(1)
Represents shares that may be resold by the selling shareholders named herein under “Selling Securityholders”. In
the event of stock splits, stock dividends or similar transactions involving the Common Shares, the number of Common Shares registered
shall, unless otherwise expressly provided, automatically be deemed to cover the additional securities to be offered or issued
pursuant to Rule 416 promulgated under the Securities Act of 1933, as amended (the “Securities Act”).
Pursuant to Rule 429 under the Securities
Act of 1933, as amended, the prospectus relating to the securities registered under this Registration Statement also relates to
Algae Dynamics Corp.’s Registration Statements on Form S-1 (Registration Nos. 333-199612 and 333-207232).
Item
15 Recent Sales of Unregistered Securities
On
June 6, 2014, the Company closed a private placement for gross proceeds of $647,860 of which $328,180 was received as at March
31, 2014 and reflected as equity to be issued. Pursuant to the private placement, the Company issued 556,118 units at $1.12 per
unit for gross proceeds of $622,860 and 44,642 units at $0.56 per unit for gross proceeds of $25,000, with each unit comprised
of one common share and one-half of one (1/2) common share purchase warrant. Each whole warrant is exercisable at $1.68 per share
within the first twelve months of the close of the private placement and $2.24 per share for the second twelve month period to
expiration. Immediate family members of management subscribed for 57,000 units for gross proceeds of $63,840 pursuant to this
private placement.
On
October 22, 2014, a consultant was issued 6,700 units in settlement of debt owed in the amount of USD$10,050 ($11,256), each unit
comprised of one common share and one-half of one (1/2) common share purchase warrant. Each whole warrant is exercisable at USD$1.50
($1.94) per share until October 22, 2016.
On
November 24, 2014, the Company closed a further private placement for gross proceeds of $30,000. Pursuant to the private placement,
the Company issued 17,700 units at USD$1.50 ($1.695) per unit for gross proceeds of $30,000, each unit comprising one common share
and one-half of one (1/2) common share purchase warrant. Each whole warrant is exercisable at USD$2.00 ($2.59) per share until
November 30, 2016.
Additionally, on November 22, 2014, 25,000
common share purchase warrants were exercised at USD$0.04 ($0.046) per warrant for total cash proceeds of USD$1,000 ($1,113).
On June 25, 2015, 12,500 common share purchase
warrants were exercised at USD$0.04 ($0.048) per warrant for total cash proceeds of USD$500 ($620).
On September 10, 2015, a consultant was issued
50,000 common shares for services rendered in the amount of $67,195, this amount has been recorded as professional fees on the
statement of operations.
On November 5, 2015, 31,000 common share purchase
warrants were exercised at USD$0.04 ($0.052) per warrant for total cash proceeds of USD$1,240 ($1,632). On December 18, 2015, 51,600
common share purchase warrants were exercised at USD$0.04 ($0.054) per warrant for total cash proceeds of USD$2,064 ($2,834).
On December 22, 2015, 31,000 common share
purchase warrants were exercised at USD$0.04 ($0.056) per warrant for total cash proceeds of USD$1,240 ($1,735).
On December 31, 2015, 48,400 common share
purchase warrants were exercised at USD$0.04 ($0.055) per warrant for total cash proceeds of USD$1,936 ($2,683).
On December 31, 2015, a private placement
was completed to issue 31,532 common shares at USD$1.11 ($1.54) per share for gross proceeds of USD$35,000 ($48,441). The shares
were subscribed for by a family member of an officer.
On December 31, 2015, a consultant was
issued 10,000 common shares for services rendered in the amount of USD$17,200 ($23,805). Another consultant was issued 93,000
common shares for services rendered in the amount of USD$159,960 ($221,385), these amounts have been recorded as professional
fees on the statement of operations.
On January 4, 2016, 31,000 common share
purchase warrants were exercised at USD$0.04 ($0.056) per warrant for total cash proceeds of USD$1,240 ($1,732). On February
25, 2016, 25,000 common share purchase warrants were exercised at USD$0.04 ($0.056) per warrant for total cash proceeds of
USD$1,000 ($1,378). Shares to be issued.
