Mr. Bernie Yeung reports

ATLAS SIGNS DEFINITIVE AGREEMENT TO ACQUIRE AN ADDITIONAL PHARMACY AND PROVIDES UPDATE ON EXPANDING ITS GLOBAL CANNABIS FOOTPRINT AND PROGRESSING ITS INTERNATIONAL VALUE CHAIN STRATEGY

Atlas Global Brands Inc. has entered into a definitive agreement, signed May 17, 2023, for the acquisition of 51 per cent of the outstanding securities of an Israeli private limited liability company operating a medical cannabis pharmacy. The proposed transaction is one of two proposed acquisitions previously announced on March 7, 2023, upon the company entering into binding letters of intent for the acquisition of a 51-per-cent and 70-per-cent interest in two medical cannabis pharmacies in Israel.

The pharmacy was granted a licence to sell medical cannabis in October, 2022, and annualized sales have since grown to approximately 6.0 million new Israeli shekels (approximately $2.2-million).

"The signing of the definitive agreement strengthens Atlas Global's strategy to improve patient access to high-quality cannabis products, through new distribution points in primary locations in Israel," said Bernie Yeung, chief executive officer of Atlas Global. "Atlas intends to continue leveraging our value chain expertise to offer a greater assortment and variety of quality offerings, while enhancing the patient experience. We believe that this acquisition will benefit both patients and our shareholders, while continuing to expand our footprint in the international cannabis market."

Terms of the proposed acquisitions

Under the proposed transaction, Atlas will acquire a 51-per-cent interest in the pharmacy for 1,132,000 common shares of Atlas Global and 650,000 new Israeli shekels (equivalent to approximately $239,743) payable at closing. The cash consideration may be increased by up to 2.05 million new Israeli shekels upon the pharmacy's revenue and profitability exceeding certain prescribed amounts for the financial years completed Dec. 31, 2023, to 2025.

The proposed transaction includes a call option whereby Atlas Global can acquire, and the vendor has a put option to sell, the remaining 49-per-cent interest in the pharmacy at a price equal to the revenue of the 12-month period ended Sept. 30, 2026, multiplied by 0.7. The put option is subject to satisfaction of conditions of profitability and good corporate standing.

The consideration shares will be subject to a lock-up period of 36 months during which 15 per cent shall be released every six months, commencing on the six-month anniversary of the closing.

The final structure of the proposed transaction shall be determined by the parties subsequent to the receipt of tax, corporate and securities law advice.

The proposed transaction is subject to receipt of all necessary regulatory approvals and other customary conditions precedent.

The proposed transaction was negotiated at arm's length and will not constitute a fundamental change or result in a change of control of the company within the meaning of the policies of the Canadian Securities Exchange. No finders' fees are payable in connection with the proposed transaction.

The proposed transaction is expected to close in calendar fourth quarter 2023.

Update on previously announced acquisitions

In addition, as previously announced on Feb. 7, 2023, the company entered into a definitive agreement to acquire one trading house and majority interests in two additional purpose-built cannabis pharmacies in Israel, and, as announced on March 7, 2023, entered into two binding letters of intent to acquire 51 per cent and 70 per cent of the outstanding securities of two additional cannabis pharmacies in Israel.

The company is awaiting regulatory approval for previously announced acquisition 1 and expects the previously announced transaction 1 will complete in calendar Q3 2023. The company and the other party to previously announced acquisition 2 continue to settle the terms of the definitive agreement for the acquisition of a 70-per-cent interest in the remaining pharmacy.

About Atlas Global Brands Inc.

Atlas Global is a global cannabis company operating in Canada and Israel with expertise across the cannabis value chain, including cultivation, manufacturing, marketing, distribution and pharmacy. Atlas currently distributes to eight countries: Australia, Canada, Denmark, Germany, Israel, Norway, Spain and the United Kingdom. In addition to a differentiated product mix, Atlas operates three licensed cannabis facilities -- one with EU-GMP (European Union good manufacturing practice), with three medical pharmacies in Israel, and has entered into binding agreements for the acquisition of a majority interest in a trading house and three additional medical cannabis pharmacies in Israel.

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