EDMONTON,
ALBERTA, CHATHAM, ONTARIO and TEL-AVIV, ISRAEL, May 01, 2023 (GLOBE NEWSWIRE)
-- PRESS RELEASE -- Atlas Global Brands Inc., a cannabis company with expertise across the value chain, is announcing the closing of its acquisition of
GreenSeal Cannabis Company, Ltd. and GreenSeal Nursery Ltd., a privately-owned
Ontario-based licensed cannabis producer and nursery.
On Feb. 27, 2023, Atlas Global announced it signed a definitive share purchase agreement to acquire GreenSeal in order to scale the production and sale of premium indoor flower, intended for export to international markets.
The acquisition, signed on April 28, 2023, includes the addition of GreenSeal’s
facility, which generated approximately $8.0M in sales in 2021 and was income
positive and is expected to be accretive to Atlas’ international strategy by
adding a GACP & CUMCS certified facility with a vertical cultivation model,
akin to Atlas’ Chatham, Ontario facility. The GreenSeal facility is expected to
expand the company’s annual production capacity by approximately 3,500 kg and
add a nursery program with hundreds of exotic genetics, further strengthening
Atlas Global’s international value chain capabilities.
“The
closing of this GreenSeal acquisition is another step in executing on our
strategy to bring a wide assortment of premium flower to international medical
cannabis markets,”
said Bernie Yeung, CEO of Atlas Global.
“With the recently
announced signing of
definitive agreements to
acquire two additional pharmacies and a trading house, along with binding LOIs
to acquire an additional two pharmacies in Israel, we believe we are set up for success in growing
Atlas’ international presence. We intend to uphold our value proposition of
offering consistent, quality products to patients.”
The
Acquired Business – GreenSeal
GreenSeal owns
an innovative genetic selection program, enabling the search for sought-after
phenotypes. This is expected to enhance Atlas’ ability to achieve the full
genetic potential of its cultivars with regards to flower composition, potency,
terpene profile and yield maximization. GreenSeal’s genetic selection program
generates hundreds of candidates of a particular strain, then uses data
modeling to identify the seeds with the strongest lab-tested levels of both THC
and terpenes, along with the most desirable traits for its indoor growing
environment.
GreenSeal’s
facility, with existing GACP & CUMCS certifications, produces just over
3,500 kg of cannabis flower annually, supporting the assortment needs of
patients internationally. GreenSeal’s cultivation facility will be utilized
alongside Atlas Global’s existing two facilities. This will enable Atlas Global
to increase its production capacity of consumer and patient-demanded cannabis
genetics, while continuing to manufacture product in a cost-effective
environment.
Transaction
Details
Pursuant to
the Share Purchase Agreement, Atlas Global issued to the GreenSeal vendors an
aggregate of 7,612,358 common shares of Atlas Global
at an issue price per share equal to CAD $0.4374, representing the 20-day
volume weighted average closing price of the company’s common shares on
the Canadian Securities Exchange prior to closing. A further 2,387,642 common shares have been reserved for
issuance to the GreenSeal vendors under the Share Purchase Agreement in
connection with certain withholding obligations of the company. Up to an
additional 1,500,000 shares may be issued at the 12-month anniversary of the
closing date of the acquisition based on the then VWAP of the Atlas Global common
shares.
Approximately
CAD $5.5 million in bank debt and CAD $0.6 million in long-term loans remain
with GreenSeal post-closing.
The Consideration
Shares will be subject to a contractual lock-up, pursuant to which 15% of the
Consideration Shares will be released every six months commencing on the
six-month anniversary of the Closing Date, until the 36-month anniversary of
the Closing Date. If, however, the volume weighted average closing price per
share for the 20 trading days preceding the share releases on the 18, 24, and
30-month release dates is at least CAD $2.00, an additional 5% of the
Consideration Shares will be released on such release date, the issuance of
such additional Consideration Shares reducing by the same number from the final
release of Consideration Shares on the 36-month anniversary of the Closing
Date.
The acquisition is an arms-length transaction and does not constitute a fundamental
change or result in a change of control of the company within the meaning of
the policies of the CSE.
Atlas Global
is not liable for any finder’s fees in respect of the acquisition.
