Form 45-106F1 Report of Exempt Distribution IT IS AN OFFENCE TO MAKE A MISREPRESENTATION IN THIS REPORT ITEM 1 - REPORT TYPE 9 New report $PHQGHG UHSRUW ,I DPHQGHG SURYLGH ILOLQJ GDWH RI UHSRUW WKDW LV EHLQJ DPHQGHG (YYYY-MM-DD) ITEM 2 - PARTY CERTIFYING THE REPORT Indicate the party certifying the report (select only one). For guidance regarding whether an issuer is an investment fund, refer to section 1.1 of National Instrument 81-106 Investment Fund Continuous Disclosure and the companion policy to NI 81-106. Investment fund issuer 9 Issuer (other than an investment fund) Underwriter ITEM 3 - ISSUER NAME AND OTHER IDENTIFIERS Provide the following information about the issuer, or if the issuer is an investment fund, about the fund. Full legal name Vireo Health, Inc. Previous full legal name If the issuer’s name changed in the last 12 months, provide most recent previous legal name. Website (if applicable) If the issuer has a legal entity identifier, provide below. Refer to Part B of the Instructions for the definition of “legal entity identifier”. Legal entity identifier ITEM 4 - UNDERWRITER INFORMATION If an underwriter is completing the report, provide the underwriter’s full legal name and firm National Registration Database (NRD) number. Full legal name Firm NRD number (if applicable) If the underwriter does not have a firm NRD number, provide the head office contact information of the underwriter. Street address Municipality Province/State Country Postal code/Zip code Telephone number Website (if applicable) ITEM 5 - ISSUER INFORMATION If the issuer is an investment fund, do not complete Item 5. Proceed to Item 6. a) Primary industry Provide the issuer’s North American Industry Classification Standard (NAICS) code (6 digits only) that corresponds to the issuer’s primary business activity. For more information on finding the NAICS industry code go to Statistics Canada's NAICS industry search tool. NAICS industry code 3 2 5 4 1 0 If the issuer is in the mining industry, indicate the stage of operations. This does not apply to issuers that provide services to issuers operating in the mining industry. Select the category that best describes the issuer’s stage of operations. Exploration Development Production Is the issuer’s primary business to invest all or substantially all of its assets in any of the following? If yes, select all that apply. Mortgages b) Real estate Consumer debt Private companies Number of employees Number of employees: c) Commerial/business debt 0 - 49 50 - 99 9 100 - 499 500 or more SEDAR profile number Does the issuer have a SEDAR profile? No 9 Yes If yes, provide SEDAR profile number 0 0 0 4 5 6 7 5 If the issuer does not have SEDAR profile complete item 5(d) - (h). d) e) Head office address Street address Province/State Municipality Postal code/Zip code Country Telephone number Date of formation and financial year-end Date of formation Financial year-end MM YYYY f) DD MM DD Reporting issuer status Is the issuer a reporting issuer in any jurisdication of Canada? No Yes If yes, select the jurisdictions of Canada in which the issuer is a reporting issuer. g) All AB BC MB NB NL NT NS NU ON PE QC SK YT Public listing status If the issuer has a CUSIP number, provide below (first 6 digits only) CUSIP number If the issuer is publicly listed, provide the names of all exchanges on which its securities are listed. Include only the names of exchanges for which the issuer KDV DSSOLHG IRU DQG UHFHLYHG D OLVWLQJ ZKLFK H[FOXGHV IRU H[DPSOH DXWRPDWHG WUDGLQJ V\VWHPV £ Exchange name(s): h) Size of issuer's assets Select the size of the issuer's assets for its most recent financial year-end (Canadian $). If the issuer has not existed for a full financial year, provide the size of the issuer's assets at the distribution end date. $0 to under $5M $5M to under $25M $25M to under $100M $100M to under $500M $500M to under $1B $1B or over ITEM 6 - INVESTMENT FUND ISSUER INFORMATION If the issuer is an investment fund, provide the following information. a) Investment fund manager information Full legal name Firm NRD number (if applicable) If the investment fund manager does not have a firm NRD number, provide the head office contact information of the investment fund manager. Street address Municipality Province/State Country Postal code/Zip code Website (if applicable) Telephone number b) Type of investment fund Type of investment fund that most accurately identifies the issuer (select only one) . Money market Equity Fixed income Balanced Alternative strategies Other (describe) Indicate whether