Mrs. Traci Costa reports

DIRECT SALES CHILDREN APPAREL RETAILER, PEEKABOO BEANS INC. COMPLETES REVERSE TAKEOVER

Peekaboo Beans Inc., formerly North Group Finance Ltd., has completed its previously announced reverse takeover transaction (RTO). In connection with the RTO, the company also completed a private placement financing of units for aggregate gross proceeds of $1,050,468, which are intended to be used to expand the company's direct sales network in Canada and finance the production-to-payment working capital cycle associated with direct sales. Trading in the common shares of the company on the TSX Venture Exchange is expected to begin on or about Sept. 28, 2016, under the symbol PBB.

Peekaboo Beans

Peekaboo Beans is the largest direct sales retailer of children apparels in Canada with close to 1,000 independent sales representatives or stylists, generating annual sales of over $3.5-million in fiscal 2015. The direct sales model allows for product demonstration and a first-hand testimonial of the high quality of Peekaboo Beans apparel. This serves as a powerful sales tool and is strengthened by continuing education between the stylists and mothers, the company's target customer. The direct sales model allows Peekaboo Beans a scalable growth strategy without the fixed structural costs that traditional retail and e-commerce retailers must incur.

Darrell Kopke, Peekaboo Beans founding director, and former Lululemon executive, stated: "Direct sales is the retail disrupter, it is the perfect hybrid between e-commerce and high-end retail, combining personalized customer service and convenience through the home party or mobile boutique experience. Retail is changing and Peekaboo Beans is leading this retail revolution."

During fiscal 2016, Peekaboo Beans streamlined its cost structure to lower its direct costs and improve gross margins in order to achieve profitability by approximately fiscal 2017. Peekaboo Beans' growth will come from investing in training and development of stylist sales leaders.

Founder and chief executive officer, Traci Costa, stated: "We have invested in the infrastructure and developed a direct sales platform with an established sales force of close to 1,000 sales reps. The next step in our long-term strategy, as we expand across Canada, is to achieve profitability while continuing to achieve strong sales growth and social impact."

Peekaboo Beans is a lifestyle brand, with a goal to empower children to play, by consciously designing clothes that are comfortable to play in and that are environmentally and ethically manufactured. Peekaboo Beans provides an entrepreneurial opportunity for women to earn income on their own terms and schedules. Peekaboo Beans has paid to date approximately $2.4-million (unaudited) in income to stylists through the direct sales model.

The RTO

The RTO consisted of the acquisition by the company of all of the issued and outstanding common shares in the capital of Peekaboo Beans Inc. (PBI) by way of a three-cornered amalgamation, pursuant to which a wholly owned subsidiary of the company amalgamated with PBI to form a new company (Amalco), and each PBI shareholder received one postconsolidation common share in the capital of the company for each PBI share held. As part of the RTO, the company changed its name from North Group Finance Ltd. to Peekaboo Beans Inc.

Following completion of the RTO, Amalco is now a wholly owned subsidiary of the company and will carry on the business of PBI, and the company meets the listing requirements of a Tier 2 industrial issuer on the exchange.

Unit financing

Prior to the closing of the RTO, PBI completed a private placement financing of units in multiple tranches for aggregate gross proceeds of $1,050,468. A total of 1,000,446 units were issued at a price of $1.05 per unit, with each unit consisting of one PBI common share and one warrant to purchase one PBI share at a price of $1.25 until Sept. 23, 2017.

The company paid finders' fees in connection with a portion of the unit financing comprising an aggregate cash fee of $17,143 (equal to 7 per cent of the gross proceeds raised from subscriptions introduced by such finders) and 23,324 warrants to purchase PBI shares (equal to 10 per cent of the number of units sold to subscribers introduced by such finders), each exercisable at a price of $1.05 per PBI share and expiring on Sept. 23, 2017. Mackie Research Capital and PI International acted as finders for such portion of the unit financing. All PBI shares, PBI warrants and finder warrants issued pursuant to the unit financing were exchanged for common shares and warrants of the company on equivalent terms pursuant to the RTO.

Outstanding share capital and ownership

On Sept. 23, 2016, the company consolidated its common shares on the basis of one postconsolidation common shares for three preconsolidation common shares.

Upon the completion of the RTO, the company has a total of 6,783,423 common shares issued and outstanding and warrants to purchase 2,707,458 common shares at a price of $1.25 until Sept. 23, 2017.

New board and management

As a result of the closing of the RTO, the directors and officers of the company are now:

Mrs. Costa (director, president and chief executive officer)

Mrs. Costa founded Peekaboo Beans in 2006. Mrs. Costa is a YMCA women of distinction award winner (2016 and 2015), an Ethel Tibbits women of distinction business award winner (2015), a recipient of the Richmond Chamber of Commerce business excellence award (2015) and a Business in Vancouver top 40 under 40 award winner (2010). Prior to founding Peekaboo Beans, Mrs. Costa was a senior executive assistant for the Aquilini Investment Group and Markin Developments from 1993 to 2000 and a national operations manager of a communications distributor from 2001 to 2006. Mrs. Costa sits on the board of directors for the non-profit organization Playground Builders and has been involved with In the Forum of Women Entrepreneurs and the Women's Enterprise Network as a committee member and as part of their mentorship programs.

