Mission Ready Announces Letter of Intent for Acquisition, Term Sheet for a USD$20 million Credit Facility and Engagement Letter for up to USD$15 million Private Placement

VANCOUVER, BRITISH COLUMBIA – July 31, 2018 – Mission Ready Solutions Inc. (“Mission Ready” or the “Company”) (TSXV:MRS) announces that it has entered into:

(a)     a non-binding letter of intent to acquire (the “Acquisition”) Unifire, Inc., a company based in Spokane, Washington (“TargetCo”);

(b)     a non-binding term sheet (the “Term Sheet”) pursuant to which Zenith Insured Credit, LLC, a New York-based trading and specialty finance company (the “Creditor”), will provide TargetCo with a new USD$20 million asset-based credit facility (the “Credit Facility”);

(c)     an engagement letter (the “Engagement Letter”) with Bay Crest Partners, LLC, a New York-based FINRA registered broker-dealer and financial services firm (the “Agent”), to complete a private placement of up to USD$15 million (the “Offering”); and

(d)     a fee agreement (the “Fee Agreement”) pursuant to which Celadon Financial Group, LLC, a FINRA registered broker dealer (“Celadon”) identified qualified investors and other broker-dealers in connection with the Acquisition.

The Acquisition

On April 19, 2018, the Company entered into a non-binding letter of intent to acquire all of the issued and outstanding shares in the capital stock of TargetCo. The Acquisition is to be completed as a reverse-triangular merger under applicable Washington corporate law with TargetCo becoming a wholly-owned subsidiary of the Company. The purchase price of the Acquisition is an estimated USD$9 million, subject to customary purchase price adjustments. Of the USD$9 million purchase price, USD$4 million is to be paid and satisfied in cash and USD$5 million is to be paid and satisfied through the issuance by the Company of approximately 26,315,790 common shares in the capital of the Company with a deemed issuance price equal to USD$0.19 per share (CAD$0.25 per share using an exchange rate of 1.32). The cash portion of the purchase price is currently expected to be funded by a portion of the net proceeds raised as part of the Offering.

TargetCo specializes in providing mission critical equipment and services to the US and international militaries, law enforcement, tactical groups, fire and rescue, utilities, power generation nuclear and hydro power plants, as well as the public.  TargetCo’s trailing revenue for the 6-month period ending June 30, 2018 was approximately USD$18.3 million and its net income for the same period was approximately USD$750,000.

The Acquisition, if completed, is a strategic transaction for Mission Ready, as it would significantly increase Mission Ready’s sales and would provide privileged access to valuable contracts that are set aside for small business, which contracts might not otherwise be available to Mission Ready.  These contracts from the most recent 5-year renewal period, which are valued at over USD$10 billion, continue to be awarded to a small number of eligible participants in advance of the next renewal date, which is expected in 2019.

Jeffery Schwartz, President & CEO of Mission Ready, states: “The Mission Ready team is keenly focused on the targeted growth and development of the Company’s expanding portfolio of leading personal protective solutions.  To support this growth plan, we have put in place an experienced senior management team and Board of Directors that possesses strong industry relationships and contacts to translate into future sales and business development opportunities.  We are now seeing the benefits of this strategy both organically, by working directly with customers and distribution partners in order to grow our sales channels, and now through this potential strategic acquisition, which would become additive to our overall long-term vision and strategy. If completed, this acquisition would immediately provide Mission Ready with a high level of contract past-performance and will open doors for the Company to participate in opportunities that would not otherwise be available to Mission Ready. We are excited at the prospect of ultimately combining and leveraging our resources and connections with those of Unifire to grow their revenues and expand the business as a wholly-owned subsidiary of Mission Ready Solutions Inc.”

The Acquisition, including the payment of the purchase price, is subject to approval of the TSX Venture Exchange (“TSXV”). The Acquisition is also conditional upon receipt of all other applicable regulatory and third party consents, completion of satisfactory due diligence by the Company and the execution of definitive legal documentation by the parties. The Company believes that the Acquisition constitutes a Fundamental Acquisition, but will not constitute a Non-Arm’s Length Transaction and will not result in a Change of Control as defined by the TSXV’s policies.

Additional detailed information about the Acquisition, including financial information of TargetCo, will follow upon the entering into of definitive legal documentation.

