Coho Announces Amended Terms for Acquisition of Purebread and Equity Financing

Vancouver, British Columbia--(Newsfile Corp. - September 12, 2023) - Coho Collective Kitchens Inc. (TSXV: COHO) ("Coho" or the "Company") is providing an update today on the acquisition of Purebread. Bakery Inc. ("Purebread") that was previously announced on May 29, 2023 (the "Acquisition"). As announced on August 31, 2023, the Acquisition, a strategic move expected to bolster Coho's market presence, is now expected to close on or before September 19, 2023. Coho is also pleased to announce today that Purebread's existing owners (collectively, the "Purebread Vendors") have also agreed to receive a portion of the purchase price for Purebread in the form of a $1.5 million Vendor-Take-Back note (the "VTB Note") issued by Coho Acquisition Corp. (the "Purchaser").

The VTB Note was negotiated between Coho and the Purebread Vendors to ensure a seamless transition and continued growth of Purebread following the date of the concurrent closings of the Offering (defined below) and Acquisition (the "Closing Date"). This amendment to the terms of the Acquisition demonstrates the confidence of the Purebread Vendors in the future success of Purebread following the Closing Date. It also better aligns the interests of the Purebread Vendors with those of Coho and its shareholders.

Further to Coho's previous announcement on July 31, 2023, Coho has also filed a new offering document (the "Offering Document") dated September 12, 2023, to replace for all intents and purposes the offering document filed and announced on July 31, 2023, which was set to expire on September 14, 2023.

Updated Equity Financing

The Company is conducting a new brokered private placement of up to 35,294,117 units of the Company ("Units") at a price of $0.17 per Unit (the "Issue Price"), for aggregate gross proceeds of up to $6,000,000 (the "Offering"). This Offering replaces for all purposes the offering announced by the Company on July 31, 2023, in order for the Company to make the Offering of Units to purchasers resident in Canada, except Quebec, pursuant to the listed issuer financing exemption (the "Listed Issuer Financing Exemption") under Part 5A of National Instrument 45-106 - Prospectus Exemptions ("NI 45-106"), subject to compliance with applicable regulatory requirements and in accordance with NI 45-106.

A maximum of 29,411,765 Units will be issued pursuant to the Listed Issuer Financing Exemption. The balance of the Units (the "4-Month Hold Units") will be issued pursuant to other exemptions from the prospectus requirements found in NI 45-106.

Each Unit will be composed of one (1) common share in the capital of the Company (a "Common Share") and one-half of one (1/2) Common Share purchase warrant (each whole warrant, a "Warrant"). Each Warrant will entitle the holder thereof to acquire one (1) additional Common Share (a "Warrant Share") at a price of $0.25 per Warrant Share for a period of 36 months from the Closing Date.

The Company intends to use the net proceeds of the Offering for completing its previously announced acquisition of Purebread, the expansion of operations, and to provide general working capital to support operations.

In connection with the Offering, Coho has entered into an agreement with Canaccord Genuity Corp. ("Canaccord" or the "Lead Agent"), dated June 14, 2023, pursuant to which Canaccord will act as lead agent to assist the Company with the Offering on a reasonable efforts basis. On the Closing Date, the Company shall pay to the Lead Agent (together with any selling group formed by the Lead Agent, the "Agents"): (i) a cash commission equal to 8.0% of the aggregate gross proceeds of the Offering payable in cash or Units, or any combination of cash or Units at the option of the Lead Agent (the "Cash Commission") and (ii) Common Share purchase warrants of the Company, exercisable at any time prior to the date that is 36 months from the Closing Date to acquire that number of Units equal to 8.0% of the number of Units issued under the Offering, at an exercise price equal to the Issue Price (the "Agent's Warrants"). On the Closing Date, the Company shall also pay the Lead Agent a corporate finance fee consisting of (i) $50,000 (payable in cash) and (ii) 294,117 Units (having a value equal to $50,000).

The Company may provide a president's list of investors that can subscribe for up to $2 million of the Offering (the "President's List"). The compensation to the Agents for subscribers on the President's List shall be reduced to 3% for both Cash Commission and Agent's Warrants.

Subject to compliance with applicable regulatory requirements, and in accordance with NI 45-106, the Offering of Units is being made to purchasers resident in Canada, except Quebec, pursuant to the Listed Issuer Financing Exemption. The Units will not be subject to a hold period in accordance with applicable Canadian securities laws. There is an Offering Document related to the Offering that can be accessed under the Company's profile at www.sedar.com and on the Company's website at: www.cohocollectivekitchens.com. Prospective investors should read this Offering Document before making an investment decision.

The Agents will also be entitled to offer the Units for sale in the United States pursuant to available exemptions from the registration requirements of the United States Securities Act of 1933, as amended (the "1933 Act"), and in those other jurisdictions outside of Canada and the United States provided it is understood that no prospectus filing or comparable obligation arises in such other jurisdiction. The 4-Month Hold Units and all securities not issued pursuant to the Listed Issuer Financing Exemption will be subject to a hold period in accordance with applicable Canadian securities law, expiring four months and one day following the Closing Date.

The Company expects to close the Offering on or about September 19, 2023, and the Offering is subject to certain conditions including, but not limited to, the receipt of all necessary regulatory approvals including the approval of the TSX Venture Exchange.

