­ TORONTO, ONTARIO – TheNewswire - October 5, 2021 – MPX International Corporation (“MPX International”, “MPXI” or the “Corporation”) (CSE:MPXI) (CNSX:MPXI.CN) (OTC:MPXOF), a multinational diversified cannabis company, is pleased to announce that following the successful bridge loan announced on April 16, 2021, it has arranged for a further short-term loan financing (the “Bridge Loan”) of up to approximately C$3,800,000 (US$3,000,000) from a group of current investors to be drawn down in several tranches. Initially, the Corporation will draw down on approximately C$1,224,000 (US$900,000) of loan proceeds immediately.

The Corporation will use the proceeds from the loan to fund product and facility development and for general corporate and working capital purposes.

The Bridge Loan will mature 6 months from the date of issuance (the “Maturity Date”) and bear interest at a rate of 12% per annum calculated in arrears and payable in cash on the earlier of the Maturity Date or concurrently with the conversion of the Bridge Loan into the non-brokered private placement offering of units (the “Units”) whereby the Corporation raised C$15,355,760 (US$11,291,000) between June 30, 2020 and August 31, 2021 (the “Offering”) pursuant to the debenture indenture dated June 30, 2020 entered into between the Corporation and AST Trust Company (Canada) (the “Debenture Trustee”) as amended by the supplemental debenture indenture dated September 16, 2020, the second supplemental debenture indenture dated December 18, 2020 and the third supplemental debenture indenture dated June 24, 2021 (as amended, supplemented or otherwise modified from time to time) providing for the issuance of 12% secured convertible dentures of the Corporation (each, an “SCD”) in the aggregate principal amount of up to C$12,000,000 (US$7,500,000) (the “Debenture Indenture”) and the warrant indenture dated June 30, 2020 entered into between the Corporation and AST Trust Company (Canada) (the “Warrant Agent”) as amended by the supplemental warrant indenture dated September 16, 2020, the second supplemental warrant indenture dated December 18, 2020 and the third supplemental warrant indenture dated June 24, 2021 (as amended, supplemented or otherwise modified from time to time) providing for the issuance of up to 84,000,000 common share purchase warrants (each, an “SCD Warrant”) (the “Warrant Indenture”).

In addition, and subject to approval from holders of SCDs, the Corporation may roll up the interest payable in respect of the September 30, 2021 Coupon Date into the Bridge Loan and with the written approval of holders representing at least 60% of the aggregate principal amount of the Bridge Loan then outstanding increase the aggregate principal amount of the Bridge Loan by up to 20%

The Corporation shall also issue common share purchase warrants (the “Bonus Warrants”) to Bridge Loan lenders on the basis of 10 Bonus Warrants for each C$1.36 (US$1.00) of principal. Each Bonus Warrant shall be exercisable for a period of sixty (60) months from the date of issuance and enable the holder thereof to purchase one Common Share at an exercise price equal to C$0.12 per common share.

In further consideration for advancing their Bridge Loan funds, the Corporation shall grant to the holder an option (the “SIM Options”) to acquire one (1) unit (a “SIM Unit”) of Salus International Management Ltd. (“SIM”) from the Corporation for each US$2.00 of Bridge Loan funds advanced by the holder. Such option shall be exercisable at a price of US$1.00 per SIM Unit for a period of sixty (60) months from the Closing Date. Each SIM Unit will be comprised of one (1) common share (the “SIM Shares”) in the capital of SIM and one-half (0.5) common share purchase warrant to acquire an additional SIM Share at an exercise price of US$1.50 per SIM Share until May 8, 2023.

