Kiaro Holdings Corp. (TSXV:KO) entered into a strategic transaction to acquire Hemisphere Cannabis Co. from Aegis Brands Inc. (TSX:AEG) on July 12, 2021.

In consideration for 100% of Hemisphere's common shares, Kiaro will issue 61,300,000 common shares to Aegis (having a current value of CAD 7,900,863, based on the five-day volume weighted average price of Kiaro's common shares), plus 6,700,000 common share purchase warrants. Kiaro will issue an additional 6,700,000 shares to Aegis upon the achievement of certain commercial milestones during the first year following closing. Upon completion of the sale transaction, Aegis will hold approximately 25% of Kiaro's common shares and will be Kiaro's largest individual shareholder.

It is anticipated that, subject to receipt of all regulatory and other applicable approvals, but not limited to, the Alcohol and Gaming Commission of Ontario and TSX Venture Exchange approval, approval of Kiaro shareholders and the satisfaction of certain other closing conditions customary in transactions of this nature. Aegis' Chief Executive Officer Steven Pelton will join the Kiaro Board of Directors at closing. In connection with the transaction, Jen Juby, Vice President of Operations at Hemisphere, will join the Kiaro team as Vice President of Retail.

Jen Juby will contribute to the integration of of the Hemisphere stores and will use her expertise to continue the implementation of the retail experience. Following completion of the transaction, Kiaro will operate 16 cannabis retail locations in multiple Canadian provinces and an expected 18 locations by the end of Q1 2022. As of September 13, 2021, Shareholders of Kiaro Holdings approved the transaction.

The Transaction is expected to complete in September 2021. Kronos Capital Partners is acting as financial advisor to Aegis in collaboration with Haywood Securities as financial advisor to Kiaro. John Connon of Goodmans LLP acted as legal advisor to Aegis Brands Inc. Jonathan O'Connor of MLT Aikins LLP acted as legal advisor to Kiaro Holdings Corp.