Mr. Jeff Ciachurski reports

CAPTIVA VERDE WELLNESS CLOSES PREVIOUSLY ANNOUNCED ACQUISITION AND PRIVATE PLACEMENT

Further to Captiva Verde Wellness Corp.'s announcement on Aug. 2, 2023, of its intention to close, the company closed (i) its acquisition of all of the issued and outstanding securities of Sonny Sports Enterprises Inc. (the club) and (ii) its previously announced non-brokered private of units of the company on Aug. 31, 2023.

The acquisition

The company entered into a definitive share purchase agreement with the club's parent company and associated shareholders reflecting the terms of the binding letter agreement previously disclosed on Aug. 2, 2023. As previously disclosed the club is known as the Miami Padel Club of the Pro Padel League.

On the closing date, as consideration for the acquisition, the company issued and paid to the shareholders of the club (the selling shareholders) an aggregate of: (i) 60 million common shares in the capital of the company, each at deemed issue price of 3.2 cents; and (ii) $1.5-million (U.S.) cash.

The consideration shares were issued pursuant to Section 2.16 of National Instrument 45-106 -- Prospectus Exemptions and are accordingly not subject to any resale restrictions under applicable Canadian securities laws. Following completion of the transactions, the former shareholders of the club will hold approximately 17 per cent of the company common shares on a non-dilutive basis. Accordingly, the acquisition is not expected to constitute a "fundamental change" or "change of business" under the policies of the Canadian Securities Exchange (the CSE).

A CSE Form 9 -- Notice of Proposed Issuance of Securities with respect to the acquisition was posted on Aug. 25, 2023, and a final Form 9 was posted on the closing date.

In connection with the closing of the acquisition:

• Ronnie Strasser, a nominee of the selling shareholders, was appointed as a director of the company effective as of the closing date.
• The company shall also adopt a restricted stock unit plan (the RSU plan) with up to 10 million restricted stock units (RSUs) under the RSU plan to be granted to eligible participants pursuant to the policies of the CSE. The 10 million RSUs will be administered by Mr. Strasser as a director of the company.

The private placement

On the closing date, the company issued to the subscribers under the private placement an aggregate of up to 90 million units, at 3.2 cents per unit, with each unit consisting of one common share in the capital of the company; and one common share purchase warrant. Each warrant entitles the holder thereof to purchase one additional common share in the capital of the company at a price of five cents per warrant share for a period of 60 months from the closing date.

All securities issued in connection with the private placement are subject to a statutory hold period ending on the date which is four months and one day following the issue date in accordance with applicable securities legislation. Proceeds from the private placement will be used for general working capital purposes and as a reserve for possible future acquisitions, including the acquisition.

A Form 9 with respect to the private placement was posted on Aug. 25, 2023, and a final Form 9 was posted on the closing date.

No finders' fees are payable in connection with the transactions. The acquisition of the club is an arm's-length transaction.

MI 61-101 disclosure

The chief executive officer, Jeff Ciachurski, and the chief financial officer, Anthony Balic, subscribed for an aggregate 15 million units of the company under the private placement, representing approximately 10 per cent of the total common shares to be issued upon closing of the transactions. The participation by such insiders in the private placement is considered a related-party transaction within the meaning of Multilateral Instrument 61-101 -- Protection of Minority Security Holders in Special Transactions. The company has relied on exemptions from the formal valuation and minority shareholder approval requirements of MI 61-101 contained in sections 5.5(a) and 5.7(1)(a) of MI 61-101 in respect of related party participation in the placement as neither the fair market value (as determined under MI 61-101) of the subject matter of, nor the fair market value of the consideration for, the transaction, insofar as it involved the related parties, exceeded 25 per cent of the company's market capitalization (as determined under MI 61-101). The company did not file a material change report more than 21 days before the expected closing of the offering as the participation of the insiders was not settled until shortly before closing.

We seek Safe Harbor.