Document:

Exhibit 10.5

 

 

 

INDEPENDENT
DIRECTOR AGREEMENT

This INDEPENDENT
DIRECTOR AGREEMENT is dated July 10, 2019 (the “Agreement”) by and between MCTC HOLDINGS, INC, a Delaware corporation
(the “Company”), and EDWARD

MANOLOS,
an individual resident of the State of California (the “Director”).

 

WHEREAS, the Company
appointed the Director effective as of the date hereof (the “Effective Date”) and desires to enter into an agreement
with the Director with respect to such appointment; and

  

WHEREAS, the Director
is willing to accept such appointment and to serve the Company on the terms set forth herein and in accordance with the provisions
of this Agreement.

 

NOW, THEREFORE, in consideration
of the mutual covenants contained herein, the parties hereto agree as follows:

 

1.                  
Position. Subject to the terms and provisions of this Agreement, the Company shall cause the Director to be appointed,
and the Director hereby agrees to serve the Company in such position upon the terms and conditions hereinafter set forth, provided,
however, that the Director’s continued service on the Board of Directors of the Company (the “Board”)
after the initial one-year term on the Board shall be subject to any necessary approval by the Company’s stockholders.

 

2.                  
Duties. (a) During the Directorship Term (as defined herein), the Director make reasonable business efforts to attend
all Board meetings and quarterly pre-scheduled Board and Management conference calls, serve on appropriate subcommittees as reasonably
requested and agreed upon by the Board, make himself available to the Company at mutually convenient times and places, attend external
meetings and presentations when agreed on in advance, as appropriate and convenient, and perform such duties, services and responsibilities,
and have the authority commensurate to such position.

 

    	 	1	 

    	 

    

 

 

(b) The Director will
use his best efforts to promote the interests of the Company. The Company recognizes that the Director (i) is or may become a full-time
executive employee of another entity and that his responsibilities to such entity must have priority and (ii) sits or may sit on
the board of directors of other entities, subject to any limitations set forth by the Sarbanes-Oxley Act of 2002 and limitations
provided by any exchange or quotation service on which the Company’s common stock is listed or traded. Notwithstanding the
same, the Director will provide the Company with prior written notice of any future commitments to such entities and use reasonable
business efforts to coordinate his respective commitments so as to fulfill his obligations to the Company and, in any event, will
fulfill his legal obligations as a Director. Other than as set forth above, the Director will not, without the prior notification
to the Board, engage in any other business activity which could materially interfere with the performance of his duties, services
and responsibilities hereunder or which is in violation of the reasonable policies established from time to time by the Company,
provided that the foregoing shall in no way limit his activities on behalf of (i) any current employer and its affiliates
or (ii) the board of directors of any entities on which he currently sits. At such time as the Board receives such notification,
the Board may require the resignation of the Director if it determines that such business activity does in fact materially interfere
with the performance of the Director’s duties, services and responsibilities hereunder.

 

3. Compensation.

 

(a)               
The Director shall receive Seven Thousand, Five Hundred Dollars ($7,500.00) per month, commencing thirty (30) days from
the Effective Date of this Agreement. Any unpaid amounts due to the Director, the Director has the option to convert any monies
owed into the Company’s common stock. Such shares shall be vested and issued at the end of the term of this Agreement. Notwithstanding
the foregoing, if the Director ceases to be a member of Board at any time during the vesting period for any reason (such as resignation,
withdrawal, death, disability or any other reason), then any unvested shares shall be irrefutably forfeited.

 

(b)               
Independent Contractor. The Director’s status during the Directorship Term shall be

that of an independent
contractor and not, for any purpose, that of an employee or agent with authority to bind the Company in any respect. All payments
and other consideration made or provided to the Director under this Section 3 shall be made or provided without withholding or
deduction of any kind, and the Director shall assume sole responsibility for discharging all tax or other obligations associated
therewith.

 

(c)                
Expense Reimbursements. During the Directorship Term, the Company shall reimburse

the Director for all
reasonable out-of-pocket expenses incurred by the Director in attending any in-person meetings, provided that the Director
complies with the generally applicable policies, practices and procedures of the Company for submission of expense reports, receipts
or similar documentation of such expenses. Any reimbursements for allocated expenses (as compared to out-of-pocket expenses of
the Director in excess of $500.00) must be approved in advance by the Company.

 

    	 	2	 

    	 

    

 

 

4.                  
Directorship Term. The “Directorship Term,” as used in this Agreement, shall mean the period commencing
on the Effective Date and terminating on the earlier of the date of the next annual stockholders meeting and the earliest of the
following to occur: (a) the death of the Director; (b) the termination of the Director from his membership on the Board by the
mutual agreement of the Company and the Director; (c) the removal of the Director from the Board by the majority stockholders of
the Company; and (d) the resignation by the Director from the Board.

