BTM Advisory Services Inc. Suite 300, # 5 Richard Way SW Calgary, AB - PDF document

BTM Advisory Services Inc. Suite 300, # 5 Richard Way SW Calgary, AB T3E 7M8 September 12, 2017 To the Investors of La Terra Ventures Land Projects, In my capacity as court-appointed Inspector of La Terra Ventures Inc. I am forwarding to you the attached Presentation for your review and questions in advance of our court date scheduled for October 6, 2017. This Presentation has been prepared for investors in the five La Terra Ventures Land Projects: Eagle Ridge (Okotoks, Alberta), Iron Landing (Crossfield, Alberta), Heritage Heights Phases I and II (Strathmore, Alberta) and The Meadows (Claresholm, Alberta) (collectively, the “Land Projects”). Its purpose is to provide investors with sufficient information to understand the current ownership and financial matters negatively affecting the Land Projects, and the proposed plan (the “Restructuring Plan”) to restructure the Land Projects’ ownership. The Restructuring Plan will be presented for Court approval on October 6, 2017. The investors affected by the Restructuring Plan include those who acquired undivided interests (“UDIs”) in the Land Projects and are referred to in the Presentation as “UDI Owners”, and to those who loaned funds to UDI Owners by way of land mortgages and are referred to in the Presentation as “Mortgagees”. UDI Owners and Mortgagees are referred to together as “Investors”. There is a Question & Answer section at the end of the Presentation which addresses questions that I expect Investors may have. I expect that Investors may have other questions. If you have questions arising from the Presentation or about your individual situation, please direct them by email to Rob Petersen at robp@wheelhousesupport.ca. Rob and I will endeavor to respond to all emails as quickly as we can. For those investors that do not have email, please call Rob at (403) 797-0266. Please note the following dates: No later than September 25, 2017 – Court Application documents relating to the Restructuring Plan will be sent by email to those Investors with email access, and mailed to those without email access. October 6, 2017 (2:00 PM) – Court Application hearing at the Court of Queen’s Bench in Calgary, Alberta Please read the Presentation very carefully as the matters discussed directly affect all Investors in the Land Projects. The Restructuring Plan that is being proposed provides, in my view, significant benefits to the Investors and will enable the Land Projects to proceed forward towards development or sale, neither of which can currently be accomplished. Yours truly, Gary L. Bentham, CPA,CA,CIRP For BTM Advisory Services Inc., in its capacity as Inspector of La Terra Ventures Inc.

LA TERRA LAND PROJECTS – RESTRUCTURING PLAN PRESENTATION TO INVESTORS SEPTEMBER 12, 2017 2

Table of Contents ............................................................................................................................................... 4 NOTICE TO READER ....................................................................................................................................................... 5 INTRODUCTION A. THE LAND PROJECTS – CURRENT OWNERSHIP AND FINANCIAL STRUCTURE ............................... 5 A ) L A T ERRA O PERATING H ISTORY 6 ................................................................................................................................ B ) L AND P ROJECT V ALUATION AND F INANCIAL /O WNERSHIP P ROFILE .......................................................................... 6 C ) M ORTGAGEE P ROFILE 7 ................................................................................................................................................ B. RESTRUCTURING PLAN .................................................................................................................................. 8 A ) S UMMARY 8 .................................................................................................................................................................. B ) B ENEFITS OF THE R ESTRUCTURING P LAN ................................................................................................................ 11 C ) T HE R ESTRUCTURING P LAN – N EXT S TEPS AND I MPLEMENTATION 12 ......................................................................... D ) T AX AND S ECURITIES I MPLICATIONS OF THE R ESTRUCTURING P LAN ...................................................................... 14 E ) C URRENT AND FUTURE FINANCING .......................................................................................................................... 14 F ) R ESTRUCTURE OR L IQUIDATE ? ................................................................................................................................ 15 C. POST REORGANIZATION OPERATIONS .................................................................................................... 15 D. LA TERRA VENTURES INC. FINANCIAL HISTORY AND CURRENT FINANCIAL POSITION ........... 16 E. QUESTIONS AND ANSWERS ......................................................................................................................... 19 3

NOTICE TO READER In preparing the financial data in this Presentation, the Inspector has relied upon unaudited financial information and La Terra company records and records for the Land Projects and Mortgages, some of which are not complete. The Inspector has not audited, reviewed or otherwise attempted to verify the accuracy or completeness of the financial information in a manner that would wholly or partially comply with Generally Accepted Assurance Standards pursuant to the Chartered Professional Accountants Canada Handbook and, accordingly, the Inspector expresses no opinion or other form of assurance in respect of the information. Future orientated financial information relied upon in this report is based on the Inspector’s assumptions regarding future events and discussions with land management professionals, appraisers, and legal counsel. Actual results achieved will vary from this information and the variations may be material. 4

INTRODUCTION On April 25, 2017, BTM Advisory Services Inc. was appointed Inspector of La Terra Ventures Inc. (“La Terra”) by Order of the Court of Queen’s Bench of Alberta (the “ Court Order ”) with the consent of La Terra’s president and sole director, John Labun. This appointment was necessitated by the occurrence and disclosure of certain questionable financial transactions negatively affecting a number of Investors, and the disclosure that La Terra was financially unable to continue as Administrator of the Land Projects. Concurrently, an Advisory Committee of UDI Owners and Mortgagees was formed to provide advice and input to the Inspector in the fulfilment of its duties. The Advisory Committee has subsequently communicated with Investors through Rob Petersen at Wheelhouse Support Services. Orchestrate Inc., a land manager and developer, was appointed Interim Administrator of the Land Projects by the Court Order. The primary responsibility of the Inspector has been to review and investigate the financial affairs of La Terra, to report its findings to the Court and to the Advisory Committee, and to assist in the development of the Restructuring Plan that will enable the ongoing management and financing of the Land Projects for the benefit of the Investors. This Presentation has been prepared by the Inspector with review by its legal counsel and has been provided to the Advisory Committee. The main topics addressed include: A –The Land Projects – Current Ownership and Financial Structure B – Restructuring Plan C – Post Reorganization Operations D – La Terra Ventures Inc. – Financial History and Current Financial Position E – Questions and Answers The questionable financial transactions that gave rise to the Inspectorship are not addressed in detail in this Presentation and are the subject of a detailed confidential report that will be presented by the Inspector to the Court and the investigative authorities. With the approval of the Court, the Inspector has communicated directly with those Investors directly affected by the questionable transactions. A. THE LAND PROJECTS – CURRENT OWNERSHIP AND FINANCIAL STRUCTURE The current ownership and financing structure of the Land Projects directly impacts every Investor. It is important to differentiate between the Land Projects and La Terra as the Investors’ financial and ownership interests are in the Land Projects, and Investors have no financial interest in La Terra. For context, some La Terra history and background is necessary to better understand the position of the Land Projects today. 5