one or both of the following apply to the investment fund . Invests primarily in other investment fund issuers Is a UCITs Fundï ïUndertaking for the Collective Investment of Transferable Securities funds (UCITs Funds) are investment funds regulated by the European Union (EU) directives that allow collective investment schemes to operate throughout the EU on a passport basis on authorization from one member state. c) Date of formation and financial year-end of the investment fund Date of formation Financial year-end MM YYYY d) MM DD DD Reporting issuer status of the investment fund No Is the investment fund a reporting issuer in any jurisdication of Canada? Yes If yes, select the jurisdictions of Canada in which the investment fund is a reporting issuer. e) All AB BC MB NB NL NT NS NU ON PE QC SK YT Public listing status of the investment fund If the investment fund has a CUSIP number, provide below (first 6 digits only) CUSIP number If the investment fund is publicly listed, provide the names of all exchanges on which its securities are listed. Include only the names of exchanges for ZKLFK WKH LVVXHU KDV DSSOLHG IRU DQG UHFHLYHG D OLVWLQJ ZKLFK H[FOXGHV IRU H[DPSOH DXWRPDWHG WUDGLQJ V\VWHPV £ Exchange names f) Net asset value (NAV) of the investment fund Select the NAV range of the investment fund as of the date of the most recent NAV calculation (Canadian $). $0 to under $5M $5M to under $25M $25M to under $100M $100M to under $500M $500M to under $1B $1B or over Date of NAV calculation: YYYY MM DD ITEM 7 - INFORMATION ABOUT THE DISTRIBUTION If an issuer located outside of Canada completes a distribution in a jurisdiction of Canada, include in Item 7 and Schedule 1 information about purchasers resident in that jurisdiction of Canada only. Do not include in Item 7 securities issued as payment of commissions or finder’s fees, which VKRXOG EH GLVFORVHG LQ ,WHP 7KH LQIRUPDWLRQ SURYLGHG LQ ,WHP PXVW UHFRQFLOH ZLWK WKH LQIRUPDWLRQ SURYLGHG LQ 6FKHGXOH RI WKH UHSRUW £ a) Currency Select the currency or currencies in which the distribution was made. All dollar amounts provided in the report must be in Canadian dollars. Canadian dollar b) 9 US dollar Euro Other (describe) Distribution date(s) State the distribution start and end dates. If the report is being filed for securities distributed on only one distribution date, provide the distribution date as both the start and end dates. If the report is being filed for securities distributed on a continuous basis, include the start and end dates for the GLVWULEXWLRQ SHULRG FRYHUHG E\ WKH UHSRUW £ Start date c) 2018 07 20 YYYY MM DD End date 2018 07 20 YYYY MM DD Detailed purchaser information Complete Schedule 1 of this form for each purchaser and attach the schedule to the completed report. d) Types of securities distributed Provide the following information for all distributions that take place in a jurisdiction of Canada on a per security basis. Refer to Part A of the Instructions for how to indicate the security code. If providing the CUSIP number, indicate the full 9-digit CUSIP number assigned to the security being distributed. The information included in item 7d must reconcile to item 7f. For examples on how to report convertible securities, see our Frequently Asked Questions. Canadian $ Security code e) CUSIP number (if applicable) Single or lowest price Number of securities Description of security Highest price Total amount P R S Series D Preferred Stock ("Series D Share") 259,321.00 59.1400 15,336,243.94 WN T Penalty Warrants 259,321.00 0.0000 0.00 Details of rights and convertible/exchangeable securities If any rights (e.g. warrants, options) were distributed, provide the exercise price and expiry date for each right. If any convertible/exchangeable securities ZHUH GLVWULEXWHG SURYLGH WKH FRQYHUVLRQ UDWLR DQG GHVFULEH DQ\ RWKHU WHUPV IRU HDFK FRQYHUWLEOH H[FKDQJHDEOH VHFXULW\ £ Security code Underlying security code Exercise price (Canadian $) Lowest Expiry date (YYYY- MM-DD) f) Describe other items (if applicable) Highest 0.0000 W N T P R S Conversion ratio 2019-03-20 Penalty war issued subject to the completion of a liquidity event. If a liquidity event occurs prior to Mar 20/19 then the war will be cancelled. If not subscriber will receive 0.1 Series D Share for each Series D Share purchased at no additional cost. Summary of the distribution by jurisdiction and exemption State the total dollar amount of securities distributed and the number of purchasers for each jurisdiction of Canada and foreign jurisdiction where a purchaser resides and