Platform Eight Capital Corp. Announces Update in Respect of Its Proposed Qualifying Transaction with Growforce Holdings Inc.

Toronto, Ontario--(Newsfile Corp. - July 25, 2018) - Platform Eight Capital Corp. (TSXV: PEC.P) (the "Corporation" or "Platform") announces that it has entered into a binding business combination agreement (the "Merger Agreement") effective July 20, 2018, to complete a transaction (the "Transaction") pursuant to which the Corporation will complete a three-cornered amalgamation (the "Amalgamation") with GrowForce Holdings Inc. ("GrowForce"), through its operating subsidiaries and controlled affiliates, a licensed producer of cannabis under Health Canada's Access to Cannabis for Medical Purposes Regulations (Canada) ("ACMPR"). The corporation resulting from the Transaction (the "Resulting Issuer") will continue under the name "GrowForce Holdings Corp."

The Corporation has called a special meeting of its shareholders for August 9, 2018 (the "Meeting") to approve, among other things: (i) the board of directors of the Resulting Issuer following the completion of the Transaction, (ii) the appointment of MNP LLP as auditors of the Resulting Issuer, (iii) the change of its name to "GrowForce Holdings Corp.", (iv) a consolidation of its shares on the basis of up to 20 pre-consolidation common shares for every one (1) post-consolidation common share (the "Consolidation"), with the exact consolidation ratio to be determined by the board of directors of the Corporation based on the relative valuations of Platform and GrowForce in the Transaction, (v) an amended and restated stock option plan, and (vi) a restricted share unit plan. Although the shareholders of the Corporation are not being asked to specifically approve of the Transaction, the matters to be considered at the Meeting are necessary in order to prepare the Corporation to complete the Transaction. Further details regarding the Meeting will be contained in a management information circular which will be sent to shareholders of the Corporation and filed on SEDAR (www.sedar.com).

GrowForce Holdings Inc.

GrowForce is a geographically diversified and vertically integrated cannabis platform based in Canada. GrowForce intends to own a majority interest in flagship cannabis facilities operated through the ACMPR. Through subsidiaries and controlled affiliates, GrowForce owns a 100% interest in WILL Cannabis, an Ontario-based licensed producer, a 51.01% interest in Grand River Organics Incorporated, a late-stage ACMPR Licensed Producer applicant, and a proposed second-site 120,000 sq. ft. industrial facility on a 13-arce land parcel in Winnipeg, Manitoba. Total funded capacity across the GrowForce portfolio currently exceeds 15,000 kg per annum, with additional capacity in the queue through existing facilities expansion and subsequent acquisitions.

GrowForce was incorporated in Ontario on February 2, 2018 as a wholly owned subsidiary of MJardin Group ("MJardin"), which subscribed for 1,000 common shares for $100. On February 26, 2018 GrowForce completed a non-brokered private placement offering of 1,000,000 common shares at a price of $0.10 per share for aggregate gross proceeds of $100,000 (the "Offering"). The Offering was only offered to the then current shareholders of MJardin as a form of "rights offering". On closing of the Offering, GrowForce ceased being a wholly-owned subsidiary of MJardin, with MJardin holding less than 1% of the outstanding shares. Rishi Gautam, Chief Executive Officer of GrowForce, is the only person to beneficially own or control, directly or indirectly, more than 10% of the issued and outstanding shares of GrowForce, holding approximately 14.6% of the issued and outstanding shares or 19.8% on a fully diluted basis.

GrowForce entered into a license agreement dated April 1, 2018 (the "License Agreement") with MJardin, North America's largest turnkey operator of legal cannabis facilities, for the exclusive rights to MJardin's cannabis management services and intellectual property portfolio for use in Canada and other federally legal markets worldwide. The terms of the License Agreement includes an operational services agreement for MJardin to provide cultivation, processing and retail services to GrowForce facilities, as well as the exclusive use of MJardin University for staff training and continuing education.