Pursuant to the terms of the Bridge Loan, the Corporation will immediately seek the approval from SCD holders to amend the Debenture Indenture by way of a 4th supplementary debenture indenture substantially as follow:

(a) increase the maximum principal amount by up to US$5,000,000;  

(b) amend the definition of “Conversion Price” such that: (i) the conversion price of the SCDs issued: (A) prior to March 1, 2021 shall be equal to C$0.12; (B) on or after March 1, 2021 shall be equal to C$0.09; and (C) subject to the approval and policies of the Canadian Securities Exchange (the “CSE”), if the Corporation sells any capital stock to any other investor (other than with respect to the Offering) for cash at a price per share lower than C$0.09 or convertible securities at a conversion price or exercise price less than C$0.09, the Conversion Price for the SCD’s issued on or after September 1, 2021 shall be reduced to such lower price; 

(c) provide that the payment of interest payable in respect of the September 30, 2021 Coupon Date shall be rolled into the Bridge Loan;  

(d) provide that the interest payable in respect of the December 31, 2021 Coupon Date be satisfied by the issuance of Units, subject to the minimum subscription price of US$1,000; and  

(e) all such other revisions or amendments to the Debenture Indenture as the Corporation may deem necessary or advisable to give full effect to or to carry out the intent of the foregoing amendments. 

The Corporation will also immediately seek the approval from SCD Warrant holders to amend the Warrant Indenture by way of a 4th supplementary warrant indenture substantially as follows:

(a) amend the second preamble such that each Unit consists of one 12% SCD and, prior to September 1, 2021, 7,000 Warrants and on or after September 1, 2021, 10,000 Warrants; 

(b) amend the definition of “Exercise Price” such that at any time the price at which a Common Share may be purchased by exercise of a Warrant is$0.20 per Common Share for Warrants issued prior to September 1, 2021 and $0.12 per Common Share for Warrants issued on or after September 1, 2021, payable in immediately available Canadian funds, subject to certain provisions of the Warrant Indenture; and 

(c) increase the maximum number of SCD Warrants by up to 50,000,000 Warrants; and  

(d) all such other revisions or amendments to the Warrant Indenture as the Corporation may deem necessary or advisable to give full effect to or to carry out the intent of the foregoing amendments. 

The Corporation shall pay in cash to the Bridge Loan lenders a non-refundable cash origination fee in the amount equal to 2% of Bridge Loan funds advanced.

Following the entering into of the 4th supplementary debenture indenture to the Debenture Indenture and the 4th supplementary warrant indenture to the Warrant Indenture, the principal amount of the Bridge Loan shall automatically convert in the Offering at a conversion premium equal to ten percent (10%) of their principal amount.

Each of the following events constitutes an event of default: (a) the Corporation fails to pay when due, after any applicable grace periods, any outstanding principal amount hereunder or any accrued and unpaid interest on such principal amount; (b) the Corporation shall not have complied with its covenants; and (c) if any representation or warranty made by the Corporation pursuant to which the loan was issued was false or inaccurate in any material respect when made.

In connection with the closing of the Bridge Loan, the Corporation will pay an aggregate finder's fees of approximately C$35,768 (US$26,300) and issue an aggregate of 263,000 compensation warrants (the “Compensation Warrants”) to eligible finders.  Each Compensation Warrant entitles the holder to purchase one Common Share at a price of C$0.12 for a period of 24 months from the applicable closing date of the Bridge Loan.

Insider Participation

The Bridge Loan can be considered a Related Party Transaction for certain regulatory purposes. The participation by certain insiders in the Bridge Loan was for a total of C$639,200 (US$470,000), 4,700,000 Bonus Warrants and 235,000 SIM Options.

It is important to note that the Bridge Loan is exempt from valuation and minority approval requirements which might otherwise result from the participation by insiders due to: (1) the Corporation, as a CSE issuer, not being listed on a designated market; and (2) the fair market value of the Bridge Loan, insofar as the Bridge Loan involves such interested parties, is less than C$2,500,000.

To the knowledge of the Corporation, after reasonable inquiry, none of the related parties have knowledge of any material information concerning the Corporation or its securities that has not been generally disclosed.

The sole independent director to the transactions (the “Special Committee”) reviewed the Bridge Loan and determined that as a CSE issuer MPXI is not listed on a specified market and the fair market value of the Bridge Loan, in so far as it involves related parties, is not more than $2,500,000. The Special Committee unanimously recommended that the board of directors of the Corporation (the “Board”) approve the Bridge Loan. Accordingly, the Bridge Loan is exempt from minority shareholder approval and formal valuation requirements of MI 61-101.

