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CO2 GRO Inc. Announces Closing of First Tranche of Private Placement of Unsecured Convertible Debenture Units

TORONTO, ON / ACCESSWIRE / February 2, 2024 / Toronto based CO2 GRO Inc. ("CO2 GRO" or the "Company") (TSXV:GROW)(OTCQB:BLONF)(Frankfurt:4021) is pleased to announce that, further to its press release on January 24, 2024, it has closed the first tranche of its previously announced private placement offering of unsecured convertible debenture units (the "Debenture Units") at a price of $1,000 per Debenture Unit for gross proceeds of $121,000 (the "Offering"). The Company anticipates that it will close subsequent tranches of the Offering in the upcoming months.

Under the first tranche, 121 Debenture Units were sold each consisting of $1,000 in principal of unsecured convertible debentures (the "Debentures") and 11,111 common share purchase warrants (the "Warrants") of the Company. Each Warrant will be exercisable to acquire one common share of the Company (a "Warrant Share") for a period of four years from the Issue Date (as defined below) at an exercise price equal to $0.105.

The Debentures will bear interest at a rate of 13.5% per annum from the date of issuance (the "Issue Date") and will have a three-year term (the "Term"). During the first year of the Term, quarterly interest payments on the Debentures will be paid in cash. In the remaining two (2) years of the Term, the Company will have the option to (i) pay further interest payments in cash or (ii) make payments-in-kind by way of issuance of common shares of the Company (the "Common Shares") at a price equal to the market price of the Common Shares at the time the accrued interest becomes payable.

At any time during the Term, each holder of Debentures may elect to convert any portion of the principal amount of the Debentures into Common Shares at a conversion price equal to $0.09 per Common Share (the "Conversion Price").

The Debentures will be subject to a forced conversion provision whereby, upon delivery of such notice to holders of the Debentures, the Company is permitted to convert the principal amount of all outstanding Debentures into Common Shares at the Conversion Price in the event that the average closing price of the Common Shares listed on the TSX Venture Exchange (the "TSXV") is greater than $0.20 for twenty (20) consecutive trading days.

The Company anticipates using the net proceeds of the Offering for working capital purposes, crystallization of its sales pipeline and conversion of ongoing TAPs (Technology Adaption Projects) with clients into recurring revenue, and for hiring of additional engineering and technical staff to advance all of the above.

The Debentures, the Warrants and the underlying Common Shares will be subject to a statutory hold period of four (4) months and one (1) day from the Issue Date. The Offering is subject to the final acceptance of the TSXV.

The Debenture Units were offered and sold by private placement in Canada pursuant to exemptions from the prospectus requirements under National Instrument 45-106 Prospectus Exemptions, and in certain other jurisdictions on a basis which does not require the qualification or registration of the securities issued pursuant to the Offering.

Insiders of the Company subscribed for a total of $100,000 Debenture Units under the first tranche of the Offering, which constitutes a "related party transaction" within the meaning of Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101"). The Company relied on exemptions from the formal valuation and minority approval requirements in sections 5.5(b) and 5.7(1)(b) of MI 61-101 on the basis that the Company is not listed on a specified market and the fair market value of the transaction, insofar as it involves "related parties", does not exceed $2,500,000, as determined in accordance with MI 61-101. The Company did not file a material change report more than 21 days before the expected closing date of the Offering as the details of the Offering and the participation therein by each "related party" of the Company were not settled until shortly prior to the closing of the Offering.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful. The securities being offered have not been, nor will they be, registered under the United States Securities Act of 1933, as amended (the "1933 Act") and may not be offered or sold to, or for the account or benefit of, persons in the United States or "U.S. persons" (as such term is defined in Regulation S under the 1933 Act) absent registration or an applicable exemption from the registration requirements of the 1933 Act and the application of state securities laws.

Visit www.co2gro.ca for more information on CO2 GRO Inc.

About CO2 GRO Inc.
CO2 GRO Inc. is a precision ag-tech, clean-tech company with a focus on People, the Planet and Prosperity. Our vision is to become one of the leading companies enhancing global food production from protected agriculture. By helping our customers sustainably increase yield and profitability, we could help feed up to half a billion people worldwide while reducing our customers' ecological footprint.

