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Concurrent $15 Million Private Placement to Fund Commercialization

VANCOUVER, BC / ACCESSWIRE / February 12, 2024 / Loop Energy Inc. (the "Company" or "Loop") (TSX:LPEN) and H2 Portable Power Corp Inc. ("H2P") are pleased to announce that they have entered into an amalgamation agreement dated February 9, 2024 (the "Amalgamation Agreement") in respect of a three-cornered amalgamation pursuant to which H2P will amalgamate (the "Amalgamation") with a subsidiary of Loop, Loop will acquire all of the issued and outstanding common shares of H2P (the "H2P Shares"), and H2P shareholders will receive common shares of Loop (the "Combined Entity Shares"). This transaction (the "Transaction") will constitute a backdoor listing of H2P (the "Listing") under Toronto Stock Exchange ("TSX") policies.

H2P Portable Power Corp Inc. is a BC-based industrial equipment developer of hydrogen-enabled industrial equipment designed for customers advancing de-carbonization strategies and for whom grid tied or battery only electrification does not meet their operating needs. H2P is developing modular and expandable advanced power systems integrating the technology advantages of the Loop fuel cell. Focused on high demand applications, H2P is working with recognized leaders in port operations, rail, film, and construction to transform and convert legacy diesel equipment assets and power generators to clean, zero emissions hydrogen technology. Supported by a strategic relationship with product developer and scale manufacturer TYCROP Manufacturing Ltd. (Chilliwack, BC) ("TYCROP"), H2P is launching multiple high profile pilot projects in and around the Lower Mainland of British Columbia beginning mid-2024.

The Transaction between Loop and H2P provides an unmatched platform to deliver hydrogen-enabled equipment across H2P and Loop's existing and prospective customer bases, in addition to leveraging Loop's supply of hydrogen fuel cells for industrial use cases led by customer demand.

Transaction Highlights:

Provided that the Transaction is completed in accordance with the provisions of the Amalgamation Agreement (see "Condition to Completion of the Transaction" below), the following benefits are anticipated for the combined entity following the Amalgamation (the "Combined Entity"):

• Strong Incoming Team - board and operational expertise in industrial equipment integration and sales. Led by CEO Scott Mason (TYCROP), the Combined Entity's directors at closing are also to include Gary Teichrob (TYCROP), Ken Hallat, Greg Bay and Jim Barton.
  • Ken Hallat - formerly a Director of Sun Rype Products and a founding Director of Sleeman Breweries;
  • Greg Bay - founding Partner of Cypress Capital Management Ltd., which has assets under management of over $4.5 billion; and
  • Jim Barton - formerly President for Canada and Midwest, Hub International.
• Operational Efficiencies - Significant cost and operational savings will be implemented immediately upon closing of the Transaction including downsizing Loop's leased real estate portfolio, selling non-core equipment and rationalizing operating expenses.
• Proven Track Record in Selling Industrial Solutions to Customers - H2P director Gary Teichrob founded and leads TYCROP (1978), a multi-faceted organization known for bringing ideas to life, serving customers with innovative industrial equipment solutions across multiple industries, and supported by 650 employees and 5 facilities in Canada and the United States.
• Concurrent Financing - concurrent with the Transaction, H2P plans to raise approximately C$15.0 million in equity in a brokered private placement (the "Concurrent Financing") of subscription receipts (the "Subscription Receipts") which will provide growth capital and stability to the Combined Entity upon closing of the Transaction.

Additionally, H2P has agreed to provide Loop $2 million in funding in February through the purchase of $0.5 million of certain fixed assets and inventory of Loop and a further $1.5 million in the form of either a bridge loan or further asset purchase, at H2P's election, which funding will provide immediate improvement for Loop's balance sheet and ability to maintain operations through to the anticipated closing of the Transaction.

"Hydrogen is the way, and customers are asking for solutions to replace their diesel-powered equipment. This transaction provides what the hydrogen sector in Canada and around the world is missing - the integration of fuel cells into transformative equipment the market can begin adopting now, not in another 5 or 10 years. We are partnering with industry leaders and government to deliver on the promise of the zero-emissions hydrogen economy," said Scott Mason, CEO of H2 Portable Power Corp.

Transaction Terms

The Transaction will be carried out by way of the Amalgamation under the Business Corporations Act (British Columbia). Following the completion of a share consolidation (the "Consolidation") and closing of the Transaction and the Concurrent Financing, existing shareholders of Loop will own approximately 9.0-9.6% of the Combined Entity Shares and existing shareholders of H2P will own approximately 60.5-62.0% of the Combined Entity Shares on a fully diluted basis. Investors in the Concurrent Financing are expected to own 28.4-30.5% of the Combined Entity Shares on a fully diluted basis.

