Biologicals

MustGrow Announces Closing of Private Placement of Units for $2,585,000

17 January 2024, Canada: MustGrow Biologics Corp. (TSXV:MGRO) (OTC:MGROF) (FRA:0C0) (the “Company” or “MustGrow“) is pleased to announce the closing of the previously announced non-brokered private placement of units (each, a “Unit“) at a price per Unit of $1,000 for aggregate gross proceeds to the Company of $2,585,000 (the “Private Placement“) on January 16, 2025 (the “Closing Date“).

Each Unit is comprised of: (i) $1,000 principal amount of unsecured convertible debentures (the “Debentures“); and (ii) 666 common share purchase warrants (the “Unit Warrants“). Each Debenture may, at the option of the holder: (i) be converted into common shares in the capital of the Company (the “Common Shares“) at price of $1.50 per Common Share (the “Principal Conversion Price“) at any time; or (ii) paid in cash 60 months following the Closing Date (subject to certain acceleration rights). Each Unit Warrant is exercisable by the holder thereof to acquire one Common Share at a price of $1.90 per Common Share for a period of 60 months following the Closing Date. The Debentures accrue interest at a rate of 8% per annum, payable semi-annually in cash.

If, at any time following the date that is 12 months from the Closing Date, the daily volume weighted average trading price of the Common Shares on the TSX Venture Exchange (the “TSXV“) is greater than $3.00 for the preceding 30 consecutive trading days, the Company shall have the option to immediately accelerate the conversion of the Debentures at the Principal Conversion Price.

In connection with the Private Placement, certain finders received an aggregate cash fee of $67,200. In addition, the Company issued to certain finders an aggregate of 44,800 non-transferable finder’s warrants (the “Finder Warrants“). Each Finder Warrant will entitle the holder thereof to purchase one Common Share at an exercise price of $1.90 per Common Share for a period of 24 months following the Closing Date.

The Company intends to use the proceeds from the Private Placement for inventory production for TerraSanteTM, working capital and general corporate purposes.

The Debentures, the Unit Warrants, the Finder Warrants, and any underlying Common Shares issued pursuant to those securities are subject to a four month plus one day hold period from the Closing Date. The Private Placement remains subject to final approval of the TSX Venture Exchange (the “TSXV“).

Certain insiders of the Company have subscribed for 300 Units under the Private Placement for aggregate gross proceeds of $300,000. Each subscription by an “insider” is considered to be a “related party transaction” for purposes of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101“). The Company did not file a material change report more than 21 days before the Closing Date as the details of the Private Placement and the participation therein by each “related party” of the Company were not settled until shortly prior to the closing of the Private Placement, and the Company wished to close the Private Placement on an expedited basis for sound business reasons. The Company is relying on exemptions from the formal valuation and minority shareholder approval requirements available under MI 61-101. The Company is exempt from the formal valuation requirement in section 5.4 of MI 61-101 in reliance on section 5.5(a) of MI 61-101 as the fair market value of the transaction, insofar as it involves interested parties, is not more than the 25% of the Company’s market capitalization. Additionally, the Company is exempt from minority shareholder approval requirement in section 5.6 of MI 61-101 in reliance on section 5.7(b) of MI 61-101 as the fair market value of the transaction, insofar as it involves interested parties, is not more than the 25% of the Company’s market capitalization.

This press release does not constitute, and shall not be construed as, an offer to sell or a solicitation of an offer to buy any Units within the United States.

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