Proposed Merger

August 13, 2015


Lattice Biologics Inc. (“Lattice”) is pleased to announce that it has entered into a letter of intent (the “LOI”) with Blackstone Ventures Inc. (“Blackstone”) (TSX‐V: BLV), a company listed on the TSX Venture Exchange. Pursuant to the LOI, Blackstone is proposing to acquire all of the issued and outstanding securities of Lattice (the “Transaction”). The Transaction will constitute a reverse takeover of Blackstone by Lattice with the resulting combined company being publicly listed on the TSX Venture Exchange.

The Transaction

On closing of the Transaction, the stockholders of Lattice will receive 35,764,184 shares of Blackstone in exchange for all of the issued common stock of Lattice. As a result, former stockholders of Lattice will own approximately between 77% and 82% of Blackstone. These shares of Blackstone will be comprised of both shares and/or unlisted convertible, restricted voting shares.

Under the terms of the LOI and prior to closing of the Transaction, Blackstone will have completed two share consolidations (effectively being a combined 60:1 consolidation of Blackstone) and settled outstanding debt through the issuance of common shares.

Additionally, Lattice has convertible notes having an aggregate principal amount of USD $1,050,000 and is in the process of granting rights to acquire an aggregate of 1,500,000 common shares of Blackstone over a period of three years in consideration of services to be rendered up to and including January 1, 2018, to members of Lattice’s Scientific Advisory Board. These commitments will be assumed by Blackstone and remain outstanding. It is anticipated that upon completion of the Transaction, Blackstone will have an aggregate of between 43,455,064 and 46,455,064 shares (inclusive of restricted shares) outstanding, and share purchase warrants to acquire up to an additional 3,333,333 shares outstanding.

Closing of the Transaction is subject to a number of conditions including Blackstone raising funds of up to $2,000,0000 (subject to a $1,100,000 minimum), both parties completing satisfactory due diligence, the entering into a definitive agreement in respect of the Transaction, receipt of all required shareholder, regulatory and third party approvals, including stock exchange approval, and satisfaction of other customary closing conditions. The Transaction cannot close until the required approvals are obtained. There can be no assurance that the Transaction will be completed as proposed or at all.

Grenville Royalty Financing

Lattice anticipates that, prior to the closing of the Transaction, Grenville Strategic Royalty Corp. (“Grenville”) will advance USD $700,000 (the “Loan”) to Lattice pursuant to a secured convertible promissory note (the “Note”). Amounts owing to Grenville under the Note will bear interest at a rate of 12.5% per annum, which interest rate will increase to 18% per annum upon the occurrence of an event of default under the Note. The Note will be secured pursuant to a general security agreement, and will mature and become payable by Lattice on July 31, 2016 (the “Maturity Date”). Under the terms of the Note, the entire outstanding amount of the Loan and any accrued and unpaid interest thereon may, at Lattice’s election, be repaid in part or in full prior to the Maturity Date, without penalty. At Grenville’s election, on or after the Maturity Date, the Loan, and interest due and payable thereon may be converted into a gross sales royalty (the “Royalty”) pursuant to an Amended and Restated Royalty Purchase Agreement (the “Royalty Agreement”) between Lattice and Grenville. Upon conversion, the Loan will form part of an aggregate US $3,700,000 advance (inclusive of the Loan) from Grenville under the Royalty Agreement. Subject to closing of the Transaction, Grenville will also receive 500,000 non-transferable share purchase warrants of Blackstone. Each warrant may be exercised to acquire one common share at a price of CAD $0.60 per share for a period of 12 months which may be reduced in certain circumstances.

About Lattice

Lattice is an emerging personalized/precision medicine leader in the field of cellular therapies and tissue engineering, with a focus on bone, skin, and cartilage regeneration. Lattice develops and manufactures biologic products to domestic and international markets.

Lattice’s products are used in a variety of applications, including:

• Enhancing fusion in spine surgery

• Enhancing breast reconstruction post mastectomy for breast cancer patients

• Sports medicine indications, including ACL repair

• Promotion of bone regeneration in foot and ankle surgery

• Promotion of skull healing following neurosurgery

• Enhancing wound repair in burn victims

• Subchondral bone defect repair in knee and other joint surgeries

Lattice is partnered in developing new precision medicine technologies to address widespread unmet clinical needs in cancer treatment. These technologies will provide an invaluable diagnostic service by utilizing patients’ own breast cancer or solid tumor cells, amplifying them within a human Extracellular Cellular Matrix (ECM) and utilizing proprietary viability markers to test the efficacy of anti-cancer agents.

