Exhibit 10.6


 


 








 


 


 


MCTC
HOLDINGS, INC.


(In
Process of Changing Name to Cannabis Global, Inc.)


		(OTC:MCTC)	



A Delaware
Corporation


 


 


 


CONFIDENTIAL
PRIVATE PLACEMENT MEMORANDUM 


 


Up
to $1,000,000 


 


Offering
Price: 


$0.025
per Common Share 


 


 


 


This
document is for informational purposes only. The contemplated transactions between Cannabis Global Inc, Inc, and/or MCTC Holdings,
Inc. and/or various investors are pending at this time. Prospective investors should carefully read and retain this Confidential
Private Placement Memorandum (the “Memorandum”). This Private Placement Memorandum is confidential.


 


The
Date of this Memorandum is June 21, 2019 


 


 


THE
SECURITIES OFFERED PURSUANT TO THE TERMS OF THIS PRIVATE PLACEMENT MEMORANDUM ARE HIGHLY 


SPECULATIVE
AND INVOLVE RISKS (SEE “RISK FACTORS”). NO ONE SHOULD INVEST IN THIS OFFERING UNLESS THEY HAVE REVIEWED THIS PRIVATE
PLACEMENT MEMORANDUM CAREFULLY AND THEY ARE PREPARED TO BEAR THE RISK OF THIS ILLIQUID INVESTMENT. 


 


THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), NOR QUALIFIED,
APPROVED OR DISAPPROVED UNDER ANY OTHER FEDERAL OR STATE 


SECURITIES
LAWS. NEITHER THE SECURITIES AND EXCHANGE COMMISSION (“SEC”) NOR ANY OTHER FEDERAL OR 


STATE
REGULATORY AUTHORITY HAS PASSED ON OR ENDORSED THE MERITS OF THIS OFFERING OR THE ACCURACY 


OR
ADEQUACY OF THIS MEMORANDUM. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL. THE SECURITIES 


OFFERED
HEREIN MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF BY AN INVESTOR UNLESS THEY ARE REGISTERED UNDER THE SECURITIES ACT
AND, WHERE REQUIRED, UNDER THE LAWS OF OTHER JURISDICTIONS, UNLESS SUCH PROPOSED SALE, TRANSFER OR DISPOSITION IS EXEMPT FROM SUCH
REGISTRATION. 


 


NO
OFFERING LITERATURE OR ADVERTISING OR ORAL REPRESENTATIONS SHALL BE USED IN THIS OFFERING 


EXCEPT
THE INFORMATION USED IN THIS PRIVATE PLACEMENT MEMORANDUM. THE DELIVERY OF THIS PRIVATE 


PLACEMENT
MEMORANDUM DOES NOT IMPLY THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY 


TIME
SUBSEQUENT TO THE DATE HEREOF. NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY REPRESENTATIONS 


OTHER
THAN THOSE CONTAINED HEREIN AND, IF GIVEN OR MADE, SUCH INFORMATION AND REPRESENTATIONS 


MUST
NOT BE RELIED UPON. EACH OFFEREE AND HIS OR HER AUTHORIZED REPRESENTATIVE IS OFFERED THE 


OPPORTUNITY
TO ASK QUESTIONS AND/OR RECEIVE ANSWERS FROM THE COMPANY CONCERNING THE TERMS AND 


CONDITIONS
OF THIS OFFERING AND TO OBTAIN SUCH ADDITIONAL INFORMATION AS HE OR SHE SHALL DEEM NECESSARY TO VERIFY THE ACCURACY OF THE INFORMATION
SET FORTH HEREIN TO THE EXTENT SUCH ADDITIONAL INFORMATION MAY BE OBTAINED BY THE COMPANY WITHOUT UNREASONABLE EFFORT OR EXPENSE.
DOCUMENTS REFERRED TO HEREIN ARE AVAILABLE FOR INSPECTION BY POTENTIAL INVESTORS OR THEIR REPRESENTATIVES UPON REQUEST. 


 


IMPORTANT NOTICES 


 


THIS
IS A PRIVATE OFFERING MADE PURSUANT TO APPLICABLE FEDERAL AND STATE “PRIVATE PLACEMENT” EXEMPTIONS. THE SECURITIES
MUST BE ACQUIRED FOR INVESTMENT PURPOSES ONLY AND ONCE ACQUIRED WILL NOT BE FREELY TRANSFERABLE.


 


THIS
PRIVATE PLACEMENT MEMORANDUM DOES NOT CONSTITUTE AN OFFER OR SOLICITATION


IN
ANY STATE OR JURISDICTION IN WHICH SUCH AN OFFER OR SOLICITATION IS UNLAWFUL. THIS


MEMORANDUM
CONSTITUTES AN OFFER ONLY IF DELIVERY OF THIS PRIVATE PLACEMENT


MEMORANDUM
IS PROPERLY AUTHORIZED BY THE COMPANY. THIS PRIVATE PLACEMENT


MEMORANDUM
HAS BEEN PREPARED BY THE COMPANY SOLELY FOR THE BENEFIT OF PERSONS


INTERESTED
IN THE PROPOSED SALE OF THE SECURITIES AND ANY DISTRIBUTION OR REPRODUCTION OF THIS PRIVATE PLACEMENT MEMORANDUM, IN WHOLE OR PART,
WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY, IS PROHIBITED.


 


NO
PERSON HAS BEEN AUTHORIZED TO MAKE ANY REPRESENTATIONS OR PROVIDE ANY


INFORMATION
WITH RESPECT TO THE INTERESTS EXCEPT SUCH INFORMATION AS IS CONTAINED


IN
THIS PRIVATE PLACEMENT MEMORANDUM OR TO MAKE ANY REPRESENTATIONS CONCERNING


THE
COMPANY OTHER THAN THOSE CONTAINED IN THIS PRIVATE PLACEMENT MEMORANDUM AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS
MUST NOT BE RELIED UPON.


 


THE
CONTENTS OF THIS PRIVATE PLACEMENT MEMORANDUM SHOULD NOT BE CONSTRUED AS


INVESTMENT,
LEGAL OR TAX ADVICE. A NUMBER OF FACTORS MATERIAL TO A DECISION


WHETHER
TO INVEST IN THE SECURITIES HAVE BEEN PRESENTED IN THIS PRIVATE PLACEMENT


MEMORANDUM
IN SUMMARY OR OUTLINE FORM ONLY IN RELIANCE ON THE FINANCIAL


SOPHISTICATION
OF THE OFFEREES. EACH INVESTOR SHOULD CONSULT HIS OR HER OWN COUNSEL, ACCOUNTANT AND OTHER PROFESSIONAL ADVISORS AS TO LEGAL, TAX
AND OTHER RELATED MATTERS CONCERNING HIS OR HER INVESTMENT.


 


SECURITIES
ARE AVAILABLE ONLY TO PERSONS WILLING AND ABLE TO BEAR THE ECONOMIC


RISKS
OF THIS INVESTMENT. INVESTMENTS IN THE COMPANY ARE SPECULATIVE, ILLIQUID AND


INVOLVE
A HIGH DEGREE OF RISK (SEE OUR FILINGS WITH THE SEC AND ANY/ALL CAUTIONARY STATEMENTS AND RISK FACTORS). THE INVESTMENTS ARE SUITABLE
AS AN INVESTMENT ONLY FOR A VERY LIMITED PORTION OF THE RISK SEGMENT OF AN INVESTOR’S PORTFOLIO.


 


THIS
OFFERING IS AVAILABLE ONLY TO “ACCREDITED INVESTORS” AS THAT TERM IS DEFINED


UNDER
THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (SEE “SUITABILITY OF INVESTMENT,” BELOW).


 


SUITABILITY OF INVESTMENT



 


The
investment described herein involves risks and is offered only to entities and individuals who can afford to assume such risks
for a substantial period of time, and who agree to purchase only for investment purposes and not with a view toward transfer, resale,
exchange or distribution. Each investor agrees to purchase with the understanding that they may need to hold securities purchased
in this offering indefinitely. Resales and other transfers of the shares of common stock could have adverse Tax consequences and
are restricted by federal and state securities laws.


ACCORDINGLY,
THIS INVESTMENT IS NOT SUITABLE FOR INVESTORS WHO DO NOT HAVE ADEQUATE LIQUID ASSETS TO AFFORD A LONG TERM, ILLIQUID INVESTMENT.


 


The
securities offered hereby are suitable only for those investors whose business and investment experience make them capable of evaluating
the merits and risks of their prospective investment in the Company, who can afford to bear the economic risk of their investment
for an indefinite period, and who have no need for liquidity in this investment. Each investor will be required to represent that
such investor is acquiring the securities being purchased by such investor for his or her own account as principal, for investment
purposes and not with a view toward resale or distribution and that he or she is aware that his or her transfer rights are restricted
by federal and state securities laws and by the absence of a market for the securities.


 


In
addition, each investor must also represent that (i) his or her overall commitment to investments which are not readily marketable
is not disproportionate to his or her net worth and his or her investment in the securities will not cause such overall commitment
to become excessive; (ii) he or she has evaluated the risks of investing in the Company; (iii) he or she has substantial experience
in making investment decisions of this type or is relying on his, or her own tax adviser, or other qualified investment adviser
in making this investment decision; and (iv) he or she is purchasing the securities for his or her own account, for investment
purposes and not with a view to subsequent distributions. In addition, each investor must represent that he or she has (i) a net
worth (excluding home, home furnishings, and automobiles) in excess of $1,000,000.00, or (ii) a natural person who has an annual
income in excess of $200,000.00 in each of the two most recent years, or a joint income with a spouse of $300,000.00 in each of
those years, and who reasonably expects to reach the same level in the current year.


 


The
Company will also require investors to complete a Subscription Agreement, and may make or cause to be made such other representations
by investors as the Company may deem appropriate. The Company will have absolute discretion regarding the sale of securities to
any prospective purchaser. In addition, because of the complexities, the lack of liquidity and the high degree of risk that an
investment in the securities involves, each prospective purchaser may be required to seek the advice of a person having such knowledge
and experience in financial and business matters as will permit meaningful evaluation of the merits and risks of an investment
in the securities.  


 


 


SUMMARY OF THE OFFERING 


 


The
following is a summary of terms and conditions of an investment in Cannabis Global Inc, Inc. a Delaware Corporation (the “Company”).


 


Offering
Terms: 


 


	
        Summary
        of Offering: 

         
	The Company is offering an approximate 10% common share position in the Company for $1,000,000.
	
        Number of Shares
        Offered:

         
	40,000,000 
	
        Price to Investors:

         
	$0.025 per common share.   
	
        Minimum
        Purchase:

         
	The minimum purchase for this financing is Fifty Thousand Dollars ($50,000).  The Company may sell less than the minimum number of Shares at its sole discretion. 
	
        Offering
        Period:

         
	June 21, 2019 through July 31, 2019, unless extended by us to a later date. 
	
        Subscription
        Agreement:

         
	Each of the investors in this Offering and the Company will execute a Subscription Agreement which shall provide for the purchase and sale of the Securities and set forth representations and warranties on behalf of each of the investors and the Company and covenants of the Company. 
	Restrictions On Transfer:	Securities purchased in this Offering may not be transferred or resold except as permitted under The Securities Act of 1933, as amended, and applicable state securities laws, pursuant to registration or exemption therefrom.  Securities purchased in this Offering will be legended to reflect the foregoing rights and obligations. 


 


The
Company reserves the right to accept or reject any subscription in its sole discretion for any reason whatsoever and to withdraw
this Offering at any time prior to the acceptance of the subscriptions received. Subscription funds paid by a Subscriber whose
subscription is rejected will be returned promptly, without interest or deduction.


 


		Business	Summary



 


MCTCHoldings,Inc.willbechangingitscorporateidentifytoCannabisGlobal,Inc.(“CannabisGlobalInc”or“theCompany”).


 


ThenewlyorganizedCompanywilloperateasaglobalplayerinthefastgrowingandhighlylucrativecannabismarketplaceandwillbeinvolvedinboththeindustrialhempmarkets,wherepermittedandlegalunderthe2018FarmBill,andthelegalmarijuanamarkets,aspermittedandlicensedbywayofvariousstateandlocallawsandregulations.


 


Bywayofdefinitionswithinthisdocument,wereference“hemp”ascannabisthatcontainslessthan0.03%Tetrahydrocannabinol(“THC”),marijuanaascannabiscultivatedandprocessedtoproduceapsychoactiveeffectand“cannabis”tomeaneitherorboth.


 


ThephilosophybehindtheorganizationofCannabisGlobalIncissimple:


 


Assembleateamofhighlyexperiencedcannabisentrepreneursandinvestorsintoapubliclytradedcompanyandthen“rollin”varioushighgrowthassetsincludingIP’s&patentsandinitiatevariousnewbusinessinitiativeswithinchosencannabissectorsinordertoproducestrongrevenuegrowthandmeaningfulmarginsfortheCompany,thus,producingreturnsforinvestorsthatexceedthereturnsgenerallyavailableviaotherinvestments.


 


WhilethedirectorsandexecutivesoftheCompanyaredetailedinalatersection,theseprinciplesconsistofindividualswithsignificantspecificandlongstandingexperienceascannabisentrepreneurs,individualswithsuccessfultrackrecordsasexecutivesinpubliclytradedcannabiscompanies,individualswithmeaningfulcannabiscultivationandprocessingexperience,inadditiontoteammembershighlyexperiencedinthecannabisrelatedcapitalmarkets.


 


InitialAssetsandOperations


 


Whileseveralacquisitionsandrollupsofassetsassociatedwiththeprincipalsareplanned,theinitialassetsandoperationsoftheCompanywillconsistof:


 


		1)	ProjectOne-HempcultivationandresearchfacilitylocatedinSouthern



		California,	



		2)	ProjectTwo-Researchanddevelopmenthempprogramlocatedatthe



		Southern	Californialocation,



		3)	ProjectThree-Powderedcannabisdrinkmixes,basedonproprietarytechnologiesand,



		4)	ProjectFour-Developmentofuniquecannabis-relatedtechnologiesand
intellectualpropertieswiththeaimofdevelopingarobustIPportfolio.



