NATIONAL INSTRUMENT 62‐103F1
REQUIRED DISCLOSURE UNDER THE EARLY WARNING REQUIREMENTS
1. Security and Reporting Issuer
1.1 State the designation of securities to which this report relates and the name and address of
the head office of the issuer of the securities.
Common Shares (the "Shares") of:
Eight Solutions Inc. (the “Company”)
100‐138 East 7th Avenue
Vancouver, BC V5T 1M6
1.2 State the name of the market in which the transaction or other occurrence that triggered the
requirement to file this report took place.
Not applicable.
2. Identity of the Acquiror
2.1 State the name and address of the Acquiror
Roderick Armes (the “Acquiror”)
100‐138 East 7th Avenue
Vancouver, BC V5T 1M6
2.2 State the date of the transaction or other occurrence that triggered the requirement to file
this report and briefly describe the transaction or other occurrence.
On July 31, 2015, the Acquiror was issued a convertible debenture in the principal amount of
$1,500,000 bearing interest at 6% per annum, maturing January 27, 2018 and convertible into
2,727,272 Shares at a deemed price of $0.55 per Share (the “Debenture”) in consideration of an
advance made to the Company in the amount of $1,500,000.
On January 29¸ 2018, the Acquiror entered into a debt settlement agreement pursuant to which
the Debenture was amended to extend the maturity date to March 31, 2019 and the conversion
price was amended to $0.14 per Share (the "Amended Debenture"). Pursuant to the terms of
the Amended Debenture, the principal amount (excluding interest) is convertible into up to
10,714,285 Shares at a deemed price of $0.14 per Share.
2.3 State the name of any joint actors
Not Applicable.
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3. Interest in Securities of the Reporting Issuer
3.1 State the designation and number or principal amount of securities acquired or disposed of
that triggered the requirement to file the report and the change in the Acquiror's
securityholding percentage in the class of securities.
See item 2.2 above.
Pursuant to the terms of the Amended Debenture the Acquiror cannot convert any portion of
the principal amount to the extent that, after giving effect to such conversion, the Acquiror
would beneficially own in excess of 19.9% of the Shares outstanding immediately after giving
effect to such conversion, on a partially diluted basis. As of the date of this report, the Acquiror
may be issued up to 8,735,000 Shares under the Amended Debenture.
On a partially diluted basis, assuming the partial conversion of the Amended Debenture into
8,735,000 Shares and the exercise of 243,750 stock options currently held by the Acquiror, the
Acquiror beneficially owns 17,061,414 common shares of the Issuer representing 19.9% of the
issued and outstanding common shares of the Issuer, based on 76,733,875 issued and
outstanding common shares as of the date hereof.
Prior to the issuance of the Amended Debenture, assuming the conversion of the Debenture
and 243,750 stock options held by the Acquiror, the Acquiror beneficially owned 11,053,686
common shares of the Company representing 13.8% of the issued and outstanding common
shares of the Issuer, based on the 76,733,875 issued and outstanding common shares as of the
date hereof.
3.2 State whether the Acquiror acquired or disposed ownership of, or acquired or ceased to have
control over, the securities that triggered the requirement to file the report.
The Acquiror acquired ownership of the securities that triggered the requirement to file this
report.
3.3 If the transaction involved a securities lending arrangement, state that fact.
Not applicable.
3.4 State the designation and number or principal amount of securities and the Acquiror's
securityholding percentage in the class of securities, immediately before and after the
transaction or other occurrence that triggered the requirement to file this report.
See item 3.1.
3.5 State the designation and number or principal amount of securities and the Acquiror's
securityholding percentage in the class of securities referred to in Item 3.4 over which
(a) the Acquiror, either alone or together with any joint actors, has ownership and
control,
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See item 3.1.
(b) the Acquiror, either alone or together with any joint actors, has ownership but control
is held by persons or companies other than the Acquiror or any joint actor, and
Not applicable.
(c) the Acquiror, either alone or together with any joint actors, has exclusive or shared
control but does not have ownership.
Not applicable.
3.6 If the Acquiror or any of its joint actors has an interest in, or right or obligation associated
with, a related financial instrument involving a security of the class of securities in respect of
which disclosure is required under this item, describe the material terms of the related
financial instrument and its impact on the Acquiror's securityholdings.
Not applicable.
3.7 the Acquiror or any of its joint actors is a party to a securities lending arrangement involving a
security of the class of securities in respect of which disclosure is required under this item,
describe the material terms of the arrangement including the duration of the arrangement,
the number or principal amount of securities involved and any right to recall the securities or
identical securities that have been transferred or lent under the arrangement.