During the period for February 2, 2018 to June 30, 2018, GrowForce had no revenues and a net loss of $16,632,659.  $8,538,303 of the net loss is attributable to the estimated value of stock based compensation; and $5,971,680 of the net loss is predominantly attributable to Professional Fees incurred in transaction expenses over the period.  As at June 30, 2018, GrowForce had total assets of $81,281,843 and total liabilities of $81,905,487.  The foregoing financial information is based on consolidated unaudited draft financial statements of GrowForce. 

Concurrent Financing

In connection with the Transaction, GrowForce will complete a "best efforts" private placement of up to 12,500,000 subscription receipts ("Subscription Receipts") at a price of $3.20 per Subscription Receipt for aggregate gross proceeds of approximately $40,000,000 (the "Financing"). The Financing will include a brokered private placement of up to 7,851,225 Subscription Receipts for gross proceeds of up to $25,123,920, and a concurrent non-brokered private placement of up to 4,648,775 Subscription Receipts for gross proceeds of up to $14,876,080. The Financing is expected to close on or about July 26, 2018.

Cormark Securities Inc. and Canaccord Genuity Group Inc. (the "Agents") have been engaged as agents in connection with the brokered portion of the Financing.

The gross proceeds of the Financing, less certain fees and expenses of the Agents, will be placed in escrow on behalf of the purchasers of Subscription Receipts, and will be released to GrowForce upon satisfaction of certain escrow release conditions, including completion of the Transaction. If the escrow release conditions are not satisfied, the Subscription Receipts will be cancelled and all proceeds from the sale of Subscription Receipts will be returned to purchasers.

Immediately prior to the Amalgamation, each Subscription Receipt will, without payment of any additional consideration or taking of any action, be converted into one common share of GrowForce (a "GrowForce Share"). Each GrowForce Share will then, without payment of any additional consideration or taking of any action, subsequently be exchanged for one (1) common share of the Resulting Issuer (a "Resulting Issuer Share") pursuant to the Amalgamation in accordance with the terms of the Merger Agreement.

GrowForce will pay the Agents a cash commission (the "Agent's Commission") equal to 7% of the aggregate gross proceeds of the brokered portion of Financing, half of which will be paid upon closing of the Financing, and half of which will be paid upon conversion of the Subscription Receipts. GrowForce will also issue to the Agents warrants (the "Compensation Warrants") to purchase such number of GrowForce Shares as is equal to 7% of the total number of Subscription Receipts issued pursuant to the brokered portion of the Financing at an exercise price of $3.20 for a period of 36 months following issuance. The Compensation Warrants will be exchanged for warrants of the Resulting Issuer in connection with the Merger. The net proceeds from the Financing will be used for business development and working capital purposes.

Terms of the Transaction

Pursuant to the Transaction, each common share of the Corporation (each "Corporation Share") will be consolidated on the basis of approximately 12.2 common shares for each one (1) Resulting Issuer Share based on the agreed upon valuations of the two companies. A value of $2,500,000 will be ascribed to the Corporation and the valuation of GrowForce will be determined in the context of the issue price of the securities issued pursuant to the Financing. Each common share of GrowForce (each "GrowForce Share") will be exchanged for one (1) Resulting Issuer Share and each convertible security of GrowForce will be exchanged for a comparable convertible security of the Resulting Issuer.

It is estimated that there will be approximately 62,011,272 Resulting Issuer Shares issued and outstanding immediately following closing of the Transaction (on a basic basis), with former shareholders of the Corporation holding approximately 1.3% of such Resulting Issuer Shares, former GrowForce shareholders holding approximately 78.5% of such Resulting Issuer Shares and subscribers under the Concurrent Financing holding approximately 20.2% of such Resulting Issuer Shares. The Resulting Issuer also expects to have approximately 7,495,691 convertible securities outstanding that are exercisable into Resulting Issuer Shares upon completion of the Transaction. On closing of the Offering and the Transaction, Rishi Gautam, Chief Executive Officer of GrowForce, is expected to be the only person to beneficially own or control, directly or indirectly, more than 10% of the issued and outstanding shares of the Resulting Issuer, holding approximately 11% of the issued and outstanding Resulting Issuer Shares or 14.3% on a fully diluted basis.