 


Theseareoutlinedinsummaryformbelow:


 


CannabisGlobalIncRedlandsHempProject


 


TheRedlandsHempProjectwillbeanintegratedhempandresearchfacilitylocatedinRedlandsCalifornia,whichisapproximately75milessoutheastofLosAngeles.Thefacilitywillnotholdahempcultivationoperation,butalsofewselectedresearchfacilitiesdedicatedtonewmethodsofhempcultivation,harvesting,dryingandpackagingbiomassforsalestothemarketplace.


 


TheprojectwillbeconductedasajointventurewithMarijuanaCompanyofAmerica,Inc.(OTCQB:MCOA)basedonitsrecentlyacquiredcultivationrights.


 


Eventhoughlocatedinanarearichinagriculturehistory,thelandonwhichRedlandsHempislocatedhasneverbeenfarmed.Thus,theCompanywillimmediatelyapplyforCaliforniaOrganicCertification,aprocesswhichgenerallytakesonlyafewweeksundersuchcircumstances.AmplewaterandcultivationresourcesarealsoavailableonsiteviatheCompany’sjointventurepartners.


 


 


CBDandTHCDrinkMixes


Investmentbank,CanaccordGenuityisestimatingtheCBDcannabisbeveragemarketcouldmakeupapproximately20%oftheoverallcannabisediblesmarketby2022.ItisestimatedthattheTHCportionofthemarketplacewillalsobegrowingveryrapidly.


 


ThereportcitesthatoneofthemajordrivingfactorsbehindthecurrentmarketgrowthfortheCBDportionofthesectoristheeaseofdistributionastherearefewregulationslimitingmarketgrowth.Numerouslargebeveragecompanieshaveexpressedstronginterestinthismarketsub-sectorwithseveralalreadymakingconsiderableinvestments.


 


Thevastmajorityofthecannabisbeveragesthathaveenteredthemarketarepre-mixedbeverages.WeatGlobalCannabisbelieveastrongopportunityexiststointroduceadifferentsubsetofcannabisdrinks–pre-packagedpowderedcannabisinfusedthattheconsumermixeswithwaterbeforeconsumption.


 


Wefeelthereareseveraladvantagestoenteringthepowdereddrinkmarket.First,therearerelativelyfewproductsonthemarket.WhileleadingwebsiteslikeWeedMapslistdozensofcannabisediblesandpremixeddrinks,therearealmostnopremixedpowdereddrinkmixes.Second,whilelargercompanieswillhavelittletroublewiththeinfusiontechnologies,smallerplayerswillexperiencesomelevelofentrybarrierduetotechnologyissuesofinfusionandcostofmachinery.Additionally,becausepowdereddrinkmixesaresignificantly
cheapertoshipversuspremixeddrinks,thereisaninherentprofitmarginadvantageinfavorofpowdereddrinks.


 


OurPowderedDrinkMixInfusionTechnologies


 


Wehavedevelopedamethodtoinfusewater-solublesubstrateswithcannabisdistillatesandisolatedcannabinoids.Wethencombinetheseinfusedsubstrateswithflavoringstocreateourpowdereddrinkmixes,whicharethenpackagedin“stickpackorsachets”formats.


 


Ourinfusionmethodisbasedonaproprietarymicro-encapsulated,nanoemulsionformulationofcannabisextracts,whicharetheninfusedintoorganicsubstratesderivedfromorganicfruitsandvegetables.


 


Themethod,whichutilizeshighsheercavitationwithaproprietarymixtureoforganiccarrieroilsallowsustoproduceflavoredpowdersthatwhencombinedwithwatercreatedrinkswithlittletoalmostnocannabistaste.


 


Itiswelldocumentedwithinthefieldofpharmaceuticalsciencethattheuseofmicroencapsulationandnanoemulsionssignificantlyincreasesbioavailabilityoffatsolubleingredientsandprovidesmuchfasteronset,mainlyrelatingtothepsychoactiveeffectsofTHC.


 


Whileatthistimewearemakingnosuchclaims,webelieveitislikelythatourformulationsareproducingsimilarresults.Webelieveitispossibleatafuturedatetoconductclinicalstudiestoconfirmsuchpossibleresults.


 


CannabisGlobalIncplanstointroducethefollowingpremixedcannabisinfusedproducts:


 


SweetDrinksCBDLine–TheCompanywillintroduceaseriesofhighlyflavoreddrinkmixessimilartothehighlysuccessfulCrystalLightproductline.Thesewillbeinfusedwith25mgofCBDfullspectrumhempdistillates.InthefutureCBDisolatescouldalsobeused,buttheCompanybelievesafullspectrumapproachissuperior.Itisexpectedthatfiveflavorswillinitiallybemadeavailable.Marginsonsuchproductsareexpectedtobeverystrong.Pricingonaperstickpacklevelwillbetargetedataround$4.00,whichcomparesfavorablytootherCBD-orientedpremixedproducts.Withlowcostforshipping,retailersanddistributorswilllikelybeabletocommandsuperiormarginscomparedtopre-mixeddrinks.Companyall-incostsareexpectedtobewellbelow$1.00perstickpack.


 


SweetDrinksTHCLine-TheCompanywillintroducealineofTHCcontainingsweetdrinkmixesforthelegalrecreationalcannabismarketplace.Theseproductswillbemadeinstrictaccordancewithstateandlocalregulationsandwill,inmostcases,
containnomorethan10MGofTHCperserving.


 


Dr.MatchaLineforMatchaGreenTeaMixes-Underthebrandname,Dr.Matcha,theCompanywillmarketalineofpowderedgreenteaandmatchateadrinkmixes.Weenvisionbothorganicandnon-organicversionoftheseproducts.ItisenvisionedthattheDr.MatchaproductlinewillbemadeinversionscontainingonlyTHC,onlyCBD,andacombinationofbothTHCandCBD.


 


OtherCoffeeandTea–TheCompanywillapproachthepowderedcoffeeandteamarketswithasimilarcostandpricingstructure.Thedifferenttargetmarketwillrequireanincreasedlevelofsophistication,whichwillbereflectedintheproductpositioningandpackaging.Initialproductswillbemainstreamgroundandinstantcoffeesandteas.TheCompanywillthenexpandintosubcategoriesofcoffeeandteapowdereddrinkproducts.ItisenvisionedthatcoffeeandteaproductlineswillbemadeinversionscontainingonlyTHC,onlyCBD,andacombinationofbothTHCandCBD.


 


EnergyEffervescentTablets–Utilizingexcipientsfromthepharmaceuticalindustry,whichrequireverylittlepostprocessing,theCompanywilllaunchalineofeffervescentenergytabletscontainingCBDtobepackedinreadymadetubes.Severallargecompanieshavedevelopedthenon-CBDmarketforeffervescenttablets,buttheCompanyhasfoundnoCBDproductsbeingmarketed.WhilewewillfirstproduceaCBDonlyvariety,wearealsolikelytofollowonwithTHCversionsoftheseproducts.


 


CocktailMixers-Whilealmostallstatesprohibittheuseofalcoholincannabisproducts,weplantointroducealineofpowderednon-alcoholiccocktailmixersthatcontainTHC.


 


		Distribution	



 


WhiteLabelInitialFocus


 


Whilewewillmarketourownbrands,theprimaryinitialstrategywillbetowhitelabelproductsforothercompanies.


 


NumerouscompanieshaveexpressedaninterestinmarketinganddistributingtheMCTCproducts.Manyofthesecompaniesaregrowingrapidly,buttheproductlinesbeingmarketedarerelativelylimitedtoCBDtinctures,paincreams,andbeautytreatments.


 


MCTCmanagementstronglybelievesthereisasignificantvoidinthemarketforawhitelabelpremixedpowdereddrinkscontainingCBD.


 


TheCompanybelievesitwillbeabletocommandstrongmarginsviaawhitelabelproductstrategy,whileallowingdistributionpartnerstomarkupproductsbyatleast100%.


 


RetailandDispensaryDistribution


 


Viaourinvestorsanddirectors,wehavestrongaccesstothelegalcannabisdispensarymarketplace.WeplantomakeextensiveuseofthischanneltomarketourTHCandCBDpowdereddrinkmixesthroughourprivatelabels.


 


		Timing	forProductIntroductions



 


Withproductdevelopmentcompleted,MCTCwillbeabletoenterthemarketveryquickly.Uponreceiptofadequatecapital,managementestimatesproductscanbereadyformarketdistributionwithin60days.


 


IntellectualProperty


 


CannabisGlobalIncalsoplanstodevelop,patentandlicenseseveralcannabis-relatedtechnologies.


 


Itisenvisionedthesewillinclude:


 


		Dissolvable	EdibleCBDFilm



 


TheCompanyhasmadeanagreementwithaSouthernCaliforniabasedinventortocreateajointventuretodevelopandpatentadissolvableediblefilmcontainingcannabidiol.


 


Weenvisionthisdissolvablefilmbeingutilizedasapackagingtechnologyforvariouspowderedfoods.TheCompanywillbeabletodevelopitsownproductsbasedonthefilmtechnologyorwillbeabletolicensethefilmtofoodmanufacturers.Uponcompletionofaneffectivejointventureagreementwiththeinventor,thejointventureplanstofileaprovisionalpatenttoprotecttheinvention(s).


 


4DPrintedCannabinoidDeliverySystemforFoodsandBeverages


 


Companypersonnelhavealsodevelopedanovelmethodologyfordeliveringcannabinoidstofoodsandbeveragesutilizing3Dprintingtechnology.Thistechnologyhasbeenmodifiedtoincludea“4thdimension”tothedeliverysystem.


 


Thetechnologyisintheformofanediblediscthatwhenplacedintoabeveragereleasestheactiveingredientwhilechangingintouniquepredeterminedshapes.


 


TheCompanywillseektofileprovisionalpatent(s)onthistechnology.


 


		Patents	onUniqueFormulations



 


TheCompanywillalsoseekintellectualpropertyforitsuniqueproductformulations,viaprovisionalpatentprocess.


 


Weenvisionmultipleprovisionalpatentapplicationsfilingsovertheshort-termrelativetotheseformulations.


 


TheCannabisGlobalIncTeam


 


ArmanTabatabaei-CEOandChairman


 


Mr.TabatabaeiisafounderandChairmanofCannabisGlobalInc,Inc.Withover15yearsofmanagementandoperationsexperience,hehasearnedastrongreputationforanumbersbasedanalyticalapproachtothemanagementoforganizations.Anexpertatdatacollectionandanalysisrelativetoresourcemanagement,riskforecastingandprofitandlossmanagement,hehasmadesignificantprogressinrevampingoperationsofseveralcompaniesoverthepastfewyears.


 


Mostrecently,Mr.TabatabaeihasconsultedwithCannabisStrategicVentures(OTCQB:NUGS)onvariousgrowthinitiativesrelativetobothcannabiscultivationandtheorganizationofnewhemp-relatedretailoperations.AtSugarmade,Inc.,(OTCQB:SGMD)hehasbeeninstrumentalinrevampingvariousoperationsrelativetotheCompany’shydroponicgrowthsuppliesinitiatives.


 


Previously,heconsultedwithlargecorporationstocreatesupplychainefficienciesusingmathematicalmodelsandsoftwaresuchasJPM,SPSSandMinitab.Armanisalsowellversedintheretailindustryafterhavingstartedandsuccessfullysellingseveralretailestablishments.


 


Mr.TabatabaeipossessesaMasterofBusinessAdministrationdegreefromtheUniversityof


Redlands,withadditionalpost-graduateworkinpredictiveanalysisfromPennsylvaniaStateUniversityandaBachelorofSciencedegreeinhealthsciences,withanemphasisonmathematicsandphysics.


 


		Robert	Hymers-Director



 


Mr.RobertL.HymersisafounderandDirectorofCannabisGlobalInc.Inc.Hehassignificantexperiencesinthecannabissectorandasafinancialexecutiveandconsultant.Mr.HymersistheManagingPartnerofPinnacleTaxServicesinLosAngelesandwaspreviouslyChiefFinancialOfficerandDirectorofMarijuanaCompanyofAmerica,Inc.(OTC:MCOA).HecurrentlyservesasamemberoftheStrategicAdvisoryBoardatMassRoots,Inc.,asaconsultantforCannabisStrategicVentures,Inc.(OTC:NUGS)andSugarmadeInc.(OTC:SGMD),withsignificantexperienceinmattersconcerningtaxaccounting,auditing,SECreporting,mergersandacquisitions,andcorporatefinance.Mr.HymersholdsaMasterofScienceinTaxationandaBachelor’sofScienceinAccountancy,inadditiontoaCPAlicense.


 


RobertalsohasspecifictaxauditexperiencebywayofemploymentatErnst&Young(EY)whereheworkedinthefirm’scoreassurancepracticeperformingauditsofpubliclyandprivatelyheldcompanies,specificallyintherealestateindustry.Mr.HymerssubsequentlytransferredtotheEY'staxpractice,wherehespecializedinprovidingtaxservicestoclientsintherealestateindustry.Mr.Hymersspecializesinpartnershiptaxation.Inaddition,Hehasabroadrangeofexperience,includingASC740taxprovisionaudits,FIN48compliance,REITcompliance,preparationof1120,1065,and1120Sreturns,multi-statetaxcomplianceandinternationaltaxconsulting.HewasalsoamemberofEY’sNationalTaxGroup(FSO)forseveralyears,whichservicesprivateequityfirms,hedgefundsandbanks.PreviouslyhewasalsotheVPofFinanceandAccountingofEverlert'swhollyownedsubsidiary,TotalpostServices,Inc.,locatedinMonrovia,CaliforniaandwasCFOofGlobalHempGroup,Inc.(OTCQB:GBHPF).


 


EdwardManolos-Director


 


Mr.EdwardManolosafounderandDirectoratCannabisGlobalInc,Inc.andisoneofthemostaccomplishedpioneersinCalifornia’sMedicalMarijuanaindustry.


 


In2004,heopenedtheveryfirstMedicalMarijuanaDispensaryinLosAngelesCountyunderthenameCMCA.HehasmanagedandoperatedoverthirtyfivedispensariesfromLosAngelestoSanJoseincludingtwentyInLosAngelesPre-ICO/PropD.HeisalsocreditedwithstartingLosAngeles’firstMedicalMarijuanafarmersmarketreferredtoas“TheCaliforniaHeritageFarmer’sMarket,”whichattractedlocalandinternationalmediaattentionandwasthefirstofitskind.