The Credit Facility

The Company has entered into the Term Sheet for the provision of the Credit Facility, which is to be used primarily to fund the operations of TargetCo following the completion of the Acquisition.  In connection with the Credit Facility, the Creditor is to have first lien security against all of the assets of TargetCo, and other security to be determined following completion of the Creditor’s due diligence. The borrowing base for the Credit Facility will be equal to 80% of eligible receivables and up to 100% of the costs of goods on purchase orders received.  The fees associated with the Credit Facility will include a factoring fee computed with respect to accounts receivable borrowed against and a purchase order fee computed with respect to advances made against purchase orders, both of which are at competitive rates.  The Credit Facility is expected to require TargetCo to have orders of a minimum of USD$100 million within the first 15 months from the first date of accessing the Credit Facility, failing which TargetCo will be required to pay a 0.5% penalty on the face value of the orders received during such 15-month period.  The Credit Facility is subject to receipt of all necessary approvals, including the approval of the TSXV, as well as satisfactory due diligence by the Creditor and the entering into of definitive legal documentation.

The Offering

The Company has entered into the Engagement Letter with the Agent, pursuant to which the Agent is to act as the exclusive placement agent with respect to a private placement financing. The Engagement Letter contemplates that the private placement will be of equity, equity-linked debt, convertible securities or other securities issued by the Company (the “Securities”) at a price or conversion price, as the case may be, to be determined by the Company and the Agent, which price will be finalized in accordance with the TSXV policies, for gross proceeds of up to USD$15 million.  The Offering is to be conducted on a “reasonable efforts” basis.

As compensation for its services, the Agent will be entitled to fees equal to 6.0% of the gross proceeds raised in the Offering. The Agent will also be reimbursed for its reasonable expenses incurred as part of the Offering.  Pursuant to the Fee Agreement, the Company is to pay a commission equal to 2.0% of the gross proceeds raised in the Offering to Celadon.  All such fees and commissions are payable in cash upon closing of the Offering.  Celadon shall also separately receive a fee directly from the Creditor for assisting in obtaining the Credit Facility.

The Company anticipates that it will use the gross proceeds of the Offering to pay the cash portion of the purchase price for the Acquisition (USD$4 million), to pay certain debts and obligations of TargetCo (approximately USD$6 million), and to use the remainder primarily for fees, commissions, and working capital and general corporate purposes for the next several months of operations of the TargetCo business (up to USD$5 million).

The Offering is subject to receipt of all necessary approvals, including the approval of the TSXV.  All securities issued in connection with the Offering shall be subject to a four month statutory hold period.

This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities described herein, and these securities will not be offered or sold in any jurisdiction in which their offer or sale would be unlawful.  The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “1933 Act”), or any state securities laws of the United States.  Accordingly, these securities will not be offered or sold to persons within the United States unless an exemption from the registration requirements of the 1933 Act and applicable state securities laws is available.

Completion of the Acquisition, the Credit Facility and the Offering are subject to a number of conditions, including but not limited to, execution of definitive documentation and receipt of all applicable regulatory and third party consents. There can be no assurance that the Acquisition, the Credit Facility and/or the Offering will be completed as proposed or at all.

About Unifire, Inc.
Unifire specializes in providing mission critical equipment and services to the US and international militaries, law enforcement, tactical groups, fire and rescue, utilities and the general public through established relationships with over 500 vendors representing approximately 1.5 million products. Additionally, Unifire provides specialized training related to fire rescue, military, emergency response, law enforcement, swift water rescue, high angle rope operation and building collapse.

About Mission Ready Solutions Inc.
Headquartered in Vancouver, British Columbia, Canada, Mission Ready innovates and manufactures leading tech-centric defense and tactical solutions to prevent injuries and enhance the performance of military personnel, first-responders and all those who protect us by equipping them with the next generation of personal protective technologies.

Mission Ready is committed to becoming a global leader in personal protective technologies through the strategic growth of its three synergistic business segments; Innovations & Development, Prototyping & Manufacturing, and Product Sales.

Mission Ready trades on the TSX Venture Exchange under the symbol MRS.

For further information, visit MRSCorp.com or contact:

Investor Relations

T: 1.877.479.7778 – Ext 500
E: IR@MRSCorp.com

Mission Ready Solutions Inc.

(signed “Jeffery L. Schwartz”)

Jeffery L. Schwartz,
President & CEO

This news release contains “forward-looking information” within the meaning of applicable Canadian securities legislation. Generally, forward-looking information can be identified by the use of forward-looking terminology such as “anticipate”, “believe”, “plan”, “expect”, “intend”, “estimate”, “forecast”, “project”, “budget”, “schedule”, “may”, “will”, “could”, “might”, “should” or variations of such words or similar words or expressions. Forward-looking information is based on reasonable assumptions that have been made by Mission Ready Solutions Inc. as at the date of such information and is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Mission Ready Solutions Inc. to be materially different from those expressed or implied by such forward-looking information.

Forward-looking statements are based on assumptions management believes to be reasonable. Although Mission Ready Solutions Inc. has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. 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. Accordingly, readers should not place undue reliance on forward-looking information.  Mission Ready Solutions Inc. does not undertake to update any forward-looking information that is included herein, except in accordance with applicable securities laws.

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

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