Hemptown Organics Corp. entered into a letter of intent to acquire Spectre Capital Corp. (TSXV:SOO.P) in a reverse merger transaction on September 8, 2020. Under the terms of the agreement, Spectre will acquire all of the securities of Hemptown to form the resulting issuer. As part of the Plan of Arrangement, it is expected that (i) Spectre will complete a share consolidation on the basis of one (new Spectre common share for every two and a half old Spectre common shares (ii) post-Consolidation Spectre common shares will be exchanged for Hemptown common shares on a one-for-one basis (“Resulting Issuer Common Shares”) and (iii) Spectre will create a new class of class A shares (“Resulting Issuer Class A Shares”) that will be exchanged on a one-for-one basis for, and be economically equivalent, to the existing class A shares of Hemptown. Any outstanding securities of Hemptown which are convertible or exchangeable into common shares or class A shares of Hemptown, unless earlier converted or exchanged in accordance with their terms, are expected to become convertible or exchangeable into Resulting Issuer Common Shares or Resulting Issuer Class A Shares, as applicable, and otherwise continue to be governed in accordance with their terms. Pursuant to the terms of the LOI, Spectre intends to lend CAD 0.2 million to Hemptown (the “Bridge Loan”). The use of the Bridge Loan proceeds will be subject to prior approval by Spectre's management and the Exchange and the Bridge Loan will be secured by a general security agreement covering Hemptown's assets and a promissory note. The Bridge Loan will be forgiven upon closing of the Transaction. If the Transaction does not complete for any reason, the Loan will be repayable by Hemptown on demand by Spectre. Apart from the Bridge Loan, no advances or other consideration are expected to be paid by Spectre to Hemptown in advance of closing of the transaction. Post completion of the transaction and the listing of the Resulting Issuer Common Shares, Spectre anticipates being classified as a "Tier 2" Industrial Issuer.

Robert Shewchuk and Stephen Ross Gatensbury will resign as directors and Geoff Balderson will resign as President, Chief Executive Officer, Chief Financial Officer and Secretary of Spectre. The board of directors of the Resulting Issuer is expected to initially consist of five directors, being Rodney Wolterman, Michael Townsend, Eric Gripentrog, Geoff Balderson and another nominee to be named at a later date. As of October 13, 2020, Ken Z. Cai has agreed to serve as a director of the Resulting Issuer. Eric Gripentrog is expected to be appointed as Chief Executive Officer of the resulting issuer, and additional officers will be determined at a later date. As per filing on March 23, 2021, Ken Z. Cai will no longer be appointed as a director of the Resulting Issuer and Michael Townsend will no longer be appointed as President of the Resulting Issuer. Instead, Zayn Kalyan will be appointed as a director and as President of the Resulting Issuer. The completion of the transaction will be subject to a number of conditions, including but not limited to, the parties successfully entering into a definitive agreement in respect of the Transaction, receipt of all necessary approvals, including the approval of the Exchange, the creation of the new Resulting Issuer Class A Shares, completion of a financing on terms to be determined, completion of satisfactory due diligence by Spectre, shareholder approval of Hemptown, court approval of the arrangement, the approval by the board of directors of Spectre Capital, the completion of the share consolidation and creation of new Class A shares; and third party consents. The closing of the Concurrent Financing is expected to occur on July 15, 2021. It is anticipated that the approval of the shareholders of Spectre to the transaction will not be required.