Mr. Bernie Yeung reports

ATLAS SIGNS DEFINITIVE AGREEMENT TO ACQUIRE A CONTROLLING INTEREST IN THREE PHARMACIES EXPANDING ITS CANNABIS NETWORK IN ISRAEL

Atlas Global Brands Inc., on May 23, 2023, entered into a definitive agreement for the acquisition of 51 per cent of the outstanding securities of three Israeli private limited liability companies operating medical cannabis pharmacies.

"The addition of these three pharmacies will further expand our geographical coverage with modern designed pharmacies, a patient-focused education platform and dispensaries tailored to consistent product assortment," said Bernie Yeung, chief executive officer of Atlas Global. "We believe that this acquisition will be beneficial to both patients and our shareholders, while continuing to expand our geographical coverage in Israel."

Terms of the proposed acquisitions

Under the proposed transaction, Atlas will acquire a 51-per-cent interest in the three pharmacies for 1,925,300 common shares of Atlas Global and four million new Israeli shekels, equivalent to approximately $1,459,144 payable at closing. Up to an additional 288,795 shares may be issued at each of the six-, 12- and 18-month anniversaries of the closing date of the proposed transaction in the event the closing share price of the Atlas common shares for the 10 preceding trading days is less than $1 for total additional share consideration of up to 866,385 Atlas common shares.

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, and 25 per cent will be released on the 36-month anniversary.

Approximately 1.2 million new Israeli shekels in existing shareholder loans, and any additional shareholder loans advanced by the sellers until closing, is expected to remain with the pharmacies, repayable from up to 25 per cent of distributable profits from the pharmacies, cash flow permitting.

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, and external financing by Atlas of three million new Israeli shekels.

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 Q4 2023.

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 practices), 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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