The Bridge Loan is closing in less than 21 days due to the limited number of investors to the Bridge Loan, all investment agreements being properly completed and received, and all loan proceeds having been forwarded, which shorter period is reasonable in the circumstances. MI 61-101 requires if a material change report is filed less than 21 days before the expected date of the closing of the transaction, an explanation is to be provided why the shorter period is reasonable or necessary in the circumstances.

The Corporation also announces that it has  engaged with financial advisors in North America and Europe to assist the board of  directors (the “Board”) to review, consider and evaluate opportunities that enhance shareholder value. These opportunities could include, among other things, an acquisition, a merger or other business combination, a financing of the Corporation as a whole or one or more individual business units / subsidiary level investments, a sale of assets or other forms of transactions that may be available to MPXI. 

In conjunction with the strategic review, the Corporation’s Board has also formed a special committee to oversee the review process. The Board is committed to evaluating  appropriate opportunities while concurrently supporting management and employees in their delivery of services to customers and partners. The Board believes that this course of action is in the best interests of the Corporation and its stakeholders.

The Board has not set a timetable for this process nor has it made any decisions related to any opportunities at this time. There can be no assurance that the exploration and review of such opportunities will result in a transaction.

The securities issued pursuant to the Offering and the Bridge Loan have not been, and will not be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons absent registration or an applicable exemption from the registration requirements. This news release will not constitute an offer to sell or the solicitation of an offer to buy nor will there be any sale of the securities in any State in which such offer, solicitation or sale would be unlawful.

About MPX International Corporation

MPX International Corporation is a multinational diversified cannabis company focused on developing and operating assets across the international cannabis industry with an emphasis on cultivating, manufacturing and marketing products which include cannabinoids as their primary active ingredient. With current operations spanning four continents in Canada, Switzerland, South Africa, Malta, Australia and Thailand as well as evolving partnership and distribution opportunities in other jurisdictions, MPXI continues to position itself as an emergent global participant in the cannabis industry.

Cautionary Statement Regarding Forward-Looking Information

This news release includes certain “forward-looking statements” under applicable Canadian securities legislation that are not historical facts. Forward-looking statements involve risks, uncertainties, and other factors that could cause actual results, performance, prospects, and opportunities to differ materially from those expressed or implied by such forward-looking statements. Forward-looking statements in this news release include, but are not limited to, MPX International’s objectives and intentions.  Forward-looking statements are necessarily based on a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties and other factors which may cause actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: general business, economic and social uncertainties; litigation, legislative, environmental and other judicial, regulatory, political and competitive developments; delay or failure to receive board, shareholder or regulatory approvals; the Corporation’s ability to effectively deal with the restrictions, limitations and health issues presented by the COVID-19 pandemic; future cannabis pricing; cannabis cultivation yields; costs of inputs; its ability to market products successfully to its anticipated clients; reliance on key personnel and contracted relationships with third parties; the regulatory environment in Australia, Canada, Malta, South Africa, Switzerland and other international jurisdictions; the ability to complete any future potential transactions and the terms and conditions thereof; the application of federal, state, provincial, county and municipal laws; and the impact of increasing competition; those additional risks set out in MPX International’s public documents filed on SEDAR at www.sedar.com, including its audited annual consolidated financial statements for the financial years ended September 30, 2020 and 2019, and the corresponding management’s discussion and analysis; and other matters discussed in this news release. Although MPX International believes that the assumptions and factors used in preparing the forward-looking statements are reasonable, undue reliance should not be placed on these statements, which only apply as of the date of this news release, and no assurance can be given that such events will occur in the disclosed time frames or at all. Except where required by law, MPX International disclaims any intention or obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.

For further information about MPXI, please contact:

MPX International Corporation

W. Scott Boyes, Chairman, President and CEO

T: +1-416-840-4703
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