Cannara Biotech to issue 3.46 million shares for debt

Mr. Nicholas Sosiak reports CANNARA ANNOUNCES PROPOSED SETTLEMENT OF CONVERTIBLE DEBENTURE VIA SHARE ISSUANCE Cannara Biotech Inc. intends to settle an aggregate of approximately $6.2-million of indebtedness, consisting of $4.7-million in principal and approximately $1.5-million in accrued interest, under its convertible debenture issued to Olymbec Investments Inc., and subsequently amended on Aug. 31, 2023, Jan. 30, 2024, and Feb. 21, 2025. The Olymbec convertible debenture was originally issued in the total principal amount of $5.7-million. As previously disclosed on June 18, 2025, the company repaid $1-million, thereby reducing the outstanding principal to $4.7-million. The company proposes to satisfy the outstanding indebtedness through the issuance of 3,462,763 common shares of Cannara, 851,652 of which represent the repayment of interest owing, at a deemed issuance price of $1.80 per common share, in accordance with the terms of the Olymbec convertible debenture. The proposed Olymbec share issuance is subject to the terms and conditions set forth in the policies of the TSX Venture Exchange and the completion of the share-for-debt transaction, as well as the issuance of the common shares, remains subject to the review and approval of the TSX-V. Derek Stern, a non-independent director of the company, holds a significant interest in Olymbec and is a control person of the company. The common shares issued to Olymbec will be deemed a related party transaction in accordance with TSX-V Policy 5.9 and Multilateral Instrument 61-101, Protection of Minority Security Holders in Special Transactions. Cannara intends to rely on an available exemption pursuant to MI 61-101 from the minority shareholder approval and valuation requirements for the proposed Olymbec share issuance as neither the fair market value of the subject matter of, nor the fair market value of the consideration for, the transaction, insofar as it involves interested parties, exceeds 25 per cent of Cannara's market capitalization. Following completion of the proposed Olymbec share issuance, Olymbec will hold 23,792,920 common shares of the company, and Mr. Stern, a non-independent director of the company, will personally hold 376,040 common shares. Collectively, these direct and indirect holdings will represent 24,168,960 common shares, or approximately 25.47 per cent of the company's issued and outstanding common shares on a postclosing basis. The proposed Olymbec share issuance has been approved by the directors of the company who are independent in connection with the proposed Olymbec share issuance. For a full description of the Olymbec convertible debenture, please refer to the company's annual information form for the fiscal year ended Aug. 31, 2024. A copy of the Olymbec convertible debenture is available under the company's profile on SEDAR+. Grant of options in connection with investor relations services With reference to its news release dated April 28, 2025, the company provides the following clarification. In connection with the renewal of an investor relations agreement originally disclosed via news release on May 4, 2022, the company has granted Bristol Capital Ltd. 40,000 stock options. Each option is exercisable at a price of $1.80 per common share and will expire 36 months from the date of grant. The options were granted on April 25, 2025, and will therefore expire on April 25, 2028. The options were issued as consideration for Bristol's continued provision of investor relations services to the company. Neither Bristol, nor any of its principals or affiliates, hold any interest, directly or indirectly, in the company or its securities, and they act at arm's length to the company. About Cannara Biotech Inc. Cannara Biotech is a vertically integrated producer of affordable premium-grade cannabis products for the Canadian markets. Cannara owns two megafacilities based in Quebec spanning over 1.65 million square feet, providing the company with 100,000 kilograms of potential annualized cultivation output. Leveraging Quebec's low electricity costs, Cannara's facilities produce premium-grade cannabis products at an affordable price. We seek Safe Harbor.