 


HeiscurrentlyamemberoftheboardofdirectorsofMarijuanaCompanyofAmerica


(OTCQB:MCOA).In2016,Mr.ManoloswasappointedtotheadvisoryboardofMarijuanaCompanyofAmericaandCannabisStrategicVentures(OTCQB:NUGS)andwastaskedwithidentifyingandstructuringstrategicpartnershipsanddrivingproductdevelopment.


 


Mr.Manolosisalsothefounderofmanysuccessfulcompanies,suchasNaturalPlantExtractsofCalifornia(NPEC),locatedinLynwood,CAandholdsoneofthefirstStateofCaliforniaissuedvolatilemanufacturinglicenses.NPEChasaddeddistributionanddeliverylicensesandislockingindistributioncontractswithsomeofthelargestlicensedcannabisbrandsinCalifornia.HeisalsoaffiliatedwithEverestBiosynthesisGroup,aleadingproducerofpharmaceuticalgradeCBD.


 


Healsoco-foundedOcenCommunicationsInc.in1997,whichwaspreviouslytradedonNASDAQunderthesymbolOCEN,whichwasanAsia-focusedinternetcommunicationsserviceprovidertransmittingvoice,fax,anddatacommunicationsforconsumers,carriersandcorporations.HisdiverseentrepreneurialfocusledhimtolaterlaunchtheKIWIBERRIFrozenyogurtfranchisein2005.


 


Mr.ManoloshasalsoprovidedconsultingservicestonumerousothercompaniesrelativetotheobtainmentofCaliforniaandWashingtonmarijuanaretailandproductionlicenses.MrManolosgraduatedfromtheUniversityofCalifornia,RiversidewithaBachelorofSciencedegreeinComputerScienceandBusinessAdministration.


 


 







 


Important
Risk Factors 


AninvestmentinCannabisGlobalInc,Inc.involvessignificantrisk.


 


Youshouldseektheadviceofappropriateprofessionaladvisorsifyoudonotpossessthenecessarybackgroundorexperiencestoanalyzeormanagetheserisks.


 


Youshouldcarefullyconsiderthefollowingrisksanduncertaintiesinadditiontootherinformationinthisprospectusinevaluatingourcompanyandourbusinessbeforepurchasingoursecurities.Ourbusiness,operatingresultsandfinancialconditioncouldbeseriouslyharmedasaresultoftheoccurrenceofanyofthefollowingrisks.Youcouldloseallorpartofyourinvestmentduetoanyoftheserisks.Youshouldinvestinourcommonstockonlyifyoucanaffordtoloseyourentireinvestment.


 


RisksRelatedtoOurBusiness


 


Weplanonderivingmost,orasubstantialportionofourrevenuesfromthecultivation,processing,anddistributionofcannabisandcannabiscontaineditems.


 


Operationofnewbusinesses,orexistingbusinesses,inthecannabissectorinvolvesagreatdealofriskandourinvestorsshouldbepreparedaccordinglytoacceptahighlevelofinvestmentrisk,includinglossofallinvestedcapital.


 


TheFarmBillrecentlypassed,andundevelopedsharedstate-federalregulationsoverhempcultivationandproductionmayimpactourbusiness.


 


TheFarmBillwassignedintolawonDecember20,2018.UnderSection10113oftheFarmBill,statedepartmentsofagriculturemustconsultwiththestate’sgovernorandchieflawenforcementofficertodeviseaplanthatmustbesubmittedtotheSecretaryofUSDA.Astate’splantolicenseandregulatehempcanonlycommenceoncetheSecretaryofUSDAapprovesthatstate’splan.Instatesoptingnottodeviseahempregulatoryprogram,USDAwillneedtoconstructaregulatoryprogramunderwhichhempcultivatorsinthosestatesmustapplyforlicensesandcomplywithafederallyrunprogram.Thedetailsandscopesofeachstate’splansarenotknownatthistimeandmaycontainvaryingregulationsthatmayimpactourbusiness.Evenifastatecreatesaplaninconjunctionwithitsgovernorandchieflawenforcementofficer,theSecretaryoftheUSDAmustapproveit.Therecanbenoguaranteethatanystateplanwillbeapproved.Reviewtimesmaybe
extensive.There maybeamendmentsandthe ultimateplans,ifapprovedbystatesandtheUSDA,maymateriallylimitourbusiness
dependinguponthescopeoftheregulations.


 


LawsandregulationsaffectingourindustrytobedevelopedundertheFarmBillareindevelopment.


 


AsaresultoftheFarmBill’srecentpassage,therewillbeaconstantevolutionoflawsandregulationsaffectingthehempindustrythatcoulddetrimentallyaffectouroperations.Local,stateandfederalhemplawsandregulationsmaybebroadinscopeandsubjecttochanginginterpretations.Thesechangesmayrequireustoincursubstantialcostsassociatedwithlegalandcompliancefeesandultimatelyrequireustoalterourbusinessplan.Furthermore,violationsoftheselaws,orallegedviolations,coulddisruptourbusinessandresultinamaterialadverseeffectonouroperations.Inaddition,wecannotpredictthenatureofanyfuturelaws,regulations,interpretationsorapplications,anditispossiblethatregulationsmaybeenactedinthefuturethatwillbedirectlyapplicabletoourbusiness.


 


Ourcurrentorplannedinvolvementinthecultivation,processing,distribution,andgeneralactivitiesrelatingtocannabismayconflictwiththeFederalControlledSubstancesAct.


 


Cannabis,marijuanaandderivatives,whilelegalinCaliforniaandinsomeotherstates,remainsillegalunderfederallaw,andare“Schedule1”drugsundertheControlledSubstancesAct(21U.S.C.§811).AsSchedule1drugs,cannabis,marijuanaandderivativesareviewedasbeinghighlyaddictiveandhavingnomedicalvalue.TheUnitedStatesDrugEnforcementAgencyenforcestheControlledSubstancesAct,andpersonsviolatingitaresubjecttofederalcriminalprosecution.ThecriminalpenaltystructureintheControlledSubstancesActisdeterminedbasedonthespecificpredicateviolations,includingbutnotlimitedto:simplepossession,drugtrafficking,attemptandconspiracy,distributiontominors,traffickingindrugparaphernalia,moneylaundering,racketeering,environmentaldamagefromillegalmanufacturing,continuingcriminalenterprise,andsmuggling.AfirstconvictionundertheControlledSubstancesActcangenerallyresultinpossiblefinesfrom$250,000to$50milliondollars,andincarcerationforperiodsgenerallyfromfiveanduptofortyyears.Forasecondconviction,finesincreasegenerallyfrom$500,000to$75milliondollars,andincarcerationforperiodsgenerallyfromtenyearstotwentyyearstolife.SomeofoursuchbusinessactivitiesisindirectconflictwiththefederalControlledSubstancesAct.IfthefederalgovernmentweretoenforcetheControlledSubstancesActasitrelatestocannabis,saidactivitiescould
be materiallyaffected.


 


Riskofgovernmentaction


 


Whilewewilluseourbesteffortstocomplywithalllaws,includingfederal,stateandlocallawsandregulations,thereisapossibilitythatgovernmentalactiontoenforceanyallegedviolationsmayresultinlegalfeesanddamageawardsthatwouldadverselyaffectus.


 


Weareanewbusinessandwemayneverbesuccessful


 


Wearejustbeginningbusinessoperationsandhaveasofyetdevelopednorevenuestreams.Asaresult,wemayincursignificantfinanciallossesintheforeseeablefuture.ThereisnohistoryuponwhichtobaseanyassumptionastothelikelihoodthatourCompanywillprovesuccessful.Wecannotprovideinvestorswithanyassurancethatourbusinesswillattractcustomersandinvestors.Ifweareunabletoaddresstheserisks,thereisahighprobabilitythatourbusinesswillfail.


 


Becauseourbusinessisdependentuponcontinuedmarketacceptancebyconsumers,anynegativetrendswilladverselyaffectourbusinessoperations


 


Wewillbesubstantiallydependentoncontinuedmarketacceptanceandproliferationofconsumersofcannabisandcannabisrelatedproducts.Webelievethatascannabis,hempandhemp-derivedCBDbecomesmoreacceptedasaresultofthepassageoftheFarmBill,thestigmaassociatedwiththesesectorwilldiminishandasaresultconsumerdemandwillcontinuetogrow.Whilewebelievethatthemarketandopportunityinthehempspacecontinuestogrow,wecannotpredictthefuturegrowthrateandsizeofthemarket.Anynegativeoutlookontheindustrywilladverselyaffectourbusinessoperations.


 


ThepossibleFDARegulationofhempandindustrialhempderivedCBD,andthepossibleregistrationoffacilitieswherehempisgrownandCBDproductsareproduced,ifimplemented,couldnegativelyaffectthecannabisindustrygenerally,whichcoulddirectlyaffectourfinancialcondition


 


TheFarmBillestablishedthathempcontaininglessthe.03%THCwasnolongera


Schedule1drugundertheCSA.Previously,theU.S.FoodandDrugAdministration(“FDA”)didnotapprovehemporCBDderivedfromhempasasafeandeffectivedrugforanyindication.TheFDAconsideredhempandhemp-derivedCBDasillegalSchedule1drugs.Further,theFDAhasconcludedthatproductscontaininghemporCBDderivedfromhempareexcluded
fromthedietary supplementdefinitionunder sections201(ff)(3)(B)(i)and(ii)oftheU.S.Food,Drug&CosmeticAct,respectively.
However,asaresultofthepassageoftheFarmBill,atsomeindeterminatefuture time,theFDAmaychoosetochangeitspositionconcerningproductscontaininghemp,orCBDderivedfromhemp,andmaychoosetoenactregulationsthatareapplicabletosuchproducts,including,butnotlimitedto:thegrowth,cultivation,harvestingandprocessingofhemp;regulationscoveringthephysicalfacilitieswherehempisgrown;andpossibletestingtodetermineefficacyandsafetyofhempderivedCBD.Inthishypotheticalevent,productscontainingCBDmaybesubjecttoregulation.Inthehypotheticaleventthatsomeoralloftheseregulationsareimposed,wedonotknowwhattheimpactwouldbeonthehempindustryingeneral,andwhatcosts,requirementsandpossibleprohibitionsmaybeenforced.Ifweareunabletocomplywiththeconditionsandpossiblecostsofpossibleregulationsand/orregistrationasmaybeprescribedbytheFDA,wemaybeunabletocontinuetooperateourbusiness.


 


Wemayhavedifficultyaccessingtheserviceofbanks


 


Itisoftendifficultforcannabisbusinesstoaccesstheservicesofbanksandwemayexperiencesuchdifficulties.OnFebruary14,2014,theU.S.governmentissuedrulesallowingbankstolegallyprovidefinancialservicestostate-licensedcannabisbusinesses.AmemorandumissuedbytheJusticeDepartmenttofederalprosecutorsre-iteratedguidancepreviouslygiven,thistimetothefinancialindustry,thatbankscandobusinesswithlegalcannabisbusinessesand"maynot"beprosecuted.Weassumethisappliestohemp.TheTreasuryDepartment'sFinancialCrimesEnforcementNetwork(FinCEN)issuedguidelinestobanksthat"itispossibletoprovidefinancialservices""tostate-licensedcannabis(andhemp)businessesandstillbeincompliancewithfederalanti-moneylaunderinglaws.Theseprovisionscreatedbarrierstoourbankingoperations.WiththepassageoftheFarmBill,weexpectthatthebankingindustrywillbemoreopentodoingbusinesswithcomplianthempbusinesses.However,thismaytaketimeandmaynotresultinamoreopenbankingclimate.Weexpectthatbankswillbemoreopentoservinghempbusinesses,butthereisnoguarantee–evenwiththepassageoftheFarmBill.


 


Bankingregulationsinourbusinessarecostlyandtimeconsuming


 


Inassessingtheprospectiveriskofprovidingservicestoacannabisorhemp-relatedbusiness,afinancialinstitutionsmayconductcustomerduediligencethatincludes:(i)verifyingwiththeappropriatestateauthoritieswhetherthebusinessisdulylicensedandregistered;(ii)reviewingthelicenseapplication(andrelateddocumentation)submittedbythebusinessforobtainingastatelicensetooperateitscannabis-relatedbusiness;(iii)requestingfromstatelicensingandenforcementauthoritiesavailableinformationaboutthebusinessandrelatedparties;(iv)developinganunderstandingof
the normalandexpectedactivityforthe business, includingthetypesofproductstobesold;(v)ongoingmonitoringofpublicly
availablesourcesforadverseinformationaboutthebusinessandrelatedparties;(vi) ongoingmonitoringforsuspiciousactivity,includingforanyoftheredflagsdescribedinthisguidance;and(vii)refreshinginformationobtainedaspartofcustomerduediligenceonaperiodicbasisandcommensuratewiththerisk.Withrespecttoinformationregardingstatelicensureobtainedinconnectionwithsuchcustomerduediligence,afinancialinstitutionmayreasonablyrelyontheaccuracyofinformationprovidedbystatelicensingauthorities,wherestatesmakesuchinformationavailable.Theseregulatoryreviewsmaybetimeconsumingandcostly.


 


Duetoourinvolvementinthecannabisandhempindustries,wemayhaveadifficulttimeobtainingthevariousinsurancesthataredesiredtooperateourbusiness,whichmayexposeustoadditionalriskandfinancialliability


 


Insurancethatisotherwisereadilyavailable,suchasgeneralliability,anddirectorsandofficers’insurance,ismoredifficultforustofind,andmoreexpensive,becauseweareserviceproviderstocompaniesinthecannabisindustry.Therearenoguaranteesthatwewillbeabletofindsuchinsuranceinthefuture,orthatthecostwillbeaffordabletous.Ifweareforcedtogowithoutsuchinsurance,itmaypreventusfromenteringintocertainbusinesssectors,mayinhibitourgrowth,andmayexposeustoadditionalriskandfinancialliabilities.


 


TheCompany’sindustryishighlycompetitive,andwehavelesscapitalandresourcesthanmanyofourcompetitorswhichmaygivethemanadvantageindevelopingandmarketingproductssimilartooursormakeourproductsobsolete.


