Coho Collective Kitchens Announces Agreement to Acquire Purebread, BMO Credit Facilities, and Equity Financing Transaction

Vancouver, British Columbia--(May 29, 2023) - Coho Collective Kitchens Inc. (TSXV: COHO) ("Coho" or the "Company") is pleased to announce that it has entered into a definitive purchase agreement dated May 28, 2023 (the "Purchase Agreement") with Twin Lakes Investments Inc., Paula Lamming, Mark Lamming, Jack Lamming (collectively, the "Vendors"), Purebread. Bakery Inc. ("Purebread"), and Coho Acquisition Corp. for the purchase of Purebread.

Under the Purchase Agreement, Coho Acquisition Corp., Coho's wholly owned subsidiary, will acquire all of the issued and outstanding securities of Purebread from the Vendors (the "Acquisition"). The Purchase Agreement provides for cash consideration of $10 million (subject to customary adjustments) (the "Cash Purchase Price") and the issuance of one million common shares of Coho ("Common Shares") with an aggregate value of approximately $220,000 (the "Consideration Shares" and, together with the Cash Purchase Price, the "Purchase Price") based on the closing price of the Common Shares ($0.22) on the TSXV on May 26, 2023. The Purchase Price will be paid to each of the Vendors based on the pro-rata ownership of Purebread immediately prior to Closing. Purebread and the Vendors are arm's length parties to Coho.

About Purebread

Purebread is one of Canada's fastest growing and most respected independent bakery and cafe businesses. Purebread's existing team currently operates six locations and will work with Coho following the closing of the Acquisition ("Closing"). Following Closing, it is expected that Purebread's existing team will continue to operate the brand under its current name, with plans to expand operations nationally. Purebread is currently generating annual revenue of over $10 million1, with a strong profit margin and clear path to scale. A new location at the Vancouver International Airport is expected to open in June 2023, and it is expected this location could increase Purebread's annual revenue by as much as $3.5 million.

Coho CEO Andrew Barnes commented, "Through this acquisition, we will strive to expand Purebread's brand presence throughout Canada, leveraging Coho's established network to propel Purebread forward. We acknowledge the incredible work undertaken by the Purebread team to establish the brand and the business and now we aim to grow its reach."

Coho sees the Acquisition as an opportunity for Purebread and Coho to leverage their resources, infrastructure, and expertise to accelerate their combined growth and profitability.

Following Closing, 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.

Paula Lamming, co-founder of Purebread commented, "Purebread is extremely excited for this new phase given Coho's potential to provide Purebread with the resources and capital for expansion into a broader market. Coho shares our high standards for quality products and service." Co-founder, Mark Lamming, added, "Coho's experience in the foodservice industry will enable Purebread to expand its footprint to grow our customer base nationwide. We are also excited about the future growth opportunities this transaction will create for our team."

The Acquisition marks a major milestone for Coho, which has experienced rapid growth since its founding in 2018. Coho is Canada's largest shared kitchen space operator, supporting over 100 local food businesses in British Columbia.

Acquisition Summary

Under the terms of the Purchase Agreement, Coho will acquire all issued and outstanding securities of Purebread (the "Purchased Shares") in exchange for the Purchase Price. The Consideration Shares forming part of the Purchase Price will be subject to a twelve month lock-up, during which time the Vendors agree that they will not, directly or indirectly, sell or agree to sell any of the Consideration Shares or securities exchangeable or exercisable for Consideration Shares.

On Closing, Paula Lamming and Mark Lamming, co-founders of Purebread, will enter into consulting agreements with Coho.

Coho will also pay a finder's fee to Canaccord Genuity Corp. (the "Finder's Fee") on Closing. Subject to the approval of the TSXV, the Finder's Fee will consist of 2,500,000 Common Shares and 2,500,000 Common Share purchase warrants (the "Finder's Warrants"). The Finder's Warrants have an exercise price of $0.40 and will expire three years from the date of Closing.

Closing of the Acquisition is expected to occur on or before July 31, 2023. Closing of the Acquisition is subject to certain conditions including, but not limited to: (i) the closing of the Equity Financing (defined below); (ii) the closing of the Facilities (defined below); (iii) the receipt of all necessary consents, regulatory approvals, and authorizations (including the approval of the TSXV); and (iv) all other conditions which are customary for a transaction of this nature. Closing of the Acquisition is expected to occur contemporaneously with the closing of the Equity Financing and the Facilities. Coho expects to provide additional details regarding the Acquisition in a forthcoming news release and corporate presentation.

BMO Credit Facilities

In order to complete the Acquisition, Coho Acquisition Corp. has entered into a letter of agreement with the Bank of Montreal ("BMO" or the "Lender"), setting out the terms under which BMO will provide up to $5.9 million in senior secured credit facilities (the "Facilities"). The Facilities will 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 are intended to be used to finance a portion of the Cash Purchase Price and for general corporate purposes. The Term Facility and Revolving Facility will bear interest at a rate not to exceed prime plus 125 basis points. The Term Facility will amortize monthly beginning the first full quarter following Closing, 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. On Closing, it is expected that the Facilities will be secured by a first ranking security interest over all present and after-acquired personal property of Coho Acquisition Corp., which entity will hold all of the issued and outstanding shares of Purebread on Closing.

The closing of the Facilities is expected to occur contemporaneously with or prior to the Acquisition, and will be subject to customary closing conditions including, but not limited to, the receipt of certain third party consents and the approval of the TSXV.

Financing for the Acquisition

Contemporaneously with or prior to the Acquisition, Coho expects to complete a marketed equity financing to raise proceeds that are intended to be used to finance a portion of the Cash Purchase Price and for general corporate purposes (the "Equity Financing").

The Equity Financing is expected to be subject to customary closing conditions including, but not limited to, the receipt of all necessary regulatory and stock exchange approvals, including the approval of the TSXV and the applicable securities regulatory authorities. Further details regarding the Equity Financing will be announced once the final terms of the Equity Financing have been determined.

Per: "Andrew Barnes"

Andrew Barnes
Chief Executive Officer and Director

Advisors

Relay Transition Partners is acting as financial advisor to Purebread, while Clark Wilson LLP is serving as legal counsel to Purebread. Fasken Martineau DuMoulin LLP is acting as legal advisor to Coho.

About Coho

Coho is a growth stage, community-driven, commercial real estate and food technology company that provides private and shared kitchen and production space to food companies from start-ups to restaurant groups seeking turnkey solutions and business services. Each of the Company's customers, called "Members", are revenue generating companies that have signed a membership agreement with Coho for an agreed upon term. The concept falls in line with a rapidly growing trend in the food-delivery industry creating a market for delivery-only and/or virtual restaurant concepts. For more information about how Coho is growing and innovating in the commissary space, visit https://www.cohocommissary.com.

Contacts

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

Investor Relations
invest@cohocommissary.com
(604) 243-7355

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 upcoming location at the Vancouver International Airport, and the combined profitability of Coho and Purebread following an 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, our statements related to: the closing of the transactions contemplated by the Acquisition, the Equity Financing and the Facilities; the impact of the Acquisition on the Company's business and its growth plans; the costs savings and synergies anticipated from the Acquisition, 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 Coho will not be able to complete the Acquisition, the Equity Financing, or the Facilities on the terms announced, within the anticipated timeline, or at all; 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; that the parties may not obtain all required consents or approvals for the Acquisition (including the approval of the TSXV); 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.

Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.

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.

THIS PRESS RELEASE IS INTENDED FOR DISTRIBUTION IN CANADA ONLY AND IS NOT INTENDED FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES.

1 This figure is sourced from unaudited financial statements of Purebread.