| VANCOUVER, British Columbia, July 27, 2020 – MYM Nutraceuticals Inc. (CSE: MYM) (OTC: MYMMF) (“MYM”) and Biome Grow Inc. (CSE:BIO) (CNSX:BIO.CN) (Frankfurt:6OTA) (OTC:BIOIF) (“Biome”) are pleased to announce that they have entered into an agreement whereby MYM has agreed to acquire 100% of Biome’s wholly-owned subsidiary Highland Grow Inc. (“HGI”), which is licensed under the Cannabis Act (Canada ) to cultivate, process, and distribute cannabis from its facility located in Antigonish, Nova Scotia. As part of the transaction, Biome will become the largest shareholder of MYM.
The total consideration to be paid by MYM for the acquisition will be approximately $12,898,727 consisting of: (i) $1.5 million in cash; (ii) 42,813,985 common shares in the capital of MYM (each a “MYM Share”) at a deemed per share price of $0.065, representing 19% of MYM’s total issued and outstanding share capital post-closing (the “Consideration Shares”); and (iii) 132,551,040 newly-created non-voting Class A Special Shares of MYM, which non-voting shares may be exchanged for MYM Shares in accordance with the Class A Special Shares’ rights and restrictions; and (iv) MYM’s agreement to make the Loan (as described below). “We are extremely excited to welcome Highland Grow to the MYM family”, said Robin Linden, interim CEO of MYM Nutraceuticals. “The Highland Grow cultivation and distribution facility in Nova Scotia will expand MYM’s cannabis footprint, enabling us to immediately supply the Canadian market with premium craft cannabis, including product grown in our Quebec based facility.” “This is a great opportunity that benefits all of our stakeholders,” said Khurram Malik, CEO of Biome Grow. “This transaction allows Biome to become the largest single shareholder in a much bigger operating platform than it could currently create on its own, an ability to address our significant liabilities stemming from our previously abandoned capital intensive strategy, and it gives Biome greater flexibility on how to evolve the business in this fast changing industry.” To finance the acquisition and to provide additional working capital, MYM has entered into a loan facility (the “Loan Facility”) with 1909203 Ontario Inc. (the “Facility Lender”) whereby MYM will borrow $3 million for a term of 18 months with an option to extend for an additional 6 months at the sole discretion of MYM upon MYM paying the Facility Lender an extension fee. 1909203 Ontario Inc. is controlled by Michael Wiener and parties related to him. The Loan Facility shall bear interest at a face rate of 17.5% per annum. MYM shall also pay the Facility Lender a set-up fee equal to 3% of the amount advanced and an immediate interest payment equal to 5% of the amount advanced separate from and in addition to the 17.5% per annum interest payable under the Loan Facility. The Loan Facility is secured against all of MYM’s current and future acquired assets. At any time during the term of the Loan Facility, at MYM’s discretion, MYM may borrow an additional $1 million from the Facility Lender on the same terms and conditions as the $3 million loan upon issuing the Facility Lender warrants to purchase 28,571,429 common shares of MYM with an exercise price of $0.07 per common share. MYM has also agreed to loan Biome an amount equal to $1 million (the “Biome Loan”) for a term of 18 months with an option to extend for an additional 6 months at the sole discretion of Biome upon Biome paying an extension fee. The Biome Loan shall bear interest at a face rate of 17.5% per annum. Biome shall also pay a set-up fee equal to 3% of the amount advanced and an immediate interest payment equal to 5% of the amount advanced separate from and in addition to the 17.5% per annum interest payable under the Biome Loan. Interest on the Loan shall be payable monthly beginning on the day that is 4 months following the advance of the Loan. Requiring no further loan of cash by MYM, the principal amount of the Biome Loan shall be increased by the amount of certain liabilities of HGI, which will continue to be owing by HGI post-closing estimated to be approximately $1.4M. Upon completion of the transaction, Michael Wiener will resign as a director of Biome and will be appointed as Chief Executive Officer and a director of MYM. Robin Linden will resume his role as a director and Chief Marketing Officer of MYM. Robert Wolf will also be appointed a director of MYM. The cash proceeds of the transaction and the Biome Loan will principally be used by Biome to satisfy outstanding obligations owing to its senior lender. In connection with the pre-payment of that loan facility, Biome has agreed to pay a pre-payment fee of $44,402.81, which amount will be satisfied by Biome issuing 417,535 common shares in the capital of Biome at a deemed price per share of $0.08. As security for the Loan, 38,461,538 Consideration Shares will be placed into escrow and released to Biome on regular intervals. Any proceeds received by Biome from the sale of such Consideration Shares shall be used to repay the Loan until such time as the Biome Loan is discharged in full. The completion transactions described herein are subject to certain conditions precedent, and if such conditions are not satisfied or waived by August 7, 2020 (or a later date if extended in accordance with the SPA), the SPA, may be terminated. There can be no assurance that these transactions will be completed. The parties acknowledge that the Facility Lender is a company related to Michael Wiener and will be loaning monies to MYM to allow it to make the cash payments to Biome to complete the share purchase and Biome Loan transactions. As such this these transactions could be considered a related party transaction pursuant to Multilateral Instrument 61-101- Protection of Minority Shareholders in Special Transactions (“MI 61-101”). Notwithstanding the forgoing, Biome has determined that the related party portion of these transactions are exempt from the valuation and minority approval requirements of MI 61-101, on the basis that the value of the related party portion of these transactions does not exceed 25% of the market capitalization of Biome as of the date hereof. |