SIMPLY SOLVENTLESS ANNOUNCES HIGHLY ACCRETIVE ALL SHARE DEAL TO ACQUIRE CANADABIS (STIGMA GROW), CREATING #2 CONCENTRATES AND #5 PREROLL PRODUCER, AND CANADABIS ANNOUNCES $2.5 MILLION CONVERTIBLE DEBENTURE FINANCING
SIMPLY SOLVENTLESS ANNOUNCES HIGHLY ACCRETIVE ALL SHARE DEAL TO ACQUIRE CANADABIS (STIGMA GROW), CREATING #2 CONCENTRATES AND #5 PREROLL PRODUCER, AND CANADABIS ANNOUNCES $2.5 MILLION CONVERTIBLE DEBENTURE FINANCING |
| [12-March-2025] |
/NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES./ CALGARY, AB, March 12, 2025 /CNW/ - Simply Solventless Concentrates Ltd. (TSXV: HASH) (OTC: SSCLCF) ("SSC") and CanadaBis Capital Inc. ("CanadaBis" or "Stigma Grow") (TSXV: CANB) are pleased to announce that they have entered into an arrangement agreement (the "Arrangement Agreement") dated March 11, 2025 pursuant to which SSC will acquire all of the issued and outstanding common shares of CanadaBis by way of a court approved plan of arrangement under the Business Corporations Act (Alberta) (the "Transaction"). Upon closing of the Transaction, the combined entity is estimated to rank second and fifth in the Canadian concentrates and preroll categories respectively, excluding Quebec. CanadaBis also announces that it has launched a brokered private placement financing of up to 2,500 unsecured convertible debentures (the "Debentures") at a price of $1,000 per Debenture, for gross proceeds of up to $2.5 million (the "Financing"), led by Research Capital as the sole agent and sole bookrunner.
Jeff Swainson, SSC's President & CEO, stated: "This Transaction is a true win-win for all parties, with CanadaBis garnering a premium of 78% to their 30-day VWAP while SSC increases Q2 2025 proforma annualized revenue and normalized net income per share by approximately 65% and 44%, respectively." Swainson continued: "Through years of combined experience, both SSC and CanadaBis have developed competitive advantages in commercialization, market penetration, lean operations, accretive acquisitions, and acquisition integration, and as we move forward together, we will have the strength of team, critical mass, profitability, and strategic positioning to drive continued and sustainable positive results in a capital starved industry ripe with impactful opportunities." Travis McIntyre, President & CEO of CanadaBis, stated: "CanadaBis has achieved positive adjusted EBITDA in thirteen straight quarters and net income profitability in eleven of the past twelve quarters. Despite our profitable operations, it has become clear to our board that industry consolidation and critical mass is required to drive sustainable competitive advantage." McIntyre added: "After a thorough evaluation of potential acquisition targets and suitors, SSC stood out to our board as a premier licensed producer with a bright future, and ultimately, as the ideal partner to achieve these goals. It is our strong belief that CanadaBis and SSC together will be a formidable company capable of positively disrupting the cannabis industry in Canada and internationally, and most importantly, that this combination will drive significant value creation for our shareholders both now and into the future." A copy of the Arrangement Agreement will be available on SEDAR+ under each of SSC's profile and CanadaBis' profile at www.sedarplus.ca. ABOUT SSC & CANADABIS
TRANSACTION HIGHLIGHTS
BENEFITS FOR CANADABIS SHAREHOLDERS
BENEFITS FOR SSC SHAREHOLDERS
BENEFITS FOR ALL SHAREHOLDERS & OPERATING SYNERGIES
SSC HISTORIC FINANCIAL FIGURES (UNAUDITED) The table below contains references to adjusted EBITDA and forward-looking information, which is a non-IFRS measure. See "Non-IFRS Financial Measures" and "Notice on Forward Looking Information" below.
CANADABIS HISTORIC FINANCIAL FIGURES
PROFORMA SSC & CANADABIS CASH, WORKING CAPITAL & COMMON SHARES
PROFORMA SSC & CANADABIS INCOME STATEMENT FIGURES SSC & CanadaBis expect to capture approximately $5.0 million of annual cost reduction synergies through the year. The table below reflects these synergies being captured.
