PTN.P Proton Capital Corp

PROTON CAPITAL CORP. (“Proton”) (PTN.P-TSX-V) is pleased to announce the signing of a Letter of Intent dated April 20, 2023 (the “LOI”) with PharmaChoice Canada Inc. (“PharmaChoice”, and together with Proton, collectively the “Parties”). The LOI contemplates terms and conditions subject to: (i) the negotiation and finalization of definitive agreements (the “Definitive Agreements”) between the Parties and (ii) the acquisition and operation by Proton of an independently owned PharmaChoice brand pharmacy or pharmacies pursuant to the terms of the Definitive Agreements, both of which together will constitute the qualifying transaction of Proton (the “Transaction”) pursuant to the policies of the TSX Venture Exchange (the “TSXV”). The LOI focuses on the purchase by Proton of independently owned PharmaChoice branded pharmacies aspect of the Transaction. Proton advises that it has not yet entered into any agreement, letter of intent, term sheet or other arrangement in relation to the acquisition of an independently owned PharmaChoice branded operating pharmacy or pharmacies.‎ The Transaction will be an Arm’s Length Transaction under the policies of the TSXV.

Terms of the Transaction

Subject to the completion of Definitive Agreements, Proton’s business shall be the acquisition of independently owned and branded PharmaChoice pharmacies as they come to market in the normal course of business, and thereafter, to continue to operate such acquired pharmacies under a PharmaChoice banner. The LOI further stipulates the terms and conditions that will have PharmaChoice assign to Proton a right-of-first refusal (“ROFR”) to acquire PharmaChoice bannered pharmacies under certain conditions applicable to such ROFR, as such pharmacies come to market.

It is also anticipated that Proton may acquire third-party owned non-PharmaChoice branded pharmacies in Canada. Upon execution of the contemplated Definitive Agreements and the subsequent completion of the qualifying transaction, Proton shall undergo a change of name that reflects its business interests in the pharmacy industry in Canada.

Pursuant to the LOI, PharmaChoice has agreed to an exclusivity period of 30 months (the “Exclusivity Period”) from April 20, 2023 (the “Effective Date” of the LOI ) where PharmaChoice will deal exclusively with Proton regarding the transactions contemplated in the LOI and will not initiate or continue discussions with third parties regarding such transactions (the “Standstill”). If PharmaChoice terminates the LOI or otherwise does not complete the Transaction, PharmaChoice has agreed to pay Proton a break fee. Notwithstanding such obligation to pay such break fee, if PharmaChoice breaches the Standstill provisions during the Exclusivity Period, then Proton shall be entitled to any remedy available to it at law or in equity, including damages and/or an injunction, ‎specific performance and other equitable relief to prevent such breaches.

Conditions

The LOI has a term of one year from the Effective Date. Completion of the Transaction is subject to the execution of Definitive Agreements and the conditions contained therein, which will include: the final agreed upon Transaction terms and conditions, ‎and such other mutually acceptable terms and conditions ‎as the Parties may agree, including such terms, conditions, ‎representations, warranties, indemnities and covenants as ‎are customary in transactions similar to the ‎Transaction.

Sponsorship

Sponsorship of a qualifying transaction of a capital pool company is required by the TSXV unless exempt in accordance with TSXV policies. Proton intends to apply for an exemption from the sponsorship requirements. However, there is no assurance that it will be able to obtain this exemption.

Other Information

Completion of the Transaction is subject to a number of conditions, including but not limited to, TSXV acceptance and, if applicable pursuant to TSXV Requirements, majority of the minority shareholder approval. Where applicable, the Transaction cannot close until the required shareholder approval is obtained.

There can be no assurance that the Transaction will be completed as proposed or at all. Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the Transaction, any information released or received with respect to the Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.

The TSXV has in no way passed upon the merits of the proposed Transaction and has neither approved nor disapproved the contents of this news release.

In addition, Proton has not entered into any agreement, letter of intent, term sheet or other arrangement in relation to the acquisition of an operating pharmacy or pharmacies, which acquisition is required for the completion of the qualifying transaction of Proton. As such, there is no guarantee that Proton will enter into such an acquisition agreement as described above or at all, and that the Transaction may not be completed as described above or at all.

If and when Definitive Agreements are executed, Proton will issue a subsequent news release in accordance with the policies of the TSXV including containing details of the Definitive Agreements and additional terms and conditions of the Transaction, including information relating to the acquisition of a pharmacy or pharmacies, summary financial information and other information in respect of such acquisition, proposed terms of any concurrent private placement, and the proposed directors, officers, and insiders of the resulting issuer upon completion of the Transaction.

In accordance with the policies of the TSXV, the common shares of Proton are currently halted from trading and will remain halted until further notice.

About PharmaChoice Canada Inc.