 


Weareinvolvedinahighlycompetitiveindustrywherewemaycompetewithnumerousothercompanieswhoofferalternativemethodsorapproaches,whomayhavefargreaterresources,moreexperience,andpersonnelperhapsmorequalifiedthanwedo.Suchresourcesmaygiveourcompetitorsanadvantageindevelopingandmarketingproductssimilartooursorproductsthatmakeourproductslessdesirabletoconsumersorobsolete.Therecanbenoassurancethatwewillbeabletosuccessfullycompeteagainsttheseotherentities.


 


Wealsoexpectthatnewcompetitorsmayintroduceproductsorservicesthataredirectlyorindirectlycompetitivewithus.Thesecompetitorsmaysucceedindevelopingproductsandservicesthathavegreaterfunctionalityorarelesscostlythanourproductsandservicesandmaybemoresuccessfulinmarketingsuchproductsandservices.Technologicalchangeshaveloweredthecostofoperatingcommunicationsandcomputersystemsandpurchasingsoftware.Thesechanges
reduceourcostofsellingproducts andprovidingservices,butalso facilitate increasedcompetitionbyreducingcompetitors’costsinprovidingsimilarservices.
Thiscompetitioncouldincreasepricecompetitionandreduceanticipatedprofit margins.


 


Wecannotguaranteethatwewillsucceedinachievingourgoals,andourfailuretodosowouldhaveamaterialadverseeffectonourbusiness,prospects,financialconditionandoperatingresults


 


Weareanewbusinessoperatinginarelativelynewmarketsector.Asistypicalinanewandrapidlyevolvingindustry,demandandmarketacceptanceforrecentlyintroducedproductsandservicesaresubjecttoahighlevelofuncertaintyandrisk.BecausethemarketforourCompanyisnewandevolving,itisdifficulttopredictwithanycertaintythesizeofthismarketanditsgrowthrate,ifany.WecannotguaranteethatamarketforourCompanywilldeveloporthatdemandforourproductswillemergeorbesustainable.Ifthemarketfailstodevelop,developsmoreslowlythanexpectedorbecomessaturatedwithcompetitors,ourbusiness,financialconditionandoperatingresultswouldbemateriallyadverselyaffected.


TheCompany’sfailuretocontinuetoattract,train,orretainhighlyqualifiedpersonnelcouldharmtheCompany’sbusiness


TheCompany’ssuccessalsodependsontheCompany’sabilitytoattract,train,andretainqualifiedpersonnel,specificallythosewithmanagementandproductdevelopmentskills.Inparticular,theCompanymusthireadditionalskilledpersonneltofurthertheCompany’sresearchanddevelopmentefforts.Competitionforsuchpersonnelisintense.IftheCompanydoesnotsucceedinattractingnewpersonnelorretainingandmotivatingtheCompany’scurrentpersonnel,theCompany’sbusinesscouldbeharmed.


Thelossofkeymanagementpersonnelcouldadverselyaffectourbusiness


Wedependonthecontinuedservicesofourexecutiveofficersandseniormanagementteamastheyworkcloselywithindependentassociateleadersandareresponsibleforourday-to-dayoperations.Oursuccessdependsinpartonourabilitytoretainourexecutiveofficers,tocompensateourexecutiveofficersatattractivelevels,andtocontinuetoattractadditionalqualifiedindividualstoourmanagementteam.Althoughwehaveenteredintoemploymentagreementswithourseniormanagementteam,anddonotbelievethatanyofthemareplanningtoleaveorretireinthenearterm,wecannotassureyouthatourseniormanagerswillremainwithus.Thelossorlimitationoftheservicesofanyofourexecutiveofficersormembersofourseniormanagementteam,
or theinabilitytoattractadditional qualified managementpersonnel,couldhaveamaterialadverseeffectonourbusiness,
financialcondition,resultsofoperations,orindependentassociaterelations.


Thelackofavailableandcost-effectivedirectorsandofficer’sinsurancecoverageinourindustrymaycauseustobeunabletoattractandretainqualifiedexecutives,andthismayresultinourinabilitytofurtherdevelopourbusiness


Ourbusinessdependsonattractingindependentdirectors,executivesandseniormanagementtoadvanceourbusinessplans.Wecurrentlydonothavedirectorsandofficers’insurancetoprotectourdirectors,officersandthecompanyagainstpossiblethird-partyclaims.Thisisduetothesignificantlackavailabilityofsuchpoliciesinthecannabisindustryatreasonablycompetitiveprices.Asaresult,theCompanyandourexecutivedirectorsandofficersaresusceptibletoliabilityclaimsarisingbythirdparties,andasaresult,wemaybeunabletoattractandretainqualifiedindependentdirectorsandexecutivemanagementcausingthedevelopmentofourbusinessplanstobeimpededasaresult.


Therecouldbeunidentifiedrisksinvolvedwithaninvestmentinoursecurities


 


Theforegoingriskfactorsarenotacompletelistorexplanationoftherisksinvolvedwithaninvestmentinthesecurities.AdditionalriskswilllikelybeexperiencedthatarenotpresentlyforeseenbytheCompany.Prospectiveinvestorsmustnotconstruetheinformationprovidedhereinasconstitutinginvestment,legal,taxorotherprofessionaladvice.Beforemakinganydecisiontoinvestinoursecurities,youshouldreadthisentireprospectusandconsultwithyourowninvestment,legal,taxandotherprofessionaladvisors.AninvestmentinoursecuritiesissuitableonlyforinvestorswhocanassumethefinancialrisksofaninvestmentintheCompanyforanindefiniteperiodoftimeandwhocanaffordtolosetheirentireinvestment.TheCompanymakesnorepresentationsorwarrantiesofanykindwithrespecttothelikelihoodofthesuccessorthebusinessoftheCompany,thevalueofoursecurities,anyfinancialreturnsthatmaybegeneratedoranytaxbenefitsorconsequencesthatmayresultfromaninvestmentintheCompany.


 


RisksRelatedtotheCompany


 


		Uncertainty	ofprofitability



 


Weareanewbusinessandtherecanbenoassurancewewilleverproduceviableproductsorproducemeaningfulrevenues.Ourrevenuesandourprofitabilitymay
beadverselyaffectedbyeconomicconditionsandchangesinthemarketforour products.Ourbusinessisalsosubjecttogeneraleconomicrisksthatcouldadversely
impacttheresultsofoperationsandfinancialcondition.


 


Becauseofthenatureofthetypeofbusinessesweplantoenteritisdifficulttoaccuratelyforecastrevenuesandoperatingresultsandtheseitemscouldfluctuateinthefutureduetoanumberoffactors.Thesefactorsmayinclude,amongotherthings,thefollowing:


 



· Ourabilitytoraisesufficientcapitaltotakeadvantageofopportunitiesandgeneratesufficientrevenuestocoverexpenses.


 


 



· Ourabilitytosourcestrongopportunitieswithsufficientriskadjustedreturns.


 


 



· Ourabilitytomanageourcapitalandliquidityrequirementsbasedonchangingmarketconditionsgenerallyandchangesinthedevelopinglegalcannabis;CBD,medicalmarijuanaandrecreationalmarijuanaindustries.


 


 



· Theamountandtimingofoperatingandothercostsandexpenses.


 


 



· Thenatureandextentofcompetitionfromothercompaniesthatmayreducemarketshareandcreatepressureonpricingandinvestmentreturnexpectations.


 


 


 ·
Adversechangesinthenationalandregionaleconomiesinwhichwewillparticipate,including,butnotlimitedto,changesinourperformance,capitalavailability,andmarketdemand.


 


 



· Adversechangesintheprojectsinwhichweplantoinvestwhichresultfromfactorsbeyondourcontrol,including,butnotlimitedto,achangeincircumstances,capacityandeconomicimpacts.


 


 



· Adversedevelopmentsintheeffortstolegalizecannabisorincreasedfederalenforcement.


 


 



· Changesinlaws,regulations,accounting,taxation,andother


requirementsaffectingouroperationsandbusiness.


 


 



· Ouroperatingresultsmayfluctuatefromyeartoyearduetothefactorslistedaboveandothersnotlisted.Attimes,thesefluctuationsmaybesignificant.


 


 


Managementofgrowthwillbenecessaryforustobecompetitive


 


Successfulexpansionofourbusinesswilldependonourabilitytoeffectivelyattractandmanagestaff,strategicbusinessrelationships,andshareholders.Specifically,wewillneedtohireskilledmanagementandtechnicalpersonnelaswellasmanagepartnershipstonavigateshiftsinthegeneraleconomicenvironment.Expansionhasthepotentialtoplacesignificantstrainsonfinancial,management,andoperationalresources,yetfailuretoexpandwillinhibitourprofitabilitygoals.


 


Weareenteringintoapotentiallyhighlycompetitivemarket


 


Themarketsforbusinessesinthecannabisandhempindustriesarecompetitiveandevolving.Inparticular,wefacestrongcompetitionfromlargercompaniesthatmaybeintheprocessofofferingsimilarproductsandservicestoours.Manyofourcurrent
andpotentialcompetitorshavelonger operatinghistories,significantlygreater financial,marketingandotherresourcesandlargerclientbasesthanwehave(ormay
beexpectedtohave).


 


Giventherapidchangesaffectingtheglobal,national,andregionaleconomiesgenerallyandthecannabisandhempindustries,inparticular,wemaynotbeabletocreateandmaintainacompetitiveadvantageinthemarketplace.Oursuccesswilldependonourabilitytokeeppacewithanychangesinitsmarkets,especiallywithlegalandregulatorychanges.Oursuccesswilldependonourabilitytorespondto,amongotherthings,changesintheeconomy,marketconditions,andcompetitivepressures.Anyfailurebyustoanticipateorrespondadequatelytosuchchangescouldhaveamaterialadverseeffectonourfinancialcondition,operatingresults,liquidity,cashflowandouroperationalperformance.


 


Ifwefailtoprotectourintellectualproperty,ourbusinesscouldbeadverselyaffected


 


Ourviabilitywilldepend,inpart,onourabilitytodevelopandmaintaintheproprietaryaspectsofproductsandbrandstodistinguishourproductsandservicesfromourcompetitors'productsandservices.Wewillrelyonpatents,copyrights,trademarks,tradesecrets,andconfidentialityprovisionstoestablishandprotectourintellectualproperty.


 


Anyinfringementormisappropriationofourintellectualpropertycoulddamageitsvalueandlimitourabilitytocompete.Wemayhavetoengageinlitigationtoprotecttherightstoourintellectualproperty,whichcouldresultinsignificantlitigationcostsandrequireasignificantamountofourtime.


 


Competitorsmayalsoharmoursalesbydesigningproductsthatmirrorthecapabilitiesofourproductsortechnologywithoutinfringingonourintellectualpropertyrights.Ifwedonotobtainsufficientprotectionforourintellectualproperty,orifweareunabletoeffectivelyenforceourintellectualpropertyrights,ourcompetitivenesscouldbeimpaired,whichwouldlimitourgrowthandfuturerevenue.


 


Wemayalsofinditnecessarytobringinfringementorotheractionsagainstthirdpartiestoseektoprotectourintellectualpropertyrights.Litigationofthisnature,evenifsuccessful,isoftenexpensiveandtime-consumingtoprosecute,andtherecanbenoassurancethatwewillhavethefinancialorotherresourcestoenforceourrightsorbeabletoenforceourrightsorpreventotherpartiesfromdevelopingsimilartechnologyordesigningaroundourintellectualproperty.


 


Ourtradesecretsmaybedifficulttoprotect


 


Oursuccessdependsupontheskills,knowledgeandexperienceofourpersonnel,ourconsultantsandadvisors.Becauseweoperateinahighlycompetitiveindustry,werelyinpartontradesecretstoprotectourproprietaryproductsandprocesses.However,tradesecretsaredifficulttoprotect.Wewillenterintoconfidentialityornon-disclosureagreementswithourcorporatepartners,employees,consultants,outsidescientificcollaborators,developersandotheradvisors.Theseagreementsgenerallyrequirethatthereceivingpartykeepconfidentialandnotdisclosetothirdparty’sconfidentialinformationdevelopedbythereceivingpartyormadeknowntothereceivingpartybyusduringthecourseofthereceivingparty'srelationshipwithus.Theseagreementsalsogenerallyprovidethatinventionsconceivedbythereceivingpartyinthecourseofrenderingservicestouswillbeourexclusiveproperty,andweenterintoassignmentagreementstoprotectourrights.


 


Theseconfidentiality,inventionsandassignmentagreementsmaybebreachedandmaynoteffectivelyassignintellectualpropertyrightstous.Ourtradesecretsalsocouldbeindependentlydiscoveredbycompetitors,inwhichcasewewouldnotbeabletopreventtheuseofsuchtradesecretsbyourcompetitors.Theenforcementofaclaimallegingthatapartyillegallyobtainedandwasusingourtradesecretscouldbedifficult,expensiveandtimeconsumingandtheoutcomewouldbeunpredictable.Thefailuretoobtainormaintainmeaningfultradesecretprotectioncouldadverselyaffectourcompetitiveposition.


 


OurBusinessCanbeaffectedbyunusualweatherpatternsorotherproblemsinherenttocultivationandprocessingofcultivatedmaterials.


 


Theproductionofsomeofourproductsreliesontheavailabilityanduseofliveplantmaterial.Growingperiodscanbeimpactedbyweatherpatternsandtheseunpredictableweatherpatternsmayimpactourabilitytoharvesthemp.Inaddition,severeweather,includingdroughtandhail,candestroyahempcrop,whichcouldresultinushavingnohemptoharvest,processandsell.IfoursuppliersareunabletoobtainsufficienthempfromwhichtoprocessCBD,ourabilitytomeetcustomerdemand,generatesales,andmaintainoperationswillbeimpacted.Thereareahostofotherissuesinherenttocultivationandtheprocessingofcultivatedmaterials,theseinclude,butarenotlimitedto:pesticideresidues,molds,mildews,insectdamage,spoilage,unacceptabletestresultsofcropsand/orcompletedproducts.Allofthesefactors,andothersinherentto
cultivationandrelatedprocessing,could significantlyaffectourbusinessandresultinlossofinvestment.


