Kelly Ventures Ltd. — M&A Activity 2020

Dec 21, 2020

KELLY VENTURES LTD.

Suite 615 – 800 West Pender Street Vancouver, British Columbia V6C 2V6 T: 604 687 7767 F: 604 688 9895

NEWS RELEASE

December 21, 2020

TSXV: KKL.P

KELLY VENTURES TO ACQUIRE EBERS TECH INC. AS QUALIFYING TRANSACTION

Not for distribution to United States newswire services or for dissemination in the United States.

Vancouver, B.C., December 21, 2020 – Kelly Ventures Ltd (TSX-V: KKL.P) (the “ Company ” or “ KKL ”), a capital pool company listed on the TSX Venture Exchange (the “ TSXV ”), is pleased to announce that it has signed a Letter of Intent (“LOI”) dated December 18, 2020, pursuant to which the Company will acquire all of the outstanding shares of Ebers Tech Inc. (“ Ebers ”). The parties intend to complete a business combination or other similarly structured transaction which will constitute a reverse take-over of KKL. The Proposed Transaction is intended to be an arm’s length Qualifying Transaction (the “ Qualifying Transaction ”) for the Company as defined under TSXV policies.

Ebers is a Canadian registered Pharma Tech company, with a portfolio of patents and development methods for producing cocrystals. Ebers is strategically positioned at the nexus of the big pharmaceutical and cocrystal industries, enabling the Company to play a crucial role in the development of the next generation of pharmaceuticals and therapies, and to simultaneously exploit the rapidly advancing cannabinoid and psilocybin cocrystal, pharmaceutical and wellness areas. Of these, the most widely studied and used application is in drug development and more specifically, the formation, design, and implementation of active pharmaceutical ingredients (“API").

Improved Drug Performance and Consistency

Cocrystallisation enables the development of drugs with superior physicochemical properties of the API while holding the properties of the drug molecule itself constant. Big Pharma depends upon consistency and stability to patent, mass produce and distribute new synthetic products that have the same benefits as the original organic product.

Cocrystal structures have also become a staple for drug development. Cocrystallisation is synthetically and systematically used to reproduce various natural drugs and medicines, often at reduced costs. Cocrystalization allows for the replication of a variable, naturally organic, product into consistent, synthetic product while simultaneously improving drug criteria including performance, solubility, stability, bioavailability, and mechanical properties of drug substances.

Favorable IP Development

Ebers conducts proprietary drug development and has certain exclusive development agreements with industry leaders, ensuring continued product development whilst retaining all future intellectual property generated. Ebers has a robust existing patent portfolio, with a clear development pathway to new intellectual property.

Unique cocrystals are eligible for new composition of matter patent protection, which is valid globally, providing 20 years protection for each cocrystal discovered by Ebers.

Strategic Partnerships

Ebers is partnering with large and established global pharmaceutical companies who are then able to further patent, mass produce and distribute the new scalable, synthetic products. In exchange, Ebers will receive stable recurring royalties through license deals.

Summary of the Qualifying Transaction

Prior to the closing of the Transaction, the Company will consolidate the currently outstanding KKL shares on a ratio of four existing shares for one new share. (the “Consolidation”). The shares of KKL postConsolidation, are referred to herein as the Post-Consolidation Shares.

There are no relationships between any non-arm’s length party of KKL and Ebers or its assets and the LOI contemplates undertaking an arm’s length business combination. Following completion of the Proposed Transaction, the current shareholders of Ebers would own a majority of the issued and outstanding post-consolidated common shares in the capital of the resulting issuer. Ebers will become a wholly owned subsidiary of the Company. The shareholders of Ebers will exchange their shares in Ebers at a ratio of 20 post-consolidation KKL shares at a deemed price of $1.00 per share (the “ Deemed QT Price ”) for each issued share of Ebers, subject to the following conditions:

Ebers will deliver an independent valuation acceptable for regulatory purposes which reflects a valuation of at least C$53 million for Ebers, and an initial working capital financing price of Canadian $1.00 per resulting issuer share. If a valuation of less than $53 million is independently indicated, and/or the financing price is reduced, then a pro-rata reduction in the number of acquisition shares issued will occur, or performance shares may be issued.

