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WILLOW BIOSCIENCES ANNOUNCES COMPANY INSIDER LED CONVERTIBLE DEBENTURE FINANCING

T.WLLW | September 12, 2023

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CALGARY, AB, Sept. 12, 2023 /CNW/ - Willow Biosciences Inc. ("Willow" or the "Company") (TSX: WLLW) (OTCQB: CANSF), a leading biotechnology company focused on revolutionizing industrial manufacturing of pure, consistent and sustainable functional ingredients, is pleased to announce an offering of convertible debenture units of the Company (the "Debenture Units"), on a non-brokered private placement basis, for aggregate proceeds of up to C$1.2 million (the "Offering"). This offering is being led by insiders including members of the Board of Directors and members of the senior management team of the Company, who are expected to subscribe to approximately 50% of the total funds raised. The Offering is currently open only to accredited investors.

Each Debenture Unit will consist of one 12% unsecured convertible debenture in the principal amount of C$1,000 (each, a "Convertible Debenture") with a maturity date of 36 months after the closing of the financing (the "Maturity Date") and 4,762 common share purchase warrants (each, a "Warrant"). Each Warrant will entitle the holder thereof to purchase one common share of the Company (each a "Share") at a price of C$0.105 per Share for a period of 24 months; provided that if, at any time prior to the expiry date of the Warrants, the 20-day volume weighted average of actual closing prices of the Shares on the Toronto Stock Exchange (the "TSX"), or other principal exchange on which the Shares are listed, is greater than C$0.15, the Company may accelerate the expiry date of the Warrants to the date that is 20 days following the date of the notice of such acceleration.

The Convertible Debentures will be convertible at the holder's option into Shares at any time prior to the earlier of the business day immediately preceding the Maturity Date and the date fixed for redemption of the Convertible Debentures at a conversion price of C$0.105 per Share. The interest on the Convertible Debentures will be payable semi-annually in arrears, beginning on December 31, 2023, and will be payable in cash or paid-in-kind through the issuance of Shares or a combination thereof, at the option of the Company. If paid-in-kind through the issuance of Shares, the number of Shares issued shall be calculated based on the 5-day WVAP of the Shares immediately prior to the notice from the Company that it has elected to satisfy its interest obligations in Shares.

The Company intends to use the proceeds from the Offering for the commercialization and development of the Company's pipeline of products, working capital and general corporate purposes. Upon closing of the financing with gross proceeds of C$1.2 million, the Company anticipates having sufficient cash on hand to fund operations into the second half of 2024. This financing also allows the new Board Members and new members of the senior management team of the Company to align with and participate in the future potential value proposition of the Company alongside existing shareholders as Willow continues to execute on its strategic growth plans.

Closing of the Offering is expected to occur on or about September 29, 2023 (the "Closing Date") and is subject to the approval of the TSX.

All securities issued under the Offering, including securities issuable on conversion or exercise thereof, will be subject to a hold period in Canada of four months and one day following the Closing Date in accordance with applicable securities legislation.

As any directors and officers of the Company that participate in the Offering are insiders of the Company, their participation in the Offering is considered a "related party transaction" pursuant to Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions ("MI 61-101"). The Company will rely on Sections 5.5(a) and 5.7(1)(a) of MI 61-101 for exemptions from the requirements to obtain a formal valuation and minority shareholder approval, respectively, because the fair market value of their participation will be below 25% of the Company's market capitalization for the purposes of MI 61-101.

About Willow Biosciences Inc.

Willow develops and produces precision fermented functional ingredients for the health and wellness, food and beverage and personal care markets. Willow's FutureGrownTM and BioOxi™ platforms enable large-scale production with sustainability at its core. Willow's R&D team has a proven track record of developing and commercializing bio-based manufacturing processes and products to benefit our B2B partners and their customers. For more information, visit www.willowbio.com.

FutureGrown™ and BioOxi™ are registered trademarks of Willow Biosciences Inc. All other trademarks are trademarks of their respective holders.

Reader Advisories

This press release is not an offer of the securities for sale in the United States. The securities offered have not been, and will not be, registered under the U.S. Securities Act or any U.S. state securities laws and may not be offered or sold in the United States absent registration or an available exemption from the registration requirement of the U.S. Securities Act and applicable U.S. state securities laws. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities, in any jurisdiction in which such offer, solicitation or sale would be unlawful.

Forward-Looking Statements

This news release may include forward-looking statements including opinions, assumptions, estimates and the Company's assessment of future plans and operations, and, more particularly, statements concerning the completion of the Offering, the size thereof and the use of proceeds therefrom. When used in this news release, the words "will," "anticipate," "believe," "likely", "estimate," "expect," "intent," "may," "project," "outlook," "could," "would'" "should," and similar expressions are intended to be among the statements that identify forward-looking statements. The forward-looking statements are based upon a number of estimates and assumptions of management, including assumptions in respect of current and future market conditions. Forward-looking statements are subject to a wide range of risks and uncertainties, and although the Company believes that the expectations represented by such forward-looking statements are reasonable, there can be no assurance that such expectations will be realized. Any number of important factors could cause actual results to differ materially from those in the forward-looking statements. Please refer to the Company's most recent Annual Information Form and Management's Discussion and Analysis for risk factors relating to Willow, which can be accessed either on Willow's website at www.willowbio.com or under the Company's profile on www.sedarplus.ca.

The forward-looking statements contained in this news release are made as of the date hereof and the Company does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, except as required by applicable law. The forward-looking statements contained herein are expressly qualified by this cautionary statement.