About 300 million MT of fruit and vegetables are grown annually from about 5 million hectares of protected vegetable facilities globally (6 kg/m²/year of average production). A 30% yield increase using our technology could add up to 100 million MT of fruits and vegetables per year. The US Centers for Disease Control and Prevention recommends annual fruit and vegetable consumption of up to 200 kg per year per adult.

Our Target Market: The estimated 800 billion square foot global protected grower market is comprised of 700 billion square feet of fruits & vegetables (Cuesta Roble 2019 estimate), and an estimated 100 billion square feet of protected floriculture and other medicinal plants and non-food varieties.

Our Technology: CO2 Delivery Solutions enriches plants with CO₂ by misting an aqueous CO₂ solution directly onto plants grown in greenhouses and other protected grow facilities globally.

Value Proposition: Approximately 98% of protected grow facilities globally cannot add CO₂ by atmospheric gassing, missing out on up to 30% increased yield potential and 100% more gross profit. CO2 GRO's technology enables all protected growers regardless of facility or location to enrich their plants with CO₂ to realize up to 30% yield increases. In addition, our technology suppresses the growth of micro-pathogens such as E.coli and powdery mildew, leading to healthier crops. Growers currently employing CO₂ gassing can save up to 90% of CO₂ gas used, reducing their ecological footprint and production costs.

Patent Protection: CO2 GRO's CO2 Delivery Solutions technology is protected by a suite of patents and patents pending.

Business Model: Our technology is sold to growers based on the cultivation area installed at prices that provide a high return on their investment and high margins for our shareholders.

Global Expansion: CO2 GRO's management is rapidly expanding its international marketing partner relationships into Mexico, Spain, the EU, the UK, South Africa, the Middle East, Southeast Asia and Latin America as well as in its US and Canadian base.

Environmental, Social and Governance: CO2 GRO is committed to good Environmental, Social and Governance (ESG) policies and practices. We are an equal opportunity employer of choice and opportunity.

Forward-Looking Statements and Disclaimer
This press release contains statements which constitute "forward looking information" within the meaning of applicable securities laws, including statements regarding the plans, intentions, beliefs and current expectations of the Company with respect to future business activities. Forward looking information is often identified by the words "may," "would," "could," "should," "will," "intend," "plan," "anticipate," "believe," "estimate," "expect" or similar expressions and include information regarding: statements regarding the future direction of the Company; the ability of the Company to successfully achieve its business and financial objectives; plans for expansion and the ability of the Company to obtain, develop and foster its business relationships; and expectations for other economic, business, and/or competitive factors. Investors are cautioned that forward-looking information is not based on historical facts but instead reflect the Company's management's expectations, estimates or projections concerning the business of the Company, future results or events based on the opinions, assumptions and estimates that management considered reasonable at the date the statements are made. Such assumptions include but are not limited to: general business and economic conditions; the Company's ability to successfully execute its plans and intentions; successful completion of the Offering; the availability of financing on reasonable terms; the Company's ability to attract and retain skilled staff; market competition; the products and technology offered by the Company's competitors; and that good relationships with business partners will be maintained. Although the Company believes that the expectations reflected in such forward looking information are reasonable, such information involves risks and uncertainties, and undue reliance should not be placed on such information, as unknown or unpredictable factors could have material adverse effects on future results, performance or achievements. Among the key factors that could cause actual results to differ materially from those projected in the forward looking information are the following: changes in general economic, business and political conditions, including changes in the financial markets; in particular, the ability of the Company to raise debt and equity capital in the amounts and at the costs that it expects; adverse changes in applicable laws or adverse changes in the application or enforcement of current laws; the biotechnology industry and the greenhouse growers market are highly competitive, and technical advances in the industry will impact the success of the Company, and other risks described in the Company's filings that are available on SEDAR+ at www.sedarplus.ca. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward looking information prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. Although the Company has attempted to identify important risks, uncertainties and factors which could cause actual results to differ materially, there may be others that cause results not to be as anticipated, estimated or intended. The Company does not intend, and does not assume any obligation, to update this forward looking information except as otherwise required by applicable law.

Neither the TSXV nor its Regulation Services Provider (as that term is defined in policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.

CONTACT:
Soumik Roy, Director of Marketing, Communications, and Investor Relations
ir@co2gro.ca
(647) 502-5006

SOURCE: CO2 Gro Inc.