares to be issued to the Aurora Shareholders on a pro-rata basis upon achievement of the Performance Milestone; Production License means the full license to be issued by Health Canada under section 25 of the MMPR permitting Aurora to undertake the following activities in connection with medicinal marijuana: 1. production; 2. sale; 3. possession; 4. transport; and {W0264474.DOC}FORM 2A – LISTING STATEMENT December 9, 2014 Page 4 5. destruction; Pubco means Aurora Cannabis Inc. prior to completing the Share Exchange, a corporation existing under the laws of the Province of British Columbia and halted for trading on the CSE; Pubco Class A Warrants means 11,250,000 warrants to purchase Pubco Shares at $0.02 per Pubco Share for a term of five years exercisable on issuance; Pubco Class C Warrants means 10,200,000 warrants to purchase Pubco Shares at $0.50 per Pubco Share for a term of three years exercisable on issuance; Pubco Options means, pursuant to the Share Exchange Agreement, an aggregate of 4,000,000 incentive stock options of Pubco having an exercise price of $0.001 per Pubco Share for a term of five years on grant that were issued to the holder of the Aurora Options in replacement of the Aurora Options, which Pubco Options shall vest on the following schedule: 1. 1,600,000 Pubco Options on December 21, 2014; 2. 1,600,000 Pubco Options on June 21, 2015; and 3. 800,000 Pubco Options on December 21, 2015; Pubco Performance Class A Warrants means 3,750,000 warrants to purchase Pubco Shares at $0.02 per Pubco Share for a term of five years exercisable on completion of the Funding Milestone; Pubco Shares means the common shares of Pubco; Pubco Warrants means the Pubco Class A Warrants, Pubco Performance Class A Warrants and the Pubco Class C Warrants; Related Person means an insider, which has the meaning set forth in the Securities Act