On December 31, 2015, the term loan was converted
into shares to be issued at a value of $54,975 based upon an estimated fair market value of USD$1.72 ($2.38) per share at the time
of conversion.
On December 31, 2015, advances from related
parties were converted into shares to be issued at a value of $117,526 based upon a fair market value of USD$1.72 ($2.38) per share
at the time of conversion.
On December 31, 2015, the Company agreed to
issue 45,000 compensatory shares to three officers of the Company with a fair market value of USD$1.72 ($2.38) per share for a
total value of $107,123. This expense was recorded as stock based compensation on the statements of operations.
On
December 31, 2015, a consulting firm was granted 13,874 shares to be issued for services rendered in the amount of USD$22,500
($31,140), these amounts have been recorded as professional fees on the statement of operations.
On
March 31, 2016, a consulting firm was granted 15,264 shares to be issued for services rendered in the amount of USD$22,500 ($29,185),
these amounts have been recorded as professional fees on the statement of operations.
Subsequent
to March 31, 2016, the Company entered into various agreements pursuant to which it has committed to issue up to 1,100,000 common
shares of the Company to October 24, 2016, as compensation for services to be rendered. Within these agreements the commitment
to Directors and Executive Officers totals 250,000 shares and the other significant commitments are to Tradersmasterpro.com, Inc
for 750,000 shares and Midtown Partners & Co., LLC for 100,000 shares.
On
May 18, 2016, 44,500 common shares purchase warrants were exercised at USD$0.04 ($0.052) per warrant for total cash proceeds of
USD$1,780 ($2,318).
On
May 15, 2016, 13,874 shares to be issued were issued as common shares.
On
June 22, 2016, 15,264 shares to be issued were issued as common shares.
On
June 30, 2016, 66,667 common shares were issued to a consultant in settlement of a debt at a value of $64,585 based upon an estimated
fair market value of USD$0.75 ($0.97) per share at the time of issuance.
On
June 30, 2016, 250,000 common shares were issued to a consulting firm as a portion of the compensation for services initiated
on June 24, 2016 and to be provided over a 6 month period at a value of $201,484 based upon an estimated fair market value of
USD$0.62 ($0.81) per share at the time of the agreement. The retainer has been recorded as a prepaid expense on the condensed
interim balance sheet as at June 30, 2016. For the three months ended June 30, 2016, the Company amortized $6,606 of this prepaid
expense, which was recorded as professional fees on the condensed interim statements of operations.
Shares
to be issued
On
May 19, 2016, the Company signed a letter of engagement with a consultant which included as part of the fee the issuance of 100,000
common shares as a non-refundable retainer at a value of $101,579 based upon an estimated fair market value of USD$0.78 ($1.02)
per share at the time of the agreement. The retainer has been recorded as a prepaid expense on the condensed interim balance sheet
as at June 30, 2016.
On
April 18, 2016, the Company signed an agreement with a consultant pursuant to which it has committed to issue 750,000 common shares
of the Company as compensation for services to be rendered over a period of 5 months.. Two directors and officers of the Company
transferred 250,000 of their personal shares to the consultant and as such the Company has agreed to reimburse the directors and
officers for these common shares transferred by issuance of common shares from treasury. The commitment was valued at $86,380
based upon an estimated fair market value of USD$0.27 ($0.35) per share at the time of the agreement. The retainer has been recorded
as a prepaid expense on the condensed interim balance sheet as at June 30, 2016. For the three months ended June 30, 2016, the
Company amortized $41,778 of this prepaid expense, which was recorded as professional fees on the condensed interim statements
of operations.
As
an event subsequent to the quarter ending June 30, 2016, on July 6, 2016, the Company agreed to issue a consultant 20,000 shares
in settlement of a debt owed in the amount of USD$15,000 ($19,500).
