Mr. Andrew Schutte reports

REPLICEL LIFE SCIENCES ANNOUNCES CLOSING OF ASSET SALE AND ROYALTY TRANSACTION AND DATE FOR VOLUNTARY DELISTING FROM THE TSX VENTURE EXCHANGE

Further to its news releases dated March 18, 2024, Aug. 28, 2024, Oct. 17, 2024, Dec. 20, 2024, and Jan. 16, 2025, RepliCel Life Sciences Inc. has closed the asset sale and royalty transaction with 1456390 B.C. Ltd. (the acquiror).

The voluntary delisting from the TSX Venture Exchange will be effective after the markets close on Friday, Feb. 28, 2025, and the company's common shares are expected to be delisted from the OTCQB and Frankfurt Stock Exchange on or around the same date. Following the delisting, the company will continue to be a reporting issuer in British Columbia, Alberta and Ontario, and it will be subject to all applicable continuous disclosure requirements under the securities laws of such provinces, including disclosure of all material changes.

The transaction

On Aug. 6, 2024, the company entered into an asset purchase and licence agreement with the acquiror, a non-arm's-length private British Columbia company owned and controlled by RepliCel's chief executive officer and president, Andrew Schutte, detailing the licence of certain patent rights by RepliCel and the sale of all know-how related to such patents rights, marketing materials, brand, server data and hardware used in RepliCel's autologous cell therapies and the development of its programmable injector device.

Pursuant to the terms of the purchase agreement, RepliCel agreed to license the patent rights and sell the assets to the acquiror in exchange for an 8-per-cent royalty on all gross profits earned by the acquiror in relation to the acquiror's commercialization of RCH-01, the NBDS platform (RCT and RCS included), RCI-01 and DermaPrecise RCI-02, up to a maximum gross dollar value paid to of approximately $178,114,732 (U.S.). If the acquiror sells, sublicenses or transfers any of the patent rights or assets to any third parties for cash consideration, the acquiror will pay RepliCel 75 per cent of the cash consideration received (subject to the aforementioned cap).

The company has agreed that, upon receipt of royalty payments from the acquiror, it will declare a dividend on its common shares. The amount and timing of any dividends resulting from royalty payments will be determined by the company's board of directors exercising its fiduciary duty and subject to applicable solvency or other legal or contractual requirements. Dividends will be made after payment of all fees, expenses and taxes associated with the transaction, the royalty and the company's operations generally, as well as retention by the company of amounts necessary to finance dividend payments to holders of options and warrants. The acquiror has agreed to finance the company's general and administrative expenses on a secured loan basis until the total payments made to the company by the acquiror reach $20-million (U.S.), after which such loans become repayable in full before any further dividends may be declared.

Mr. Schutte, the chief executive officer and president of RepliCel, is a director, chief executive officer and controlling shareholder of the acquiror and as a result, the transaction is a related party transaction under Multilateral Instrument 61-101, Protection of Minority Security Holders in Special Transactions. The transaction is exempt from the valuation requirements of MI 61-101 by virtue of the exemption contained in Section 5.5(b) as the company's shares are not listed on a specified market. Minority approval for the transaction was obtained at the annual general and special meeting of shareholders held on Jan. 16, 2025.

Acquiror loan

As further described in the purchase agreement, the acquiror agreed to advance certain amounts to the company to finance general and administrative expenses on a secured, interest-free loan basis. Proceeds of the acquiror loan will be advanced by the acquiror to the company after the delisting.

The acquiror loan is a related party transaction, as defined MI 61-101, as the current chief executive officer of the company is also a director of the acquiror. The acquiror loan is exempt from the formal valuation requirements of Section 5.4 of MI 61-101 pursuant to Subsection 5.5(a) of MI 61-101 as the fair market value of the acquiror loan does not exceed 25 per cent of the company's market capitalization. The acquiror loan is also exempt from the minority approval requirements of Section 5.6 of MI 61-101 pursuant to Subsection 5.7(1((f) of MI 61-101 as the acquiror loan is on reasonable commercial terms and not convertible into or repayable in equity or voting securities of the company.

Name change

Following the delisting and in accordance with the terms of the purchase agreement, as amended, the company will change its name from RepliCel Life Sciences Inc. to 0913693 B.C. Ltd. Outstanding share and warrant certificates will not be affected by the name change and will not need to be exchanged. The company will provide further updates regarding the name change, including the new ISIN (international securities identification number) and Cusip number, in a subsequent news release.

We seek Safe Harbor.