 

5.                  
Director’s Representation and Acknowledgment. The Director represents to the Company that his execution and
performance of this Agreement shall not be in violation of any agreement or obligation (whether or not written) that he may have
with or to any person or entity, including without limitation, any prior or current employer. The Director hereby acknowledges
and agrees that this Agreement (and any other agreement or obligation referred to herein) shall be an obligation solely of the
Company, and the Director shall have no recourse whatsoever against any stockholder of the Company or any of their respective affiliates
with regard to this Agreement.

 

6.                  
Director Covenants. (a) Unauthorized Disclosure. The Director agrees and understands that in the Director’s
position with the Company, the Director has been and will be exposed to and receive information relating to the confidential affairs
of the Company, including, but not limited to, technical information, business and marketing plans, strategies, customer information,
other information concerning the Company’s products, promotions, development, financing, expansion plans, business policies
and practices, and other forms of information considered by the Company to be confidential and in the nature of trade secrets.
The Director agrees that during the Directorship Term and thereafter, the Director will keep such information confidential and
will not disclose such information, either directly or indirectly, to any third person or entity without the prior written consent
of the Company; provided, however, that (i) the Director shall have no such obligation to the extent such information
is or becomes publicly known or generally known in the Company’s industry other than as a result of the Director’s
breach of his obligations hereunder and (ii) the Director may, after giving prior notice to the Company to the extent practicable
under the circumstances, disclose such information to the extent required by applicable laws or governmental regulations or judicial
or regulatory process. This confidentiality covenant has no temporal, geographical or territorial restriction. Upon termination
of the Directorship Term, the Director will promptly return to the Company and/or destroy at the Company’s direction all
property, keys, notes, memoranda, writings, lists, files, reports, customer lists, correspondence, tapes, disks, cards, surveys,
maps, logs, machines, technical data, other product or document, and any summary or compilation of the foregoing, in whatever form,
including, without limitation, in electronic form, which has been produced by, received by or otherwise submitted to the Director
in the course or otherwise as a result of the Director’s position with the Company during or prior to the Directorship Term,
provided that the Company shall retain such materials and make them available to the Director if requested by him in connection
with any litigation against the Director under circumstances in which (i) the Director demonstrates to the reasonable satisfaction
of the Company that the materials are necessary to his defense in the litigation and (ii) the confidentiality of the materials
is preserved to the reasonable satisfaction of the Company.

 

 

    	 	3	 

    	 

    

 

(b)               
Non-Solicitation. During the Directorship Term and for a period of three (3) years

thereafter, the Director
shall not interfere with the Company’s relationship with, or endeavor to entice away from the Company, any person who, on
the date of the termination of the Directorship Term and/or at any time during the one year period prior to the termination of
the Directorship Term, was an employee or customer of the Company or otherwise had a material business relationship with the Company.

 

(c)                
Non-Compete. The Director agrees that during the Directorship Term and for a period

of Three (3) years thereafter,
he shall not in any manner, directly or indirectly, through any person, firm or corporation, alone or as a member of a partnership
or as an officer, director, stockholder, investor or employee of or consultant to any other corporation or enterprise; engage in
the business of developing, marketing, selling or supporting technology to or for businesses in which the Company engages in or
in which the Company has an actual intention, as evidenced by the Company's written business plans, to engage in, within any geographic
area in which the Company is then conducting such business. Nothing in this Section 6 shall prohibit the Director from being (i)
a stockholder in a mutual fund or a diversified investment company or (ii) a passive owner of not more than three percent of the
outstanding stock of any class of securities of a corporation, which are publicly traded, so long as the Director has no active
participation in the business of such corporation.

 

(d)               
Insider Trading Guidelines. Director agrees to execute the Company’s Insider Trading Guidelines in the form attached
hereto.

 

(e)               
Remedies. The Director agrees that any breach of the terms of this Section 6 would

result in irreparable
injury and damage to the Company for which the Company would have no adequate remedy at law; the Director therefore also agrees
that in the event of said breach or any threat of breach, the Company shall be entitled to an immediate injunction and restraining
order to prevent such breach and/or threatened breach and/or continued breach by the Director and/or any and all entities acting
for and/or with the Director, without having to prove damages or paying a bond, in addition to any other remedies to which the
Company may be entitled at law or in equity. The terms of this paragraph shall not prevent the Company from pursuing any other
available remedies for any breach or threatened breach hereof, including, but not limited to, the recovery of damages from the
Director. The Director acknowledges that the Company would not have entered into this Agreement had the Director not agreed to
the provisions of this Section 6.

