The Newly Institute Provides Update on Proposed Arrangement and Certain Secured Indebtedness

Calgary, Alberta--(Newsfile Corp. - August 1, 2023) - The Newly Institute Inc. ("Newly" or the "Company") wishes to announce that, further to the Company's press release dated July 13, 2023, Newly has terminated the arrangement agreement among Newly, HEAL Global Holdings Corp. ("HEAL" and, together with "Newly", the "Parties"), and Pathway Health Corp.

Additionally, the Company wishes to announce that the Parties have entered into a non-binding term sheet dated July 28, 2023 (the "Term Sheet") providing the principal terms and conditions upon which the Parties intend to restructure certain indebtedness by the Company to HEAL. Pursuant to the Term Sheet, the Parties agreed, among other things:

• HEAL will forbear on the enforcement of the indebtedness of Newly pursuant to the secured convertible promissory grid note dated January 27, 2023 (the "Note") until September 1, 2023;
• to negotiate a good faith definitive forbearance agreement the ("Forbearance Agreement") pursuant to which HEAL, a secured lender and Newly's largest shareholder, shall further refrain from enforcing on the Company's indebtedness pursuant to the Note for a maximum period of 90 days until November 1, 2023 (the "Forbearance Period");
• HEAL will advance $500,000 to Newly on the terms set forth in the Note to provide for working capital (the "Interim Advance") and the Parties will negotiate a good faith amendment and restatement of the Note, or such other replacement credit facility as the Parties may agree (the "Restructuring Facility"), aggregating the existing indebtedness by the Company to HEAL, including the Interim Advance, and providing for a further advance of up to $1,000,000 to fund the Company's obligations as set out in the Operating Plan (as defined below); and
• the Company will complete the Private Placement (as defined below).

The transactions contemplated by the Term Sheet, including entering into of the Forbearance Agreement, are subject to, among others, the consent of the Company's senior lender thereto and the satisfaction by Newly of certain conditions, including preparation of a financial plan satisfactory to HEAL (the "Operating Plan"). The Term Sheet does not create a binding agreement among the Parties, and there is no assurance that the Parties will reach agreement on the terms of the transactions contemplated by the Term Sheet, including the Forbearance Agreement or Restructuring Facility, as set out in the Term Sheet or at all.

In connection with the foregoing transactions, Newly is in the process of retaining an investment banking firm to act as its financial advisor and has agreed to use its reasonable commercial efforts to carry out, directly or indirectly through a to-be incorporated holding company, a private placement of one or more equity securities or securities convertible into equity securities, for aggregate gross proceeds of no less than $4.0 million (the "Private Placement"). Further particulars of the Private Placement will be disseminated in a subsequent news release to be issued upon finalization of its terms in consultation with the financial advisor.

During the Forbearance Period, Newly will continue to work with HEAL in restructuring its indebtedness to HEAL while continuing to evaluate strategic alternatives with a view to the best interests of the Company and its stakeholders. Such alternatives could include, among other things, sale of part of the assets of the Company, a sale of the Company, a merger or other business combination with another party, a restructuring of the Company's obligations, a strategic financing or other strategic transaction. There can be no assurance that the exploration of strategic alternatives will result in a transaction or permit the Company to continue operations. The Company does not intend to provide announcements or updates unless or until it determines that further disclosure is appropriate or necessary.

About The Newly Institute
Newly is a Calgary, Alberta based private company, that believes mental health treatment is in drastic need of a paradigm shift. Our vision is to provide long-lasting change within the industry, our community and with our patients. We have pioneered an intensive bio-psycho-social treatment model that can be supplemented by medically managed psychedelic-assisted therapies when appropriate. Our medical professionals help patients overcome deeply embedded traumas, addiction and pain that are preventing them from living fully in their everyday lives. While our programs are based on evidence and data, our approach is personal as we know it is vital that people feel safe as together we do the difficult work necessary to achieve wellness. The Company currently operates clinics in Calgary and Edmonton, Alberta as well as Fredericton, New Brunswick.

Forward-Looking Statements
This news release contains forward-looking statements, which relate to future events or future performance and reflect management's current expectations and assumptions, potential outcomes of the strategic review process; the continued forbearance on the Note by HEAL; the entering into of the Forbearance Agreement; the entering into of the Restructuring Facility; the terms and conditions of the proposed Private Placement; the use of proceeds from the Restructuring Facility; the existence of future business or financing opportunities and the level of interest in the Company's assets; timeline of the completing the review process, obtaining new capital to support the review process and maintaining current operations; projections on the ability of the company to maintain current operations, the Company's ability to realize additional value from its current assets, and the impact of the decision of the Company's management, employees and other stakeholders. Such forward-looking statements reflect management's current beliefs and are based on assumptions made by and information currently available to the Company. Investors are cautioned that these forward-looking statements are neither promises nor guarantees, and are subject to risks and uncertainties that may cause future results to differ materially from those expected. These forward-looking statements are made as of the date hereof and, except as required under applicable securities legislation, the Company does not assume any obligation to update or revise them to reflect new events or circumstances except as required by applicable law. All of the forward-looking statements made in this press release are qualified by these cautionary statements.

For further information contact:
Arthur H. Kwan
Chief Executive Officer
Phone: (825) 540-4042
Email: info@thenewly.ca

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/175783