Coho Collective Kitchens Announces the Closing of Its Acquisition of Purebread

Vancouver, British Columbia--(Newsfile Corp. - September 20, 2023) - Coho Collective Kitchens Inc. (TSXV: COHO) ("Coho" or the "Company") is pleased to announce that it has closed the strategic acquisition of Purebread. Bakery Inc. ("Purebread") that was initially announced on May 29, 2023 (the "Acquisition"), along with concurrent debt and equity financing transactions. Purebread is one of Canada's most respected bakery and cafe businesses.

The final terms of the Acquisition were most recently announced on September 12, 2023. The purchase price was paid through a combination of $8.5 million cash on closing (subject to customary adjustments for indebtedness and working capital), a $1.5 million vendor-take-back note, and the issuance of 1,000,000 common shares of Coho ("Common Shares") to a vendor of Purebread.

Going forward, Purebread will operate as a wholly owned subsidiary of Coho, with its own operational and management teams. However, Coho will provide marketing, sales, and financing support to Purebread, helping Purebread increase market penetration, develop new markets, and ultimately deliver their exceptional baked goods to more happy customers. Coho will also leverage its growing shared kitchen footprint to rapidly scale Purebread's growth through a hub and spoke model.

Coho's CEO, Andrew Barnes, expressed his vision for the acquisition, stating, "With this strategic move, we are committed to enhancing Purebread's footprint across Canada. Leveraging Coho's well-established network, we aspire to propel Purebread to new heights. We recognize the remarkable efforts put in by the Purebread team in building both the brand and the business, and our goal now is to expand its influence further."

Paula Lamming, co-founder of Purebread, commented, "Purebread is excited to be part of the Coho family and about the opportunities that lay ahead for the combined company. We believe Coho's industry experience, relationships, and access to potential new locations will help Purebread build on its historical success." Co-founder, Mark Lamming, added, "We're pleased that customers in new markets will have the chance to experience Purebread's high-quality baking as the business continues to expand under Coho's stewardship."

Acquisition Summary

• In July 2023, Purebread generated Trailing-12-months ("TTM") Revenue of $11,000,000 and TTM Adjusted EBITDA of $1,932,000⁽¹⁾.
• Purebread's newest location, at the Vancouver International Airport, has increased Purebread's revenue by 30%.
• Purebread has maintained a record of profitable operations for 15+ years.
• Acquisition has allowed Coho to achieve its 2024 growth strategy ahead of schedule, with Coho becoming a cashflow positive business with healthy EBITDA results.
• Acquisition has been structured to ensure a smooth transition and alignment of long-term interests, with Paula Lamming and Mark Lamming entering into consulting agreements with Coho.

⁽¹⁾ This is a Non-IFRS Financial Measure. For reconciliation of Adjusted EBITDA to Net Income, see "Non-IFRS Financial Measures" below.

Equity Financing

Coho is also pleased to announce the closing of its previously announced brokered financing. Canaccord Genuity Corp. (the "Agent") acted as the lead agent on the transaction, pursuant to which Coho issued an aggregate of 26,445,186 units (the "Units") at a price of $0.17 per Unit (the "Offering Price"), for aggregate gross proceeds of $4,495,681.62 (the "Offering").

Each Unit consists of one Common Share and one-half of one Common Share purchase warrant of the Company (each whole Common Share purchase warrant, a "Warrant"). Each Warrant is exercisable to acquire one Common Share of the Company (a "Warrant Share") at a price of $0.25 per Warrant Share for a period of 36 months following the date hereof (the "Closing Date").

The Units were issued pursuant to the listed issuer financing exemption under Part 5A of National Instrument 45-106 - Prospectus Exemptions. The securities offered under the listed issuer financing exemption will not be subject to a hold period, in accordance with applicable Canadian securities laws. Coho used net proceeds of the Offering for completing the Acquisition, and intends to use the balance for the expansion of operations, as well as to provide general working capital to support its operations.

In connection with the Offering, the Company paid the Agent: (A) a cash commission equal to 8% of the gross proceeds of the Offering (other than subscribers on the President's List for up to $2,000,000 in respect of whom the cash commission was 4%), payable in cash, units or a combination thereof, payable as follows: $118,973.71 in cash, 472,591 Common Shares of the Company and 472,591 Compensation Warrants (as defined below); and (B) 1,645,027 Agent's Warrants (the "Agent's Warrants"). Each Agent's Warrant is exercisable for a unit of the Company (a "Compensation Unit"), consisting of one (1) Common Share and one-half of one Common Share purchase warrant of the Company (each whole Common Share purchase warrant, a "Compensation Warrant"). Each Compensation Warrant is exercisable to acquire one Common Share of the Company (a "Compensation Warrant Share") at a price of $0.25 per Compensation Warrant Share for a period of 36 months following the date of issuance. The Agent also earned a corporate finance fee, consisting of: (i) $50,000 (payable in cash); and (ii) 294,118 Compensation Units. The securities issued to the Agents are subject to resale restrictions for four months and a day after the date hereof.

BMO Credit Facilities

To facilitate the Acquisition, Coho Acquisition Corp. (the "Purchaser"), Coho's wholly owned subsidiary, secured credit facilities from the Bank of Montreal ("BMO" or the "Lender"), which will provide up to $5.9 million in senior secured credit facilities (the "Facilities") to the Purchaser.

The Facilities consist of a $5.5 million non-revolving term facility (the "Term Facility"), a $300,000 revolving facility (the "Revolving Facility"), and a $100,000 corporate credit card facility. The Term Facility and Revolving Facility were used to finance a portion of the cash purchase price paid in connection with the Acquisition, and will also be used for general corporate purposes.