 


RisksRelatedtoOurCommonShares


 


Becausewemayissueadditionalsharesofourcommonstock,investmentinourcompanycouldbesubjecttosubstantialdilution


 


Weanticipatethatalloratleastsomeofourfuturefunding,ifany,willbeintheformofequityfinancingfromthesaleofourcommonstock.Ifwedosellmorecommonstock,investors’investmentinourcompanywillbediluted.Dilutionisthedifferencebetweenwhatinvestorspayfortheirstockandthenettangiblebookvaluepershareimmediatelyaftertheadditionalsharesaresoldbyus.Ifdilutionoccurs,anyinvestmentinourcompany’scommonstockcouldseriouslydeclineinvalue.


 


Tradinginourcommonstockhasbeensubjecttowidefluctuations.Widefluctuationsinthefuturearelikely


 


OurcommonstockiscurrentlyquotedforpublictradingonthePinkSheetMarketTier.Thetradingpriceofourcommonstockhasbeensubjecttowidefluctuations.Tradingpricesofourcommonstockmayfluctuateinresponsetoanumberoffactors,manyofwhichwillbebeyondourcontrol.Thestockmarkethasgenerallyexperiencedextremepriceandvolumefluctuationsthathaveoftenbeenunrelatedordisproportionatetotheoperatingperformanceofcompanieswithlimitedbusinessoperation.Therecanbenoassurancethattradingpricesandpriceearningsratiospreviouslyexperiencedbyourcommonstockwillbematchedormaintained.Thesebroadmarketandindustryfactorsmayadverselyaffectthemarketpriceofourcommonstock,regardlessofouroperatingperformance.Inthepast,followingperiodsofvolatilityinthemarketpriceofacompany’ssecurities,securitiesclassactionlitigationhasoftenbeeninstituted.Suchlitigation,ifinstituted,couldresultinsubstantialcostsforusandadiversionofmanagement’sattentionandresources.


 


WeplancorporateactionwithTheFinancialIndustryRegulatoryAuthority(FINRA)-Therecanbenoassuranceswillbesuccessfulinthesecorporateactions


 


AFINRAcorporateactionisaneventbyapubliccompanythatmayaffectthecompany’ssecuritiesand,therefore,itsshareholders.Corporateactionscanrangefrommakingachangetoacompany’snametoissuingadividendorotherdistributiontoamajorrestructuringofthecompany.WeplanseveralcorporateactionswhichwillrequiretheapprovalbyFINRA.Therecanbeno
assuranceswewillbe successful inthesecorporateactions.Ourinabilitytoimplementsuchcorporateactionscould
negativelyaffectourabilitytoattractcapitalandcouldimpactourbusinessnegativelyinotherways.


 


Delawarelawprovidestherightsforcorporationstoindemnifyofficersanddirectors.Thus,ourBy-Lawsprovidefortheindemnificationofourofficersanddirectorsatourexpense,andcorrespondinglylimitstheirliability,whichmayresultinamajorcosttousandhurttheinterestsofourshareholdersbecausecorporateresourcesmaybeexpendedforthebenefitofofficersand/ordirectors


 


OurBy-LawsincludeprovisionsthateliminatethepersonalliabilityofourdirectorsformonetarydamagestothefullestextentpossibleunderthelawsoftheStateofDelawareorotherapplicablelaw.Theseprovisionseliminatetheliabilityofourdirectorsandourshareholdersformonetarydamagesarisingoutofanyviolationofadirectorofhisfiduciarydutyofduecare.UnderDelawarelaw,however,suchprovisionsdonoteliminatethepersonalliabilityofadirectorfor(i)breachofthedirector'sdutyofloyalty,(ii)actsoromissionsnotingoodfaithorinvolvingintentionalmisconductorknowingviolationoflaw,(iii)paymentofdividendsorrepurchasesofstockotherthanfromlawfullyavailablefunds,or(iv)anytransactionfromwhichthedirectorderivedanimproperbenefit.Theseprovisionsdonotaffectadirector'sliabilitiesunderthefederalsecuritieslawsortherecoveryofdamagesbythirdparties.


 


WedonotintendtopaycashdividendsonanyinvestmentinthesharesofstockofourCompanyandanygainonaninvestmentinourCompanywillneedtocomethroughanincreaseinourstock’sprice,whichmayneverhappen


 


Wehaveneverpaidanycashdividendsandcurrentlydonotintendtopayanycashdividendsfortheforeseeablefuture.Totheextentthatwerequireadditionalfundingcurrentlynotprovidedfor,ourfundingsourcesmayprohibitthepaymentofadividend.Becausewedonotcurrentlyintendtodeclaredividends,anygainonaninvestmentinourcompanywillneedtocomethroughanincreaseinthestock’sprice.Thismayneverhappen,andinvestorsmaylosealloftheirinvestmentinourcompany.


 


Oursecuritiesaresubjecttopennystockrules.Youmayhavedifficultyre-sellingyourshares


 


Oursharesaspennystocks,arecovered
bySection15(g)oftheSecurities Exchange Actof1934whichimposesadditionalsalespracticerequirementsonbroker/dealerswhosellourcompany’ssecuritiesincludingthedeliveryofastandardizeddisclosuredocument;disclosureandconfirmationofquotationprices;disclosureofcompensationthebroker/dealerreceives;and,furnishingmonthlyaccountstatements.Theserulesapplytocompanieswhosesharesarenottradedonanationalstockexchange,tradeatlessthan$5.00pershare,orwhodonotmeetcertainotherfinancialrequirementsspecifiedbytheSecuritiesandExchangeCommission.Theserulesrequirebrokerswhosell“pennystocks”topersonsotherthanestablishedcustomersand“accreditedinvestors”tocompletecertaindocumentation,makesuitabilityinquiriesofinvestors,andprovideinvestorswithcertaininformationconcerningtherisksoftradinginsuchpennystocks.Theserulesmaydiscourageorrestricttheabilityofbrokerstoselloursharesofcommonstockandmayaffectthesecondarymarketforoursharesofcommonstock.Theserulescouldalsohamperourabilitytoraisefundsintheprimarymarketforoursharesofcommonstock.


 


FINRAsalespracticerequirementsmayalsolimitastockholder’sabilitytobuyandsellourstock


 


Inadditiontothe“pennystock”rulesdescribedabove,theFinancialIndustryRegulatoryAuthority(knownas“FINRA”)hasadoptedrulesthatrequirethatinrecommendinganinvestmenttoacustomer,abroker-dealermusthavereasonablegroundsforbelievingthattheinvestmentissuitableforthatcustomer.Priortorecommendingspeculativelow-pricedsecuritiestotheirnon-institutionalcustomers,broker-dealersmustmakereasonableeffortstoobtaininformationaboutthecustomer’sfinancialstatus,taxstatus,investmentobjectivesandotherinformation.Underinterpretationsoftheserules,FINRAbelievesthatthereisahighprobabilitythatspeculativelow-pricedsecuritieswillnotbesuitableforatleastsomecustomers.FINRArequirementsmakeitmoredifficultforbroker-dealerstorecommendthattheircustomersbuyourcommonshares,whichmaylimityourabilitytobuyandsellourstockandhaveanadverseeffectonthemarketforourshares.


 


 


 


Costsandexpensesofbeingareportingcompanyunderthe1934Securitiesand


ExchangeActmaybeburdensomeandpreventusfromachievingprofitability


 


Asapubliccompany,wearesubjecttothereportingrequirementsoftheSecuritiesExchangeActof1934,asamended,
and partsofthe Sarbanes-OxleyAct. Weexpect thattherequirementsoftheserulesandregulationswillcontinuetoincreaseour
legal,accountingandfinancialcompliancecosts,makesomeactivitiesmoredifficult,time-consumingandcostly,andplacesignificantstrainonourpersonnel,systemsandresources.


 


Therecouldbeunidentifiedrisksinvolvedwithaninvestmentinoursecurities


 


Theforegoingriskfactorsarenotacompletelistorexplanationoftherisksinvolvedwithaninvestmentinthesecurities.AdditionalriskswilllikelybeexperiencedthatarenotpresentlyforeseenbytheCompany.Prospectiveinvestorsmustnotconstruethistheinformationprovidedhereinasconstitutinginvestment,legal,taxorotherprofessionaladvice.Beforemakinganydecisiontoinvestinoursecurities,youshouldreadthisentireprospectusandconsultwithyourowninvestment,legal,taxandotherprofessionaladvisors.AninvestmentinoursecuritiesissuitableonlyforinvestorswhocanassumethefinancialrisksofaninvestmentintheCompanyforanindefiniteperiodoftimeandwhocanaffordtolosetheirentireinvestment.TheCompanymakesnorepresentationsorwarrantiesofanykindwithrespecttothelikelihoodofthesuccessorthebusinessoftheCompany,thevalueofoursecurities,anyfinancialreturnsthatmaybegeneratedoranytaxbenefitsorconsequencesthatmayresultfromaninvestmentintheCompany.


 


 


		COMMON	STOCKSUBSCRIPTION



		AGREEMENT	



 


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		RECITALS:	



 


WHEREAS,theCompanyandtheSubscriberareexecutinganddeliveringthis


AgreementinrelianceuponanexemptionfromsecuritiesregistrationaffordedbyRule506(b)ofRegulationDisconsidereda“safeharbor”underSection4(a)(2)(“RegulationD”)aspromulgatedbytheUnitedStatesSecuritiesandExchangeCommission(the“Commission”)undertheSecuritiesActof1933,asamended(the“1933Act”).


 


WHEREAS,theCompanyhasengagedinaprivateoffering(the“Offering”)inwhichtheSubscriberagreestopurchaseandtheCompanyagreestoofferandsellcommonsharesatthepriceof$0.025foreachcommonsharewithamaximumpurchaseofOneMillionDollars($1,000,000).


WHEREAS,theCompanydesirestoenterintothisAgreementtoissueandsellthePurchasedSharesandtheSubscriberdesirestopurchasethatnumberofPurchasedSharessetforthinAppendixA,heretoonthetermsandconditionssetforthherein.


		AGREEMENT:	



NOW,THEREFORE,inconsiderationofthemutualcovenantsandotheragreementscontainedinthisAgreement,theCompanyandtheSubscriberherebyagreeasfollows:


1.                 
PurchaseandSaleofPurchasedShares.Subjecttothesatisfactionor


waiverofthetermsandconditionsofthisAgreement,ontheClosingDate(asdefinedbelow),eachSubscribershallpurchaseandtheCompanyshallselltoeachSubscriberthePurchasedUnitsfortheportionofthePurchasePricedesignatedonthesignaturepageshereto.


 


2.                 
Closing.Theissuance and saleofthe PurchasedSharesshalloccuron


theclosingdate(the“ClosingDate”),whichshallbethedatethatSubscriberfunds
representingthenetamountduetotheCompanyfromthePurchasePriceoftheOfferingis
transmittedbywiretransferorotherwisetoorforthebenefitoftheCompany.The consummationofthetransactionscontemplatedherein(the“Closing”)shalltakeplacesuch
dateandtimeastheSubscriberandtheCompanymayagreeupon;provided,thatalloftheconditionssetforthinSection11hereofandapplicabletotheClosingshallhavebeenfulfilledorwaivedinaccordanceherewith.


3.                 
SubscriberRepresentations,WarrantiesandCovenants.TheSubscriberherebyrepresentsandwarrantstoandagreeswiththeCompanythat:


 


		(a)	OrganizationandStandingoftheSubscriber.IfsuchSubscriberisanentity,suchSubscriberisacorporation,partnershiporotherentitydulyincorporatedororganized,validlyexistingandingoodstandingunderthelawsofthejurisdictionofitsincorporationororganization.



 


		(b)	AuthorizationandPower.SuchSubscriberhastherequisitepowerandauthoritytoenterintoandperformthisAgreementandtheotherTransactionDocuments(asdefinedinSection4(c))andtopurchasethePurchasedSharesbeingsoldtoithereunder.Theexecution,deliveryandperformanceofthisAgreementandtheotherTransactionDocumentsbysuchSubscriberandtheconsummationbyitofthetransactionscontemplatedherebyandtherebyhavebeendulyauthorizedbyallnecessarycorporateorpartnershipaction,andnofurtherconsentorauthorizationofsuchSubscriberoritsBoardofDirectors,stockholders,partners,members,asthecasemaybe,isrequired.ThisAgreementandtheotherTransactionDocumentshavebeendulyauthorized,executedanddeliveredbysuchSubscriberandconstitutes,orshallconstitutewhenexecutedanddelivered,avalidandbindingobligationofsuchSubscriberenforceableagainstsuchSubscriberinaccordancewiththetermsthereof.



 


		(c)	NoConflicts.Theexecution,deliveryandperformanceofthisAgreementandtheotherTransactionDocumentsandtheconsummationbysuchSubscriberofthetransactionscontemplatedherebyandtherebyorrelatingheretodonotandwillnot(i)resultinaviolationofsuchSubscriber’scharterdocumentsorbylawsorotherorganizationaldocumentsor(ii)conflictwith,orconstituteadefault(oraneventwhichwithnoticeorlapseoftimeorbothwouldbecomeadefault)under,orgivetoothersanyrightsoftermination,amendment,accelerationorcancellationofanyagreement,indentureorinstrumentorobligationtowhichsuchSubscriberisapartyorbywhichitspropertiesorassetsarebound,orresultinaviolationofanylaw,rule,orregulation,oranyorder,judgmentordecreeofanycourtorgovernmentalagencyapplicabletosuchSubscriberoritsproperties(exceptforsuchconflicts,defaultsandviolationsaswouldnot,individuallyorintheaggregate,haveamaterialadverseeffectonsuchSubscriber).SuchSubscriberisnotrequiredtoobtainanyconsent,authorizationororderof,ormakeanyfilingorregistrationwith,anycourtorgovernmentalagencyinorderforittoexecute,deliverorperformanyofitsobligationsunderthisAgreementandtheotherTransactionDocumentsortopurchasethePurchased
Sharesinaccordancewiththetermshereof,providedthatforpurposesoftherepresentation
madeinthissentence,suchSubscriberisassumingandrelyingupontheaccuracyofthe
relevantrepresentationsandagreementsoftheCompanyherein.



