Trees Corporation (NEO: Tree) (“Trees” or the “Company“) is pleased to announce that it has completed the closing of a non-brokered private placement (the “Private Placement“) of 200 units (“Units“) of the Company at a price of $1,000 per Unit for gross proceeds of approximately $200,000. The closing is expected to form part of a larger offering for gross proceeds of up to $1,000,000.

Proceeds from the Private Placement will be directed towards general working capital requirements and the opening of the Company’s next Trees Cannabis location at 3812a Bloor Street West, Etobicoke, ON, anticipated to open later this year.

Each Unit consists of (i) one 12.0% secured convertible promissory note bearing a principal amount of $1,000 (each, a “Convertible Note“), convertible into common shares of the Company (each, a “Common Share“) at a conversion price of C$0.015 per Common Share (the “Conversion Price“) and maturing thirty-six (36) months from the closing of the Private Placement; and (ii) 66,667 common share purchase warrants of the Company (each, a “Warrant“). Each Warrant entitles the holder thereof to purchase one Common Share at a price of C$0.015 per share until October 20, 2025, subject to Acceleration (defined hereafter).

If, during the term of the Convertible Notes, the volume weighted-average share price of the Common Shares on the Neo Exchange Inc. (the “NEO“) for twenty (20) consecutive trading days equals or exceeds C$0.06, the Company may, upon 30 days’ prior notice, convert the Convertible Notes into Common Shares at the conversion price of $0.015 (subject to customary adjustments), in whole or, from time to time, in part.

In the event that the volume-weighted average price of the Common Shares on the NEO for twenty (20) consecutive trading days equals or exceeds $0.06, the Company may, upon 30 days’ prior notice, accelerate the expiry of the Warrants to a date that is 30 days from the date of the notice (the “Acceleration“).

The Company intends to use the net proceeds from the Private Placement for general working capital purposes. Completion of the proposed Private Placement is subject to the satisfaction of certain conditions precedent, including, but not limited to, receipt of all necessary regulatory approvals, including approval of the NEO.

The Company paid a finder’s fee of C$ 7,000 in cash to certain finders in connection with the closing of the Private Placement.

Pursuant to applicable Canadian securities laws, all securities issued and issuable in connection with the closing of the Private Placement will be subject to a four (4) month hold period ending February 21, 2023.