May 26, 2022
Calgary, Alberta, Canada – May 26, 2022 - CE Brands Inc. (TSXV: CEBI; CEBI.WT) (“CE Brands”, “we”, “our”, or the “Company”), a data-driven consumer-electronics company, is pleased to announce it has closed the Company’s previously announced non-brokered private placement (the “Offering”)of senior secured convertible notes (the “Convertible Notes”) with certain investment entities management or advised by Vesta Wealth Partners Ltd., a leading Canadian investment firm purchasing Convertible Notes having an aggregate principal amount of CA$1,000,000. As a result of the previously announced increase in the Company’s existing credit facility (the “Choco Facility”) with Choco-Up in an amount up to US$2,250,000 of net proceeds to the Company, the Company has determined not to pursue the remaining contemplated CA$2,000,000 of the Offering.
The Common Shares are currently listed on the TSXV under the symbol “CEBI”. The Company has received approval from the TSXV to list the common shares underlying the Convertible Notes and the common share purchase warrants issued under the Offering on the TSXV. Neither the Convertible Notes nor the Warrants will be listed on the TSXV.
Pursuant to the policies of the TSXV and applicable Canadian securities laws, the securities issued and issuable in connection with the Offering will be subject to a hold period of four (4) months and one day expiring on September 26, 2022. The form of Convertible Note will be filed under the Company’s profile on SEDAR at www.sedar.com.
Required Disclosure under MI 61-101
The board of directors of CE Brands (the “Board”) determined that the Offering constitutes a “related party transaction” for the purposes of Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions (“MI 61-101”), as it involved the Company issuing securities to and borrowing money from entities over which Vesta, a “related party” of the Company pursuant to MI 61-101, exercises certain discretionary control. The Offering was exempt from both the formal valuation requirements and minority approval requirements of MI 61-101 for related party transactions by virtue of Sections 5.5(g) and 5.7(e) of MI 61-101.
A further discussion and description of the review and approval process adopted by the independent and disinterested members of the Board and other information required by MI 61-101 in connection with the Offering will beset forth in the Company’s material change report to be filed following the closing of the Offering under the Company’s SEDAR profile at www.sedar.com.
The closing of the Offering will take place prior to the anticipated filing of the Company’s material change report. In the context of the Company’s liquidity and working capital constraints, it is necessary for the Company to close the Offering on an expedited basis to improve the Company’s financial position and as such, it was not possible to delay closing of the Offering until after the filing of the material change report.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy securities of the Company in the United States nor shall there be any sale of securities of the Company in any jurisdiction in which such offer, solicitation or sale would be unlawful. The securities described herein have not been, and will not be, registered under the United States Securities Act of 1933, as amended, or the securities laws of any state of the United States. Accordingly, any of the securities described herein may not be offered or sold in the United States or to U.S. persons unless an exemption from registration is available.
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 release.
For more information, please visit www.cebrands.ca.
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About CE Brands
CE Brands Inc. develops products with leading manufacturers and iconic brand licensors by utilizing proprietary data that identifies key market opportunities. With sales today in over 70 countries, our innovative, highly repeatable process, which we call the “CE Method”, has created an optimal growth path for CE Brands to be the premier global licensed brand manufacturer.
Forward-Looking Information
This press release contains forward-looking information within the meaning of applicable securities laws. In general, forward-looking information refers to disclosure about future conditions, courses of action, and events. The use of any of the words “anticipates”, “believes”, “expects”, “intends”, “plans”, “will”, “would”, and similar expressions are intended to identify forward-looking information. More particularly and without limitation, this press release includes forward-looking information with respect to the Offering and the anticipated availability of funding through the Choco Facility.
There can be no assurance that the Company will be able to secure additional financing in the future and/or complete the draws under the Choco Facility on the terms contemplated, in a timely manner or at all. If the Company fails to secure additional financing and/or complete the draws under the Choco Facility, then the Company may have insufficient liquidity and capital resources to operate its business resulting in material uncertainty regarding the Company’s ability to meet its financial obligations as they become due and continue as a going concern.
Although CE Brands believes that the expectations and assumptions on which such forward-looking information is based are reasonable, undue reliance should not be placed on the forward-looking information because CE Brands cannot give any assurance that they will prove to be accurate. By its nature, forward-looking information is subject to various risks and uncertainties, which could cause the actual results and expectations to differ materially from the anticipated results or expectations expressed in this press release. Such risks and uncertainties include, among others, the impact of the evolving Covid-19 pandemic on the Company’s business, operations and sales; reliance on third party manufacturers and suppliers; the Company’s ability to stabilize its business and secure sufficient capital, including the funding under the Choco Facility, which may not be completed in a timely manner or at all; the Company’s available liquidity being insufficient to operate its business and meet its financial commitments, which could result in the Company having to refinance or restructure its debt, sell assets or seek to raise additional capital, which may be on unfavorable terms; the inability to implement the Company’s objectives and priorities for 2022 and beyond, which could result in financial strain on the Company and continued pressure on the Company’s business; risks associated with developing and launching new products; increased indebtedness and leverage; the fact that historical and projected financial information may not be representative of the Company’s future results; the inability to position the Company for long-term growth; risks associated with issuing new equity including the possible dilution of the Company’s outstanding common shares; the value of existing equity following the completion of any financing transaction; the Company defaulting on its obligations, which could result in the Company having to file for bankruptcy or undertake a restructuring proceeding; the Company being put into a bankruptcy or restructuring proceeding; and the risk factors included in CE Brand’s continuous disclosure documents available on www.sedar.com. Readers are cautioned not to place undue reliance on this forward-looking information, which is given as of the date of this press release, and to not use such forward-looking information other than for its intended purpose. CE Brands undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events, or otherwise, except as required by applicable securities legislation.
Further Information
For further information about CE Brands or its principal operating subsidiary, eBuyNow eCommerce Ltd., please contact:
Kalvie Legat Rob Knowles
Chief Financial Officer Manager, Investor Relations
778-771-0901 403-472-6382
IR@cebrands.ca