for each exemption relied on in Canada for that distribution. However, if an issuer located outside of Canada completes a distribution in a jurisdiction of Canada, include distributions to purchasers resident in that jurisdiction of Canada only. This table requires a separate line item for: (i) each jurisdiction where a purchaser resides, (ii) each exemption relied on in the jurisdiction where a purchaser resides, if a purchaser resides in a jurisdiction of Canada, and (iii) each exemption relied on in Canada, if a purchaser resides in a foreign jurisdiction. For jurisdictions within Canada, state the province or territory, otherwise state the country. Province or country Exemption relied on Number of purchasers Total amount (Canadian $) Ontario NI 45-106 2.3 [Accredited investor] 31 13,265,515.98 British Columbia NI 45-106 2.3 [Accredited investor] 1 1,318,822.00 Alberta NI 45-106 2.3 [Accredited investor] 1 65,054.00 New Brunswick NI 45-106 2.3 [Accredited investor] 2 413,980.00 Bahamas Distributions to purchasers outside of local jurisdiction (BC, AB, NB) 1 88,710.00 Guernsey Distributions to purchasers outside of local jurisdiction (BC, AB, NB) 1 184,161.96 Total dollar amount of securities distributed 15,336,243.94 37 Total number of unique purchasers࢖ ࢖In calculating the total number of unique purchasers to which the issuer distributed securities, count each purchaser only once, regardless of whether the issuer distributed multiple types of securities to, and relied on multiple exemptions for, that purchaser. g) Net proceeds to the investment fund by jurisdiction If the issuer is an investment fund, provide the net proceeds to the investment fund for each jurisdiction of Canada and foreign jurisdiction where a purchaser resides.ࢗ If an issuer located outside of Canada completes a distribution in a jurisdiction of Canada, include net proceeds for that jurisdiction of Canada only. For jurisdictions within Canada, state the province or territory, otherwise state the country. Province or country Net proceeds (Canadian $) Total net proceeds to the investment fund ñ“Net proceeds” means the gross proceeds realized in the jurisdiction from the distributions for which the report is being filed, less the gross redemptions that occurred during the distribution period covered by the report. K 2IIHULQJ PDWHULDOV 7KLV VHFWLRQ DSSOLHV RQO\ LQ 6DVNDWFKHZDQ 2QWDULR 4XpEHF 1HZ %UXQVZLFN DQG 1RYD 6FRWLD ,I D GLVWULEXWLRQ KDV RFFXUUHG LQ 6DVNDWFKHZDQ 2QWDULR 4XpEHF 1HZ %UXQVZLFN RU 1RYD 6FRWLD FRPSOHWH WKH WDEOH EHORZ E\ OLVWLQJ WKH RIIHULQJ materials that are required under the prospectus exemption relied on to be filed with or delivered to the securities regulatory authority or regulator in those jurisdictions. In Ontario, if the offering materials listed in the table are required to be filed with or delivered to the Ontario Securities Commission (OSC), attach an electronic version of the offering materials that have not been previously filed with or delivered to the OSC. Description Date of document or other material (YYYY-MM-DD) Previously filed with or delivered to regulator? (Y/N) Date previously filed or delivered (YYYY-MM-DD) ITEM 8 - COMPENSATION INFORMATION Provide information for each person (as defined in NI 45-106) to whom the issuer directly provides, or will provide, any compensation in connection with the distribution. Complete additional copies of this page if more than one person was, or will be, compensated. Indicate whether any compensation was paid, or will be paid, in connection with the distribution. No a) 1 If yes, indicate number of persons compensated. 9 Yes Name of person compensated and registration status Indicate whether the person compensated is a registrant. No 9 Yes If the person compensated is an individual, provide the name of the individual. Full legal name of individual Family name First given name Secondary given names If the person compensated is not an individual, provide the following information. Full legal name of non-individual Eight Capital Firm NRD number 5 5 1 8 (if applicable) 0 9 No Indicate whether the person compensated facilitated the distribution through a funding portal or an internet-based portal. b) Yes Business contact information If a firm NRD number is not provided in Item 8 (a), provide the business contact information of the person being compensated. Street address c) Municipality Province/State Country Postal code/Zip code Email address Telephone number Relationship to issuer or investment fund manager Indicate the person’s relationship with the issuer or investment fund manager (select all that apply). Refer to the meaning of “connected” in Part B(2) of the Instructions and the meaning of “control” in section 1.4 of NI 45-106 for the purposes of completing this section. 