Sponsorship

The Transaction is subject to the sponsorship requirements of the TSXV, unless an exemption from the sponsorship requirement is available or a waiver is granted. The Corporation intends to apply for an exemption to the sponsorship requirement. There is no assurance that an exemption from this requirement will be obtained.

Management and Insiders of the Resulting Issuer

Upon completion of the Transaction, all the current directors and officers of the Corporation will resign except for John Travaglini who will continue as a director of the Resulting Issuer. The proposed board of directors of the Resulting Issuer will be Rishi Gautam, David Sharpe, Lorne Sugarman, Robert Silver, Moya Cahill and John Travaglini. Rishi Gautam will be appointed Chief Executive Officer, Christopher Seto, Chief Financial Officer and Corporate Secretary and James Lowe, Executive Vice President of Operations of the Resulting Issuer.

Rishi Gautam — Chief Executive Officer, Chairman and Director

Rishi Gautam brings a vast array of cannabis management knowledge and expertise to the GrowForce team. Rishi structured and ultimately participated in the initial financing for MJardin in 2014, and has been a Director of MJardin since inception. Prior to joining MJardin as Chairman & CEO in 2017, Rishi co-created and ran a private investment firm since 2010 alongside fellow colleagues from Goldman Sachs, where he advised and invested in a variety of emerging growth markets including legal cannabis, eSports and population health management. Rishi began his career in the analyst program of Goldman Sachs, and then subsequently moved to Lehman Brothers/Barclays where he ultimately co-led an investment team in San Francisco. Rishi graduated from the University of Miami with a Bachelor of Business Administration in Accounting and also received a Masters in Accounting from Florida International University. Rishi is an actively-licensed CPA.

Christopher Seto, Chief Financial Officer and Secretary

Chris Seto has over 20 years of capital markets and financial management experience.  Chris joined GrowForce in 2018 as Chief Financial Officer and Secretary, where he oversees the financial management of the company including budgeting, financing, mergers & acquisitions, financial reporting and internal controls. Chris was previously an investment banker for fourteen years with Paradigm Capital, UBS Securities and CIBC World Markets, where he provided strategic, financial and capital raising advice to companies across the Diversified sector , advising and executing on over $80 billion in completed transactions.  Prior to his career in investment banking, Chris gained extensive financial management experience in the telecom and healthcare industries where he held management positions at Bell Canada and Morneau Shepell , leading divisional and company finance and accounting functions. Chris is a graduate of McMaster University (B.Com 1996) and the Richard Ivey School of Business (M.B.A 2002), and received his Certified Management Accountant designation (C.M.A. 1999).

James Lowe, Executive Vice President of Operations

James has spent most of his career focused on the commercial production of cannabis and has been involved with the CO medical marijuana industry from inception. He has overseen the design, construction, and/or management of over 75 commercial cultivation facilities throughout the US ranging from 3,000 sq. ft. to 8-acres. James' experience in the most highly regulated cannabis markets in the world is unparalleled and provides a unique comprehension of commercial cannabis cultivation and industry regulations. Prior to co-founding MJardin, James founded and served as Chief Executive Officer for Cloud 9 Support, an independent cultivation management company with more 100+ employees in 10 cultivation facilities that served as the basis for MJardin's initial management contracts. Before starting Cloud 9, James served as VP of Operations for Novan Solar (Golden, CO) and Senior Project Developer for S.O.L.I.D. Solar (Phoenix, AZ and Denver, CO). James attended Appalachian State University in Boone, NC (1998-2003) focusing on Industrial Technology with a concentration in Renewable Energy and minoring in Business Administration.