This news release shall not constitute an offer to sell or the solicitation of an offer to buy securities in the United States, nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. The securities being offered have not been, nor will they be, registered under the 1933 Act or under any U.S. state securities laws, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the 1933 Act, as amended, and applicable state securities laws.

Extension of Outside Date of Acquisition

As detailed in Coho's announcement on August 31, 2023, the Company and the Purebread Vendors have also agreed to extend the outside date of the definitive purchase agreement executed in connection with the Acquisition (the "Purchase Agreement") from August 31, 2023 to September 19, 2023 (the "Extension"). The Extension will allow Coho and the Purebread Vendors to finalize remaining documentation and facilitate concurrent closings of the Acquisition and the Offering, term credit facility, and revolving credit facility necessary to support the Acquisition. The term credit facility and revolving credit facility are further described in the Company's news release dated May 29, 2023.

Other than the Extension and the VTB Note, the Purchase Agreement is otherwise unamended as of the date hereof and the Acquisition is expected to proceed substantially on the terms previously announced.

Details of VTB Note

The Purchaser, a wholly owned subsidiary of Coho, will issue the VTB Note in favour of Twin Lakes Investments Inc. ("Twin Lakes"), one of the Purebread Vendors. The VTB Note will be secured by a general security agreement granted by the Purchaser and Purebread in favour of Twin Lakes. Purebread will also be executing a guarantee and indemnity for the obligations of the Purchaser to Twin Lakes.

All principal and interest owing in connection with the VTB Note must be repaid by the date that is 24 months after the Closing Date. The VTB Note may be prepaid by Coho in full without penalty at any time during the term. The VTB Note shall initially bear interest at a rate of 10% for the twelve month period commencing on the Closing Date (the "Initial Interest Rate Period") and is subject to adjustment following the Initial Interest Rate Period (as detailed by Coho in the Offering Document).

About Coho

Coho is a growing player in commercial real estate and food technology, operating fast casual restaurants and shared-kitchen facilities. As Canada's largest shared-kitchen company, Coho is expanding its presence and services. Through combined efforts, Coho and Purebread strive to positively impact the communities in which they operate.

For more information, please visit cohocollectivekitchens.com.

Contacts

Andrew Barnes, Chief Executive Officer
andrew@cohocommissary.com
(778) 877-6513

Investor Relations
invest@cohocommissary.com
(604) 243-7355

NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS NEWS RELEASE.

Cautionary Statements Regarding Forward-Looking Information

This press release may contain "forward-looking statements" within the meaning of applicable Canadian securities laws, including, without limitation, information regarding the intended use of proceeds of the Offering, our statements related to the closing of the Acquisition; the impact of the Acquisition on the Company's market presence, business and growth plans; the expected seamless transition of Purebread and its potential growth; and the expected timing for the closing of the Acquisition, the term and revolving credit facility financings and the equity financing referred to above.

Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management, are inherently subject to significant business, economic and competitive uncertainties, and contingencies. These statements generally can be identified by the use of forward-looking words such as "may", "should", "will", "could", "intend", "estimate", "plan", "anticipate", "expect", "believe" or "continue", or the negative thereof or similar variations. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause future results, performance or achievements to be materially different from the estimated future results, performance or achievements expressed or implied by those forward-looking statements and the forward-looking statements are not guarantees of future performance.

Coho's statements expressed or implied by these forward-looking statements are subject to a number of risks, uncertainties, and conditions, many of which are outside of Coho's control, and undue reliance should not be placed on such statements. Forward-looking statements are qualified in their entirety by the inherent risks and uncertainties surrounding the Acquisition and the Offering, including: that Coho will not be able to complete the Acquisition on the terms announced, within the anticipated timeline, or at all; that the actual impact of the Acquisition on Coho's business and growth strategy will not be as currently anticipated; that Coho's other assumptions in making forward-looking statements may prove to be incorrect; adverse market conditions; that the parties may not obtain all required consents or approvals for the Acquisition (including the approval of the TSXV); risks inherent in the ghost-kitchen, retail bakery, or coffeehouse sectors in general; that future results may vary from historical results; that the Company will be able to utilize the net proceeds of the Offering in the manner intended; the state of the financial markets for the Company's securities; recent market volatility and potentially negative capital raising conditions; that the Offering will close on the date intended or at all; that general business and economic conditions will not change in a material adverse manner; assumptions regarding political and regulatory stability and stability in financial and capital markets; the Company's ability to raise the necessary capital or to be fully able to implement its business strategies; and competition in the markets where Coho operates.

The forward-looking statements contained in this news release are made as of the date of this news release. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

No securities regulatory authority has either approved or disapproved the contents of this press release. This press release does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale or any acceptance of an offer to buy these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

The securities referred to in this news release have not been, nor will they be, registered under the 1933 Act, or any U.S. state securities laws, and may not be offered or sold within the United States or to, or for the account or benefit of, persons in the "United States" (as such term is defined in Regulation S under the 1933 Act), absent registration under the 1933 Act and all applicable state securities laws or compliance with the requirements of an exemption therefrom. This news release does not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in the United States or in any other jurisdictions in which such offer, sale, or solicitation would be unlawful.

All financial figures are approximate and in Canadian dollars, unless otherwise noted.

NOT FOR DISSEMINATION INTO THE UNITED STATES OF AMERICA OR DISTRIBUTION TO U.S. NEWSWIRE SERVICES

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/180357