CANADABIS TRANSACTION METRICS The CanadaBis Transaction metrics are as follows:
SSC TRANSACTION METRICS The table below contains references to adjusted EBITDA, which is a non-IFRS measure. See "Non-IFRS Financial Measures" below.
Closing of the Transaction is subject to a number of conditions precedent, including but not limited to the approval of the TSXV, approval of CanadaBis shareholders (for which 67% have entered into support agreements) and a notification to Health Canada. There is no guarantee that the Transaction will close on the terms set forth herein or at all. $2.5 MILLION CANADABIS CONVERTIBLE DEBENTURE FINANCING The financing is an integral part of the Transaction to CanadaBis. Proceeds from the Debentures will be used to ensure CanadaBis meets various conditions of the transaction, as well as to free up cash flow to invest in inventory to accelerate the timing of product launches to coincide with the completion of the Transaction. The Debentures have the following key terms:
The Debentures will be exchanged for debentures of SSC ("SSC Debentures") on closing of the Transaction. The SSC Debentures will be exercisable for SSC common shares and will otherwise be on the same terms as the Debentures, with an adjustment to the conversion price of the SSC Debentures based on the Transaction's exchange ratio. CanadaBis will grant the Agent an option (the "Agent's Option") to increase the size of the Financing by up to 15% of the Debentures, exercisable by giving written notice of the exercise of the Agent's Option, or a part thereof, to CanadaBis at any time up to 48 hours prior to the time of closing of the Financing. Closing of the Financing is expected to occur on or about April 2, 2025, and is subject to a number of conditions precedent, including but not limited to the approval of the TSXV. The Debentures and any Common Shares issuable upon conversion thereof will be subject to a statutory hold period of four months and one day after the closing of the Financing. ABOUT SIMPLY SOLVENTLESS CONCENTRATES LTD. SSC is a public company (TSXV: HASH) incorporated under the Business Corporations Act (Alberta). SSC's mission is to provide pure, potent, terpene-rich ready to consume cannabis products to discerning cannabis consumers. For more information regarding SSC, please see www.simplysolventless.ca. Simply Solventless Concentrates Ltd. ABOUT CANADABIS CAPITAL LTD. CanadaBis Capital Inc. is a public company (TSXV: CANB) is a vertically integrated Canadian cannabis company focused on achieving large-scale growth in the global cannabis market – with specific attention paid to supplying the fast-emerging concentrates category through their Stigma Grow cultivation and BHO extraction facility. Third-Party Information All third-party information contained herein, including information regarding SSC and CanadaBis which has been provided by the respective management of each of SSC and CanadaBis, has not been independently verified by the other party. While each party believes such information to be reliable, each party makes no representation or warranty as to the accuracy of such third-party information. Notice on Forward Looking Information SSC financial results as at January 31, 2025 which together with the unaudited financial results for the twelve months ended December 31, 2024 are estimates and subject to change pending completion of the audit of the financial results for the year ended December 31, 2024 due to be filed on SEDAR+ on or before April 30, 2025. This press release contains forward-looking statements and forward-looking information (collectively, "forward-looking statements") within the meaning of applicable securities laws. Any statements that are contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are often identified by terms such as "may", "should", "anticipate", "will", "estimates", "believes", "intends", "expects", "projected", "approximately" and similar expressions which are intended to identify forward-looking statements. More particularly and without limitation, this press release contains forward looking statements concerning the benefits of the Transaction, including expected market position, financial projections and synergies of the Transaction, revenue growth, the use of proceeds for the Financing, completing opportunistic acquisitions, capitalizing on SSC's business plan and SSC's results of operations and performance, the consideration to be received by CanadaBis' shareholders, which may fluctuate in value due to SSC's common shares forming the consideration, the closing of the convertible debenture offering, the satisfaction of closing conditions including, without limitation (i) required CanadaBis shareholder approval; (ii) necessary court approval in connection with the plan of arrangement, (iii) SSC obtaining the necessary approvals from the TSXV Exchange for the listing of securities in connection with the Transaction; (iv) CanadaBis obtaining the necessary approvals from CanadaBis shareholders and the TSXV for the delisting of the CanadaBis Shares; and (v) other closing conditions, including, without limitation, obtaining certain consents, and compliance by SSC and CanadaBis with various covenants contained in the Arrangement Agreement. SSC and CanadaBis each cautions