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SIMPLY SOLVENTLESS ANNOUNCES $5.0 MILLION CONVERTIBLE DEBENTURE FINANCING WITH $3.0 MILLION LEAD ORDER, JANUARY RECORD REVENUE & NEAR-TERM PRODUCT LAUNCHES
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CALGARY, AB, Jan. 28, 2025 /CNW/ - Simply Solventless Concentrates Ltd. (TSXV: HASH) ("SSC") is pleased to announce that it has launched a non-brokered private placement financing of up to 5,000 secured convertible debenture units (the "Debenture Units") at a price of $1,000 per Debenture Unit, for gross proceeds of up to $5.0 million, inclusive of a $3.0 million lead order from institutional investor Plaza Capital (the "Financing"). Proceeds of the Financing are expected to fund the purchase price of the previously announced acquisition of all of the issued and outstanding shares of Delta 9 Bio-Tech Inc. ("Bio-Tech") (see link) which is anticipated to close in early February, to further strengthen SSC's balance sheet in readiness for future value additive opportunities and for general working capital purposes. SSC is also pleased to announce record expected monthly revenue in January 2025 of approximately $4.5 million (excluding Bio-Tech revenue), demonstrating the success of SSC's recent accretive acquisitions, and the near-term launch of 25 new and uniquely differentiated products under its existing prominent brands Astrolab, Frootyhooty, Lamplighter, and Zest into the Alberta and Ontario recreational markets.
SSC Logo (CNW Group/Simply Solventless Concentrates Ltd.)
Jeff Swainson, SSC President & CEO stated: "It was important to fund the Bio-Tech acquisition in a manner that limited dilution such that we could maximize earnings per share. This Financing is expected to accomplish that goal, with a $1.00/share conversion price and a $1.20/share warrant exercise price, reflecting 30% and 56% premiums to SSC's ten-day volume weighted average price, respectively. These premiums are indicative of the confidence that high-quality institutional investors such as Plaza Capital have in SSC's equity value, and such confidence will be a core facilitator of continued explosive growth for SSC." Swainson added: "SSC continues to post monthly record revenue due to both organic growth and acquisitions, and SSC's near-term product launches are a testament to SSC's vigilant focus on providing a suite of cannabis products that are among the highest quality available in Canada today."
$5.0 Million Convertible Debenture Financing
The Debenture Units have the following key terms:
Debenture Units: Each Debenture Unit consists of one $1,000 principal value convertible debenture of SSC (the "Debentures") and 1,000 common share purchase warrants of SSC ("Warrants").
Conversion: The Debentures are convertible into SSC common shares at $1.00 per SSC common share ("Conversion Price"), representing a 30% premium to SSC's 10-day VWAP trading price of $0.77, at any time during the term of the Debentures at the option of each holder.
Maturity Date: 48 months from the date of issuance.
Interest Rate: 11% per annum payable quarterly in cash or in SSC common shares at the Conversion Price, at the option of each holder.
Security: Each Debenture will be secured by all of the present and after acquired property of SSC, which will be evidenced by a general security agreement and a pledge of shares of SSC's subsidiaries.
Repayment: At maturity, the principal amount outstanding on the Debentures will be repaid by SSC in cash. SSC will have a right to prepay or redeem a part of the entire principal amount of the Debentures at any time prior to maturity by providing a minimum 10 days notice.
Warrants: Each Warrant is exercisable into one SSC common share at a price of $1.20 per common share for a period of four years from the date of issuance. If the maximum Financing is completed, a total of 5,000,000 Warrants will be issued. The Warrant exercise price of $1.20 per common share represents a 56% premium to SSC's 10-day VWAP trading price of $0.77.
No binding definitive agreement has been entered into with respect to the Financing and there is no guarantee the Financing will be completed on the terms disclosed in this press release or at all. The Financing and the Bio-Tech acquisition are subject to a number of conditions precedent, including but not limited to the approval of the TSX Venture Exchange (the "TSXV"). For more details regarding the Bio-Tech acquisition, see SSC's press release dated December 30, 2024 which is available on SSC's SEDAR+ profile at www.sedarplus.ca.
Record Monthly Revenue & Upcoming Product Launches
SSC is pleased to announce that it expects record monthly revenue of approximately $4.5 million in January 2025. To further expand revenue, SSC is launching approximately 25 new products in the Alberta and Ontario markets between February and April 2025. With 15 of the new products being infused prerolls and blunts, these new products leverage the strong preroll manufacturing capabilities of our wholly owned subsidiary ANC Inc., which SSC acquired in October 2024.
SSC is a public company incorporated under the Business Corporations Act (Alberta) that trades on the TSXV under the ticker symbol HASH. SSC's mission is to provide pure, potent, terpene-rich ready to consume cannabis products to discerning cannabis consumers.
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 Financing, the use of proceeds of the Financing, the closing date of the Financing and Bio-Tech acquisition, SSC's January 2025 revenue, and SSC's upcoming product launches. SSC 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, including expectations and assumptions concerning SSC, the ability to secure adequate financing on terms acceptable to SSC, the ability to maintain relationships with customers, employees and suppliers, the timing and market acceptance of products, competition in SSC's markets, SSC's reliance on customers, fluctuations in interest rates, SSC's ability to maintain good relations with its customers, employees and other stakeholders, changes in law or regulations, SSC's ability to protect its intellectual property, as well as other risks and uncertainties, including those described in SSC's 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. 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 SSC 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 revenue of SSC, which is 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 business operations. SSC and its 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, SSC's expected course of action. However, because this information is highly subjective, it should not be relied on as necessarily indicative of future results. SSC 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 guidance. SSC's actual results may differ materially from these estimates.
