Mr. Jay Garnett reports

XEBRA BRANDS ANNOUNCES NON-BROKERED PRIVATE PLACEMENT OF UNITS AND CONVERTIBLE DEBENTURES UP TO C$1,000,000

Xebra Brands Ltd. intends to complete a non-brokered private placement in the aggregate amount of up to $1-million pursuant to a binding commitment from a strategic investor. The company intends to issue up to 12 million units of the company at a price of five cents per unit for gross proceeds of up to $600,000 and a concurrent placement of up to a principal amount of $400,000 of unsecured convertible debenture units.

Pursuant to the commitment, the strategic investor will have the right to appoint one director to become a member of the board of directors of the company and will also be entitled to appoint a person as a board observer to board meetings. The observer seat will not have the right to vote on matters put forth before the board but will have access to the information provided to the board and will be entitled to attend board meetings.

Each unit will comprise one common share of the company and one common share purchase warrant. Each unit warrant will entitle the holder thereof to acquire one common share at an exercise price of 10 cents per unit warrant share at any time for a period of 18 months following the closing of the unit offering.

Each convertible debenture unit issued pursuant to the CD offering will consist of: (i) $1,000 principal amount of unsecured convertible debenture of the company; and (ii) 20,000 common share purchase warrants. Each CD warrant shall entitle the holder to acquire one common share at an exercise price of 10 cents per CD warrant share at any time for a period of 18 months following the closing of the CD offering.

The debentures will mature on the date that is 36 months from the date of issuance and shall bear interest at a rate of 8 per cent per annum, payable semi-annually in arrears, and will not be redeemable by the company. The debentures will be convertible into common shares at the option of the holder at any time prior to the maturity date at a conversion price equal to five cents per debenture share.

It is expected that the closing of the unit offering will be on or about Oct. 6, 2023, or such other date or dates that Xebra may determine.

If the CD offering is fully subscribed, it is expected that the strategic investor will hold in excess 20 per cent of the issued and outstanding common shares, and as such, the issuance of the debentures and CD warrants would materially affect control (as such term is defined in the policies of the Canadian Securities Exchange) of Xebra, requiring the company to obtain shareholder approval to permit the strategic investor to hold greater than 20 per cent of the common shares on a partially diluted basis. The company intends to seek such approval at its annual general and special meeting to be held on Nov. 7, 2023. The CD offering is expected to close following the meeting and receipt of shareholder approval.

The net proceeds received by the company from the offering are intended to be used for general corporate and working capital purposes.

The offering is subject to the receipt of all regulatory approvals, including the approval of the Canadian Securities Exchange.

About Xebra Brands Ltd.

Xebra is an international cannabis cultivation and product company, with global brands and intellectual property. Its focus includes beverages, wellness and leisure. Xebra is an absolute first mover in the Mexican cannabis sector, with the first ever granted authorization to a corporation by the COFEPRIS (Mexican Health Regulatory Agency). In Canada, Xebra retails its unique Vicious Citrus OG and NEO tetrahydrocannabinol/cannabinol lemonades.

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