Mr. Paul Haber reports

GUNPOWDER CAPITAL CORP. ANNOUNCES FORMATION OF REAL ESTATE DIVISION AND COMMENCEMENT OF A NON-BROKERED PRIVATE PLACEMENT

Gunpowder Capital Corp. has formed GP Realty Inc. and has also completed the purchase of its first property, 57 Wellington St., a fully tenanted residential rental property located in London, Ont.

Total purchase price of the property was $450,000. The corporation purchased the property by making a down payment of $180,000 and by securing a 25-year fixed-rate mortgage at 4.5 per cent per annum. The property currently has a net annual return on investment (ROI) of 9.3 per cent per annum.

In connection with the acquisition the corporation has granted 200,000 stock options at 10 cents to officers who have provided personal guarantees for the above-noted mortgage. The options granted are not subject to any vesting restrictions and each option is exercisable for a five-year period.

Paul Haber stated: "We are very pleased to launch our real estate division. We believe that real estate provides an excellent long-term investment to our shareholders. Our first acquisition was purchased almost 20 per cent under current market value, and has an annual ROI of almost 10 per cent, which, in today's market, is exceptional. We also believe we can improve the return on this building through rent increases to market levels and modifications to the building and finding efficiencies in the way the building is managed."

The corporation also announced today that it has commenced a non-brokered private placement financing to raise a maximum of $2-million by sale of 200,000 Series A preferred shares at a price of $10 per share. The Series A preferred shares will pay an 8-per-cent annual dividend to the holders of the preferred shares. Furthermore, holders of the preferred shares will also see 25 per cent of aftertax realized gains on any capital dispositions. No special voting rights will be granted to the holders of the preferred shares.

In connection with the offering, a finder's fee may be paid consisting of a cash commission equal to 8 per cent of the gross proceeds. Net proceeds of the financings will be used for strategic acquisitions, business development and for working capital purposes. Closing of the private placement is expected to occur on or before Aug. 31, 2016.

The corporation has also agreed to issue an aggregate of 382,147 shares at a deemed prices of 15 cents per share to settle debts owed to non-arm's-length parties. All shares issued in connection with the shares-for-debt transaction are subject to a four-month statutory hold period, in accordance with applicable securities legislation.

We seek Safe Harbor.