Lattice’s principal goal is to develop diagnostic treatments capable of assisting physicians in identifying

the most effective treatment plans for individuals on a completely personalized basis.

Lattice’s headquarters, laboratory and manufacturing facilities are located in Scottsdale, Arizona. The facility includes ISO Class 1000 and ISO Class 100 clean rooms, and specialized equipment capable of crafting traditional allografts and precision specialty allografts for various clinical applications. The Lattice team includes highly trained tissue bank specialists, surgical technicians, certified sterile processing and distribution technicians, and CNC operators who maintain the highest standards of aseptic technique throughout each step of the manufacturing process. From donor acceptance to the final packaging and distribution of finished allografts, Lattice is committed to maintaining the highest standards of allograft quality, innovation, and customer satisfaction.

Lattice maintains all necessary licensures to process and sell its tissue engineered products within the U.S. and internationally. This includes Certificates to Foreign Governments from the U.S. Food and Drug Administration (FDA) for 29 countries, which allow the export of bone, tendon, meniscus, ligament, soft tissue, and cartilage products outside of the U.S. Further information on Lattice, including current financial statements, will be filed and posted on SEDAR upon the completion of disclosure document that will be prepared in accordance with stock exchange requirements in connection with the Transaction.

Board and Management

Following completion of the Transaction, Lattice’s principal shareholders, namely Guy Cook, Chief Executive Officer and Cheryl Farmer, Chief Financial Officer, each of Phoenix, Arizona, will serve as Chief Executive Officer and Chief Financial Officer of Blackstone following completion of the Transaction and Gregory Davis will serve as Chief Operating Officer. In addition, Blackstone’s board of directors will be reconstituted to include Mr. Cook, Ms. Farmer, Cathy Thomas, CPA, of Danville, California, Mario Stifano, CPA of Toronto, Ontario, and Blackstone’s current CEO and Director, Donald McInnes of Vancouver, British Columbia.

Lattice’s Chief Executive Officer, Guy Cook, remarked, “This board of directors and management team offers true depth across an indispensable range of expertise, which allows us to draw on beneficial contacts in M&A, Canadian government resources, and U.S. regulatory authorities.

Through the collaboration and focus of such a dedicated group of professionals, we are highly confident that we will execute Lattice’s goal of making personalized medicine available in the near future.

We recognize this is an excellent time to bring our products and services to market and we have assembled excellent senior managers to accomplish our growth goals. I am incredibly fortunate to partner with each one of these talented individuals.”

Guy Cook, Chief Executive Officer

Mr. Cook brings more than 25 years of experience organizing, managing, and running all aspects of startup and mid-size businesses. Prior to leading the asset purchase of International Biologics (renamed Lattice Biologics Inc.) in September of 2013, Guy founded and led Bacterin International Inc. (AMEX: BONE) from a small contract R&D start-up to a publicly traded multinational organization with sales in over 15 countries, multi-million dollar revenue, and more than 150 employees. Under his tenure, Bacterin revenues increased from USD $7.8mm in 2009 to USD $15.4mm in 2010 and USD $30.1mm in 2012, achieving record sales. Guy’s expertise includes over 18 years of experience in the tissue engineering field. He began his career as a confocal microscopist scientist, utilizing novel biomarkers at Montana State University’s Center for Biofilm Engineering, a National Science Foundation center of excellence.

Cheryl Farmer, CPA, Chief Financial Officer 

Ms. Farmer joined Lattice in September of 2014 with 20 years of experience as a CFO and business development specialist. She started her career with Big 6 accounting firms and soon began generating valuable and far-reaching professional relationships across a diverse network of industries. Prior to joining Lattice, Cheryl served as a Global Business Executive for the Greater Phoenix Economic Council (GPEC), Arizona’s premier economic development organization for public entities and private investors. In this role, she was responsible for identifying and building strategic relationships throughout Western Canada with individual businesses, government agencies, economic development organizations, and foreign trade associations to support expansion into America with great success. Cheryl’s trademark entrepreneurial spirit, determination to improve advanced stem cell technology outcomes, and expertise in finance, system/process implementation, efficiency management, business development, and growth strategy are critical assets for Lattice’s continued growth.

Gregory Davis, Chief Operating Officer

Mr. Davis joined Lattice as it Executive Director in August of 2014. Greg is a dynamic, results-focused leader with over 25 years of experience in the tissue banking industry. Throughout his career, Greg has worked with several organ procurement organizations and has also led eye and tissue banks. His emphasis has been on operations management, strategic planning, and the development of highly effective work teams to maximize productivity, while maintaining continuous quality improvement and regulatory compliance. Greg also brings extensive experience in developing operational budgets and cost containment initiatives.