 

(f)                 
The provisions of this Section 6 shall survive any termination of the Directorship Term, and the existence of any claim
or cause of action by the Director against the Company, whether predicated on this Agreement or otherwise, shall not constitute
a defense to the enforcement by the Company of the covenants and agreements of this Section 6.

 

    	 	4	 

    	 

    

 

 

7.                  
Indemnification. The Company agrees to indemnify the Director for his activities as a member of the Board to the
fullest extent permitted under applicable law

 

8.                  
Non-Waiver of Rights. The failure to enforce at any time the provisions of this Agreement or to require at any time
performance by the other party hereto of any of the provisions hereof shall in no way be construed to be a waiver of such provisions
or to affect either the validity of this Agreement or any part hereof, or the right of either party hereto to enforce each and
every provision in accordance with its terms. No waiver by either party hereto of any breach by the other party hereto of any provision
of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions at that time
or at any prior or subsequent time.

 

9.                  
Notices. Every notice relating to this Agreement shall be in writing and shall be given by personal delivery or by
registered or certified mail, postage prepaid, return receipt requested; to:

 

If to the
Company:

 

MCTC Holdings,
Inc.

520 S. Grand
Ave., Suite 320

Los Angeles,
CA 90071

Attn: Arman
Tabatabaei, CEO

 

If to the
Director:

 

Mr. Edward
Manolos

 

		_______________________	

 

		_______________________	

 

    	 	5	 

    	 

    

 

 

Either of the parties
hereto may change their address for purposes of notice hereunder by giving notice in writing to such other party pursuant to this
Section 9.

 

10.              
Binding Effect/Assignment. This Agreement shall inure to the benefit of and be binding upon the parties hereto and
their respective heirs, executors, personal representatives, estates, successors (including, without limitation, by way of merger)
and assigns. Notwithstanding the provisions of the immediately preceding sentence, neither the Director nor the Company shall assign
all or any portion of this Agreement without the prior written consent of the other party.

 

11.              
Entire Agreement. This Agreement (together with the other agreements referred to herein) sets forth the entire understanding
of the parties hereto with respect to the subject matter hereof and supersedes all prior agreements, written or oral, between them
as to such subject matter.

 

12.              
Severability. If any provision of this Agreement, or any application thereof to any circumstances, is invalid, in
whole or in part, such provision or application shall to that extent be severable and shall not affect other provisions or applications
of this Agreement.

 

13.              
Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California,
without reference to the principles of conflict of laws. All actions and proceedings arising out of or relating to this Agreement
shall be heard and determined in any court in Los Angeles County, California and the parties hereto hereby consent to the jurisdiction
of such courts in any such action or proceeding; provided, however, that neither party shall commence any such action
or proceeding unless prior thereto the parties have in good faith attempted to resolve the claim, dispute or cause of action which
is the subject of such action or proceeding through mediation by an independent third party.

 

14.              
Legal Fees. The parties hereto agree that the non-prevailing party in any dispute, claim, action or proceeding between
the parties hereto arising out of or relating to the terms and conditions of this Agreement or any provision thereof (a “Dispute”),
shall reimburse the prevailing party for reasonable attorney’s fees and expenses incurred by the prevailing party in connection
with such

Dispute; provided,
however, that the Director shall only be required to reimburse the Company for its fees and expenses incurred in connection
with a Dispute if the Director’s position in such Dispute was found by the court, arbitrator or other person or entity presiding
over such Dispute to be frivolous or advanced not in good faith.

 

    	 	6	 

    	 

    

 

 

15.              
Modifications. Neither this Agreement nor any provision hereof may be modified, altered, amended or waived except
by an instrument in writing duly signed by the party to be charged.

 

16.              
Tense and Headings. Whenever any words used herein are in the singular form, they shall be construed as though they
were also used in the plural form in all cases where they would so apply. The headings contained herein are solely for the purposes
of reference, are not part of this Agreement and shall not in any way affect the meaning or interpretation of this Agreement.

 

17.              
Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an
original but all of which together shall constitute one and the same instrument.

 

 

    	 	7	 

    	 

    

 

 

IN WITNESS WHEREOF, the Company has caused this
Director Agreement to be executed by authority of its Board of Directors, and the Director has hereunto set his hand, on the day
and year first above written.

 

 

 

 

		MCTC HOLDINGS, INC.   
	    	 
	    	/s/ Arman Tabatabaei
	  	Arman Tabatabaei   
	  	Chief Executive Officer and   
	 	Director
	 	 
	    	 /s/ Edward Manolos
	      	 Edward Manolos
	  	DIRECTOR

    	 	8Exhibit 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.

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