Combined Entity Shares held by the principals of the Combined Entity may be held in escrow pursuant to the terms of an escrow agreement and will be released over a period of 18 months in accordance with the terms of such escrow agreement, all as prescribed by the TSX's Escrow Policy Statement.

Deal Protection Measures / Fiduciary Out

The Amalgamation Agreement contains customary deal-protection provisions including non-solicitation covenants, a fiduciary out, a right to match, and a break fee payable to H2P under certain circumstances.

The Company anticipates that it will file the Amalgamation Agreement on Loop's profile on SEDAR+ at on February 13, 2024.

Conditions to Completion of the Transaction

The Transaction is subject to receipt of approval of holders of common shares of Loop ("Loop Shareholders") at a special meeting of Loop Shareholders to be called in April 2024 (the "Loop Meeting"), with the Transaction subject to approval by a majority vote of Loop Shareholders and the Consolidation by a two-thirds majority vote of the Loop Shareholders, in each case, voting in person or by proxy at the Loop Meeting. Loop and H2P are arm's length parties and, accordingly, the Transaction is not a related party transaction under applicable securities laws.

Other conditions to completion of the Transaction include: (a) approval of the Amalgamation by H2P shareholders; (b) approval of the TSX to the Listing; (c) approval of the Minister responsible for Pacific Economic Development Canada; (d) there being no material adverse changes in respect of either Loop or H2P; and, (e) other standard conditions of closing for a transaction of this nature. There can be no assurance that all of the necessary approvals will be obtained or that all conditions of closing will be satisfied in which event the Transaction may not proceed.

Concurrent Financing

H2P has represented the following to Loop with respect to the Concurrent Financing:

The Concurrent Financing will be in the form of a brokered private placement offering of Subscription Receipts to raise gross proceeds of approximately C$15.0 million, which gross proceeds (net of certain expenses) will be held in escrow pending closing of the Transaction (the "Escrowed Proceeds"). Each Subscription Receipt shall entitle the holder thereof to receive, without payment of any additional ‎consideration or further action on the part of the holder, one H2P Share upon the satisfaction or waiver of all conditions to the completion of the Transaction in ‎accordance with the terms of the Amalgamation Agreement ‎(collectively, the "Escrow Release Conditions").‎

Provided that the Escrow Release Conditions are satisfied or waived (where permitted), the Escrowed Proceeds will be released from escrow to or as directed by H2P and the Subscription Receipts shall be automatically converted into H2P Shares without payment of any additional consideration or further action on the part of the subscribers. These H2P Shares will then be immediately exchanged for Combined Entity Shares pursuant to the Amalgamation on the closing of the Transaction. In the event that the Escrow Release Conditions are not satisfied, the Escrowed Proceeds will be returned to the holders of Subscription Receipts and such Subscription Receipts will be cancelled.

The net proceeds of the Concurrent Financing will be used to fund ongoing operations, product and technology development for the Combined Entity and for working capital and general corporate ‎purposes‎.

The Concurrent Financing is to be conducted in all of the provinces and territories of Canada pursuant to private placement exemptions, in the United States pursuant to available exemptions from the registration requirements of the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), and applicable state securities laws‎, and in such other jurisdictions outside of Canada and the United States, in ‎each case, in accordance with all applicable laws, provided that no prospectus, ‎registration statement or similar document is required to be filed in such foreign ‎jurisdiction‎. Completion of the Concurrent Financing is subject to satisfaction of customary closing conditions.

The Subscription Receipts to be issued in connection with the Concurrent Financing will be subject to an indefinite statutory hold period in Canada from the closing date of the Concurrent Financing; however, the Combined Entity Shares issuable to holders of Subscription Receipts on conversion thereof will be freely tradeable in Canada. The closing date of the Concurrent Financing is expected to be on or around March 15, 2024.

The Subscription Receipts to be offered in the Concurrent Financing have not been, and will not be, registered under the U.S. Securities Act or any U.S. state securities laws, and may not be offered or sold in the United States or to, or for the account or benefit of, United States persons absent registration or any applicable exemption from the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws. This news release shall not constitute an offer to sell or the solicitation of an offer to buy securities in the United States, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

Transaction Timeline

Pursuant to the Amalgamation Agreement and subject to satisfying all necessary conditions and receipt of all required approvals, the parties anticipate completion of the Transaction in April 2024.

Complete details of the Transaction and disclosure in respect of H2P will be included in a management information circular of Loop that will be sent to Loop Shareholders in advance of the Loop Meeting.