Cathy Thomas, Board Member

Ms. Thomas, CPA, is the Founder of Paraclae, LLC, a thriving finance and accounting consulting firm that recently merged with Sensiba San Filippo, one of the largest Northern California based CPA and business consulting firms. Cathy offers over 30 years of experience in business accounting services, including 15 years with Deloitte and Touche, five of which as a partner. Her major career accomplishments address the critical areas of complex public offerings, global corporate auditing, and Sarbanes Oxley Compliance. Most significantly, the latter of which encompasses compliance program development and implementation to protect shareholders and the general public from accounting errors and fraudulent enterprise practices and to improve the accuracy of corporate disclosures. In 2002, she started the consulting arm of Armanino Mc Kenna, LLP, as a member of the firm’s executive committee. Providing outsourced internal audit services specifically to address Sarbanes Oxley Compliance, outsourced finance, and accounting resources, the firm tripled in size across six years driven by the increase in revenue from the consulting practice. In 2008, Cathy founded Paraclae and was profitable year one.

Mario Stifano, Board Member

Mr. Stifano, CPA, is currently President and CEO of Cordoba Minerals Corp. (TSX Venture: CDB), a Toronto-based junior resource exploration company focused on the exploration and acquisition of copper and gold projects in Colombia. He joins the team as a key Board Member. Mario is a seasoned executive who brings strong capital markets experience and will be invaluable to the development and implementation of a successful mergers and acquisitions strategy. Throughout his career, he has raised approximately $700mm in equity and debt for technology and resource companies, including raising funds for start-ups and an IPO. Mario’s extensive mergers and acquisitions experience, including a $400 million acquisition while CFO of Lake Shore Gold (TSX: LSG), will greatly assist Lattice and the pursuit of its growth strategies.

Donald McInnes, Board Member

Mr. McInnes comes to Lattice as a natural resources entrepreneur who began funding ideas through Canadian capital markets in 1993. Donald is the founder and former CEO of Plutonic Power Corporation (TSX: PCC), a British Columbia-based renewable power development company with a broad portfolio of clean energy projects. In 2011, Plutonic merged with Magma Energy Corp. (TSX: MXY) to create Alterra Power Corp. (TSX: AXY), a diversified clean energy company with annual gross revenue in excess of $100mm. Mr. McInnes currently serves as Alterra’s Vice Chairman of the Board and Chair of the Health & Safety Committee. Donald is a frequent public speaker, passionate contributor to the debate on public policy, and involved member of the business community. He shares his talents with a variety of boards and associations, including serving as Past Chair of the Board of Prostate Cancer Canada, Past Chairman of the Clean Energy Association of British Columbia, and Past Governor of the British Columbia Business Council, among many others. In the past four years, he has been awarded an EY Entrepreneur of the Year Award in the Pacific Division Cleantech category, the Queen’s Diamond Jubilee Medal, and the Clean Energy Association of British Columbia’s Lifetime Achievement Award. Lattice Biologics Inc.

Guy Cook

Chief Executive Officer

This news release may include forward-looking statements that are subject to risks and uncertainties. All statements herein, other than statements of historical fact, are to be considered forward looking. Generally, forward-looking information can be identified by the use of forward-looking terminology such as “anticipates” or variations of such words and phrases or statements that certain actions, events or results “will” occur. Forwardlooking statements are based on the opinions and estimates of management as of the date such statements are made and they are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed by such forward-looking statements or forward-looking information including: the amount and composition of the consideration to be received by Lattice stockholders; the share consolidations and debt settlement to be completed by Blackstone; the capital structure of Blackstone on closing of the Transaction; the advance and terms of the Loan; the benefits provided by Lattice’s new medicine precision technologies; the composition of Blackstone’s board of directors and management upon closing of the Transaction; the execution of Lattice’s goals; and the closing of the Transaction . Although Lattice believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in forward-looking statements. Factors that could cause actual results to differ materially from those in forward-looking statements include market prices, continued availability of capital and financing, and general economic, market or business conditions. There can be no assurances that such statements will prove accurate and, therefore, readers are advised to rely on their own evaluation of such uncertainties. We do not assume any obligation to update any forward-looking statements except as required under the applicable laws.

United States Advisory

The securities referenced herein have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws, and may not be offered or sold within the United States unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available. This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any state of the United States in which such offer, solicitation or sale would be unlawful.


Media Contact: Melanie Battista, Public Relations, Lattice Biologics Inc., 16701 N 90th Street, Suite #101, Scottsdale, AZ 85260, 480-563-0800 Office, |

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