 


		(d)	AcquisitionforInvestment.TheSubscriberisacquiringthePurchasedSharessolelyforitsownaccountforthepurposeofinvestmentandnotwithaviewtoorforresaleinconnectionwithadistribution.TheSubscriberdoesnothaveapresentintentiontosellthePurchasedShares,norapresentarrangement(whetherornotlegallybinding)orintentiontoeffectanydistributionofthePurchasedSharestoorthroughanypersonorentity.TheSubscriberacknowledgesthatitisabletobearthefinancialrisksassociatedwithaninvestmentinthePurchasedSharesandthatithasbeengivenfullaccesstosuchrecordsoftheCompanyandthesubsidiariesandtotheofficersoftheCompanyandthesubsidiariesandreceivedsuchinformationasithasdeemednecessaryorappropriatetoconductitsduediligenceinvestigationandhassufficientknowledgeandexperienceininvestingincompaniessimilartotheCompanyintermsoftheCompany’sstageofdevelopmentsoastobeabletoevaluatetherisksandmeritsofitsinvestmentintheCompany.



 


		(e)	InformationonCompany.SuchSubscriberhasbeenfurnishedwithorhashadaccesshisorherrequiredorrequestedinformationabouttheCompany.Subscriberissatisfiedwiththeinformationmadeavailable.



 


		(f)	OpportunitiesforAdditionalInformation.TheSubscriberacknowledgesthattheSubscriberhashadtheopportunitytoaskquestionsofandreceiveanswersfrom,orobtainadditionalinformationfrom,theexecutiveofficersoftheCompanyconcerningthefinancialandotheraffairsoftheCompany.



 


		(g)	InformationonSubscriber.Subscriberis,andwillbeontheClosingDate,an



“accreditedinvestor”,assuchtermisdefinedinRegulationDpromulgatedbytheCommissionunderthe1933Act,isexperiencedininvestmentsandbusinessmatters,hasmadeinvestmentsofaspeculativenatureandhasPurchasedSharesofUnitedStatespublicly-ownedcompaniesinprivateplacementsinthepastand,withitsrepresentatives,hassuchknowledgeandexperienceinfinancial,taxandotherbusinessmattersastoenablesuchSubscribertoutilizetheinformationmadeavailablebytheCompanytoevaluatethemeritsandrisksofandtomakeaninformedinvestmentdecisionwithrespecttotheproposedpurchase,whichrepresentsaspeculativeinvestment.SuchSubscriberhastheauthorityandisdulyandlegallyqualifiedtopurchaseandownthePurchasedShares.SuchSubscriberisabletobeartheriskofsuchinvestmentforanindefiniteperiodandtoaffordacompletelossthereof.TheinformationsetforthonthesignaturepageheretoregardingsuchSubscriberisaccurate.


 


		(h)	Compliancewith1933Act.SuchSubscriberunderstandsandagreesthatthePurchasedShareshavenotbeenregisteredunderthe1933Actoranyapplicablestatesecuritieslaws,byreasonoftheirissuanceinatransactionthatdoesnotrequireregistrationunderthe1933Act(basedinpartontheaccuracyoftherepresentationsandwarrantiesoftheSubscriber
containedherein),andthat such Purchased Sharesmust beheldindefinitely unlessasubsequentdispositionisregisteredunderthe1933Actoranyapplicablestate
securitieslawsorisexemptfromsuchregistration.TheSubscriberacknowledgesthatthe SubscriberisfamiliarwithRule144oftherulesandregulationsoftheCommission,as
amended,promulgatedpursuanttotheSecuritiesAct(“Rule144”),andthatsuchperson
hasbeenadvisedthatRule144permitsresalesonlyundercertaincircumstances.TheSubscriberunderstandsthattotheextentthatRule144isnotavailable,theSubscriberwillbeunabletosellanyPurchasedShareswithouteitherregistrationunderthe1933Actortheexistenceofanotherexemptionfromsuchregistrationrequirement.Inanyevent,andsubjecttocompliancewithapplicablesecuritieslaws,theSubscribermayenterintolawfulhedgingtransactionsinthecourseofhedgingthepositiontheyassumeandtheSubscribermayalsoenterintolawfulshortpositionsorotherderivativetransactionsrelatingtothePurchasedShares,anddeliverthePurchasedShares,tocloseouttheirshortorotherpositionsorotherwisesettleothertransactions,orloanorpledgethePurchasedShares,tothirdpartieswhointurnmaydisposeofthesePurchasedShares.



 


		(i)	PurchasedSharesLegend.ThePurchasedSharesshallbearthefollowingorsimilarlegend



 


 


THESALEOFTHEPURCHASEDSHARESREPRESENTEDBYTHISCERTIFICATE


HASNOTBEENREGISTEREDUNDERTHESECURITIESACTOF1933,AS


AMENDED,NORAPPLICABLESTATESECURITIESLAWS.THEPURCHASED


SHARESMAYNOTBEOFFEREDFORSALE,SOLD,TRANSFERREDORASSIGNED


INTHEABSENCEOF(A)ANEFFECTIVEREGISTRATIONSTATEMENTFORTHE


PURCHASEDSHARESUNDERTHESECURITIESACTOF1933,ASAMENDED,OR


(B)ANOPINIONOFCOUNSEL(WHICHCOUNSELSHALLBESELECTEDBYTHE


HOLDER),INAGENERALLYACCEPTABLEFORM,THATREGISTRATIONISNOT


REQUIREDUNDERSAIDACTORPURSUANTTORULE144ORRULE144A


UNDERSAIDACT,OROTHERWISE.NOTWITHSTANDINGTHEFOREGOING,THE


PURCHASEDSHARESMAYBEPLEDGEDINCONNECTIONWITHABONAFIDEMARGINACCOUNTOROTHERLOANORFINANCINGARRANGEMENTSECUREDBYTHEPURCHASEDSHARES.”:


		(j)	CommunicationofOffer.TheoffertosellthePurchasedShareswasdirectlycommunicatedtosuchSubscriberbytheCompany.AtnotimewassuchSubscriberpresentedwithorsolicitedbyanyleaflet,newspaperormagazinearticle,radioortelevisionadvertisement,oranyotherformofgeneraladvertisingorsolicitedorinvitedtoattendapromotionalmeetingotherwisethaninconnectionandconcurrentlywithsuchcommunicatedoffer.



		(k)	RestrictedSecurities.SuchSubscriberunderstandsthatthePurchasedShareshavenotbeenregisteredunderthe1933ActandsuchSubscriberwillnotsell,offertosell,assign,pledge,hypothecateorotherwisetransferanyofthePurchasedSharesunlesspursuanttoaneffectiveregistrationstatementunderthe1933Act,orunlessanexemptionfromregistrationis
available.Notwithstandinganythingto thecontrary containedinthis Agreement,suchSubscribermaytransfer(withoutrestrictionandwithouttheneedforan
opinionofcounsel)thePurchasedSharestoitsAffiliates(asdefinedbelow)providedthat
eachsuchAffiliateisan“accreditedinvestor”underRegulationDandsuchAffiliateagrees
tobeboundbythetermsandconditionsofthisAgreement.Forthepurposesofthis
Agreement,an“Affiliate”ofanypersonorentitymeansanyotherpersonorentitydirectlyorindirectlycontrolling,controlledbyorunderdirectorindirectcommoncontrolwithsuchpersonorentity.AffiliateincludeseachSubsidiaryoftheCompany.Forpurposesofthisdefinition,“control”meansthepowertodirectthemanagementandpoliciesofsuchpersonorfirm,directlyorindirectly,whetherthroughtheownershipofvotingsecurities,bycontractorotherwise.



 


		(l)	NoGovernmentalReview.SuchSubscriberunderstandsthatnoUnitedStatesfederalorstateagencyoranyothergovernmentalorstateagencyhaspassedonormaderecommendationsorendorsementofthePurchasedSharesorthesuitabilityoftheinvestmentinthePurchasedSharesnorhavesuchauthoritiespasseduponorendorsedthemeritsoftheofferingofthePurchasedShares.



 


		(m)	CorrectnessofRepresentations.SuchSubscriberrepresentsthattheforegoingrepresentationsandwarrantiesaretrueandcorrectasofthedatehereofand,unlesssuchSubscriberotherwisenotifiestheCompanypriortotheClosingDate,shallbetrueandcorrectasoftheClosingDate.TheSubscriberunderstandsthatthePurchasedSharesarebeingofferedandsoldinrelianceonatransactionalexemptionfromtheregistrationrequirementofFederalandstatesecuritieslawsandtheCompanyisrelyinguponthetruthandaccuracyoftherepresentations,warranties,agreements,acknowledgmentsandunderstandingsoftheSubscribersetforthhereininordertodeterminetheapplicabilityofsuchexemptionsandthesuitabilityoftheSubscribertoacquirethePurchasedShares.



		(n)	NoBrokers.SuchSubscriberhasnottakenanyactionwhichwouldgiverisetoanyclaimbyanypersonforbrokeragecommissions,finder’sfeesorsimilarpaymentsrelatingtothisAgreementorthetransactionscontemplatedhereby.



(0)RiskFactorReview.TheSubscriberhasreviewedandhasfurtherinitialedontheAgreementsignaturepagethatheorshehasreviewedandunderstandstheRiskFactorsoutlineherein.TheSubscriberfurtheragreesthatheorshehashadtheopportunitytoaskquestionsofmanagementoftheCompanyrelativetotheseriskfactorsandanyotherfactorsrelatingtheriskofthisinvestment.


4.CompanyRepresentationsandWarranties.TheCompanyrepresents


andwarrantstoandagreeswitheachSubscriberthat:


		(a)	DueIncorporation.TheCompanyisacorporationorotherentitydulyincorporatedororganized,validlyexistingandingoodstandingunderthelawsofthejurisdictionofitsincorporationororganizationandhastherequisitecorporatepowertoownitspropertiesandtocarryonitsbusinessaspresentlyconducted.TheCompanyisdulyqualifiedasaforeigncorporationtodobusinessandisingoodstandingineachjurisdictionwherethenatureofthe
businessconductedorpropertyowned byit makes suchqualification necessary,otherthanthosejurisdictionsinwhichthefailuretosoqualifywouldnothavea
MaterialAdverseEffect.ForpurposesofthisAgreement,a“MaterialAdverseEffect”means
anymaterialadverseeffectonthebusiness,operations,properties,orfinancialconditionof
theCompanyanditsSubsidiariesindividually,orintheaggregateand/oranycondition, circumstance,orsituationthatwouldprohibitorotherwisemateriallyinterferewiththeabilityoftheCompanytoperformanyofitsobligationsunderthisAgreementinanymaterialrespect.ForpurposesofthisAgreement,“Subsidiary”means,withrespecttoanyentityatanydate,anycorporation,limitedorgeneralpartnership,limitedliabilitycompany,trust,estate,association,jointventureorotherbusinessentityofwhichmorethan30%of(i)theoutstandingcapitalstockhaving(intheabsenceofcontingencies)ordinaryvotingpowertoelectamajorityoftheboardofdirectorsorothermanagingbodyofsuchentity,(ii)inthecaseofapartnershiporlimitedliabilitycompany,theinterestinthecapitalorprofitsofsuchpartnershiporlimitedliabilitycompanyor(iii)inthecaseofatrust,estate,association,jointventureorotherentity,thebeneficialinterestinsuchtrust,estate,associationorotherentitybusinessis,atthetimeofdetermination,ownedorcontrolleddirectlyorindirectlythroughoneormoreintermediaries,bysuchentity.



		(b)	OutstandingStock.AllissuedandoutstandingsharesofcapitalstockandequityinterestsintheCompanyhavebeendulyauthorizedandvalidlyissuedandarefullypaidandnon-assessable.



		(c)	Authority;Enforceability.ThisAgreement,thePurchasedShares,andanyotheragreementsdeliveredtogetherwiththisAgreementorinconnectionherewith(collectively,the“TransactionDocuments”)havebeendulyauthorized,executedanddeliveredbytheCompanyandarevalidandbindingagreementsoftheCompanyenforceableinaccordancewiththeirterms,subjecttobankruptcy,insolvency,fraudulenttransfer,reorganization,moratoriumandsimilarlawsofgeneralapplicabilityrelatingtooraffectingcreditors’rightsgenerallyandtogeneralprinciplesofequity.TheCompanyhasfullcorporatepowerandauthoritynecessarytoenterintoanddelivertheTransactionDocumentsandtoperformitsobligationsthereunder.



		(d)	Consents.Noconsent,approval,authorizationororderofanycourt,governmentalagencyorbodyorarbitratorhavingjurisdictionovertheCompany,oranyofitsAffiliates,ortheCompany’sshareholdersisrequiredfortheexecutionbytheCompanyoftheTransactionDocumentsandcomplianceandperformancebytheCompanyofitsobligationsunderthe



TransactionDocuments,including,withoutlimitation,theissuanceandsaleofthePurchasedShares.TheTransactionDocumentsandtheCompany’sperformanceofitsobligationsthereunderhavebeenapprovedbytheCompany’sBoardofDirectors.Noconsent,approval,orderorauthorizationof,orregistration,qualification,designation,declarationorfilingwith,anygovernmentalauthorityintheworld,includingwithoutlimitation,theUnitedStates,orelsewhereisrequiredbytheCompanyoranyAffiliateoftheCompanyinconnectionwiththeconsummationofthetransactionscontemplatedbythisAgreement,exceptaswouldnototherwisehaveaMaterialAdverseEffectortheconsummationofanyoftheotheragreements,covenantsorcommitmentsoftheCompanyoranySubsidiarycontemplatedbytheotherTransactionDocuments.Anysuchqualificationsandfilingswill,inthecaseofqualifications,
beeffectiveonthe Closingand will,inthe caseoffilings,bemade withinthetimeprescribedbylaw.


