Kelowna, BC – TheNewswire – May 16, 2022—Forbidden Spirits Distilling Corp. (TSXV:VDKA) – the “Company” or “Forbidden Spirits”), a fast-growing craft distillery headquartered in Kelowna, British Columbia, is pleased to provide an update on its previously announced non-brokered private placement (the “Private Placement”) of convertible debenture units (the “Units”) and proposed acquisition (the “Acquisition”) of the issued and outstanding securities of Ontario-based Niagara Falls Craft Distillers Ltd. (“Niagara”).
As previously announced on March 9, 2022, the Company has entered into a non-binding letter of intent for the Acquisition of Niagara, an arm’s length craft distiller, for an aggregate purchase price of approximately $4.8 million payable as to approximately $4 million in cash and as to approximately $810,000 through the issuance of 1,124,898 common shares in the capital of the Company (the “Common Shares”), representing a deemed price of $0.72/share.
Completion of the Acquisition is subject to a number of conditions, including, but not limited to: (i) the entering into of a definitive agreement by June 30, 2022 (ii) the completion of satisfactory due diligence by each of the parties, (iii) the approval by the directors and shareholders (if required) of the Company and Niagara, (iv) receipt of all requisite regulatory approvals, including the approval of the TSX Venture Exchange (the “Exchange”) and/or governmental authorizations and consents, and (v) the Company obtaining the requisite financing on terms and conditions satisfactory to the Company. There can be no assurance that the Acquisition will be completed on the terms contained herein or at all.
As previously announced on April 5, 2022, the Company has launched the Private Placement of Units. Each Unit to be comprised of one secured convertible debenture of the Company in the aggregate principal amount of $1,000 (each, a “Convertible Debenture”) and 500 common share purchase warrants of the Company (each, a “Warrant”). Each Convertible Debenture shall be convertible into common shares of the Company (the “Common Shares”) at a price of $0.30 per share (the “Conversion Price”) for a period of three years following the Closing Date (as defined herein). Each Warrant entitles the holder to acquire one Common Share at a price of $0.50 for a period of two years from the Closing Date.
The Convertible Debentures shall bear simple interest at a rate of 8.0% per annum from the date of issue and payable semi-annually in arrears on the last day of December and June in each year. Should the volume weighted average trading price of the Common Shares on the Exchange (or such other recognized stock exchange on which the Common Shares primarily trade) be greater than $0.75 for any ten consecutive trading days, the Company may give notice to all holders of outstanding Convertible Debentures of the mandatory conversion of all, but not less than all, of the then outstanding Convertible Debentures at the Conversion Price. In addition, at any time following the Closing Date, the Company may, at its option, redeem pro rata all or part of the Convertible Debentures, upon not less than 30 nor more than 60 days’ prior written notice, at a redemption price which is equal to 105% of the principal amount thereof, plus any accrued and unpaid interest that would otherwise be payable to the holder up to the redemption date.
It is anticipated that the Convertible Debentures will be secured by way of share pledge against the common shares of a wholly-owned subsidiary of the Company which the Company anticipates will own 100% of the common equity of Niagara should the Acquisition be completed.
The Company intends to use the net proceeds from the Private Placement to fund the Acquisition and for planned capital expenditures, working capital and general corporate requirements associated with the Acquisition and otherwise.
Subject to the satisfaction of customary conditions, including receipt of approval of the Exchange as well as finalization and execution of definitive documentation, the Private Placement is expected to close on or about June 30, 2022, or such other date as the Company may determine (the “Closing Date”).
The Convertible Debentures and the Warrants comprising the Units and any Common Shares issuable upon conversion or exercise thereof, as applicable, will be subject to a statutory hold period lasting four months and one day following the Closing Date.
The Company anticipates paying a cash commission to eligible finders equal to 6.0% of the gross proceeds of the Private Placement as well as issuing compensation warrants equal to 6.0% of the gross proceeds of the Private Placement divided by the CDN$0.30 Conversion Price for a period of 24 months after the Closing Date.
The securities being offered have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons absent registration or an applicable exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any State in which such offer, solicitation or sale would be unlawful.
About Forbidden Spirits Distilling Corp:
Forbidden Spirits is a fast-growing craft distillery and trades under the ticker symbol VDKA on the TSX Venture Exchange.
Forbidden Spirits currently manufactures and distributes a portfolio of ultra-premium brands including:
Additional information with respect to Forbidden Spirits and its portfolio of ultra-premium spirits can be found on Forbidden Spirits’ website at www.forbiddenspirits.ca.
About Niagara Falls Craft Distillers:
Niagara Falls Craft Distillers Ltd. is a leading Ontario-based craft distiller making award-winning craft spirits, beers, and ready-to-drink products for themselves and by contract for others since 2016.
ON BEHALF OF THE BOARD OF DIRECTORS:
Chairman and CEO
Email: [email protected]
Phone: (250) 317-0996
This press release contains forward-looking statements and information based on the beliefs of management and reflects the Company’s current expectations. When used in this press release, the words “estimate”, “project”, “belief”, “anticipate”, “intend”, “expect”, “plan”, “predict”, “may” or “should” and the negative of these words or such variations thereon or comparable terminology are intended to identify forward-looking statements and information. Risks and uncertainties that may cause actual results to differ materially from those contemplated in those forward-looking statements and information.
Forward-looking statements in this document include statements regarding the Company’s expectations regarding the terms the Private Placement and receipt of related regulatory approvals, the use of proceeds from the Private Placement, the timing and ability of the Company to close the Private Placement, the Company’s ability to close the Acquisition, and other statements that are not historical facts. By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, that there is no assurance that Forbidden Spirits will obtain the requisite regulatory approvals for the Private Placement, including those required from the Exchange; or that the Private Placement or Acquisition will close on the terms anticipated or at all
Such forward-looking statements are based on a number of assumptions including, but not limited to the economy generally; the COVID-19 pandemic; adverse industry events; the receipt of required regulatory approvals and the timing of such approvals; consumer interest in the services and products of the Company; financing; competition; and anticipated and unanticipated costs. Although the Company has attempted to identify important factors that could cause actual actions, events, or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended.
THE FORWARD-LOOKING INFORMATION CONTAINED IN THIS PRESS RELEASE REPRESENTS THE EXPECTATIONS OF THE COMPANY AS OF THE DATE OF THIS PRESS RELEASE AND, ACCORDINGLY, IS SUBJECT TO CHANGE AFTER SUCH DATE. READERS SHOULD NOT PLACE UNDUE IMPORTANCE ON FORWARD-LOOKING INFORMATION AND SHOULD NOT RELY UPON THIS INFORMATION AS OF ANY OTHER DATE. WHILE THE COMPANY MAY ELECT TO, IT DOES NOT UNDERTAKE TO UPDATE THIS INFORMATION AT ANY PARTICULAR TIME EXCEPT AS REQUIRED IN ACCORDANCE WITH APPLICABLE LAWS.
Neither the 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 press release.
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