The Term Facility and Revolving Facility bear interest at a rate of interest not to exceed prime plus 125 basis points. The Term Facility will amortize monthly beginning in the first full quarter following the Closing Date, with repayments of the Term Facility made over an 84 month period. The Revolving Facility is repayable on demand. Interest on the Facilities will be payable monthly in arrears. The Facilities are secured by a first ranking security interest over all present and after-acquired personal property of the Purchaser, which holds all of the issued and outstanding shares of Purebread following the Acquisition.

The closing of the Facilities occurred contemporaneously with the Acquisition and the Offering.

Finder's Fee

In connection with the Acquisition, Coho also paid a finder's fee to the Agent on the Closing Date. The Finder's Fee consisted of 2,500,000 Common Shares and 2,500,000 Common Share purchase warrants (the "Finder's Warrants"). The Finder's Warrants are convertible into Common Shares, have an exercise price of $0.40 per Finder's Warrant, and will expire three years from the Closing Date.

Advisors

Fasken Martineau DuMoulin LLP acted as legal advisor to Coho. Canaccord Genuity Corp. acted as agent in connection with the Offering. DLA Piper (Canada) LLP acted as legal advisor to the Agent. Borden Ladner Gervais LLP acted as legal advisor to BMO. Relay Transition Partners acted as financial advisor to Purebread, while Clark Wilson LLP served as legal advisor to Purebread.

About Coho Collective Kitchens Inc.

Coho is a growing player in commercial real estate and food technology, operating fast casual restaurants and shared-kitchen facilities. As Canada's largest shared-kitchen company, Coho is expanding its presence and services. Through their combined efforts, Coho and Purebread strive to positively impact the communities in which they operate.

For more information, please visit cohocollectivekitchens.com.

For more information:

Andrew Barnes, Chief Executive Officer
Coho Collective Kitchens
andrew@cohocommissary.com
(778) 877-6513

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 NEWS RELEASE.

Non-IFRS Financial Measures

We report our financial results in accordance with IFRS. This press release was prepared using results and financial information determined under IFRS. In addition to IFRS financial measures, this press release also contains non-IFRS financial measures, non-IFRS ratios, capital management measures and other supplementary financial measures used by management to assess the Company's operational performance including EBITDA and Adjusted EBITDA.

These measures do not have a standardized meaning under IFRS. It is likely that the non-IFRS financial measures used by the Company will not be comparable to similar measures reported by other issuers or those used by financial analysts as their measures may have different definitions. The measures used by the Company are intended to provide additional information and should not be considered in isolation or as a substitute for IFRS financial performance measures.

Generally, a non-IFRS financial measure is a numerical measure of an entity's historical or future financial performance, financial position or cash flows that is neither calculated nor recognized under IFRS. Management believes that such non-IFRS financial measures are important as they provide readers with a better understanding of the results of our recurring operations and their related trends, while increasing transparency and clarity into our operating results. Management also believes these measures to be useful in assessing the Company's capacity to fulfill its financial obligations.

EBITDA is defined as earnings before interest, income taxes, depreciation and amortization. Adjusted EBITDA adjusts EBITDA for one-time and incremental costs for new locations, provisions for operational and financial oversight, and certain other costs. A reconciliation of Purebread's Adjusted EBITDA to net income determined in accordance with IFRS is provided for the periods presented.

Cautionary Statements Regarding Forward-Looking Information

Any "financial outlook" or "future oriented financial information" in this press release, as defined by applicable securities legislation, including (but not limited to) future revenues of Coho or Purebread, the future revenue of Purebread's location at the Vancouver International Airport, and the combined profitability of Coho and Purebread following the Acquisition has been approved by management of Coho. Readers are cautioned that any such financial outlook or future oriented financial information contained herein is provided for the purpose of providing information about management's current expectations and plans relating to the future. Coho and its management believe that the prospective financial information has been prepared on a reasonable basis, reflecting management's best estimates and judgments, and represent, to the best of management's knowledge and opinion, Coho's expected course of action. However, because this information is highly subjective, it should not be relied on as necessarily indicative of future activities or results.

This press release may contain "forward-looking statements" within the meaning of applicable Canadian securities laws, including, without limitation, the impact of the Acquisition on the Company's business and its growth plans; the costs savings and synergies anticipated from the Acquisition, the future success of Purebread's YVR location; and the Company's growth and acquisition plans in general.

Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management, are inherently subject to significant business, economic and competitive uncertainties, and contingencies. These statements generally can be identified by the use of forward-looking words such as "may", "should", "will", "could", "intend", "estimate", "plan", "anticipate", "expect", "believe" or "continue", or the negative thereof or similar variations. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause future results, performance or achievements to be materially different from the estimated future results, performance or achievements expressed or implied by those forward-looking statements and the forward-looking statements are not guarantees of future performance.

Coho's statements expressed or implied by these forward-looking statements are subject to a number of risks, uncertainties, and conditions, many of which are outside of Coho's control, and undue reliance should not be placed on such statements. Forward-looking statements are qualified in their entirety by the inherent risks and uncertainties surrounding the Acquisition, including: that the actual impact of the Acquisition on Coho's business and growth strategy will not be as currently anticipated; that Coho's other assumptions in making forward-looking statements may prove to be incorrect; adverse market conditions; Coho's actual use of any proceeds referenced herein; risks inherent in the ghost-kitchen, retail bakery, or coffeehouse sectors in general; that future results may vary from historical results; and competition in the markets where Coho operates. Except as required by securities law, Coho does not assume any obligation to update or revise any forward-looking statements, whether as a result of new information, events or otherwise.

No securities regulatory authority has either approved or disapproved the contents of this press release. This press release does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale or any acceptance of an offer to buy these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

All financial figures are approximate and in Canadian dollars, unless otherwise noted.

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