Canada House And MTL Cannabis Enter Into Second Restated Share Exchange Agreement

Canada House Cannabis Group Inc. CHV and Montréal Cannabis Médical Inc. ("MTL Cannabis") entered into a second restated share exchange agreement in respect of the Canada House’s completion of the second tranche of its acquisition of all of the issued and outstanding shares of MTL Cannabis.

Transaction Summary

The first stage of the transaction closed on August 30, 2022 and resulted in the acquisition by the company of approximately 24.99% of the issued and outstanding shares of MTL Cannabis in in exchange for 49.99% of the issued and outstanding common shares of the company (the "tranche one consideration shares"). The second restated share exchange agreement continues to provide for the acquisition by the company of the remaining 75.01% of the issued and outstanding shares of MTL Cannabis in a second tranche (the "tranche two closing") on, except as described in the MIC, substantially equivalent economic terms for the second tranche as set forth in the restated share exchange agreement dated as of July 22, 2022. In consideration for the shares of MTL Cannabis to be acquired at the tranche two closing, the company is to issue such number of common shares (the "tranche two consideration shares") as when added to the tranche one consideration shares equals 80.0% of the issued and outstanding shares of the company on a post-issuance basis.

The percentages of common shares noted above will be subject to anti-dilution adjustments in favor of the vendors of the MTL Cannabis shares wherein additional common shares will be issued up to 49.99% of the common shares prior to the subsequent closing and up to 80.0% following the subsequent closing in the event of the issuance of common shares upon the conversion of the principal and accrued interest of the company's $6.5 million convertible debenture issued to Archerwill Investments Inc. on August 5, 2020. Similar anti-dilution protection will apply in the event warrants issued to Archerwill on the repayment of the debenture are exercised for common shares, except that only 50% of such common shares shall be subject to ant-dilution protection.

The transaction constitutes a "reverse takeover" of the company and, upon the tranche two closing, the company will change its legal name to and operate as MTL Cannabis Corp., with its common shares to trade on the CSE under the ticker symbol "MTLC" or such other name and ticker symbol as the company and MTL Cannabis may approve and be deemed acceptable to the regulatory authorities.

Approval for the transaction will be sought from the company's shareholders at the annual and special meeting of shareholders of Canada House to be held on July 28, 2023, at 9:00 a.m. (Eastern time).

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