PATHWAY HEALTH CORP. PROVIDES UPDATE ON PROPOSED BUSINESS ACQUISITION, RECAPITALIZATION AND DEBT RESTRUCTURING

TORONTO, March 1, 2023 /CNW/ - Pathway Health Corp. (TSXV: PHC) (Frankfurt: KL1) ("Pathway" or the "Corporation") is pleased to provide an update on its proposed acquisition of all the issued and outstanding common shares of each of HEAL Global Holdings Corp. ("HEAL") and The Newly Institute Inc. ("The Newly") from their respective shareholders in exchange for common shares in the capital of Pathway to be completed by way of an arrangement ("Proposed Transaction") pursuant to a plan of arrangement under the Business Corporations Act (Alberta) (see press release dated December 22, 2022).

The parties continue to work together in the advancement of due diligence activities, as well as other matters contemplated by the non-binding letter of intent dated December 16, 2022 (the "Original LOI") in fulfilment of the Proposed Transaction. On January 31, 2023 and February 28, 2023, respectively, the parties signed an amending agreement and second amending agreement (collectively, the "LOI Amending Agreements", and together with the Original LOI, the "LOI") in each case to extend certain deadlines as set out in the Original LOI. Pursuant to the terms of the LOI Amending Agreements, the parties agreed, among other things, to extend the date upon which the LOI may be terminated upon written notice by any party in the event a definitive agreement for the Proposed Transaction has not been entered into (the "Termination Date"). In accordance with the terms of the LOI Amending Agreements, the Termination Date was extended from January 31, 2023 to February 28, 2023, and subsequently to March 31, 2023 (the "Extension"). In consideration of the Extension, and the measurable benefit received by the Corporation in light of its financial circumstances, Pathway agreed to pay to HEAL a one-time fee (the "Deal Extension Fee") in the amount of CDN$1,140,510, the payment of which is to be made in connection with completion of the Proposed Transaction.  Pathway may, in accordance with applicable corporate and securities laws and regulatory approvals, satisfy the Deal Extension Fee in full by issuing to HEAL in connection with the completion of the Proposed Transaction, that number of Pathway common shares calculated by dividing the aggregate Deal Extension Fee by $0.05.  Mainly due to negotiated adjustments in the relative valuations of all three parties, management currently anticipates the current holders of Pathway shares would own more than the previously announced estimated 34% of the issued and outstanding shares of the resulting issuer after giving effect to the Proposed Transaction, taking into account the extension fee and the additional convertible bridge loan announced on February 3, 2023. 

The Corporation expects to announce additional details regarding the Proposed Transaction when a definitive agreement is executed, which is expected in Q1 2023.  No assurances can be made that the parties will successfully negotiate and enter into a definitive agreement, or that the Proposed Transaction will be consummated on the terms or timeframe currently contemplated, or at all. 

About Pathway

Pathway is an integrated healthcare company that provides products and services to patients suffering from chronic pain and related conditions. The Corporation owns and operates eleven community-based clinics across four provinces where its team of health professionals work together to help patients through a variety of evidence-based approaches and products, including medical cannabis. Pathway's patient care programs utilize an interdisciplinary approach that is guided by trained pain specialists, physical and occupational therapists, psychologists, nurses, and other healthcare providers. Pathway is also the leading provider of medical cannabis services in Canada and has established itself as the leading partner with national and regional pharmacy companies for the delivery of medical cannabis services to their customers. Pathway is working with several pharmacy companies on the development of Cannabis Health Products (CHPs) for OTC product distribution through retail pharmacy locations across the country following anticipated changes to the Cannabis Act (Canada).

For more information, visit Pathway's website: www.pathwayhealth.ca 

About The Newly Institute

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

The company strives to become Canada's largest and premier operator of inter-disciplinary mental health clinics.  They currently operate clinics in Calgary, Fredericton, and Edmonton with additional locations planned across Canada.

For more information, visit The Newly Institute's website: www.thenewly.ca

About HEAL

HEAL, a privately held company existing under the laws of the Province of Alberta, was established with the goal of becoming a global leader in personalized, curated healthcare. 

Cautionary Note Regarding Forward Looking Statements

This news release includes certain "forward-looking statements" under applicable Canadian securities legislation, including statements with respect to the Proposed Transaction, the intention and timing of entering into a definitive agreement with respect to the Proposed Transaction, the completion thereof and the timing and payment of the Deal Extension Fee. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors that may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include but are not limited to: the ability of Pathway, HEAL and The Newly to negotiate satisfactory terms for, and to execute, a definitive agreement for the Proposed Transaction; the satisfaction of all conditions precedent to the completion of the Proposed Transaction, including receipt of all regulatory and shareholder approvals; the Corporation's ability to continue as a going concern, general business, economic, competitive, political, and social uncertainties; delay or failure to receive applicable approvals; and the results of operations. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Pathway disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Neither the Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Exchange) accepts responsibility for the adequacy or accuracy of this Press Release. The TSX Venture Exchange Inc. has in no way passed upon the merits of the Proposed Transaction and has neither approved nor disapproved the contents of this press release.

SOURCE Pathway Health Corp.

Robin Cook, Corporate Development, [phone], [email protected]