Early Warning Report Issued Pursuant to National Instrument 62-103 Acquisition of Shares of Must Capital Inc.

July 30, 2019 9:53 PM EDT | Source: Must Capital Inc.

Toronto, Ontario--(Newsfile Corp. - July 30, 2019) - This press release is being disseminated as required by National Instrument 62‐103 The Early Warning System and Related Take Over Bids and Insider Reporting Issues in connection with the filing of an early warning report (the "Early Warning Report") regarding the acquisition of securities of Must Capital Inc. (TSXV: MUST.H) (the "Company") by Scharfe Holdings Inc. ("Scharfe") of 488-1090 West Georgia Street, Vancouver BC V6E 3V7, Pacific West Mercantile Corp. ("Pacific West") of P.O Box 3566 Stn Terminal, Vancouver BC, V6B 3Y6, 2286252 Ontario Inc. ("228"), of 2955 Harvey Crescent, Mississauga ON, L5L 4V9, and 2444444 Ontario Inc. ("244"), of 333 Bay Street, Suite 1770, Toronto ON, M5H 2R2. The address of the Company's registered office is 121 King Street West, Suite 2150, Toronto, Ontario, M5H 3T9.

Scharfe entered into a debt conversion agreement with the Company under which Scharfe agreed to settle $162,660.19 of indebtedness in exchange for 2,065,526 common shares in the capital of the Company. Following the transaction, Scharfe and its affiliates beneficially own 3,498,261 common shares in the capital of the Company, representing approximately 18.00% of the issued and outstanding securities of the Company on an undiluted basis. Before the transaction, Scharfe and its affiliates beneficially owned 1,432,725 common shares in the capital of the Company, representing approximately 10.77% of the issued and outstanding securities of the Company on an undiluted basis.

Pacific West entered into a debt conversion agreement with the Company under which Pacific West agreed to settle $151,500.00 of indebtedness in exchange for 1,923,810 common shares in the capital of the Company. Following the transaction, Pacific West and its affiliates beneficially own 2,479,366 common shares in the capital of the Company, representing approximately 12.75% of the issued and outstanding securities of the Company on an undiluted basis. Before the transaction, Pacific West and its affiliates beneficially owned 555,556 common shares in the capital of the Company, representing approximately 4.18% of the issued and outstanding securities of the Company on an undiluted basis.

228 and 244 share a common control person. 228 entered into a debt conversion agreement with the Company under which 228 agreed to settle $165,100.00 of indebtedness in exchange for 2,096,508 common shares in the capital of the Company. 244 entered into a debt conversion agreement with the Company under which 228 agreed to settle $4,165.44 of indebtedness in exchange for 52,894 common shares in the capital of the Company. Following the transactions, 228, 244 and their affiliates beneficially own 3,582,137 common shares in the capital of the Company, representing approximately 18.43% of the issued and outstanding securities of the Company on an undiluted basis. Before the transaction, 228, 244 and their affiliates beneficially owned 1,432,725 common shares in the capital of the Company, representing approximately 10.77% of the issued and outstanding securities of the Company on an undiluted basis.

228 and 244 should be considered joint actors. Pacific West and Scharfe should not be considered joint actors.

The securities were acquired for investment purposes and each of Scharfe, Pacific West, 228, and 244 may increase or decrease their beneficial ownership or control depending on market or other conditions.

As a result of the share issuances described above, Cale Thomas ("Thomas"), who previously issued an early warning report in connection with his holdings in the Company, has fallen below the 10% threshold on a fully-diluted basis. Thomas and his affiliates beneficially own 974,007 common shares in the capital of the Company and 974,007 common share purchase warrants, representing approximately 5.01% of the issued and outstanding securities of the Company on an undiluted basis and 7.76% on a fully-diluted basis.

As a result of the share issuances described above, Jason Meretsky ("Meretsky"), who previously issued an early warning report in connection with his holdings in the Company, has fallen below the 10% threshold on an undiluted basis. Meretsky and his affiliates beneficially own 1,532,800 common shares in the capital of the Company and 1,532,800 common share purchase warrants, representing approximately 7.88% of the issued and outstanding securities of the Company on an undiluted basis. However, on a fully-diluted basis, Meretsky and his affiliates hold approximately 12.21% of the issued and outstanding securities of the Company.

This transaction is exempt from the formal take-over provisions of the Securities Act (Ontario) pursuant to section 4.2 of National Instrument 62-104.

A copy of the Early Warning Report will be filed on www.SEDAR.com. After the Early Warning Report has been filed, a copy of the report can be obtained from Michele (Mike) Marrandino, President and CEO of the Company (tel #: (604) 722-5225).

NOT FOR DISTRIBUTION TO UNITED STATES OF AMERICA WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES OF AMERICA

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