Kanzen Signs LOI for Share-Exchange QT with Geyser

Kanzen Capital Corp. Announces Qualifying Transaction With Licensed Producer Applicant

Kanzen Capital Corp. (“Kanzen”) is pleased to announce that it has entered into a letter of intent (the “LOI”) dated April 25, 2018, with Geyser Management Inc. (“Geyser”), a private company incorporated under the Canada Business Corporations Act. Kanzen and Geyser propose to complete an arrangement, amalgamation, share exchange or similar transaction who will continue the business of Geyser (the “Transaction”). The transaction is expected to constitute Kanzen’s Qualifying Transaction under the capital pool Companies policy (the “CPC Policy”) of the TSX Venture Exchange (the“Exchange”). Kanzen, after completion of the Qualifying Transaction, is referred to in this news release as the “Resulting Issuer”.

Geyser’s principal business is to identify and evaluate commercial opportunities for the acquisition of assets or businesses in the marijuana and hemp industry. Geyser’s wholly owned subsidiary, 0957102 B.C. Ltd. (“0957”), recently acquired by Geyser in March 2018, is a late-stage applicant under the Access to Cannabis for Medical Purposes Regulations and Health Canada has granted 0957 a “right-to-build” stage license.

Further information about Geyser, including financial information, will be provided in a subsequent news release. Geyser’s principal assets include cash and its interests in 0957. Geyser’s current liabilities are primarily comprised of a $1,000,000 promissory note granted in connection with Geyser’s acquisition of 0957 and shareholder loans. Prior to and/or concurrent with the completion of the Transaction, Geyser may complete one or more private placements of its Class A common shares, and share purchase warrants, in consultation with Kanzen, for gross proceeds of up to $3,185,430 (the“Geyser Private Placement”)

Upon completion of the Transaction, the parties anticipate that the Resulting Issuer will be listed as a Tier 2 Industrial Issuer.

The Transaction is arm’s length and is therefore not a Non-Arm’s Length qualifying transaction under the CPC Policy. Accordingly, the CPC Policy does not require Kanzen to obtain shareholder approval of the Transaction.

Summary of the Transaction

The LOI contemplates that Kanzen, Geyser and Geyser’s shareholders will complete a share exchange whereby the holders of Class A Shares of Geyser will exchange such shares in consideration for common shares of Kanzen and the holders of Class B Shares of Geyser will exchange such shares for common shares of Kanzen, to be reserved but issued in the future based on certain performance milestones. Outstanding convertible securities in Geyser will also be exchanged for equivalent convertible securities of Kanzen.

Immediately before the closing of the Transaction, Kanzen will (a) consolidate the issued and outstanding common shares and convertible securities of Kanzen on the basis of 1.5 old: 1.0 new common shares (the “Consolidation”), and (b) change its name to a new name suitable to its business. The share exchange will take place on a 1-for-1 basis, after completion of the Consolidation and the change of name.

It is contemplated that 10,479,300 common shares of Kanzen will be issued to the Class A shareholders of Geyser, and up to 7,539,650 warrants to purchase shares of the Resulting Issuer will be issued to replace outstanding Geyser warrants (the“Replacement Warrants”). The Replacement Warrants will be exercisable into common shares of the Resulting Issuer at exercise prices ranging from $0.10 to $1.00.

Up to 22,500,000 Resulting Issuer shares will be issued to the Class B shareholders of Geyser on achieving certain performance milestones (the “Performance Shares”). The Performance Shares are releasable as follows:

(a) 3,000,000 Performance Shares on the 90th day following the granting of “LP Cultivation” to the Resulting Issuer, or any of its subsidiaries, namely the granting of a license from Health Canada for the purposes of cultivating marijuana;

(b) 3,000,000 Performance Shares upon the granting of “LP Processing” status resulting Issuer, or any of its subsidiaries, namely the granting of approval from Health Canada for the manufacture and packaging of marijuana and/or marijuana-related produces for sale to Licenced Producers;

(c) 3,750,000 Performance Shares upon the granting of or acquiring permits for the import or export of marijuana by the Resulting Issuer, or any of its subsidiaries;

(d) 3,750,000 Performance Shares upon the acquisition of a marijuana-related business or assets with a minimum CAD $3,000,000 transaction value;

(e) 4,500,000 Performance Shares cumulative gross revenue of at least CAD$5,000,000; and

(f) 4,500,000 Performance Shares cumulative gross revenue of at least CAD$10,000,000.