David Sharpe — Director

David is the Chief Executive Officer, responsible for the strategic direction of the firm and ensuring sustainable growth is achieved. David has close to 25 years of financial services industry experience,  in roles such as General Counsel, Chief Compliance Officer and Chief Risk Officer for leading financial organizations, and previously was the head of investigations for the Mutual Fund Dealers Association of Canada. David is Chair Emeritus of First Nations University of Canada. David was a member of the Board of Governors for close to 7 years and ‎served as Board Chair.  He is also a Board member of the Economic Development Corporation for Eabametoong (Fort Hope) First Nation and is a member of the Dean's Council at Queen's University, Faculty of Law. David is a member of the Mohawks of the Bay of Quinte. David is a lawyer and has been a member of the Law Society of Upper Canada since 1997. He has an LLB from Queen's University, an LLM in Securities Law from Osgoode Hall Law School and a Masters of Business Administration from the Richard Ivey School of Business, University of Western Ontario.  David has also received the Professional Director Certification from the Johnson-Shoyama Graduate School of Public Policy at the University of Saskatchewan/University of Regina. In 2015, David was named to the Diversity 50 in Canada.

Robert Silver — Director

Mr. Silver earned a Bachelor of Sciences (honours) degree from the University of Manitoba in 1970, and went on as President & co-owner of Western Glove Works to direct the growth of the company into Canada's largest jeans wear distributor. He is also a director and partner of Warehouse One, a chain of 123 retail apparel stores in Canada, Urban Barn, a chain of 47 furniture stores in Canada, and of Comark Consolidated, a chain of over 300 retail apparel stores in Canada under the brands Bootlegger, Ricki's, Cleo's and Jean Machine. During his 40-year business career, he has been extensively involved in reviewing internal management financial reporting, and external audited and unaudited financial statements from various perspectives; as an owner/investor, as a member of senior management, and as a board member. Appointed Chancellor of the University of Winnipeg in 2009, Robert has previously served as Co-chair of the Manitoba Premier's Economic Advisory Council, and is a recipient of the Order of Manitoba.

Lorne Sugarman — Director

Lorne Sugarman is currently a principal at KES 7 Capital Inc, and the Executive Chairman of Wellpoint Health LTD. He was previously the CEO of Wellpoint for a period of six years where he grew the business to over 250 employees. During this time, he also raised over $20mm in debt and equity and completed and integrated seven acquisitions. Previous to Wellpoint, Lorne Sugarman was the Managing Director, Investment Banking at GMP Securities, one of Canada's largest independent investment banks.  Mr. Sugarman has experience in a broad range of corporate finance transactions, including mergers and acquisitions and public and private financings for many of Canada's leading non-resource companies. Mr. Sugarman began his career with Deloitte & Touche as an audit practitioner and subsequently worked with Deloitte Consulting providing strategic advice to international clients in both Canada and the United States.  Mr. Sugarman holds an MBA from University of Toronto and a Bachelor of Arts (Economics) from the University of Western Ontario and is a member of the Institute of Chartered Accountants of Ontario.

Moya Cahill - Director

Moya Cahill is CEO and co-founder of PanGeo Subsea, a technology and service provider of high-resolution 3D SAS sub-bottom acoustic imaging technology. Under her leadership, PanGeo has successfully attracted international private equity to underpin the commercialization of PanGeo's technology to a global market, while showcasing its St. John's office as its global centre of excellence for acoustic innovation and engineering. PanGeo's offices in Aberdeen, Scotland provide critical operational support for the company's offshore site investigation campaigns positioning PanGeo as a significant technology player in the offshore renewable energy sector in UK, Germany, France, Holland, Denmark, Norway and eastern seaboard of the US. A professional engineer and graduate of Memorial University, Ms. Cahill has over 25 years' experience in the oil and gas sector and offshore renewable energy sector. She started her career in the late '80's with Norsk Hydro in Norway. Having been exposed to the success of the Norwegian supply chain, she returned to Newfoundland and established her own engineering and consulting company MNC Group. In 1998 Ms. Cahill co-founded Pan Maritime Energy Services Inc., a project management and engineering company. As President, she provided the leadership and vision to expand the interests of the company in eastern Canada as well as to establish an office in Doha, Qatar. Ms. Cahill is a recipient of the "Canadian Women Entrepreneur of the Year Award" as well as the prestigious "Canada's Top 40 Under 40". Most recently she was honored to receive from the Newfoundland Oil and Gas Association, its "Outstanding Contribution Award" which recognized her role in the development of the offshore industry in Canada over the past 20 years.

