The Newly Institute Inc. Provides Update on Proposed Arrangement and Short-Term Forbearance on Repayment of Certain Secured Indebtedness

Calgary, Alberta--(Newsfile Corp. - July 13, 2023) - The Newly Institute Inc. ("Newly" or the "Company") wishes to announce that the Alberta Court of King's Bench (the "Court") has denied an originating application seeking a final order to approve the previously announced arrangement (the "Final Order") (see press releases dated April 1, 2023, April 27, 2023, April 28, 2023, May 17, 2023, and May 31, 2023) by way of plan of arrangement pursuant to the Business Corporations Act (Alberta) among Newly, Pathway Health Corp. ("Pathway"), and HEAL Global Holdings Corp. ("HEAL") (the "Transaction"). As a result, the Transaction is not expected to proceed and the Company, Pathway and HEAL are in discussions regarding termination of the Transaction and repayment of the outstanding indebtedness owed to HEAL by Newly and Pathway.

The Transaction, whereby Pathway would acquire Newly and HEAL, was approved by 100% of Newly securityholders who voted at the special meeting held on May 30, 2023, 93.4% of disinterested Pathway shareholders at an annual and special meeting held on May 30, 2023, and 100% of the HEAL shareholders and yet did not receive the Court's approval and, therefore, will not proceed. Following the Court's decision, management will continue to work closely with stakeholders, employees, and partners to assess all available options and determine the most suitable course of action in light of this recent development.

In light of the foregoing, HEAL has agreed to a short-term forbearance arrangement with respect to a $2.5 million secured convertible promissory note (the "Note") pursuant to which HEAL has agreed to temporarily refrain from enforcing its default-related rights and remedies under the Note until July 27, 2023. Prior to the forbearance, the Note was to mature on the earlier of June 30, 2023 and the date on which the definitive agreement or letter of intent, as applicable, in respect of the Transaction terminated or expired.

As a direct result of the denial of the application for the Final Order by the Court, Newly's management and board of directors intend to establish a special committee and immediately start a process to evaluate strategic alternatives with a view to the best interests of the Company and its shareholders and other stakeholders, including its creditors and other partners. These alternatives could include, among other things, a restructuring, a recapitalization, a refinancing, a sale of the Company, a merger or other business combination with another party, or another strategic transaction. The Company has not set a timetable for this process, nor has it made any decisions related to any strategic alternatives at this time. 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, Alberta, Edmonton, Alberta, and 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 existence of future business 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/173422