Lendified Provides Disclosure Related to the Shares for Debt Transaction

Toronto, Ontario–(Newsfile Corp. – August 25, 2021) – Lendified Holdings Inc. (TSXV: LHI) (formerly, Hampton Bay Capital Inc.) (the “Company” or “Lendified“), at the request of the Ontario Securities Commission, is providing a supplementary update to the Company’s shares for debt transaction as announced by way of press release on May 14, 2021, July 29, 2021 and July 30, 2019 and in its material change report dated August 9, 2021 (the “Material Change Report“).

On July 30, 2021, the Company settled an aggregate of $10,618,310.53 of outstanding indebtedness with certain creditors (the “Debt Conversion“) through the issuance of 212,366,210 common shares of the Company at a price of $0.05 per share. The common shares issued are subject to a four-month hold period under applicable law expiring on December 1, 2021.

Certain parties to the Debt Conversions are “related parties” of the Company, which accounted for an aggregate of $5,156,965.45 of the Debt Conversion, as disclosed in the Material Change Report. The settlement of debt and the issuance of common shares in the Debt Conversion to such parties is a “related party transaction” pursuant to Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101“) and is exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 by virtue of the exemptions in Sections 5.5(b) and 5.7(1)(e) of MI 61-101. The Company relied on the financial hardship exemption under section 5.7(1)(e) of MI 61-101 given that the Company has been in serious financial difficulty. Particularly, as disclosed in the Company’s audited financial statements for the year ended December 30, 2020 (the “Audited Financial Statements“), the Company had an accumulated deficit of $52,846,491 as at December 30, 2020. Additionally, certain debt instruments of the Company were past due, and the Company was in violation of the debt covenants and was in default. The foregoing and the impacts of the COVID-19 pandemic on the Company’s business and the ability of its customers to repay loans, among other things, are material uncertainties that cast significant doubt on the Company’s ability to continue as a going concern, as disclosed in the note to the Audited Financial Statements. The Debt Conversion was part of the Company’s overall strategy toward improving its financial condition and the Debt Conversion was designed to improve the Company’s financial position by reducing the debt on its balance sheet and relieving the Company of the financial burden of servicing such debt.

Further to the disclosure in the Material Change Report, the Company did not file a material change report 21 days before the closing of the Debt Conversion as the principal terms of such transactions were not finalized until, or close to, the closing date of the Debt Conversion. Additionally, after reasonable inquiry, the Company is not aware of any prior valuations in respect of the Company in the 24 months prior to the date of the Material Change Report.

Prior to the completion of the Debt Conversion and the satisfaction of the escrow release conditions converting the subscription receipts of the Company into common shares and warrants (the “Subscription Receipt Offering“), as announced on August 6, 2021, there were 190,292,639 common shares of the Company issued and outstanding. Following the completion of the Debt Conversion and the Subscription Receipt Offering, the Company has 440,199,349 common shares issued and outstanding.

The Debt Conversion resulted in the creation of Gesmex Corporation (“Gesmex“) and Placement AMMC Inc. (“AMMC“) as a new “Control Person” (as such term is defined in the policies of the TSX Venture Exchange (“TSXV“)) of the Company. Prior to the Debt Conversion, AMMC held 12,161,621 common shares of the Company, representing 6.39% of the total issued and outstanding common shares of the Company, and Gesmex held 16,708,287 common shares, representing 8.78% of the total issued and outstanding common shares of the Company. Following completion of the Debt Conversion and satisfaction of the escrow release conditions converting the subscription receipts of the Company into common shares and warrants, as announced on August 6, 2021, AMMC now holds 106,012,394 common shares, representing 24.08% of the total issued and outstanding common shares of Lendified and Gesmex now holds 21,005,181, representing 4.77% of the total issued and outstanding common shares of Lendified. For greater clarify, AMMC and Gesmex did not participate in the Company’s private placement of subscription receipts. Pursuant to the policies of the TSXV, the Company obtained disinterested shareholder approval, being shareholders that are not interested parties to the new Control Person holding in the aggregate 50% + 1 of the issued and outstanding common shares of the Company, for the creation of Gesmex and AMMC as a new Control Person by way of shareholder consent. A copy of the form of shareholder consent can be found on the Company’s SEDAR profile at www.sedar.com.

The securities offered have not been registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons absent registration or an applicable exemption from registration requirements. This release does not constitute an offer for sale of securities in the United States.

ABOUT LENDIFIED HOLDINGS INC.

Lendified, a company located in Ontario, Canada, is a Canadian company operating a lending platform which provides working capital loans to small and medium-sized businesses across Canada.

Further Information

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For further information regarding Lendified, please contact:

John Gillberry, Chief Executive Officer and Director
1-844-451-3594
john.gillberry@lendified.com

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

This news release may contain forward-looking statements which reflect the Company’s current expectations regarding future events. The forward-looking statements are often, but not always, identified by the use of words such as “seek”, “anticipate”, “plan, “estimate”, “expect”, “intend” and statements that an event or result “may”, “will”, “should”, “could” or “might” occur or be achieved and other similar expressions. These forward-looking statements involve risk and uncertainties, including, but not limited to, whether the effects of the COVID-19 pandemic will be even more severe than it has been to date, any of which could cause results, performance, or achievements to differ materially from the results discussed or implied in the forward-looking statements. Many risks are inherent in the industries in which the Company participates; others are more specific to the Company, there can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. The Company’s ongoing quarterly filings should be consulted for additional information on risks and uncertainties relating to these forward-looking statements. Investors should not place undue reliance on any forward-looking statements. All forward-looking information contained in this press release is given as of the date hereof and is based upon the opinions and estimates of management and information available to management as at the date hereof. Management assumes no obligation to update or alter any forward-looking statements whether as a result of new information, further events or otherwise.

NOT FOR DISSEMINATION TO UNITED STATES NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES

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