An anonymous director reports

F-20 DEVELOPMENT CORP. ANNOUNCES AN INCREASE IN OWNERSHIP OF SHARES OF AVANT BRANDS INC.

F-20 Development Corp., a shareholder of Avant Brands Inc., on Feb. 1, 2023, completed the transaction pursuant to which the company purchased the 50-per-cent equity stake in 3PL Ventures Inc. from the acquirer for a purchase price of $15-million, which was satisfied as follows:

• $1.5-million cash paid on the closing date;
• $9.5-million payable by way of a convertible debenture. The debenture may be converted into shares of the company, at the election of the acquirer, at a conversion price of 50 cents per share in the capital of the company. The debentures bear an interest rate of 10 per cent per annuum and have a maturity date of Aug. 1, 2024;
• 16,430,573 shares (subject to escrow);
• 5,819,161 shares; and
• Five million share purchase warrants. Each warrant entitles the acquirer to purchase one additional share of the company at an exercise price of 50 cents per share until Feb. 1, 2025, subject to an acceleration by the company in the event that the volume-weighted average trading price of the shares on the Toronto Stock Exchange exceeds $1.25 for a period of 20 consecutive trading days.

Prior to the closing of the transaction, the acquirer held 45,000 shares of the company and 375,000 warrants to purchase shares of the company, and the acquirer's non-diluted shareholdings represented approximately 0.02 per cent of the company's issued and outstanding shares, and the acquirer's partially diluted shareholdings represented 0.2 per cent of the company's issued and outstanding shares (that is, assuming full exercise of all warrants and no other issuances of shares by the company).

Following the closing of the transaction, the acquirer held 22,294,734 shares of the company, debentures convertible into up to 19 million shares, assuming the entire principal sum of the debenture is converted into shares of the company, at the election of the acquirer, and 5,375,000 warrants, and the non-diluted shareholdings now represent approximately 9.72 per cent of the company's issued and outstanding shares. Thus, on a partially diluted basis (that is, assuming full exercise of all warrants, full conversion of all debentures by the acquirer and no other issuances of shares by the company), the acquirer would hold a total of 46,669,734 shares representing approximately 18.39 per cent of the company's issued and outstanding shares.

The acquirer may increase or decrease its ownership of securities of the company as the circumstances or market conditions warrant. To obtain a copy of the early warning report filed by the acquirer, please contact the acquirer at 250-215-5028 or refer to the company's SEDAR profile.

Further details of the transaction in which the acquirer acquired the shares, debentures and warrants may be found in the news releases of the company in relation to the transaction dated and filed on SEDAR on Feb. 2, 2023.