Mr. Bill Panagiotakopoulos reports

SAFE SUPPLY STREAMING CO. LTD. ANNOUNCES SIGNING OF DEFINITIVE AGREEMENT TO ACQUIRE DRUG LAB 118 LTD

Further to the press release of Sept. 26, 2024, Safe Supply Streaming Co. Ltd. has signed a definitive share purchase agreement dated Nov. 1, 2024, to acquire 100 per cent of the issued and outstanding shares of Drug Lab 118 Ltd. (Drug Lab U.S.) from DrugLab118 Ltd. (Drug Lab parent). The acquisition of Drug Lab U.S. enhances the company's portfolio of proprietary products, developed through extensive research and development, and further strengthens its position in the medical testing and harm reduction sector.

Terms of the transaction

Pursuant to the terms of the definitive agreement, Safe Supply will acquire all of the issued and outstanding shares of Drug Lab U.S. from the Drug Lab parent, and in consideration, Safe Supply will issue an aggregate of 10 million common shares to the Drug Lab parent at a deemed issue price of five cents per consideration share. The consideration shares are subject to contractual resale restrictions, allowing one-third of the consideration shares to be traded after four, eight and 12 months following the closing of the acquisition. It is anticipated that the Drug Lab parent will appoint one nominee to the company's board of directors upon closing of the acquisition. The closing of the acquisition is expected to take place as soon as reasonably practicable, upon satisfaction of all requisite closing conditions.

In connection with the acquisition, the company has agreed to issue one million common shares at a deemed issue price of five cents per finder's fee share to a certain arm's-length third party as compensation for facilitation of the introduction of the company to the Drug Lab parent and Drug Lab U.S. The finder's fee shares will be subject to a statutory hold period of four months and one day from the date of issuance in accordance with applicable securities laws.

Drug Lab U.S. and the Drug Lab parent are arm's-length parties to the company. It is not expected that the acquisition will result in a change of control or the creation of a new control person.

Strategic acquisition and strong future outlook

Management of Safe Supply believes the acquisition enhances the company's portfolio of proprietary product offerings and potential revenue opportunities, particularly with the addition of harm reduction test strips developed by Drug Lab U.S. These test kits, covering a wide range of narcotics and other substances, are a key element of Safe Supply's strategic growth initiative, expanding its product portfolio and increasing its presence in the North American market. The rising presence of toxic substances in schools, universities and public venues continues to pose significant health risks, particularly from contaminated opioids and other potentially fatal substances. By leveraging the Drug Lab parent's extensive research and development experience and advanced technology, the integration of Drug Lab U.S. will further broaden Safe Supply's product offerings and enhance its ability to address growing regulatory requirements and consumer safety needs.

Bill Panagiotakopoulos, chief executive officer of Safe Supply, commented: "The acquisition of Drug Lab U.S. demonstrates Safe Supply's strength in sourcing strategic deals and closing them efficiently. With [the] Drug Lab parent's extensive R&D investment, this acquisition significantly enhances our portfolio and positions us to lead in the rapidly expanding harm reduction market. We are confident this acquisition will contribute meaningfully to our revenue growth and long-term market share."

Colin Lyon, chief executive officer of the Drug Lab parent, added: "We are excited to partner with Safe Supply to expand our reach into the North American market. With Safe Supply's resources and strategic vision, we are well positioned to execute our goals and grow our market presence. We look forward to this collaboration as we continue to innovate in harm reduction technologies."

The acquisition comes at a time of rapid growth in the global market for narcotic testing and harm reduction solutions, with Drug Lab U.S.'s proprietary technology offering strong market potential, particularly in North America. According to Polaris Market Research, the global market for drug testing kits is expected to reach $11.83-billion by 2028, growing at a compound annual growth rate of 5.0 per cent from 2021 to 2028.

About Drug Lab 118 Ltd.

Drug Lab U.S., incorporated in Delaware, is a subsidiary of the Drug Lab parent, a United Kingdom-based company specializing in forensic drug detection technologies. With a focus on innovative solutions for the detection of illicit substances, Drug Lab U.S. has developed a portfolio of proprietary, cutting-edge test kits for narcotics and harm reduction. Drug Lab U.S. has an exclusive agreement with the Drug Lab parent to distribute these products in North America.

About Safe Supply Streaming Co. Ltd.

Safe Supply, a publicly traded company that is listed on the Canadian Securities Exchange, is focused on the acquisition, investment and development of businesses within the medical, wellness and technology sectors. The company aims to drive sustainable growth and shareholder value by leveraging innovative, technology-driven solutions that address critical needs in health care and wellness.

We seek Safe Harbor.