Red Light increases distribution to 123 Safeway stores

Executive Summary

• Red Light Holland’s subsidiary, Happy Caps, has expanded its retail partnership with Albertsons Companies (Safeway) from 66 to 123 stores across Oregon and Washington, with product availability starting the week of Nov. 17, 2025.
• The company granted significant equity incentives, including 100,000 stock options and 4.25 million Restricted Stock Units (RSUs) to employees and consultants, alongside a separate grant of 3.5 million RSUs to a director.
• The Board approved the issuance of 5,611,250 shares to settle cash compensation owed to directors and consultants at a deemed price of 3.5 cents per share to preserve cash, with additional share issuances planned for arm's-length creditors.

Key Details

• Retail Expansion:
  • Partnership expanded to 123 Safeway locations in Oregon and Washington (up from 66 stores).
  • Launch week: Nov. 17, 2025 (timed for Thanksgiving).
  • Replenishment order scheduled for the week of Dec. 5, 2025.
  • Total units increased to 4,428 (up from 2,376 units in the spring program).
  • Products include shiitake, lion's mane, and oyster mushroom home grow kits.
  • Kits are locally produced in Oregon in partnership with Trailbridge Mushroom Farm.
• Equity Incentive Grants:
  • Granted 100,000 options to acquire common shares to an incoming employee.
  • Exercise price: $0.05 per share.
  • Expiration: Nov. 3, 2030.
  • Vesting: Over two years.
  • Granted 4.25 million RSUs to certain officers, employees, and consultants.
  • Vesting: Over two years.
• Director RSU Grant:
  • A director received 3.5 million RSUs.
  • Classified as a related-party transaction under Multilateral Instrument 61-101.
  • Exempt from formal valuation and minority shareholder approval as consideration does not exceed 25% of market capitalization.
• Shares-for-Debt Settlement:
  • Issuance of 5,611,250 shares to directors and consultants to reduce cash compensation obligations.
  • Deemed price: $0.035 per share.
  • Directors received 4,659,750 shares (related-party transaction under MI 61-101, exempt from valuation/approval requirements).
  • Purpose: To preserve the company's cash balance.
  • Additional shares to be issued to arm's-length creditors at a deemed price to be determined at settlement.
• Regulatory Notes:
  • Shares underlying options and RSUs are subject to a statutory four-month-and-one-day hold period.
  • Company did not file material change reports more than 21 days prior to the grants/settlements as required by MI 61-101, citing the need for speed in incentivizing personnel and removing cash obligations.

Notable Quotes

• "We're extremely proud to nearly double our U.S. retail footprint with Safeway, just in time for American Thanksgiving... This expansion into 123 stores reflects strong consumer demand and confidence in our Happy Caps brand." — Todd Shapiro, CEO and Director