		(e)	NoViolationorConflict.Assumingtherepresentationsandwarrantiesofthe
SubscriberinSection3aretrueandcorrect,neithertheissuancenorsaleofthePurchased
SharesnortheperformanceoftheCompany’sobligationsunderthisAgreementandallotherTransactionDocumentsenteredintobytheCompanyrelatingtheretowill:



violate,conflictwith,resultinabreachof,orconstituteadefault(oraneventwhichwiththegivingofnoticeorthelapseoftimeorbothwouldbereasonablylikelytoconstituteadefault)under(A)thearticlesorcertificateofincorporation,charterorbylawsoftheCompany,or(B)totheCompany’sknowledge,anydecree,judgment,order,law,treaty,rule,regulationordeterminationapplicabletotheCompanyofanycourt,governmentalagencyorbody,orarbitratorhavingjurisdictionovertheCompanyoroverthepropertiesorassetsoftheCompanyoranyofitsAffiliates;or


		(i)	resultinthecreationorimpositionofanylien,chargeorencumbranceuponthePurchasedSharesoranyoftheassetsoftheCompanyoranyofitsSubsidiaries.



		(f)	ThePurchasedShares.ThePurchasedSharesuponissuance:



		(i)	are,orwillbe,freeandclearofanysecurityinterests,liens,claimsorotherencumbrances,subjectonlytorestrictionsupontransferunderthe1933Actandanyapplicablestatesecuritieslaws;



 


		(ii)	havebeen,orwillbe,dulyandvalidlyauthorizedandonthedateofissuanceofthePurchasedShares,thePurchasedShareswillbedulyandvalidlyissued,fullypaidandnonassessable;



		(iii)	willnothavebeenissuedorsoldinviolationofanypreemptiveorothersimilarrightsoftheholdersofanysecuritiesoftheCompanyorrightstoacquiresecuritiesoftheCompany;and



		(iv)	willnotsubjecttheholdersthereoftopersonalliabilitybyreasonofbeingsuchholders.



		(g)	Litigation.Thereisnopendingor,tothebestknowledgeoftheCompany,threatenedaction,suit,proceedingorinvestigationbeforeanycourt,governmentalagencyorbody,orarbitratorhavingjurisdictionovertheCompany,oranyofitsAffiliatesthatwouldaffecttheexecutionbytheCompanyorthecompleteandtimelyperformancebytheCompanyofitsobligationsundertheTransactionDocuments.



		(h)	InformationConcerningCompany.TheReportscontainallmaterialinformationrelatingtotheCompanyanditsoperationsandfinancialconditionasoftheirrespectivedateswhichinformationisrequiredtobedisclosedtherein.TheReports,includingthefinancialstatementsincludedthereindonotcontainanyuntruestatementofamaterialfactoromittostateamaterial
factrequiredto bestated therein ornecessarytomakethe statementstherein,takenasawhole,notmisleadinginlightofthecircumstancesandwhen
made.



		(i)	NoGeneralSolicitation.NeithertheCompany,noranyofitsAffiliates,nortoits
knowledge,anypersonactingonitsortheirbehalf,hasengagedinanyformofgeneralsolicitationorgeneraladvertising(withinthemeaningofRegulationDunderthe1933Act)inconnectionwiththeofferorsaleofthePurchasedShares.



		(j)	Survival.TheforegoingrepresentationsandwarrantiesshallsurviveforaperiodofoneyearaftertheClosingDate.



		(k)	NoBrokers.NeithertheCompanynoranySubsidiaryhastakenanyactionwhichwouldgiverisetoanyclaimbyanypersonforbrokeragecommissions,finder’sfeesorsimilarpaymentsrelatingtothisAgreementorthetransactionscontemplatedhereby.



5.RegistrationRights.


		(a)	RegistrationStatementRequirements.TheCompanyshallfile,onabesteffortsbasis,withinsixmonthsofclosing,withtheCommissionaFormS-1registrationstatement(the“RegistrationStatement”)(orsuchotherformthatitiseligibletouse)inordertoregisterallorsuchportionoftheRegistrableSharesaspermittedbytheCommission(providedthattheCompanyshallusediligenteffortstoadvocatewiththeCommissionfortheregistrationofalloftheRegistrableShares)pursuanttoRule415forresaleanddistributionunderthe1933ActassoonaspracticableaftertheClosingDate,anduseitsreasonableeffortstocausetheRegistrationStatementtobedeclaredeffective.



		(b)	RegistrationProcedures.IfandwhenevertheCompanyisrequiredbytheprovisionsofSection5(a)toeffecttheregistrationofanyRegistrableSharesunderthe1933Act,theCompanywill,asexpeditiouslyaspossible:



		(i)	prepareandfilewiththeCommissionaregistrationstatementwithrespecttosuchsecuritiesandusecommerciallyreasonableeffortstocausesuchregistrationstatementtobecomeandremaineffectivefortheperiodofthedistributioncontemplatedthereby;



		(ii)	prepareandfilewiththeCommissionsuchamendmentsandsupplementstosuchregistrationstatementandtheprospectususedinconnectiontherewithasmaybenecessarytokeepsuchregistrationstatementeffectiveuntilsuchregistrationstatementhasbeeneffectivefortheearlierof(a)aperiodofone(1)year,and(b)thedateonwhichthePurchasedSharescanbeensoldbytheSubscriberpursuanttoRule144withoutvolumerestrictions;



		(iii)	notifytheSubscriberwithintwenty-fourhoursoftheCompany’sbecoming
awarethataprospectusrelatingtheretoisrequiredtobedeliveredunderthe1933Act,of
thehappeningofanyeventofwhichtheCompanyhasknowledgeasaresultofwhichthe
prospectuscontainedinsuchregistrationstatement,asthenineffect,includes anuntrue statementofamaterialfact
oromitstostatea materialfactrequired tobestated thereinor necessarytomakethestatementsthereinnotmisleadinginlightofthecircumstancesthen
existingorwhichbecomessubjecttoaCommission,stateorothergovernmentalorder suspendingtheeffectivenessoftheregistrationstatementcoveringanyoftheRegistrable
Shares.EachSubscriberherebycovenantsthatitwillnotsellanyRegistrableShares pursuanttosuchprospectusduringtheperiodcommencingatthetimeatwhichtheCompanygivessuchSubscribernoticeofthesuspensionoftheuseofsuchprospectusandendingatthetimetheCompanygivessuchSubscribernoticethatsuchSubscribermaythereaftereffectsalespursuanttotheprospectus,oruntiltheCompanydeliverstosuchSubscriberorfileswiththeCommissionanamendedorsupplementedprospectus.



		(c)	ProvisionofDocuments.Itshallbeaconditionprecedenttotheobligationsofthe



CompanytocompletetheregistrationpursuanttothisAgreementwithrespecttothe


RegistrableSharesofaparticularSubscriberthatsuchSubscribershallfurnishtotheCompanyinwritingsuchinformationandrepresentationletters,includingacompletedformoftheSellingSecurityholderQuestionnaire,withrespecttoitselfandtheproposeddistributionbyitastheCompanymayreasonablyrequesttoassurecompliancewithfederalandapplicablestatesecuritieslaws.


		(d)	Expenses.AllexpensesincurredbytheCompanyincomplyingwithSection5,including,withoutlimitation,allregistrationandfilingfees,printingexpenses(ifrequired),feesanddisbursementsofcounselandindependentpublicaccountantsfortheCompany,feesandexpenses(includingreasonablecounselfees)incurredinconnectionwithcomplyingwithstatesecuritiesor“bluesky”laws,feesoftheFINRA,transfertaxes,andfeesoftransferagentsandregistrars,arecalled“RegistrationExpenses.”TheCompanywillpayallRegistrationExpensesinconnectionwithanyregistrationstatementdescribedinSection



		5.	



		(e)	IndemnificationandContribution.



		(i)	IntheeventofaregistrationofanyRegistrableSharesunderthe1933ActpursuanttoSection5,theCompanywill,totheextentpermittedbylaw,indemnifyandholdharmlesstheSubscriber,eachoftheofficers,directors,agents,Affiliates,members,managers,controlpersons,andprincipalshareholdersoftheSubscriber,eachunderwriterofsuchRegistrableSharesthereunderandeachotherperson,ifany,whocontrolssuchSubscriberorunderwriterwithinthemeaningofthe1933Act,againstanylosses,claims,damagesorliabilities,jointorseveral,towhichtheSubscriber,orsuchunderwriterorcontrollingpersonmaybecomesubjectunderthe1933Actorotherwise,insofarassuchlosses,claims,damagesorliabilities(oractionsinrespectthereof)ariseoutoforarebaseduponanyuntruestatementorallegeduntruestatementofanymaterialfactcontainedinanyregistrationstatementunderwhichsuchRegistrableShareswasregisteredunderthe1933ActpursuanttoSection5,anypreliminaryprospectusorfinalprospectuscontainedtherein,oranyamendmentorsupplementthereof,orariseoutoforarebasedupontheomissionorallegedomissiontostatethereinamaterialfactrequiredtobestatedthereinornecessarytomakethestatementsthereinnotmisleadinginlightofthecircumstanceswhen
made,andwillsubjecttotheprovisionsofSection5(e)(iii)reimbursetheSubscriber,eachsuchunderwriterandeachsuch
controllingpersonforany legalor otherexpensesreasonably incurredbytheminconnectionwithinvestigatingordefendinganysuchloss,claim,damage,
liabilityoraction;provided,however,thattheCompanyshallnotbeliabletotheSubscriber
totheextentthatanysuchdamagesariseoutoforarebaseduponanuntruestatementor
omissionmadeinanypreliminaryprospectusif(i)theSubscriberfailedtosendordelivera
copyofthefinalprospectusdeliveredbytheCompanytotheSubscriberwithorpriortothedeliveryofwrittenconfirmationofthesalebytheSubscribertothepersonassertingtheclaimfromwhichsuchdamagesarise,andthefinalprospectuswouldhavecorrectedsuchuntruestatementorallegeduntruestatementorsuchomissionorallegedomission,or(ii)totheextentthatanysuchloss,claim,damageorliabilityarisesoutoforisbaseduponanuntruestatementorallegeduntruestatementoromissionorallegedomissionsomadeinconformitywithinformationfurnishedbyanysuchSubscriberinwritingspecificallyforuseinsuchregistrationstatementorprospectus.



		(ii)	IntheeventofaregistrationofanyoftheRegistrableSharesunderthe1933ActpursuanttoSection5,eachSubscriberseverallybutnotjointlywill,totheextentpermittedbylaw,indemnifyandholdharmlesstheCompany,andeachperson,ifany,whocontrolstheCompanywithinthemeaningofthe1933Act,eachofficeroftheCompanywhosignstheregistrationstatement,eachdirectoroftheCompany,eachunderwriterandeachpersonwhocontrolsanyunderwriterwithinthemeaningofthe1933Act,againstalllosses,claims,damagesorliabilities,jointorseveral,towhichtheCompanyorsuchofficer,director,underwriterorcontrollingpersonmaybecomesubjectunderthe1933Actorotherwise,insofarassuchlosses,claims,damagesorliabilities(oractionsinrespectthereof)ariseoutoforarebaseduponanyuntruestatementorallegeduntruestatementofanymaterialfactcontainedintheregistrationstatementunderwhichsuchRegistrableShareswereregisteredunderthe1933ActpursuanttoSection5,anypreliminaryprospectusorfinalprospectuscontainedtherein,oranyamendmentorsupplementthereof,orariseoutoforarebasedupontheomissionorallegedomissiontostatethereinamaterialfactrequiredtobestatedthereinornecessarytomakethestatementsthereinnotmisleading,andwillreimbursetheCompanyandeachsuchofficer,director,underwriterandcontrollingpersonforanylegalorotherexpensesreasonablyincurredbytheminconnectionwithinvestigatingordefendinganysuchloss,claim,damage,liabilityoraction,provided,however,thattheSubscriberwillbeliablehereunderinanysuchcaseifandonlytotheextentthatanysuchloss,claim,damageorliabilityarisesoutoforisbaseduponanuntruestatementorallegeduntruestatementoromissionorallegedomissionmadeinrelianceuponandinconformitywithinformationpertainingtosuchSubscriber,assuch,furnishedinwritingtotheCompanybysuchSubscriberspecificallyforuseinsuchregistrationstatementorprospectus.



		(iii)	Promptlyafterreceiptbyanindemnifiedpartyhereunderofnoticeofthecommencementofanyaction,suchindemnifiedpartyshall,ifaclaiminrespectthereofistobemadeagainsttheindemnifyingpartyhereunder,notifytheindemnifyingpartyinwritingthereof,buttheomissionsotonotifytheindemnifyingpartyshallnotrelieveitfromany
liabilitywhichitmayhavetosuchindemnifiedpartyotherthanunderthisSection5(e)(iii)
andshallonlyrelieveitfromanyliabilitywhichitmayhavetosuchindemnifiedpartyunder
thisSection5(e)(iii),exceptandonlyifandtotheextenttheindemnifyingpartyis
prejudiced bysuchomission.Incaseanysuchactionshallbebroughtagainst any indemnified
partyand itshallnotifytheindemnifyingpartyofthecommencementthereof,theindemnifyingparty
shallbeentitledtoparticipateinand,totheextentitshallwish,toassumeandundertake
thedefensethereofwithcounselsatisfactorytosuchindemnifiedparty,and,afternotice
fromtheindemnifyingpartytosuchindemnifiedpartyofitselectionsotoassumeand
undertakethedefensethereof,theindemnifyingpartyshallnotbeliabletosuchindemnifiedpartyunderthisSection5(e)(iii)foranylegalexpensessubsequentlyincurredbysuchindemnifiedpartyinconnectionwiththedefensethereofotherthanreasonablecostsofinvestigationandofliaisonwithcounselsoselected,provided,however,that,ifthedefendantsinanysuchactionincludeboththeindemnifiedpartyandtheindemnifyingpartyandtheindemnifyingpartyshallhavereasonablyconcludedthattheremaybereasonabledefensesavailabletoindemnifiedpartywhicharedifferentfromoradditionaltothoseavailabletotheindemnifyingpartyoriftheinterestsoftheindemnifiedpartyreasonablymaybedeemedtoconflictwiththeinterestsoftheindemnifyingparty,theindemnifiedparties,asagroup,shallhavetherighttoselectoneseparatecounsel,reasonablysatisfactorytotheindemnifiedandindemnifyingparty,andtoassumesuchlegaldefensesandotherwisetoparticipateinthedefenseofsuchaction,withthereasonableexpensesandfeesofsuchseparatecounselandotherexpensesrelatedtosuchparticipationtobereimbursedbytheindemnifyingpartyasincurred.



