November 15, 2021
Calgary, Alberta, Canada - November 15, 2021 - CE Brands Inc. (TSXV: CEBI; CEBI.WT) (“CE Brands”, “we”, “our”, or the “Company”), a data-driven consumer-electronics company, is pleased to announce the closing of its previously announced private placement of senior secured convertible notes (the “Convertible Notes”) for aggregate committed capital of $4,000,000, with a potential upsize in the amount of $2,000,000 (the “Debt Financing”) and non-brokered private placement equity financing (the “Equity Financing”, and together with the Debt Financing, the “Private Placement”) with existing institutional investors for aggregate gross proceeds of $1,400,000. In addition, 2,000,000 common share purchase warrants (“Warrants”) have been issued to the holders of the Convertible Notes and 112,000 finder’s Warrants have been issued to certain eligible finders under the Equity Financing, and a cash fee of $112,000 was paid to certain eligible finders in connection with the Equity Financing.
The Company intends to use the proceeds from the Private Placement to address the Company’s working capital needs, including for the purchase of inventory and for general corporate purposes.
“We are very pleased to be able to announce the closing of these financings,” said Craig Smith, CEO of CE Brands. “These funds significantly improve CE Brands’ financial position, alleviate our current working capital constraints and better position us to develop and deliver high quality consumer electronic products to the market,” continued Mr. Smith.
The Company’s common shares (“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, the Warrants and the Common Shares issued pursuant to the Equity Financing on the TSXV. Neither the Convertible Notes, the “Upsize” Convertible Notes, the Warrants nor the finders 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 Private Placement will be subject to a hold period of four (4) months and one day expiring on March 13, 2022. The form of Convertible Note will be filed under the Company’s profile on SEDAR at www.sedar.com.
Disclosure Required under MI 61-101
The board of directors of CE Brands (the “Board”) determined that the Debt Financing constituted 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 – which the Board determined is a “related party” of the Company pursuant to MI 61-101 – exercises certain discretionary control. The Debt Financing 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 of the Board and other information required by MI 61-101 in connection with the Debt Financing is set forth in the Company’s material change report dated November 9, 2021 and filed under the Company’s SEDAR profile at www.sedar.com.
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.
To be added to the CE Brands’ distribution list please register at https://www.cebrands.ca/investors
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 potential benefits and effects of the Private Placement, the anticipated use of the proceeds from the Private Placement, and the Company’s ability to manage manufacturing, supply chain and inventory constraints and continue to operate its business in the ordinary course.
The forward-looking information is based on certain key expectations and assumptions, including the receipt of all regulatory and related approvals for the Private Placement, timing of the resumption of manufacturing operations at the Company’s partner factories in Asia, the timing of product shipments and deliveries, forecast sales price and sales volume of the Company’s products and the ability of the Company to secure additional sources of inventory debt funding in 2022.
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; 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 2021 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 1-855-770-2324