Mr. Ali Mahdavi reports

EMBLEM ANNOUNCES $25 MILLION BOUGHT DEAL

Emblem Corp. has entered into a letter of engagement with Eight Capital, under which Eight Capital has agreed to purchase 5,714,300 units and 15,000 convertible unsecured debentures of the company, on a bought deal basis, pursuant to the filing of a short form prospectus, subject to all required regulatory approvals, at a price per unit of $1.75 for gross proceeds of $10,000,025 and a price per convertible debenture of $1,000 for gross proceeds of $15-million, for total gross proceeds of $25,000,025. Prior to closing the offering, Eight Capital and the company may agree to form a syndicate of underwriters.

The company has agreed to grant Eight Capital an overallotment option to purchase up to an additional 15 per cent of the units at the unit issue price, exercisable in whole or in part, at any time on or prior to the date that is 30 days following the closing of the offering. If this option is exercised in full, an additional $1,500,004 will be raised pursuant to the offering and the aggregate proceeds of the offering will be $26,500,029.

Each unit will comprise one common share of the company and one common share purchase warrant. Each warrant shall entitle the holder thereof to purchase one common share at an exercise price of $2.15, for a period of 36 months following the closing of the offering.

The convertible debentures shall bear interest at a rate of 8 per cent per year from the date of issue, payable semi-annually in arrears on June 30 and Dec. 31 of each year. The convertible debentures will have a maturity date of 36 months from the closing date of the offering.

The convertible debentures will be convertible at the option of the holder into common shares of the company at any time prior to the close of business on the maturity date at a conversion price of $1.95 per share. Beginning on the date following the closing date, the company may force the conversion of all of the principal amount of the then outstanding convertible debentures at the conversion price on 30 days prior written notice should the daily volume-weighted average trading price of the shares be greater than $2.93, for any 10 consecutive trading days.

The convertible debentures will be subject to redemption, in whole or in part, by the company at any time following the date that is 12 months from the date of issuance upon giving holders not less than 30 and not more than 60 days of prior written notice, at a price equal to the then outstanding principal amount of the convertible debentures plus all accrued and unpaid interest up to and including the redemption date. Upon a change of control of the company, holders of the convertible debentures will have the right to require the company to repurchase their convertible debentures, in whole or in part, on the date that is 30 days following the change of control, at a price equal to 100 per cent of the principal amount of the convertible debentures then outstanding plus accrued and unpaid interest thereon. If 90 per cent or more of the principal amount of the convertible debentures outstanding on the date of the notice of the change of control have been tendered for redemption, the company will have the right to redeem all of the remaining convertible debentures at the offer price.

As consideration for its services, Eight Capital (along with any additional underwriters included in a syndicate of underwriters in connection with the offering) will receive a cash commission equal to 6 per cent of the gross proceeds of the offering. The company will also issue to Eight Capital (along with any additional underwriters) non-transferable compensation warrants in an amount equal to 3 per cent of the gross proceeds of the offering divided by the unit issue price. Each compensation warrant will be exercisable into one unit at the unit issue price for a period of 36 months following the closing of the offering.

The company intends to use the net proceeds of the offering to finance construction of the first 100,000-square-foot production facility on the 80-acre property located in Paris, Ont., which was acquired in May, 2017, and for working capital. It is anticipated that built-out production capacity will be used to address the adult recreational market in Canada upon legalization.

The closing date of the offering is scheduled to be on or about Nov. 7, 2017, and is subject to certain customary conditions, including, but not limited to, the receipt of all necessary approvals, including the approval of the TSX Venture Exchange and the applicable securities regulatory authorities.

The offered securities will be offered by way of a short form prospectus to be filed in all of the provinces of Canada, except Quebec, pursuant to National Instrument 44-101, Short Form Prospectus Distributions.

About Emblem Corp.

Emblem is licensed under the Access to Cannabis for Medical Purposes Regulations (ACMPR) to cultivate and sell medical marijuana. Emblem carries out its principal activities producing marijuana from its facilities in Paris, Ont., pursuant to the provisions of the ACMPR and the Controlled Drugs and Substances Act (Canada) and its regulations.

We seek Safe Harbor.