that all forward-looking statements are inherently uncertain, and that actual performance may be affected by a number of material risks, factors, assumptions and expectations, many of which are beyond the control of SSC and CanadaBis, including expectations and assumptions concerning SSC and CanadaBis, the ability to satisfy conditions precedent to the closing of the Transaction, including approval of the TSXV, CanadaBis shareholders and Health Canada, the ability to realize expected revenue and cost synergies of the Transaction on the timelines expected, the risk that the businesses will not be integrated successfully, the ability to maintain relationships with customers, employees and suppliers, the timing and market acceptance of products, competition in SSC's and CanadaBis' markets, SSC's and CanadaBis' reliance on customers, fluctuations in interest rates, SSC's and CanadaBis' ability to maintain good relations with its customers, employees and other stakeholders, changes in law or regulations, SSC's and CanadaBis' ability to protect its intellectual property, as well as other risks and uncertainties, including those described in each of SSC's and CanadaBis' filings available on SEDAR+ at www.sedarplus.ca. The reader is cautioned that assumptions used in the preparation of any forward-looking statements may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted as a result of numerous known and unknown risks, uncertainties and other factors, many of which are beyond the control of SSC and CanadaBis. The reader is cautioned not to place undue reliance on any forward-looking statements. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this press release are expressly qualified by this cautionary statement. The forward-looking statements contained in this press release are made as of the date of this press release, and each of SSC and CanadaBis does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by securities law. Future Oriented Financial Information This press release contains future-oriented financial information and financial outlook information (collectively, "FOFI") about gross revenue, net income, adjusted EBITDA, EBITDA, normalized net income, and inventory turnover, which are subject to the same assumptions, risk factors, limitations and qualifications as set forth in the above paragraphs. FOFI contained in this document was approved by management as of the date of this document and was provided for the purpose of providing further information about SSC's and CanadaBis' future business operations assuming closing of the Transaction. SSC, CanadaBis and their respective management believe that FOFI has been prepared on a reasonable basis, reflecting management's best estimates and judgments, and represent, to the best of management's knowledge and opinion, each of SSC's and CanadaBis' expected course of action. However, because this information is highly subjective, it should not be relied on as necessarily indicative of future results. Each of SSC and CanadaBis disclaims any intention or obligation to update or revise any FOFI contained in this document, whether as a result of new information, future events or otherwise, unless required pursuant to applicable law. Readers are cautioned that the FOFI contained in this document should not be used for purposes other than for which it is disclosed herein. Differences in the timing of capital expenditures or revenues and variances in production estimates can have a significant impact on the key performance measures included in SSC's and CanadaBis' guidance. SSC's actual results may differ materially from these estimates. Non-IFRS Financial Measures This press release includes references to "normalized net income", "adjusted EBITDA" and "EBITDA" which are not defined under International Financial Reporting Standards (IFRS). The intent of these non-IFRS measures is to provide additional useful information to investors and analysts. These non-IFRS measures do not have standardized meanings prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other entities. As such, these non-IFRS measures should not be considered in isolation or used as a substitute for measures of performance prepared in accordance with IFRS. Normalized net income is calculated as income plus non-recuring expenses, one-time gains/(losses) and share compensation expense. Normalized net income is considered as a useful measure by management to understand the profitability excluding the effects of certain non-operating items. Adjusted EBITDA is calculated as income before interest, taxes, depreciation and amortization expenses. Adjusted EBITDA is considered as a useful measure by management to understand profitability excluding the effects of capital structure, taxation and depreciation, but may not be appropriate for other purposes. Adjusted EBITDA is not defined under IFRS and therefore should not be considered an alternative to, or more meaningful than, income (loss) and comprehensive income (loss). This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction. 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 release.
SOURCE CanadaBis Capital Inc. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Company Codes: TorontoVE:CANB, OTC-PINK:SSCLCF, OtherOTC:SSCLCF, TorontoVE:HASH |