Upon a valuation acceptable to the TSXV of $53 million or greater, the shareholders of Ebers will exchange their 2,643,922 Ebers shares for 52,878,440 Post Consolidation Shares for a deemed total valuation of $52,878,440.

If the Independent Valuation indicates a reduced valuation of less than $53 million, the Parties may elect to issue up to 5,287,844 restricted management and board performance escrow shares (“Performance Shares”) to be released upon Ebers attaining the following financial performance targets (the “ Financial Performance Targets ”):

• Ebers generating EBITDA (earnings before interest, taxes, depreciation, and amortization) in excess of $2,000,000 in any audited fiscal year ending December 31, 2021, 2022 or 2023; or

• Ebers generating revenue in excess of $4,000,000 in any audited fiscal year ending December 31, 2021, 2022 or 2023.

In the event the Financial Performance Targets are not met by Ebers by December 31, 2023, the Performance Shares shall be cancelled.

Other than the issuance of Post Consolidation Shares, there is no other consideration payable by the Company to acquire Ebers. Upon completion of the QT, the Company will continue with the business of Ebers (the “ Resulting Issuer ”) and accordingly, the Resulting Issuer intends to list as a Tier 2 Life Sciences issuer on the TSXV.

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Ebers intends, concurrent with Closing, on completing a non-brokered private placement (“Ebers Private Placement”) at $1.00 per Post Consolidation Share to satisfy its working capital requirements. No further issuances of securities by Ebers will occur prior to the closing of the Proposed Transaction.

A comprehensive news release will be issued by KKL and Ebers setting out the terms of the Qualifying Transaction on signing a definitive agreement, which shall include information about KKL upon closing of the Transaction and a proposed concurrent financing for Ebers. A Finder’s fee may be paid for introducing the Qualifying Transaction, subject to TSXV policies.

In connection with the Proposed Transaction, the Resulting Issuer intends to appoint certain new directors to its board of directors, to continue its corporate status into Ontario, to appoint as its auditors Crowe Mackay LLC, and approve a new stock option plan. If required, KKL will call a shareholder meeting to approve these matters to be effective on completion of the Proposed Transaction.

Prior to the closing of the Proposed Transaction, the Company intends to change its name to “Ebers Tech Inc.”, or such other name as may be agreed by the parties.

No deposits, advances or loans have been made by the Company to Ebers and none are contracted to be made pursuant to the Agreement.

The Company may be seeking a waiver of the sponsorship requirements of TSXV Policy 2.2 Sponsorship and Sponsorship Requirements , but there is no assurance that such waiver will be granted.

Proposed Directors and Officers of the Resulting Issuer

On completion of the Proposed Transaction, the directors and officers of KKL are expected to resign other than Paul Larkin who is expected to remain a director, and certain key management team and advisors will be appointed, including:

NIGEL LITTLE, Board Chairman of Ebers Tech Inc (“Ebers”).

Mr. Little is an investment banker with 40 years’ experience at the highest levels in the U.K., Europe and North America with HSBC James Capel, Morgan Stanley, NationsBank, Nomura and Canaccord Capital (where he was President of U.K. / Europe and a Vice Chairman of the global business). Whilst at Canaccord, Nigel was highly involved with a number of Canadian technology/ pharma tech corporations such as ID Biomedical (and its C$ 1.7 billion takeover by Glaxo SmithKline) plus many other corporate deals in this sector and in the natural resources sector.

Post-graduation with an honours degree in natural sciences from University of London, Nigel started his career as a pharmaceutical analyst and has had a lifelong involvement with the pharmaceutical/pharma-tech and medical sectors. Nigel is a former Senior Advisor to Smith and Williamson Corporate Finance and an Advisory Board Member of Kleinwort Benson Merchant Bank and was an active member of their Private Equity department, sourcing the largest deal they transacted (a North American pharma-tech company). His main focus is Ebers Tech Inc. but also is a senior advisor to a US -based pre-IPO/VC business, Iron Edge VC which specializes in investment in pre-IPO “Unicorns” primarily in the Technology and Biotech sectors.

