Mr. Philip Campbell reports

HERBAL DISPATCH ANNOUNCES EXTENSION OF CONVERTIBLE DEBENTURES

Herbal Dispatch Inc. has amended the terms of the unsecured convertible debentures as entered into by the company and each of 0971289 B.C. Ltd., a company controlled by Drew Malcolm and Herb Dhaliwal on May 15, 2020, and Dec. 13, 2023, respectively, as amended.

This final amendment to the convertible debentures extends the maturity date from Jan. 31, 2026, to Jan. 31, 2028. All other terms of the convertible debentures remain the same, with the interest rate being 14 per cent per annum, the conversion price being six cents and the threshold price being 12 cents.

Prior to effecting the amendment, the company sought and obtained an exemption from the Canadian Securities Exchange as it relates to certain requirements for convertible debenture amendments as provided for under Policy 6, Distributions & Corporate Finance, of the CSE.

Related party transaction

As both Mr. Malcolm and Mr. Dhaliwal are also directors of the company, the amendment constitutes a related party transaction for the purposes of Multilateral Instrument 61-101, Protection of Minority Security Holders in Special Transactions. Under sections 5.4 and 5.6 of MI 61-101, the company is required to obtain a formal valuation and minority shareholder approval, respectively, for the amendment unless exemptions are available.

The company is relying upon exemptions from the formal valuation and minority shareholder approval requirements of MI 61-101 pursuant to sections 5.5(a) and 5.7(1)(a), respectively, Fair Market Value Not More Than 25 Per Cent of Market Capitalization, on the basis that, at the time the amendment was agreed to, neither the fair market value of the subject matter of nor the fair market value of the consideration for the amendment, insofar as it involves interested parties, exceeds 25 per cent of the company's market capitalization.

The board of directors of the company have unanimously approved the amendment, with each of Mr. Malcolm and Mr. Dhaliwal abstaining from the resolution approving the amendment to their respective convertible debenture, and no materially contrary view or abstention was expressed or made by any director in relation to the amendment.

The company did not file a material change report in respect of the related parties' participation in the amendment at least 21 days before the effective date of the amendment as the parties were still in negotiation and discussions as they relate to the amendment at that time.

About Herbal Dispatch Inc.

Herbal Dispatch is a leading operator of cannabis e-commerce platforms in Canada, delivering quality medical and recreational products to discerning consumers at competitive prices. Its flagship marketplace has earned trust as a premier destination for exclusive access to small-batch craft cannabis and a wide selection of curated cannabis products. The company is also actively expanding through exports to international markets, positioning it for sustained growth and new revenue opportunities. The company's common shares trade on the Canadian Securities Exchange under the symbol HERB.

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