6.ClosingConditions.


		(a)	TheobligationhereunderoftheSubscribertoacquireandpayforthePurchasedSharesissubjecttothesatisfactionorwaiver,atorbeforetheClosing,ofeachoftheconditionssetforthbelow.TheseconditionsarefortheSubscriber’ssolebenefitandmaybewaivedbytheSubscriberatanytimeinitssolediscretion.



		(i)	TherepresentationsandwarrantiesoftheCompanycontainedinthis



AgreementshallhavebeentrueandcorrectonthedateofthisAgreementandshallbetrueandcorrectontheClosingDateasifgivenonandasoftheClosingDate(exceptforrepresentationsgivenasofaspecificdate,whichrepresentationsshallbetrueandcorrectasofsuchdate),andonorbeforetheClosingDatetheCompanyshallhaveperformedallcovenantsandagreementsoftheCompanycontainedhereinorinanyoftheotherTransactionDocumentsrequiredtobeperformedbytheCompanyonorbeforetheClosing


		Date;	and



 


		(ii)	TheTransactionDocumentshavebeendulyexecutedanddeliveredbytheCompanytotheSubscriber.



 


		(b)	TheobligationhereunderoftheCompanytoissueandsellthePurchasedSharestothePurchaserissubjecttothesatisfactionorwaiver,atorbeforetheClosing,ofeachoftheconditionssetforthbelow.TheseconditionsarefortheCompany’ssolebenefitandmaybewaivedbytheCompanyatanytimeinitssolediscretion.



 


		(i)	TherepresentationsandwarrantiesoftheSubscriberinthisAgreementandeachoftheotherTransactionDocumentstowhichtheSubscriberisapartyshallbetrueandcorrectinallmaterialrespectsasofthedatewhen
made andasof theClosingDate asthough madeatthattime,exceptforrepresentationsandwarrantiesthatareexpresslymadeasofa
particulardate,whichshallbetrueandcorrectinallmaterialrespectsasofsuchdate;



 


		(ii)	ThePurchasePriceforthePurchasedShareshasbeendeliveredtothe



		Company;	and



 


		(iii)	TheTransactionDocumentstowhichtheSubscriberisapartyhavebeendulyexecutedanddeliveredbytheSubscribertotheCompany.



 


7.Miscellaneous.


		(a)	Notices.Allnotices,demands,requests,consents,approvals,andothercommunicationsrequiredorpermittedhereundershallbeinwritingand,unlessotherwisespecifiedherein,shallbe(i)personallyserved,(ii)depositedinthemail,registeredorcertified,returnreceiptrequested,postageprepaid,(iii)deliveredbyreputableaircourierservicewithchargesprepaid,or(iv)transmittedbyhanddelivery,telegram,orfacsimile,addressedassetforthbelowortosuchotheraddressassuchpartyshallhavespecifiedmostrecentlybywrittennotice.Anynoticeorothercommunicationrequiredorpermittedtobegivenhereundershallbedeemedeffective(a)uponhanddeliveryordeliverybyfacsimile,withaccurateconfirmationgeneratedbythetransmittingfacsimilemachine,attheaddressornumberdesignatedbelow(ifdeliveredonabusinessdayduringnormalbusinesshourswheresuchnoticeistobereceived),orthefirstbusinessdayfollowingsuchdelivery(ifdeliveredotherthanonabusinessdayduringnormalbusinesshourswheresuchnoticeistobereceived)or(b)onthesecondbusinessdayfollowingthedateofmailingbyexpresscourierservice,fullyprepaid,addressedtosuchaddress,oruponactualreceiptofsuchmailing,whichevershallfirstoccur.Theaddressesforsuchcommunicationsshallbe:



 


IftotheCompany,to:


 


CannabisGlobalInc,Inc.


520S.GrandAve


		Suite	320



LosAngeles,CA90071


!       "
#$ #%& '()*+,-)&,.


/0
10 2-3 Advisors,
LLC.
131 Auburn Drive, Lake Worth, Fl, 33460


 


Totheaddressandfacsimilenumberlistedonthesignaturepageofthis


		Agreement	



		(b)	EntireAgreement;Amendment.ThisAgreementandtheotherTransaction
Documentscontaintheentireunderstandingandagreementofthepartieswithrespectto thematterscoveredherebyand,exceptasspecificallysetforthhereinorintheTransaction
Documents,neithertheCompanynortheSubscribermakesanyrepresentations,warranty, covenantorundertakingwithrespecttosuch
mattersand theysupersede allprior understandingsandagreementswithrespecttosaidsubjectmatter,allofwhicharemerged
herein.NoprovisionofthisAgreementnoranyoftheTransactionDocumentsmaybewaivedoramendedotherthanbyawritteninstrumentsignedbytheCompanyandtheSubscriber,andnoprovisionhereofmaybewaivedotherthanbyawritteninstrumentsignedbythepartyagainstwhomenforcementofanysuchwaiverissought.



		(c)	Counterparts/Execution.ThisAgreementmaybeexecutedinanynumberofcounterpartsandbythedifferentsignatoriesheretoonseparatecounterparts,eachofwhich,whensoexecuted,shallbedeemedanoriginal,butallsuchcounterpartsshallconstitutebutoneandthesameinstrument.ThisAgreementmaybeexecutedbyfacsimiletransmission,PDF,electronicsignatureorothersimilarelectronicmeanswiththesameforceandeffectasifsuchsignaturepagewereanoriginalthereof.



		(d)	LawGoverningthisAgreement.ThisAgreementshallbegovernedbyandconstruedinaccordancewiththelawsoftheStateofCaliforniawithoutregardtoprinciplesofconflictsoflaws.AnyactionbroughtbyeitherpartyagainsttheotherconcerningthetransactionscontemplatedbythisAgreementshallbebroughtonlyinthestatecourtsofCaliforniaorinthefederalcourtslocatedinthestate.ThepartiestothisAgreementherebyirrevocablywaiveanyobjectiontojurisdictionandvenueofanyactioninstitutedhereunderandshallnotassertanydefensebasedonlackofjurisdictionorvenueorbaseduponforumnonconveniens.ThepartiesexecutingthisAgreementandotheragreementsreferredtohereinordeliveredinconnectionherewithonbehalfoftheCompanyagreetosubmittotheinpersonamjurisdictionofsuchcourtsandherebyirrevocablywaivetrialbyjury.Theprevailingpartyshallbeentitledtorecoverfromtheotherpartyitsreasonableattorney’sfeesandcosts.IntheeventthatanyprovisionofthisAgreementoranyotheragreementdeliveredinconnectionherewithisinvalidorunenforceableunderanyapplicablestatuteorruleoflaw,thensuchprovisionshallbedeemedinoperativetotheextentthatitmayconflicttherewithandshallbedeemedmodifiedtoconformwithsuchstatuteorruleoflaw.Anysuchprovisionwhichmayproveinvalidorunenforceableunderanylawshallnotaffectthevalidityorenforceabilityofanyotherprovisionofanyagreement.Eachpartyherebyirrevocablywaivespersonalserviceofprocessandconsentstoprocessbeingservedinanysuit,actionorproceedinginconnectionwiththisAgreementoranyotherTransactionDocumentsbymailingacopythereofviaregisteredorcertifiedmailorovernightdelivery(withevidenceofdelivery)tosuchpartyattheaddressineffectfornoticestoitunderthisAgreementandagreesthatsuchserviceshallconstitutegoodandsufficientserviceofprocessandnoticethereof.Nothingcontainedhereinshallbedeemedtolimitinanywayanyrighttoserveprocessinanyothermannerpermittedbylaw.



		(e)	ConsenttoJurisdiction.TheCompanyandtheSubscriberherebyirrevocablywaive,andagreenottoassertinanysuchsuit,actionorproceeding,anyclaimthatitisnotpersonallysubjecttothejurisdictioninCaliforniaofsuchcourt,thatthesuit,actionorproceedingisbroughtinaninconvenientforumorthatthevenueofthesuit,actionorproceedingisimproper.NothinginthisSectionshallaffectorlimitanyrighttoserveprocessinanyothermannerpermittedbylaw.



		(f)	Captions:CertainDefinitions.Thecaptions ofthe
various sectionsandparagraphsof thisAgreementhavebeeninsertedonlyforthepurposesofconvenience;suchcaptionsare
notapartofthisAgreementandshallnotbedeemedinanymannertomodify,explain,enlargeorrestrictanyoftheprovisionsofthisAgreement.AsusedinthisAgreementtheterm“person”shallmeanandincludeanindividual,apartnership,ajointventure,acorporation,alimitedliabilitycompany,atrust,anunincorporatedorganizationandagovernmentoranydepartmentoragencythereof.



		(g)	Severability.IntheeventthatanytermorprovisionofthisAgreementshallbefinallydeterminedtobesuperseded,invalid,illegalorotherwiseunenforceablepursuanttoapplicablelawbyanauthorityhavingjurisdictionandvenue,thatdeterminationshallnotimpairorotherwiseaffectthevalidity,legalityorenforceability:(i)byorbeforethatauthorityoftheremainingtermsandprovisionsofthisAgreement,whichshallbeenforcedasiftheunenforceabletermorprovisionweredeleted,or(ii)byorbeforeanyotherauthorityofanyofthetermsandprovisionsofthisAgreement.



 


[SignatureandSubscriberInformationPagesFollow]





 






    	 		 



    	 



    

 


APPENDIX
A 


SUBSCRIBER
INFORMATION 


 


U.S.
ACCREDITED INVESTOR CERTIFICATE 


MCTC
Holdings, INC.


(the
“Company”)


 


AND THE
UNITED STATES SECURITIES ACT OF 1933 (the “Act”)


 


The
undersigned covenants, represents and warrants to the Company that:


I
hereby so declares and further declares that it is an “Accredited Investor” as that term is defined in Regulation D
promulgated under the Act, by virtue of its qualification under one or more of the following categories (PLEASE CHECK OFF APPROPRIATE
CATEGORY): 


 


	
        ( x )

         

        ( x )

         

        ( )

         

        ( )

         

        ( )

         

        ( )

         

        ( )
	
        I am a natural
        person whose individual net worth, or joint net worth with that person's spouse, at the time of purchase exceeds $1,000,000.

        I am a
        natural person who had an individual income in excess of $200,000 in each of the two most recent years or joint income with that
        person's spouse in excess of $300,000 in each of those years and has a reasonable expectation of reaching the same income level
        in the current year.

        _______________________________
        is a corporation, organization described in section 501(c)(3) of the United States Internal Revenue Code, or similar business trust,
        or partnership, not formed for the specific purpose of acquiring the Securities, with total assets in excess of $5,000,000.

        ________________________________
        is a trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the Securities, whose purchase
        is directed by a sophisticated person.

        I am a director
        or executive officer of the Corporation.

        ___________________________________is
        a private business development company as defined in section 202(a)(22) of the Investment Advisers Act of 1940.

        __________________________________is
        a bank as defined in section 3(a)(2) of the Act, or a savings and loan association or other institution as defined in section 3(a)(5)(A)
        of the Act whether acting in its individual or fiduciary capacity; a broker or dealer registered pursuant to section 15 of the
        Securities Exchange Act of 1934; an insurance company as defined in section 2(13) of the Act; an investment company registered
        under the Investment 



Company
Act of 1940 or a business development company as defined in section 2(a)(48) of that Act; a Small Business Investment Company
licensed by the U.S. Small Business Administration under section 301(c) or (d) of the Small Business Investment Act of 1958;
a plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political
subdivisions, for the benefit of its employees, if such plan has total assets in excess of $5,000,000; an employee benefit plan
within the meaning of the Employee Retirement Income Security Act of 1974 if the investment decision is made by a plan fiduciary,
as defined in section 3(21) of such Act, which is either a bank, savings and loan association, insurance company, or registered
investment adviser, or if the employee benefit plan has total assets in excess of $5,000,000 or, if a self- directed plan, with
investment decisions made solely by persons that are accredited investors.


 


( x)
____Paladin Advisors, LLC___________ ______ is an entity in w hich all of the equ ity owners are accredite d inve stor s und er
one or more of the cate gor ies set f orth above.


 


The
statements made in this Certificate are true.


 


On this Date:_____07/3/2019______________________________
_____


 


 


		X_________________________________________________	



		(Sign)	



 


On
t


 


 


 


 


Please acknowledge
your acceptance of the foregoing Subscription Agreement with MCTC Holdings, INC.
by signing and returning a copy to the Company whereupon it shall become a binding agreement.


 


Number
of Common Shares  2,000,000
x $0.025_ =  $50,000
(the “Purchase


Price”)



 


	X___________________________________	_____________________________________
	Signature	Signature (if purchasing jointly)
	 	 
	___________________________________	_____________________________________
	Name Typed or Printed	Name Typed or Printed
	 	 
	___________________________________	_____________________________________
	Entity Name	Entity Name
	 	 
	___________________________________	_____________________________________
	Address	Address
	 	 
	___________________________________	_____________________________________
	City, State and Zip Code	City, State and Zip Code
	 	 
	___________________________________	_____________________________________
	Telephone - Business	Telephone - Business
	 	 
	___________________________________	_____________________________________
	Telephone – Residence	Telephone – Residence
	 	 
	___________________________________	_____________________________________
	Facsimile – Business	Facsimile - Business


 


___________________________________
_____________________________________


Facsimile
– Residence Facsimile
– Residence


 


___________________________________
_____________________________________


Tax
ID # or Social Security # Tax
ID # or Social Security #


 


 


 


EXACT
Name or name of entity in which securities should be issued:


_____________________________________________ 


 


 


 





This Subscription
Agreement is agreed to and accepted as of____July 3________, 2019.


 


 


FOR
SUBSCRIBER: 


 


X
/S/ _Daniel Frid_________________(Subscriber Sign)


____Daniel
Frid/ CEO Paladin Advisor,  
 


LLC______________(Subscriber
Print Name)


 


FOR
MCTC Holdings, INC.: 


 


		X____________________________	



/S/
Arman Tabatabaei 


Arman
Tabatabaei – CEO


Dated:
_____________________ 07-03-2019


 


This
document is not to be transferred or reproduced without permission MCTC Holdings, Inc.