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ALEX REGAN , Director, CEO and Founder, Ebers Tech Inc.

Alex Regan graduated from the University of Miami with a Master’s in Economics. He is British by birth but spends most of his time in North America and has been actively engaged with a major American multi state corporation for the last 6 years. As CEO and Founder of Ebers, Alex has been instrumental in assembling a team of leading, global experts in the field of solid-state chemistry, intellectual property and senior pharma executives, all of whom were keen to get involved in the exciting cocrystal area and its application to the pharmaceutical and also wellness areas.

Alex has long-standing experience in the North American cannabis market, having shadowed the founder and executive chairman of a US multi-state operator for more than 6 years prior to having founded Ebers Tech Inc. in Canada. Having realized and identified the multiple areas of untapped potential and synergies between the cannabinoid and pharmaceutical industries (particularly surrounding molecule reformulation and strengthened IP protection) Alex realized that a significant range of opportunities were presenting themselves.

PASCAL HUGHES , Director, Ebers Tech Inc.

Pascal Hughes has extensive experience in corporate finance, advisory and equity investment in both private and public markets internationally. He has led enterprises and has a broad range of small, medium and large transaction experience — investing directly, and on behalf of third parties. When he was the CEO of Levrett Plc, he led the reverse takeover of Nuformix, a Cambridge -based biotech company in 2017 on the London Stock Exchange, generating returns in excess of 6 x for most investors.

He is a member of the Advisory Board of CAPTIS Intelligence Inc., a US-based global industry leader in security and crime prevention technology and is a NED and Chairman of the Risk and Governance Committee at Dorman Long Engineering, a leading provider of engineering solutions to the oil and gas industry in West Africa.

Pascal holds a B.A. (Hons) in Accounting & Finance from Dublin City University and a M.Sc. in Finance from Queens University, Belfast. He is also an alum of London Business School.

He is an Irish national, who relocated to London in 1994 to join Deutsche Bank AG and worked in investment banking for 20 years where he held a number of senior positions latterly as Managing Director in Fixed Income, Currencies and Commodities at UBS Bank.

Dr. DAVE TAPOLCZAY , Chief Scientific Advisor to Ebers

Dr. Dave Tapolczay has held senior leadership positions in international R&D healthcare companies and charities. His past roles include joint worldwide head of chemistry for Zeneca agrochemicals, VP of Glaxo Smith Kline pharmaceuticals & senior VP of Millennium Pharmaceuticals, which at the time was the largest Biotech company in the world.

For 10 years Dave was CEO of Medical Research Council Technology and served on the management committee of the Medical Research Council. He has also worked extensively as an entrepreneur having started or been involved with the creation of several new life science companies, 4 of which have successfully exited via trade sales and 2 listed on the stock market.

He has built an international network and reputation in pharmaceutical R&D plus commercialization of technology in healthcare and has a strong academic record with more than 40 Patents and publications. He has been a Visiting Professor at Sussex University and Special Expert Advisor (Life Sciences) to the Shanghai government.

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Trading Halt

At the Company’s request, trading in the shares of KKL has been halted by the Exchange. Trading is expected to remain halted until, at the earliest, the completion of the proposed Qualifying Transaction.

For further information contact:

Paul Larkin CEO, Kelly Ventures Ltd. plarkin@pro.net

Nigel Little Chairman, Ebers Tech Inc. nl@ebers.ca

Forward-Looking Statements Disclaimer

Certain information in this press release may contain forward-looking statements. This information is based on current expectations that are subject to significant risks and uncertainties that are difficult to predict. Actual results might differ materially from results suggested in any forward-looking statements. KKL assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those reflected in the forward-looking statements unless and until required by securities laws applicable to KKL. Additional information identifying risks and uncertainties is contained in filings by KKL with the Canadian securities regulators, which filings are available at www.sedar.com. Completion of the Ebers 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 filing statement to be prepared in connection with the Ebers 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 Ebers Transaction and has neither approved nor disapproved the contents of this press release. The KKL Common Shares will remain halted until such time as permission to resume trading has been obtained from the TSXV. KKL is a reporting issuer in British Columbia.

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