Sproutly Announces Financial Results for the Fiscal Year 2020, Postponement of Executive Compensation Disclosure and Board Reorganization

Sproutly Canada, Inc. (CSE: SPR) (OTCQB: SRUTF) (FRA: 38G) (“Sproutly" or the “Company”) today announced the Company’s financial results for the fiscal year ended February 29, 2020, as well as a postponement of executive compensation disclosure and a Board reorganization.

“Although we were making progress with sales of our CALIBER indoor-grown Berry White and Lemon Z strains being sold into five provinces, the COVID-19 pandemic had a significant impact on our operations,” said Dr. Arup Sen, Chief Executive Officer of Sproutly. “As a result, we implemented the Business Transformation Plan and shifted our primary focus to our APP technology while minimizing our cost structure. We are now focused on using our naturally water soluble Infuz2O and BioNatural oils in unique Cannabis 2.0 edible and beverage products.”

Highlights for the Fourth Quarter Ended February 29, 2020

• The Company’s licensed subsidiary, Toronto Herbal Remedies (“THR”), entered into a cannabis standing offer contract with the province of Alberta from Alberta Gaming, Liquor & Cannabis (“AGLC”), the province’s wholesaler and operator of Alberta’s only legal online recreational cannabis store, AlbertaCannabis.org.
• THR entered into a cannabis supply agreement in the province of New Brunswick through Cannabis NB (“CNB”) as of December 5th, 2019.
• The Company delivered its first shipment of CALIBER flower to both ALGC and CNB, marking its entrance into Canada’s recreational cannabis market.
• The Company secured a private loan of $1 million from Infusion Biosciences Inc., a related party of the Company.

Subsequent Events

• THR entered into cannabis supply agreements with the provinces of British Columbia, Manitoba and Saskatchewan, through the British Columbia Liquor Distribution Branch, the Manitoba Liquor and Lotteries Corporation and the Saskatchewan Liquor and Gaming Authority, respectively. These are the 3^rd, 4^th and 5^th provinces in Canada to carry the Company’s CALIBER branded indoor-grown dried flower products.
• The Company amended the conversion price of its previously issued convertible debentures from a price of $0.75 per common share to $0.105 per share.
• The Company commenced a Business Transformation Plan. The key aspects are:
  • Appointing Dr. Arup Sen as CEO, replacing Keith Dolo
  • Implementing a reduction in its staffing by 75% and cutback in cultivation output
  • Infusion Biosciences has provided a letter of intent to invest up to an additional $855,000. The investment will be made by way of issuance of convertible debentures (the “Convertible Debentures”). The Convertible Debentures will bear an accrued interest rate of 15% and be exchangeable into units at a price of $0.07 per unit (the “Units”). The Units consist of one common share and one common share purchase warrant, with each warrant allowing the holder to purchase one common share at a price of $0.08.
• The Company reorganized their Board of Directors. Michael Bellas, Gregg Orr and Justin Kates departed, with Craig Loverock and Paul Marcellino joining the Board.

Postponement of Executive Compensation Disclosure