Mr. Soumik Roy reports

CO2 GRO INC. ANNOUNCES CLOSING OF FIRST TRANCHE OF PRIVATE PLACEMENT OF UNSECURED CONVERTIBLE DEBENTURE UNITS

Further to CO2 Gro Inc.'s press release on Jan. 24, 2024, it has closed the first tranche of its previously announced private placement offering of unsecured convertible debenture units at a price of $1,000 per debenture unit for gross proceeds of $121,000. The company anticipates that it will close subsequent tranches of the offering in the upcoming months.

Under the first tranche, 121 debenture units were sold each consisting of $1,000 in principal of unsecured convertible debentures and 11,111 common share purchase warrants of the company. Each warrant will be exercisable to acquire one common share of the company for a period of four years from the issue date (as defined below) at an exercise price equal to 10.5 cents.

The debentures will bear interest at a rate of 13.5 per cent per annum from the date of issuance and will have a three-year term. During the first year of the term, quarterly interest payments on the debentures will be paid in cash. In the remaining two years of the term, the company will have the option to (i) pay further interest payments in cash or (ii) make payments in kind by way of issuance of common shares of the company at a price equal to the market price of the common shares at the time the accrued interest becomes payable.

At any time during the term, each holder of debentures may elect to convert any portion of the principal amount of the debentures into common shares at a conversion price equal to nine cents per common share.

The debentures will be subject to a forced conversion provision whereby, upon delivery of such notice to holders of the debentures, the company is permitted to convert the principal amount of all outstanding debentures into common shares at the conversion price in the event that the average closing price of the common shares listed on the TSX Venture Exchange is greater than 20 cents for 20 consecutive trading days.

The company anticipates using the net proceeds of the offering for working capital purposes, crystallization of its sales pipeline and conversion of continuing TAPs (technology adaption projects) with clients into recurring revenue, and for hiring of additional engineering and technical staff to advance all of the above.

The debentures, the warrants and the underlying common shares will be subject to a statutory hold period of four months and one day from the issue date. The offering is subject to the final acceptance of the TSX-V.

The debenture units were offered and sold by private placement in canada pursuant to exemptions from the prospectus requirements under National Instrument 45-106 Prospectus Exemptions, and in certain other jurisdictions on a basis which does not require the qualification or registration of the securities issued pursuant to the offering.

Insiders of the company subscribed for a total of $100,000 debenture units under the first tranche of the offering, which constitutes a related party transaction within the meaning of Multilateral Instrument 61-101 -- Protection of Minority Security Holders in Special Transactions. The company relied on exemptions from the formal valuation and minority approval requirements in sections 5.5(b) and 5.7(1)(b) of MI 61-101 on the basis that the company is not listed on a specified market and the fair market value of the transaction, insofar as it involves related parties, does not exceed $2.5-million, as determined in accordance with MI 61-101. The company did not file a material change report more than 21 days before the expected closing date of the offering as the details of the offering and the participation therein by each related party of the company were not settled until shortly prior to the closing of the offering.

About CO2 Gro Inc.

CO2 Gro is a precision ag-tech, clean-tech company with a focus on people, the planet and prosperity. Its vision is to become one of the leading companies enhancing global food production from protected agriculture. By helping its customers sustainably increase yield and profitability, CO2 Gro could help feed up to half a billion people worldwide while reducing its customers' ecological footprint.

We seek Safe Harbor.