Recommendations by the Boards of Directors and Fairness Opinion

After consultation with its financial and legal advisors, the board of directors of Loop unanimously approved the entering into of the Amalgamation Agreement. Raymond James Ltd. provided a fairness opinion to the board of directors of Loop, stating that, as of the date of such opinion and based upon and subject to the assumptions, limitations and qualifications stated in such opinion, the consideration payable pursuant to the Amalgamation is fair, from a financial point of view, to the Loop Shareholders.

Advisors and Counsel

Raymond James Ltd. is acting as financial advisor and Osler, Hoskin & Harcourt LLP is acting as legal counsel to Loop. Moneta Partners is acting as financial advisor and Gowling WLG is acting as legal counsel to H2P.

Officer Changes at Loop

In conjunction with the signing of the Amalgamation, Ben Nyland has resigned as President and CEO of Loop. Paul Cataford has been appointed interim CEO and Daryl Musselman has been appointed Interim CFO and COO of Loop. Mr. Cataford will remain Corporate Secretary and Director and Mr. Nyland will remain a Director of Loop.

About Loop Energy Inc.

Loop Energy is a leading designer and manufacturer of hydrogen fuel stacks targeted for the electrification of commercial vehicles such as buses and trucks, as well as stationary power applications. Loop Energy's products feature the company's proprietary eFlow technology in the fuel cell stack's bipolar plates. eFlow technology enables customers to achieve superior performance and higher fuel efficiency when using Loop Energy's fuel cell stacks, which lowers operating cost for end users while enabling OEMs to achieve lower capital cost and faster time to market. Loop Energy works closely with its partners to enable the production of hydrogen electric solutions. For more information about how Loop Energy is driving towards a zero- emissions future, visit .

About H2P

H2 Portable Power Corp. is a Chilliwack, B.C.-based equipment and technology supplier and partner to growing hydrogen ecosystems. Emissions is the Mission. Broad-scale non-grid tied industrial applications are challenging to electrify, and often present the most substantial potential for CO2 emissions reduction. H2P's advanced power systems, powered by hydrogen, present practical solutions that industry leaders can implement now to achieve their decarbonization goals. H2P is not competing against other clean energy solutions; H2P is combining the best technologies and ideas to transform industry, reduce global climate impact, and to energize industry with the most abundant element on planet earth. Clean Power Anywhere. Please also visit the H2P website at

For further information from Loop, please contact:

Paul Cataford - CEO | paul.cataford@loopenergy.com

For further information from H2P, please contact:

Scott Mason - Interim CEO | scott.mason@h2portable.com

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

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking information within the meaning of applicable securities legislation ("forward-looking statements"), which reflect management's current expectations and projections regarding future events including statements regarding the Transaction and the benefits thereof, including the financial and operational benefits and attributes of the Combined Entity, the timing for the Loop Meeting, the pro forma ownership of the Combined Entity, the Concurrent Financing, and timing to close the Concurrent Financing and Transaction.

Investors are cautioned that forward-looking statements are not based on historical facts, but instead reflect the Company's expectations, estimates or projections concerning future results or events based on the opinions, assumptions and estimates of management considered reasonable at the date the statements are made, including assumptions regarding the Company's and H2P's ability to close the Transaction and the Concurrent Financing. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, such statements involve risks and uncertainties, and undue reliance should not be placed thereon, as unknown or unpredictable factors could have material adverse effects on future results, performance or achievements of the Company.

Among the key factors that could cause actual results to differ materially from those projected in the forward-looking statements are the following: the parties' ability to consummate the Transaction and H2P's ability to complete the Concurrent Financing; the ability to receive, in a timely manner and on satisfactory terms, all necessary approvals, including TSX approval, and requisite shareholder and third party approvals; the ability of the parties to satisfy, in a timely manner, all other conditions to the closing of the Transaction; the potential impact of the announcement or consummation of the Transaction on relationships, including with regulatory bodies, stock exchanges, lenders, service providers, employees and competitors; the diversion of management time on the Transaction; assumptions concerning the Transaction and the operations and capital expenditure plans of the combined entity following completion of the Transaction; credit, liquidity and additional financing risks for the Company; the Company's actual financial results and ability to manage its cash resources; changes in general economic, business and political conditions, including challenging global financial conditions or otherwise; changes in applicable laws and regulations both locally and in foreign jurisdictions; compliance with extensive government regulation; the risks and uncertainties associated with foreign markets; and the other risk factors more fully described under the heading "Risk Factors" in the each of Company's most recent annual information form and management's discussion and analysis, each of which is available on the Company's SEDAR+ profile at .

Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements 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 and such changes could be material. The Company does not intend, and do not assume any obligation, to update the forward-looking statements except as otherwise required by applicable law.

SOURCE: Loop Energy Inc.