Mr. Bob Blink reports

TRANSCANNA HOLDINGS INC. ANNOUNCES CLOSING OF PREVIOUSLY ANNOUNCED TRANSACTIONS AND PROVIDES UPDATE

Transcanna Holdings Inc. has closed the previously announced asset transfer transactions approved by special resolution of its Transcanna shareholders on April 28, 2023.

In connection with, among other things, the transactions, the parties to the deed in lieu of foreclosure agreement by and among Pelorus Fund REIT LLC, Dalvi LLC, Lyfted Farms Inc., the company and James R. Blink, solely in his individual capacity, dated Feb. 13, 2023, entered into an omnibus amendment, limited conditional waiver and joinder agreement dated as of Aug. 18, 2023, together with PMG Dalvi LLC, a Delaware limited liability company, and PMG Lyfted Farms LLC, a Delaware limited liability company. The existing loan parties and lender had entered into the previously announced loan agreement, effective as of July 29, 2022, by and among the lender, Dalvi, Lyfted Farms and the guarantor parties, whereby the lender had provided a term loan to the borrower in the original principal amount of $15,808,000 (U.S.). In accordance with the terms and provisions of the loan agreement, the original loan amount, together with all other obligations (as defined in the loan agreement), was secured by a first-priority security interest and lien on the collateral (as defined therein). The existing loan parties and lender entered into the deed in lieu following the occurrence and continuation of events of default under the loan agreement.

Under the amendment agreement, in connection with the lender having designated the joining borrowers as its designees (pursuant to the terms of the deed in lieu agreement) to take all right, title and interest in the collateral and, in consideration of Dalvi, Lyfted Farms and Transcanna executing and delivering the conveyance documents (as defined in the deed in lieu agreement) transferring title to the collateral to the joining borrowers, and effective at closing of the transactions: (i) the joining borrowers were joined as borrowers under the loan agreement and accompanying agreements; (ii) the lender made all monetary obligations non-recourse to Dalvi and Lyfted Farms (without waiving or modifying Transcanna's guaranteed obligations, limited guarantor's guaranty obligations, any of lender's security interests in or liens on the collateral, or any rights and remedies of lender with respect to the collateral under any of the loan documents or under the guarantees); and (iii) the lender conditionally waived all existing defaults and events of default, in each case subject to the terms and conditions of the amendment agreement. As of closing, the total unpaid principal (including the current protective advances, but excluding pending and unpaid expenses of the lender) plus unpaid accrued interest (but excluding any interest accruing at the default interest rate and interest accruing on the current protective advances) is equal to $21,066,661.57.

The company, through its wholly owned cannabis licence holding subsidiary Lyfted Farms, has entered into a management service agreement (the MSA) with PMG Lyfted Farms, whereby PMG Lyfted Farms has agreed, among other things, to manage and operate on behalf of Lyfted Farms all aspects of any commercial cannabis activities, until such time as the parties agree to terminate the MSA.

Company update

The company further announces that it continues under a previously announced cease trade order by the B.C. Securities Commission under National Instrument 51-102 (Continuous Disclosure Obligations) as a result of not filing its audited annual financial statements, accompanying management's discussion and analysis, and certifications for the year ended Nov. 30, 2022, by the requisite filing deadline. The company's 2022 audit currently remains continuing, and the company is advised by its auditor that the completion of the audit continues to be delayed. The company is working diligently with its consultants and auditor to complete the remaining audit and make the required filings as soon as possible. Once complete, a news release will be issued indicating that the annual and quarterly filings have been submitted. The company previously announced that it anticipates that it will complete the annual and quarterly filings on or before Aug. 28, 2023; however, the company expects that all filings may occur toward the end of September. In the event the CTO remains in effect for more than 90 days, the company will meet additional filing requirements with respect to the CTO under National Policy 11-207.

About Transcanna Holdings Inc.

Transcanna is a California-based, Canadian-listed company, holding licences for cannabis-focused brands for the California lifestyle, through its wholly owned California subsidiaries.

We seek Safe Harbor.