Mr. Marc Edwards reports

KANE BIOTECH ANNOUNCES AGREEMENT IN PRINCIPLE FOR THE SALE OF ITS INTEREST IN STEM ANIMAL HEALTH

Kane Biotech Inc. has reached an agreement in principle for the sale of its entire interest in Stem Animal Health Inc. to a third party multinational pharmaceutical company (the purchaser) on a cash-free debt-free basis for $8-million (U.S.), subject to adjustments in accordance with the terms of the agreement in principle, as well as other consideration, including the net cash held in Stem (estimated at $600,000) and a working capital adjustment (estimated at $350,000). Over all, it is anticipated that the sale of Stem Animal Health will net Kane Biotech in excess of $11.5-million (including the cash deposits already received, as noted below). The purchaser is not a non-arm's-length party (as that term is defined by the TSX Venture Exchange) of the company.

In connection with the transaction, but not included in the net amount of the sale, the company will be eligible for a $750,000 (U.S.) sales-based milestone payment and will also be entering into product development and transitional manufacturing agreements with Stem.

The company anticipates using the net proceeds from the transaction to repay its outstanding loan to Pivot Financial I LP in the amount of approximately $6.7-million, and for general working capital purposes.

Prior to the completion of the transaction, as previously announced, the company received an aggregate of $1,525,000 (U.S.) from the purchaser in cash deposits that it applied toward the sale price for the interest. Accordingly, the company is expected to receive $6,475,000 (U.S.) upon the completion of the transaction.

"We are pleased with the outcome of this transaction," said Marc Edwards, president and chief executive officer of Kane Biotech. "Kane Biotech will be receiving full value for the successful animal health business that it created, allowing the company to significantly strengthen its balance sheet and narrow its focus on human health biofilm solutions."

Prior to the completion of the transaction, the company owned a two-thirds interest in Stem. The remaining one-third interest was owned by an arm's-length third party.

In accordance with the policies of the TSX Venture Exchange, the transaction must be consented to by shareholders of the company holding over 50 per cent of the common shares of the company due to the fact that the transaction constitutes a sale of more than 50 per cent of the company's assets, business or undertaking. The company anticipates that it will be able to satisfy this requirement through the written consent of shareholders of the company holding more than 50 per cent of the common shares of the company.

The closing of the transaction is subject to the approval of the TSX Venture Exchange.

About Kane Biotech Inc.

Kane Biotech is a biotechnology company engaged in the research, development and commercialization of technologies and products that prevent and remove microbial biofilms. The company has a portfolio of biotechnologies, intellectual property (67 patents and patents pending, trade secrets, and trademarks) and products developed by the company's own biofilm research expertise and acquired from leading research institutions. StrixNB, DispersinB, Aledex, bluestem, silkstem, goldstem, coactiv+, coactiv+, DermaKB, DermaKB Biofilm and revyve are trademarks of Kane Biotech. The company is listed on the TSX Venture Exchange under the symbol KNE and on the OTCQB Venture Market under the symbol KNBIF.

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