Mr. Andre Audet reports

MOLECULE HOLDINGS INC. ANNOUNCES ISSUANCE OF CEASE TRADE ORDER, APPLICATION FOR PARTIAL REVOCATION ORDER, AND PROVIDES UPDATE ON DEBENTURE AMENDMENTS AND FINANCING

On March 5, 2024, the Ontario Securities Commission (the OSC), as principal regulator of Molecule Holdings Inc., issued on a failure-to-file cease trade order (CTO) prohibiting the trading by any person or company of any securities of the company in Canada, except pursuant to limited exceptions under the CTO.

The CTO was issued as a result of the company's delay in filing its annual financial statements, management's discussion and analysis and related officer certifications for the year ended Oct. 31, 2023 (collectively, the annual filings), as required under parts 4 and 5 of National Instrument 51-102 -- Continuous Disclosure Obligations and pursuant to National Instrument 52-109 -- Certification of Disclosure in Issuer's Annual and Interim Filings. As disclosed in the company's prior press releases, the interim financial statements, management's discussion and analysis, and related officer certifications for the three and nine months ended July 31, 2023, were late filed as a result of a contractual dispute between the company and the financial services company that assisted the company with finance-related consulting services (the dispute). The delayed filing of the interim filings, as well as the onboarding of the two new independent consultants currently providing the company with financial, accounting and bookkeeping services as a result of the dispute, has caused an associated delay in the preparation and audit of the annual filings.

The company regrets this unnecessary delay in filing and the inconvenience to shareholders and is working with the consultants and its auditor to file the annual filings as soon as possible. It is currently expected that the annual filings will be completed prior to the end of May.

The CTO will remain in place until such time as it is fully revoked following the filing of the annual filings by the company, in accordance with National Policy 11-207 -- Failure-to-File Cease Trade Orders and Revocations in Multiple Jurisdictions. However, the company intends to file a partial revocation application with the OSC to allow the company to complete the debenture amendments and the financing (each as defined under the heading "corporate update" herein during the CTO, as further described under the "partial revocation application" heading herein.

The company will make further announcements with respect to the status of the annual filings as and when appropriate.

Corporate update

The company is also pleased to provide a general corporate update regarding its continuing activities.

The company has engaged in discussions with the Canadian Securities Exchange (the CSE), holders of the outstanding unsecured debentures issued by the company in the aggregate principal amount of $3.14-million to amend the terms of such unsecured debentures that have the effect of (i) revising certain material terms of the unsecured debentures; and (ii) requiring the holders to concurrently convert the unsecured debentures into common shares in the capital of the company, which would satisfy the outstanding principal amount and accrued and unpaid interest owing pursuant to the unsecured debentures in full.

As of the date of this press release, holders of approximately 90 per cent of the principal have agreed to non-binding term sheets disclosing the proposed terms of the amendments. Further, the CSE has recently approved the completion of the amendments and has granted the company an exemption from the requirement to obtain securityholder approval to complete the amendments.

The company believes that the amendments will assist the company in reorganizing its capital structure in order to ultimately attract investment required to manage the growth of the business.

Prior to the CTO, the company initiated conversations with potential investors regarding an interim financing. Any proposed financing will be conditional on revocation of the CTO or receipt of an order (as defined herein).

Partial revocation application

The company is currently preparing an application to the OSC to request that the OSC issue an order partially revoking the CTO to allow for the company to complete the amendments and/or the financing. The company expects the application to be submitted to the OSC within the next week.

The company will make further announcements with respect to the status of the application, as appropriate. Receipt of an order would allow the company to complete the amendments and continue to progress discussions regarding a financing.

Additional information

There can be no assurance that the company will be able to remedy its filing default and have the CTO lifted, that the OSC will issue an order, or that the company will complete the amendments and/or the proposed financing, in a timely manner, on the terms set out herein, or at all. Failure to complete, or receive approval for, any of the matters noted herein may have a negative impact on the value of the securities of the company.

As a result of the CTO, the company has halted discussions with the holders and the potential investors as discussions regarding the amendments and the interim financing are not permitted activities under the CTO.

About Molecule Holdings Inc.

Molecule is a licensed producer dedicated to creating cannabis-infused beverages for the Canadian market. The company produces leading, top-quality drinks to provide opportunity and choice to people seeking a convenient and social way to consume cannabis. Molecule is focused on growing both its portfolio, and the overall cannabis beverage market. The company wants to ensure people have the best opportunity to find exactly the product and experience they thirst for.

We seek Safe Harbor.