Calgary, Alberta – P Squared Renewables Inc. (TSXV: PSQ.P) (“PSQ”) a capital pool company, is pleased to announce that it has engaged a Canadian investment banking firm to act as sponsor for its previously announced proposed Qualifying Transaction (the “QT”) with Universal Ibogaine Inc. (“UI”).

The potential sponsor firm is currently in process of undertaking due diligence review procedures, following which it intends to deliver a standard sponsorship report in accordance with Policy 2.2 -Sponsorship and Sponsorship Requirements, of the TSX Venture Exchange (the “TSXV”) and at which point PSQ will be in a position to announce the name of the sponsor. An agreement to act as sponsor should not be construed as any assurance with respect to the merits of the QT or the likelihood of its completion.

Offering of Subscription Receipts by PSQ

PSQ is in process of undertaking a non-brokered private placement financing of subscription receipts (“Subscription Receipts”) which are being offered by 1266855 B.C. Ltd. (“Subco”), a wholly owned subsidiary of PSQ. Subco intends to issue up to 24,000,000 Subscription Receipts at a price of $0.25 per Subscription Receipt for aggregate gross proceeds of up to $6 million (the “Offering”). PSQ has received to date, and is holding in trust, proceeds from initial subscription agreements for the Offering totaling approximately $2.1 million.

The Offering is being completed in connection with the previously announced three-cornered amalgamation (the “Amalgamation”) among PSQ, Subco and UI, which will result in a reverse take-over of PSQ by UI.

Completion of the Offering is subject to certain conditions including receipt of all regulatory approvals, including the acceptance of the TSXV, and satisfaction of all conditions for the completion of the QT.

Subject to approval of the TSXV, (i) the Offering will be a “Concurrent Financing” to the QT, as that term is defined in the TSXV Policy 2.4 – Capital Pool Companies and (ii) the Amalgamation will meet the requirements to constitute PSQ’s QT.

As described in PSQ’s news release of January 26, 2021, each Subscription Receipt issued by Subco to the subscribers to the Offering will ultimately become exchangeable for units of the post-page 2 of 4Amalgamation resulting issuer (the “Resulting Issuer Units”) on a one for one basis pursuant to the terms of the Amalgamation. As such, the Resulting Issuer Units, not the Units issuable in exchange for the initial Subscription Receipts, will be delivered to the Subscriber following the completion of the Offering and the QT.

Each Subscription Receipt will ultimately become exchanged for Resulting Issuer Units, consisting of one common share of the Resulting Issuer and one common share purchase warrant (each, a “Resulting Issuer Warrant”) which will have a term of five years from closing of the QT. The Resulting Issuer Warrants will entitle the holder thereof to purchase one common share in the capital of the Resulting Issuer at an escalating annual exercise price, which will be (a) $0.50 per share if exercised in the first year from the date of issuance; (b) $0.75 in year 2; (c) $1.00 in year 3; (d) $1.25 in year 4; and (e) $1.50 per share if exercised in year 5.

Pending Acquisition by UI of the Kelburn Clinic

UI has entered into an agreement to acquire the operations of an initial addiction treatment facility, located near Winnipeg, Manitoba, which operates as the Kelburn Mental Health & Addiction Recovery Centre (the “Kelburn Clinic”). The Kelburn Clinic is privately owned by arms-length parties and has been in operation for over 6 years. UI and PSQ intend to fund the consideration payable on closing of this acquisition (the “Kelburn Acquisition”) concurrent with TSXV approval of the QT. The Kelburn Acquisition consists of the following:

• $1.5 million payable for the purchase of the operations of the Kelburn Clinic, consisting of $1 million cash (of which a deposit of $250,000 has been paid) and $500,000 payable in the form of equity Units to be issued by UI (as further described below), and

• $3.5 million for the purchase of the land (50 acres) and buildings utilized by the Kelburn Clinic (the “Kelburn Property”), consisting of an estimated $1.6 million to be payable in cash and the balance of $1.9 million payable in the form of equity Units to be issued by UI. The agreement for purchase of the Kelburn Property is subject to UI obtaining a satisfactory real estate appraisal report, and a related mortgage financing for $1.6 million.

Private placement equity financing by UI (the “UI Financing”)

UI has been undertaking an ongoing non-brokered private placement of units (the “UI Units”), with each UI Unit consisting of one UI common share and one warrant (a “UI Warrant”) entitling the holder to purchase an additional UI common share. The UI Warrants will have the same terms as the Resulting Issuer Warrants that will be issuable under the Offering as noted above – a term of five years from closing of the QT, and an escalating annual exercise price ($0.50 per share if exercised in year 1 from issuance, increasing to $1.50 per share if exercised in year 5).

The UI Financing also includes a number of UI Units which have been issued to date in settlement of services received and certain obligations owing by UI. UI will also issue UI Units as partial consideration payable on closing of the pending Kelburn Acquisition. The following UI Units have been issued on a cumulative basis since fall 2020:

The above total of $811,353 includes UI Units valued at $316,667 which were issued for the value of past services received from members of UI’s Board of Directors and as partial payment for services provided by a UI Officer.

Proceeds of the UI Financing have been used (i) to fund initial deposits due on the Kelburn Acquisition, (ii) to fund UI’s ongoing general & administrative expenses, and business development activities, and (iii) to supplement working capital.

Following issuance of the above noted UI Units, UI will have approximately 128.5 million common shares issued and outstanding. In addition, UI is obligated to issue (i) an estimated total of 9.6 million UI Units pursuant to the above noted acquisition of the Kelburn Clinic and the Kelburn Property, and (ii) approximately 12 million common shares which are required to be issued to certain of UI’s initial shareholders on completion of a UI “liquidity event”, which will be constituted by the QT with PSQ.

About P Squared Renewables

PSQ was incorporated in 2017 and listed on the TSXV (as a Capital Pool Company) on June 21, 2017 under the trading symbol “PSQ.P”. Since its formation, PSQ has been searching for and evaluating suitable business combinations to constitute its QT under the policies of the TSXV.

For more information about PSQ, please contact:

Shabir Premji

Executive Chairman & CEO
P Squared Renewables Inc.
Telephone: 403-870-1841
Email: [email protected]