State if the securities lending arrangement is subject to the exception provided in section 5.7
of NI 62‐104.
Not applicable.
3.8 If the Acquiror or any of its joint actors is a party to an agreement, arrangement or
understanding that has the effect of altering, directly or indirectly, the Acquiror's economic
exposure to the security of the class of securities to which this report relates, describe the
material terms of the agreement, arrangement or understanding.
Not applicable.
4. Consideration Paid
4.1 State the value, in Canadian dollars, of any consideration paid or received per security and in
total.
Indebtedness owed to the Acquiror was settled by the issuance an amended convertible
debenture in the amount of $1,500,000 convertible into 10,714,285 Shares at a deemed price of
$0.14 per Share.
4.2 In the case of a transaction or other occurrence that did not take place on a stock exchange or
other market that represents a published market for the securities, including an issuance from
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treasury, disclose the nature and value, in Canadian dollars, of the consideration paid or
received by the Acquiror.
See item 4.1.
4.3 If the securities were acquired or disposed of other than by purchase or sale, describe the
method of acquisition of disposition.
The Amended Debenture was issued as a debt settlement.
5. Purpose of the Transaction
State the purpose or purposes of the Acquiror and any joint actors for the acquisition or
disposition of securities of the reporting issuer.
The Acquiror acquired the Amended Debenture that is the subject of this early warning report
for investment purposes.
Describe any plans or future intentions which the Acquiror and any joint actors may have
which relate to or would result in any of the following:
(a) the acquisition of additional securities of the reporting issuer, or the disposition of
securities of the reporting issuer;
The Acquiror may, depending on various factors including, without limitation, market
and other conditions, increase or decrease his beneficial ownership, control or
direction over common shares or other securities of the Company, through market
transactions, private agreements, treasury issuances, exercises of convertible securities
or otherwise.
(b) a corporate transaction, such as a merger, reorganization or liquidation, involving the
reporting issuer or any of its subsidiaries;
Not applicable
(c) a sale or transfer of a material amount of the assets of the reporting issuer or any of
its subsidiaries;
Not applicable.
(d) a change in the board of directors or management of the reporting issuer, including
any plans or intentions to change the number or term of directors or to fill any existing
vacancy on the board;
Not applicable.
(e) a material change in the present capitalization or dividend policy of the reporting
issuer;
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Not applicable.
(f) a material change in the reporting issuer’s business or corporate structure;
Not applicable.
(g) a change in the reporting issuer’s charter, bylaws or similar instruments or another
action which might impede the acquisition of control of the reporting issuer by any
person or company;
Not applicable.
(h) a class of securities of the reporting issuer being delisted from, or ceasing to be
authorized to be quoted on, a marketplace;
Not applicable.
(i) the issuer ceasing to be a reporting issuer in any jurisdiction in Canada;
Not applicable.
(j) a solicitation of proxies from securityholders;
Not applicable.
(k) An action similar to any of those enumerated above;
Not applicable.
6. Agreements, Arrangements, Commitments or Understandings With Respect to Securities of the
Reporting Issuer
Describe the material terms of any agreements, arrangements, commitments or
understandings between the Acquiror and a joint actor and among those persons and any
person with respect to securities of the class of securities to which this report relates,
including but not limited to the transfer or the voting of any of the securities, finder’s fee
joint ventures, loan or option arrangements, guarantees of profits, division of profits or loss,
or the giving or withholding of proxies. Include such information for any of the securities that
are pledged or otherwise subject to a contingency, the occurrence of which would give
another person voting power or investment power over such securities, except that disclosure
of standard default and similar provisions contained in loan agreements need not be included.
See Items 2.2 and 3.1 above.
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7. Change in Material Fact
If applicable, describe any change in a material fact set out in a previous report filed by the
Acquiror under the early warning requirements or Part 4 in respect of the reporting issuer’s
securities.
Not applicable.
8. Exemption
8.1 If the Acquiror relies on an exemption from requirements in securities legislation applicable to
formal bids for this transaction, state the exemption being relied on and describe the facts
supporting that reliance.
The securities were acquired through a debt settlement transaction between the Acquiror
and the Company pursuant to the exemption in section 2.14 of National Instrument 45‐
106 ‐ Prospectus and Registration Exemptions.
9. Certification
I, as the Acquiror, certify, or I, as the agent filing the report on behalf of an Acquiror, certify to
the best of my knowledge, information and belief, that the statements made in this report are
true and complete in every respect.
DATED this 31st day of January, 2018
(signed) "Roderick Armes"_________
RODERICK ARMES |
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