PharmaChoice Canada Inc. is a corporation operating as a shareholder owned buying group comprised of approximately 1,050 independent pharmacies in Canada. Headquartered in Saskatoon, Saskatchewan and Halifax, Nova Scotia, PharmaChoice is the 8th largest pharmacy banner in North America by store count, the 3rd largest in Canada, and the fastest growing pharmacy banner in Canada over the last six years.

PharmaChoice licenses pharmacy brands to independent pharmacy owners in Canada.

About Proton Capital Corp.

Proton was incorporated on September 1, 2021 by certificate of incorporation issued pursuant to the provisions of the Business Corporations Act (Alberta). Proton is classified as a Capital Pool Company (“CPC”) as defined in Policy 2.4 of the TSXV. The principal business of Proton is to identify and evaluate assets or businesses with a view to potentially acquire them or an interest therein by completing a purchase transaction, by exercising of an option or by any concomitant transaction. The purpose of such an acquisition is to satisfy the related conditions of a “qualifying transaction” as defined under TSXV policies. Proton’s shares trade on the TSXV under the trading symbol: PTN.P

For further information, contact:Mr. Alan Simpson3603 Selinger CrescentRegina, Saskatchewan S4V 2H7 Tel: (306) 536-3771

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 release.

Forward-Looking Information: This news release contains “forward-looking information” within the meaning of applicable Canadian securities legislation. All statements, other than statements of historical fact, included herein are forward-looking information. In particular, this news release contains forward-looking information in relation to: the the LOI, the finalization of Definitive Agreements, the proposed Transaction and the potential completion of the proposed Transaction, including, the potential ‎acquisition of independently owned PharmaChoice branded operating pharmacies, the entering into of any agreement, letter of intent, term sheet or other arrangement in relation to the acquisition of an independently owned PharmaChoice branded operating pharmacy or pharmacies, the execution of Definitive Agreements, the potential completion of a qualifying transaction, Proton’s potential business upon the completion of the proposed Transaction being the acquisition and operation of pharmacies under the PharmaChoice brand, the assignment by PharmaChoice of the ROFRs to Proton and the acquisition of pharmacies pursuant to the terms of the ROFRs, the acquisition of non-PharmaChoice branded pharmacies, the potential name change of Proton upon completion of the proposed Transaction, the potential conditions and satisfaction of those conditions for the completion of the proposed Transaction, and the issuance of a further news release upon the execution of Definitive Agreements and the inclusion of additional information in such news release. This forward-looking information reflects Proton’s current beliefs and is based on information currently available to Proton and on assumptions Proton believes are reasonable. These assumptions include, but are not limited to: the execution of Definitive Agreements; Proton negotiating and executing an agreement with a PharmaChoice branded pharmacy or pharmacies which will constitute part of the qualifying transaction of Proton; the ability to enter into subsequent purchase agreements to purchase PharmaChoice branded pharmacies pursuant to the Definitive Agreements and the ROFNs; the ability to purchase non-PharmaChoice branded pharmacies; the satisfaction of any conditions to the Transaction set forth in the LOI and the Definitive Agreements, including, without limitation, the acceptance of the proposed Transaction by the TSXV and typical closing conditions; the completion of satisfactory due diligence by Proton in relation to proposed Transaction; the receipt of all required approvals for the proposed Transaction‎, including TSXV acceptance and any board approvals or third party consents; market acceptance of the proposed Transaction‎; and acceptable financing to complete the proposed Transaction‎. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Proton to be materially different from those expressed or implied by such forward-looking information. Such risks and other factors may include, but are not limited to: general business, economic, competitive, political and social uncertainties; general capital market conditions and market prices for securities; delay or failure to receive board of directors, third party or regulatory approvals; competition; changes in legislation, including environmental legislation, affecting Proton; the timing and availability of external financing on acceptable terms; conclusions of economic evaluations and appraisals; lack of qualified, skilled labour or loss of key individuals; risks related to the COVID-19 pandemic including various recommendations, orders and measures of governmental authorities to try to limit the pandemic, including travel restrictions, border closures, non-essential business closures, service disruptions, quarantines, self-isolations, shelters-in-place and social distancing, mandatory vaccination policies, disruptions to markets, economic activity, financing, supply chains and sales channels, and a deterioration of general economic conditions including a possible national or global recession. A description of additional risk factors that may cause actual results to differ materially from forward-looking information can be found in Proton’s disclosure documents on the SEDAR website at www.sedar.com. Although Proton has attempted to identify important risks and factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. Readers are cautioned that the foregoing list of factors is not exhaustive. Readers are further cautioned not to place undue reliance on forward-looking information as there can be no assurance that the plans, intentions or expectations upon which they are placed will occur. Forward-looking information contained in this news release is expressly qualified by this cautionary statement. The forward-looking information contained in this news release represents the expectations of Proton as of the date of this news release and, accordingly, is subject to change after such date. However, Proton expressly disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable securities law.