9 d) Connect with the issuer or investment fund manager Insider of the issuer (other than an investment fund) Director or officer of the investment fund or investment fund manager Employee of the issuer or investment fund manager None of the above Compensation details Provide details of all compensation paid, or to be paid, to the person identified in Item 8(a) in connection with the distribution. Provide all amounts in Canadian dollars. Include cash commissions, securities-based compensation, gifts, discounts or other compensation. Do not report payments for services incidental to the distribution, such as clerical, printing, legal or accounting services. An issuer is not required to ask for details about, or report on, internal allocation arrangements with the directors, officers or employees of a non-individual compensated by the issuer. Cash commissions paid 763,753.20 Security codes Value of all securities distributed as compensation࢚ Describe terms of warrants, options or other rights Security code 2 P W R S N Security code 3 T 16,972 Compensation Warrants. Each warrant entitling the holder to purchase 1 Series D-1 preferred share at a price per share equal to US$45 up to and including July 20, 2020. Describe Other compensation࢛ Total compensation paid Security code 1 763,753.20 Check box if the person will or may receive any deferred compensation (describe the terms below) ࢚Provide the aggregate value of all securities distributed as compensation, excluding options, warrants or other rights exercisable to acquire additional securities of the issuer. Indicate the security codes for all securities distributed as compensation, including options, warrants or other rights exercisable to acquire additional securities of the issuer. ࢛Do not include deferred compensation. ITEM 9 - DIRECTORS, EXECUTIVE OFFICERS AND PROMOTERS OF THE ISSUER If the issuer is an investment fund, do not complete Item 9. Procced to Item 10 £ Indicate whether the issuer is any of the following (select all that apply). Reporting issuer in any jurisdiction of Canada Foreign public issuer Wholly owned subsidiary of a reporting issuer in any jurisdiction of Canada࢜ Provide name of reporting issuer Wholly owned subsidiary of a foreign public issuer࢜ Provide name of foreign public issuer Issuer distributing eligible foreign securities only to permitted clients࢝ ,I WKH LVVXHU LV DW OHDVW RQH RI WKH DERYH GR QRW FRPSOHWH ,WHP D ² F 3URFHHG WR ,WHP £ ࢜An issuer is a wholly owned subsidiary of a reporting issuer or a foreign public issuer if all of the issuer’s outstanding voting securities, other than securities that are required by law to be owned by its directors, are beneficially owned by the reporting issuer or the foreign public issuer, respectively. ࢝Check this box if it applies to the current distribution even if the issuer made previous distributions of other types of securities to non-permitted clients. Refer to the definitions of “eligible foreign security” and “permitted client” in Part B(1) of the Instructions. 9 a) If the issuer is none of the above, check this box and complete Item 9(a) - (c). Directors, executive officers and promoters of the issuer Provide the following information for each director, executive officer and promoter of the issuer. For locations within Canada, state the province or territory; otherwise state the country. For “Relationship to issuer”, “D” – Director, “O” – Executive Officer, “P” – Promoter. Organization or company name b) Family name First given name Secondary given names Business location of non-individual or residentail jurisdiction of individual Relationship to issuer (select all that apply) Province or country D O P 9 Kingsley Kyle United States 9 9 Shimpa Amber United States 9 9 Dahmer Stephen United States 9 Greenbaum Eric United States 9 Hoffnung Aaron United States 9 9 Promoter information If the promoter listed above is not an individual, provide the following information for each director and executive officer of the promoter. For locations within Canada, state the province or territory; otherwise state the country. For “Relationship to promoter”, “D” – Director, “O” – Executive Officer. Organization or company name Family name First given name Secondary given names Residential jurisdiction of individual Province or country c) Relationship to promoter (select one or both if applicable) D O Residential address of each individual Complete Schedule 2 of this form providing the full residential address for each individual listed in Item 9(a) and (b) and attach to the completed report. Schedule 2 also requires information to be provided about control persons. ITEM 10 - CERTIFICATION Provide the following certification and business contact information of an officer or director of the issuer or underwriter. If the issuer or underwriter is not a company, an individual who performs functions similar to that of a director or officer may certify the report. For example, if the issuer is a trust, the report may be certified by the issuer's trustee. If the issuer is an investment fund, a director or officer of the investment fund manager (or, if the investment fund manager is not a company, an individual who performs similar functions) may certify the report if the director or officer has been authorized to do so by the investment fund. The certification may not be delegated to an agent or other individual preparing the report on behalf of the issuer or underwriter. If the individual completing and filing the report is different from the individual certifying the report, provide their name and contact details in Item 11. The signature on the report must be in typed form rather than handwritten form. The report may include an electronic signature provided the name of the signatory is also in typed form. IT IS AN OFFENCE TO MAKE A MISREPRESENTATION IN THIS REPORT By completing the information below, I certify to the securities regulatory authority or regulator that: x I have read and understand this report; and x all of the information provided in this report is true. Full legal name Shimpa Family name Amber First given name Secondary given names Title Chief Financial Officer Name of issuer/underwriter/ investment fund manager Vireo Health, Inc. Email address ambershimpa@vireohealth.com Telephone number 6129991606 Signature "Amber Shimpa" Date 2018 YYYY 07 27 MM DD ITEM 11- CONTACT PERSON Provide the following business contact information for the individual that the securities regulatory authority or regulator may contact with any questions regarding the contents of this report, if different than the individual certifying the report in Item 10. Same as individual certifying the report Full legal name DeLuca Family name Title Solicitor Frank First given name Secondary given names Name of company Cassels Brock & Blackwell LLP Telephone number 4166427475 Email address fdeluca@casselsbrock.com Notice - Collection and use of personal information The personal information required under this form is collected on behalf of and used by the securities regulatory authority or regulator under the authority granted in securities legislation for the purposes of the administration and enforcement of the securities legislation. If you have any questions about the collection and use of this information, contact the securities regulatory authority or regulator in the local jurisdiction(s) where the report is filed, at the address(es) listed at the end of this form. The attached Schedules 1 and 2 may contain personal information of individuals and details of the distribution(s). The information in Schedules 1 and 2 will not be placed on the public file of any securities regulatory authority or regulator. However, freedom of information legislation may require the securities regulatory authority or regulator to make this information available if requested. By signing this report, the issuer/underwriter confirms that each individual listed in Schedule 1 or 2 of the report who is resident in a jurisdiction of Canada: D £££££KDV EHHQ QRWLILHG E\ WKH LVVXHU XQGHUZULWHU RI WKH GHOLYHU\ WR WKH VHFXULWLHV UHJXODWRU\ DXWKRULW\ RU UHJXODWRU RI WKH LQIRUPDWLRQ pertaining to the individual as set out in Schedules 1 or 2, that this information is being collected by the securities regulatory authority or regulator under the authority granted in securities legislation, that this information is being collected for the purposes of the administration and enforcement of the securities legislation of the local jurisdiction, and of the title, business address and business telephone number of the public official in the local jurisdiction, as set out in this form, who can answer questions about the security regulatory authority’s or regulator’s indirect collection of the information, and b) has authorized the indirect collection of the information by the securities regulatory authority or regulator.