On completion of the proposed Merger, the former CanaFarma Shareholders will own approximately seventy-seven percent (77%) of the Resulting Issuer and the former KYC shareholders will own approximately twenty-three percent (23%) of the Resulting Issuer. 

Resulting from the proposed Merger between CanaFarma and the Subco, will be a wholly-owned subsidiary of the Resulting Issuer. Following the proposed Merger, the Resulting Issuer will continue to be a reporting issuer in the Provinces of Alberta and British Columbia. KYC has applied for a listing of its Common Shares on the CSE; however, as of the date of this Prospectus, CanaFarma has not received conditional approval from the CSE for such a Listing. It is a condition to the consummation of the Merger that such approval is obtained. 

The following chart shows the corporate relationship of the Resulting Issuer and its subsidiary, Mergeco, as well as its US subsidiaries, and the governing jurisdiction of each such entity, immediately following completion of the Proposed Merger.

In addition, CanaFarma has arranged for the incorporation of a new corporation named Newmark Biotech LLC, which will, upon the organization, be held as to 51% by CanaFarma, and 49% owned by Prasch BV, a private company that is owned by CanaFarma’s Chief Chemist & Technologist, Lekhram Changoer. It is CanaFarma’s intention to have Newmark Biotech hold all patents that are filed in respect of the Resulting Issuer’s products. 

Merger, the Resulting Issuer intends to, through the operations of Mergeco, be indirectly engaged in the business of “Seed-to-Sale” Industrial Hemp cultivation, and the resulting conversion to and manufacturing of CBD infused products. The Resulting Issuer will continue to own all the properties, assets and rights and will be liable for all the liabilities and obligations of KYC as constituted immediately prior to the Effective Time. 

In addition, the Resulting Issuer will, through Mergeco, indirectly own all of the properties, assets, and rights of CanaFarma and Mergeco will be liable for all of the liabilities and obligations of CanaFarma outstanding immediately prior to the Effective Time. Through Mergeco and CanaFarma, the Resulting Issuer will continue to carry on CanaFarma’s business. 

As of September 30, 2019, CanaFarma had a cash balance of $216,018. As of September 30, 2019, CanaFarma had other current assets of $7,307,658. Current liabilities of CanaFarma as of September 30, 2019, were $2,293,271. As of September 30, 2019, CanaFarma had total assets of $9,544,790, working capital of $5,230,405 and an accumulated deficit of ($2,246,193).