CANN GROUP LIMITED — Capital/Financing Update 2023

Nov 20, 2023

Proposed issue of securities

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Announcement Summary

Entity name

CANN GROUP LIMITED

Announcement Type

New announcement

Date of this announcement

21/11/2023

The Proposed issue is:

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A placement or other type of issue

Total number of +securities proposed to be issued for a placement or other type of issue

		Maximum Number of
ASX +security code	+Security description	+securities to be issued
New class-code to be	Convertible notes	1,320,000
confirmed

Proposed +issue date

22/11/2023

Refer to next page for full details of the announcement

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Part 1 - Entity and announcement details

1.1 Name of +Entity

CANN GROUP LIMITED

We (the entity named above) give ASX the following information about a proposed issue of +securities and, if ASX agrees to +quote any of the +securities (including any rights) on a +deferred settlement basis, we agree to the matters set out in Appendix 3B of the ASX Listing Rules.

If the +securities are being offered under a +disclosure document or +PDS and are intended to be quoted on ASX, we also apply for quotation of all of the +securities that may be issued under the +disclosure document or +PDS on the terms set out in Appendix 2A of the ASX Listing Rules (on the understanding that once the final number of +securities issued under the +disclosure document or +PDS is known, in accordance with Listing Rule 3.10.3C, we will complete and lodge with ASX an Appendix 2A online form notifying ASX of their issue and applying for their quotation).

1.2 Registered Number Type

ACN

Registration Number

603949739

1.3 ASX issuer code

CAN

1.4 The announcement is

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New announcement

1.5 Date of this announcement

21/11/2023

1.6 The Proposed issue is:

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A placement or other type of issue

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Part 7 - Details of proposed placement or other issue

Part 7A - Conditions

7A.1 Do any external approvals need to be obtained or other conditions satisfied before the placement or other type of issue can proceed on an unconditional basis? No

Part 7B - Issue details

Is the proposed security a 'New	Will the proposed issue of this
class' (+securities in a class that is	+security include an offer of
not yet quoted or recorded by ASX)	attaching +securities?
or an 'Existing class' (additional	No
securities in a class that is already
quoted or recorded by ASX)?
New class

Details of +securities proposed to be issued

ISIN Code (if Issuer is a foreign company and +securities are non CDIs)

Have you received confirmation from ASX that the terms of the proposed +securities are appropriate and equitable under listing rule 6.1? Will the entity be seeking quotation of the 'new' class of +securities on ASX? ASX +security code New class-code to be confirmed +Security description Convertible notes No Yes	Have you received confirmation from ASX that the terms of the proposed +securities are appropriate and equitable under listing rule 6.1? Will the entity be seeking quotation of the 'new' class of +securities on ASX? ASX +security code New class-code to be confirmed +Security description Convertible notes No Yes
New class-code to be confirmed	Convertible notes

+Security type

+Convertible debt securities

Number of +securities proposed to be issued

1,320,000

Offer price details

Are the +securities proposed to be issued being issued for a cash consideration? Yes

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In what currency is the cash What is the issue price per consideration being paid? +security? AUD - Australian Dollar AUD 1.53000

Will all the +securities issued in this class rank equally in all respects from their issue date? Yes

+Convertible debt securities details

These securities are: Type of security Convertible Convertible note or bond +Security currency Face value USD - US Dollar USD 1.1500 Interest rate type Zero coupon/no interest Frequency of coupon/interest payments per year No coupon/interest payments

s128F of the Income Tax Assessment Act status applicable to the +security s128F exempt Is the +security perpetual (ie. no Maturity date maturity date)? 22/5/2025 No Select other features applicable to the +security None of the above Is there a first trigger date on which a right of conversion, redemption, call or put can be exercised (whichever is first)? No

Details of the type of +security that will be issued if the securities are converted, transformed or exchanged

CAN : ORDINARY FULLY PAID

Number of +securities that will be issued if the +securities are converted, transformed or exchanged (including, if applicable, any interest)

1,320,000 convertible notes will convert to a maximum of 34,696,095 ordinary shares.

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Please provide a URL link for a document lodged with ASX setting out the material terms of the +securities proposed to be issued or provide the information by separate announcement.

Please see announcement lodged 21 November 2023 setting out the terms of the agreement https://investors.canngroupli mited.com/Investors/

Part 7C - Timetable

7C.1 Proposed +issue date

22/11/2023

Part 7D - Listing Rule requirements

7D.1 Has the entity obtained, or is it obtaining, +security holder approval for the entire issue under listing rule 7.1? No

7D.1b Are any of the +securities proposed to be issued without +security holder approval using the entity's 15% placement capacity under listing rule 7.1? Yes

7D.1b ( i ) How many +securities are proposed to be issued without security holder approval using the entity's 15% placement capacity under listing rule 7.1?

1,320,000 convertible notes will convert to a maximum of 34,696,095 ordinary shares.

7D.1c Are any of the +securities proposed to be issued without +security holder approval using the entity's additional 10% placement capacity under listing rule 7.1A (if applicable)? No

7D.2 Is a party referred to in listing rule 10.11 participating in the proposed issue? No

7D.3 Will any of the +securities to be issued be +restricted securities for the purposes of the listing rules? No

7D.4 Will any of the +securities to be issued be subject to +voluntary escrow? No

Part 7E - Fees and expenses

7E.1 Will there be a lead manager or broker to the proposed issue? Yes

7E.1a Who is the lead manager/broker?

EverBlu Corporate Capital

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7E.1b What fee, commission or other consideration is payable to them for acting as lead manager/broker?

6% cash fee on funds raised 2% paid in shares on total facility limit

Subject to shareholder approval 6,735,867 unquoted options on the same terms as Obsidian. Please refer to material terms in announcement lodged 21 November 2023.

7E.2 Is the proposed issue to be underwritten? No

7E.4 Details of any other material fees or costs to be incurred by the entity in connection with the proposed issue

Part 7F - Further Information

7F.01 The purpose(s) for which the entity is issuing the securities

The Company is entering into the Convertible Securities Agreement to provide working capital to assist in achieving its scale up of its Mildura facility.

7F.1 Will the entity be changing its dividend/distribution policy if the proposed issue proceeds? No

7F.2 Any other information the entity wishes to provide about the proposed issue

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