Mr. Kopke (director)

Mr. Kopke has been a director of, and an initial investor in, Peekaboo Beans since 2006. Mr. Kopke is currently the chief executive officer and founder of Institute B, a business advisory and accelerator firm focusing on for-profit social impact benefit corporations since 2010. Previously, Mr. Kopke was the chief executive officer of Kit and Ace Designs Ltd., a global designer and retailer of technical luxury apparel and accessories based in British Columbia, Canada. Mr. Kopke was a member of the group of founders of Lululemon, serving as Asia-Pacific managing director until 2009. Mr. Kopke earned a master in business administration in supply chain management from the University of British Columbia (2001) and a bachelor of commerce in marketing from Concordia University (1993). Mr. Kopke was a Business in Vancouver top 40 under 40 award winner (2006).

Nikki Mayer (director)

Mrs. Mayer has been a general manager of Peekaboo Beans since 2011 and a director since 2015. In October, 2003, Mrs. Mayer opened Lululemon's fifth franchise store in Whistler, B.C., and owned and operated the store until September, 2005, when Lululemon purchased the store. The Whistler franchise had the highest sales per square foot during the two years Mrs. Mayer owned and operated the location. Mrs. Mayer opened Lululemon's second U.S. retail franchise location in Bellevue, Wash., in July, 2005, and owned and operated the store until September, 2008. The Bellevue franchise was recognized for achieving the highest year-over-year comparative sales growth from 2007 to 2008 and the highest sales per square foot in the United States in 2008.

Glenn Johnson (director)

Mr. Johnson has been a director and initial investor in Peekaboo Beans since 2006. In 2007, Mr. Johnson founded Endurance Wind Power Inc., a British Columbia-based manufacturer of advanced wind turbines operating in North America and the United Kingdom. Endurance was named Profit Magazine's top 100 fastest growing companies in 2012. In 2011, Mr. Johnson and Endurance partnered with the Tsleil-Waututh Nation of Greater Vancouver to form TWN Wind Power Inc. to help Canada's first nations reduce their dependence on non-renewable sources of power. In 2001, Mr. Johnson founded Glace Capital Corp., a merchant bank and private equity firm that specializes in investing and restructuring established companies with compelling growth opportunities. In 1994, Mr. Johnson founded, and sold in 2000, Comsource Broadband Technologies Corp., a North American-based communications distribution company. Mr. Johnson was recognized as Ernst and Young's entrepreneur of the year, Pacific region (2013), and was a Business in Vancouver's top 40 under 40 award winner in 2012.

Michael Kuiack and Andrew Mah have continued as directors of the company while Christine McPhie continues to serve as chief financial officer and corporate secretary of the company. Tom Kusumoto has resigned as a director.

A filing statement describing the company and PBI, as well as the terms of the RTO, prepared in accordance with the policies of the exchange, is available on SEDAR. The summary of the RTO set out herein is qualified in its entirety by reference to the description of the RTO in the filing statement.

Other transactions

In connection with the RTO, the company wound up its wholly owned subsidiary, 0719906 B.C. Ltd., and settled its outstanding indebtedness to Northpark Ltd., a finance company controlled by Mr. Kusumoto, through the assignment and transfer to such company of the pledged collateral securing such indebtedness, consisting of shares in Chinook Tyee Industry Ltd. previously held by the company and units of the company on the same terms as the units issued pursuant to the unit financing. A bridge loan between Northpark Ltd., as lender, and PBI, as borrower, of up to $700,000, of which $480,000 has been drawn upon as of the closing date of the RTO, remains outstanding as indebtedness of Amalco. The loan bears interest at a rate of 15 per cent per annum, matures on Dec. 31, 2017, and is convertible into up to 666,666 units of the company, depending on the amount outstanding, on the same terms as the units issued pursuant to the unit financing. Additionally, Northpark Ltd. received a fee for such loan comprising warrants to purchase 480,000 common shares of the company, each having an exercise price of $1.25 and expiring on Sept. 30, 2017, which are subject to escrow conditions in accordance with exchange escrow requirements.

PBI has also issued a promissory note in the principal amount of approximately $247,000 to Mrs. Mayer, general manager and a director of Peekaboo Beans, in respect of a prior shareholder loan. The note is convertible at the option of Mrs. Mayer into 235,068 units of the company on the same terms as the units issued pursuant to the units financing. The note is due on Dec. 31, 2017, and bears interest at a rate of 8 per cent per annum.

The company has also implemented a stock option plan in the form approved by shareholders of the company at the annual general and special meeting held on June 30, 2016.

We seek Safe Harbor.