John Travaglini - Director

John Travaglini is a technology and capital markets entrepreneur and an experienced M&A professional. Prior to founding 4Front Capital Partners, he owned a mid-market investment and merchant banking consulting firm based out of Toronto, Ontario. In this role John consulted to large multinational corporations, funds and family offices worldwide on wealth preservation, mergers and acquisitions and international investments. Prior to that John co-owned an investment bank with offices in Toronto, London, Singapore and Sydney Australia. John co-founded a systems integration company and has held sales positions with Sun Microsystems, Unisys Corporation. John has held board positions and executive management positions in both public and private companies in Canada and abroad. He holds an Honors Degree in Business Administration from Wilfrid Laurier University and is a graduate of the Quantum Shift Executive Management program sponsored by KPMG and Ivey School of Business.

Filing Statement

In connection with the Transaction and pursuant to TSXV requirements, the Corporation will file a filing statement on SEDAR, which will contain details regarding the Transaction, the Merger Agreement, the Concurrent Financing, the Corporation, GrowForce and the Resulting Issuer.

About Platform Eight Capital Corp.

The Corporation is incorporated under the Business Corporations Act (Ontario) and is a Capital Pool Company listed on the TSXV. The Corporation has no commercial operations and has no assets other than cash. For further information please see the final prospectus of the Corporation dated January 9, 2018, filed on SEDAR at www.sedar.com.

For further information please contact:

John Travaglini
Chief Executive Officer
(416) 861-1100

Cautionary Notes

All information provided in this press release relating to GrowForce has been provided by management of GrowForce and has not been independently verified by management of the Corporation.

As the date of this press release, the Corporation has not entered into a Definitive Agreement with GrowForce, and readers are cautioned that there can be no assurances that a Definitive Agreement will be executed.

Completion of the Transaction is subject to a number of conditions, including but not limited to, TSXV acceptance and if applicable pursuant to TSXV requirements, majority of the minority shareholder approval. Where applicable, the transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the transaction, any information released or received with respect to the transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.

The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed Transaction and has neither approved nor disapproved the contents of this press release. Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

This press release contains statements that constitute "forward-looking information" (collectively, "forward-looking statements") within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release. Any statement that discusses predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as "expects", or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "budget", "scheduled", "forecasts", "estimates", "believes" or "intends" or variations of such words and phrases or stating that certain actions, events or results "may" or "could", "would", "might" or "will" be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements. Forward-looking statements contained in this press release include, without limitation, statements regarding: the terms, conditions, and completion of the Transaction and the Concurrent Financing; use of funds; and the business and operations of the Resulting Issuer. In making the forward- looking statements contained in this press release, the Corporation has made certain assumptions, including that: due diligence will be satisfactory; the Concurrent Financing will be completed on acceptable terms; all applicable shareholder, and regulatory approvals for the Transaction will be received. Although the Corporation believes that the expectations reflected in forward-looking statements are reasonable, it can give no assurance that the expectations of any forward-looking statements will prove to be correct. Known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: results of due diligence; availability of financing; delay or failure to receive board, shareholder or regulatory approvals; and general business, economic, competitive, political and social uncertainties. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this press release. Except as required by law, the Corporation disclaims any intention and assumes no obligation to update or revise any forward-looking statements to reflect actual results, whether as a result of new information, future events, changes in assumptions, changes in factors affecting such forward-looking statements or otherwise.

Not for distribution to United States newswire services or for dissemination in the United States. This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.