On closing of the Transaction, giving effect to the Consolidation and the Private Placement described below, the Resulting Issuer is expected to have 17,645,967 common shares outstanding (undiluted). Assuming the issuance of all Performance Shares, the Resulting Issuer will have 40,145,967 common shares outstanding(undiluted).

Certain of the Resulting Issuer shares issued to the principals of Geyser who will become the management of the Resulting Issuer will be subject to escrow in accordance with TSXV policies.

Concurrent Financing

Concurrent with the closing of the Transaction, on a post-Consolidation basis, Kanzen will conduct a private placement of units for minimum gross proceeds of $2,000,000 (the“Private Placement”). Each unit will be issued at $0.60 per unit and consist of one common share and one share purchase warrant (a “Warrant”). Each Warrant will be exercisable into one common share of the Resulting Issuer at $0.80 per common share for 2 years. The Warrants are subject to accelerated expiry if the closing price of the resulting Issuer’s common shares is $1.00 or higher for 10 consecutive trading days. Kanzen may pay finder’s fee in connection with the Private Placement, in accordance with the policies of the Exchange.

Conditions of Closing

Completion of the Transaction will be subject to certain conditions, including but not limited to: (a) completion of the Private Placement; (b) completion of the Geyser Private Placement; (c) receipt of all necessary approvals of the boards of directors of Kanzen and Geyser; (d) receipt of all necessary third party consents; (e) approval of the Transaction by the Exchange as Kanzen’s Qualifying Transaction; (f) Kanzen satisfying the Initial Listing Requirements set by the Exchange for a Tier 2 Industrial Issuer; and (g)the parties’ entry into a definitive agreement in furtherance to the LOI.

Advances and Loans

Kanzen has advanced $25,000 to Geyser, as a non-refundable deposit, upon signing theLOI. Kanzen expects to advance up to $225,000 to Geyser as a refundable deposit or secured loan, subject to the approval of the Exchange.

Sponsorship

Kanzen intends to apply to the Exchange for a waiver of the Exchange’s sponsorship requirements. There is no assurance that this waiver will be granted; however, Kanzen anticipates that because the Resulting Issuer will operate in a highly regulated industry ,there are reasonable expectations that the Exchange will grant the waiver.

Management and Board of Directors

Upon completion of the Qualifying Transaction, it is expected that certain members of the Kanzen board will resign and the board of directors of the Resulting Issuer will be reconstituted with nominees put forth by Geyser, expected to include Aerock Fox,Andreas S Thatcher, Bradley D Kersch, at least two independent directors who will be announced prior to the completion of the Transaction, and such other nominees as put forward by Geyser:

Aerock Fox, Director

Mr. Fox is a senior executive with over 25 years experience in private and public companies, including companies such as Video One Canada and Apawthecary Pets USA. He is the founder of Casting Workbook, Video One Canada (Entertainment One)and Keystone Entertainment. Mr. Fox has expertise in CO2 and ethanol extraction technology. He holds a Bachelor of Arts degree in Business, Masters of Counselling Psychology from the University of British Columbia.

Andreas S. Thatcher, Director

Mr. Thatcher is the President of Rhizome Group, an international licensing and financing entity for the media industry. He is a former partner at Rhizome Capital, a media investment company. Mr. Thatcher has extensive licensing and partnership experience in European and Asian markets. He has acted as a Portfolio Strategist at CIBC World markets. Mr. Thatcher holds a Master of Arts degree in Economics from the University of Victoria.

Bradley D. Kersch, Director

Mr. Kersch is a team entrepreneur, strategist and business leader with over 25 years of experience in startups and business turnarounds. He has a strong business background in media, advertisement and marketing. Mr. Kersch has been an executive with Solace Management Group for over five years in building premium Canadian consumer packaged brands. He holds a Bachelor of Arts degree in International Business and Marketing from the University of Victoria.

ON BEHALF OF THE BOARD

Kanzen Capital Corp.

Dave Eto

Chief Executive Officer and Director

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