Since
inception, we have issued 10,091,356 common shares to 46 investors for total consideration of $1,555,324, of which $742,346 was
received in cash and used for working capital.
These
securities were issued pursuant to Section 4(2) of the Securities Act and/or Rule 506 and Regulation S promulgated thereunder.
The holders represented their intention to acquire the securities for investment only and not with a view towards distribution.
The investors were given adequate information about us to make an informed investment decision. We did not engage in any general
solicitation or advertising. We directed our transfer agent to issue the stock certificates with the appropriate restrictive legend
affixed to the restricted stock.
Item
17. Undertakings.
A.
The undersigned Registrant hereby undertakes:
(1)
To file, during any period in which offers or sales are being made, a posteffective amendment to this Registration Statement to:
(a)
include any prospectus required by Section 10(a)(3) of the Securities Act;
(b)
reflect in the prospectus any facts or events arising after the effective date of this Registration Statement (or the most recent
posteffective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set
forth in this Registration Statement. Notwithstanding the foregoing, any increase or decrease in the volume of securities offered
(if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant
to Rule 424(b) under the Securities Act if, in the aggregate, the changes in volume and price represent no more than a 20% change
in maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective Registration
Statement; and
(c)
include any additional or changed material information with respect to the plan of distribution.
(2)
That, for the purpose of determining any liability under the Securities Act, each such posteffective amendment shall be deemed
to be a new registration statement relating to the securities offered herein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3)
To remove from registration by means of a posteffective amendment any of the securities being registered which remain unsold at
the termination of the offering.
(4)
For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed
as part of a registration statement in reliance upon Rule 430A and contained in the form of prospectus filed by the Registrant
pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of the Registration Statement
as of the time it was declared effective.
(5)
For the purpose of determining any liability under the Securities Act, each posteffective amendment that contains a form of prospectus
shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(6)
For the purpose of determining liability under the Securities Act to any purchaser:
Each
prospectus filed pursuant to Rule 424(b) under the Securities Act as part of a registration statement relating to an offering,
other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A (§§230.430A
of this chapter), shall be deemed to be part of and included in the Registration Statement as of the date it is first used after
effectiveness. Provided however, that no statement made in a registration statement or prospectus that is part of the Registration
Statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus
that is part of the Registration Statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede
or modify any statement that was made in the registration statement or prospectus that was part of the Registration Statement
or made in any such document immediately prior to such date of first use.
(7)
For the purpose of determining liability of the Registrant under the Securities Act to any purchaser in the initial distribution
of securities:
The
Registrant undertakes that in a primary offering of securities of the Registrant pursuant to this Registration Statement, regardless
of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser
by means of any of the following communications, the Registrant will be a seller to the purchaser and will be considered to offer
or sell such securities to such purchaser:
(a)
Any preliminary prospectus or prospectus of the Registrant relating to the offering required to be filed pursuant to Rule 424
of this chapter;
(b)
Any free writing prospectus relating to the offering prepared by or on behalf of the Registrant or used or referred to by the
Registrant;
(c)
The portion of any other free writing prospectus relating to the offering containing material information about the Registrant
or its securities provided by or on behalf of the Registrant; and
(d)
Any other communication that is an offer in the offering made by the Registrant to the purchaser.
B.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling
persons of the Company pursuant to the foregoing provisions, or otherwise, the Company has been advised that in the opinion of
the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is,
therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the
small business issuer of expenses incurred or paid by a director, officer or controlling person of the small business issuer in
the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection
with the securities being registered, the Company will, unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy
as expressed in the Securities Act and will be governed by the final adjudication of such issue.
C.
The undersigned Registrant hereby undertakes that:
(1)
For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus
filed as part of this Registration Statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant
pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this Registration Statement
as of the time it was declared effective.
(2)
For the purpose of determining any liability under the Securities Act of 1933, each posteffective amendment that contains a form
of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering
of such securities at that time shall be deemed to be the initial
bona fide
offering thereof.