SIMPLY SOLVENTLESS ANNOUNCES CLOSING OF STRATEGIC ACQUISITION OF ANC INC. AND PROVIDES UPDATES ON 2026 WARRANT EXERCISES AND MANITOBA PRODUCT LAUNCHES

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CALGARY, AB, Oct. 18, 2024 /CNW/ - Simply Solventless Concentrates Ltd. (TSXV: HASH) ("SSC") is pleased to announce that it has closed the previously announced acquisition of all the outstanding shares of ANC Inc. ("ANC") through a share purchase agreement ("SPA") (the "Acquisition"). A copy of the SPA is available on SEDAR+ under SSC's profile at www.sedarplus.ca. SSC is also pleased to provide updates regarding SSC's previously exercised right to accelerate the expiry of approximately 15,000,000 of SSC's outstanding common share purchase warrants (the "2026Warrants") that have an exercise price of $0.20 per warrant (the "Acceleration Right"), and the October launch of Astrolab, Frootyhooty, and Lamplighter products in Manitoba.

ANC Inc. Transaction Information

Leveraging the strong synergies of the Transaction, ANC will continue to operate independently as a leader in contract preroll manufacturing in Canada. Partnering with LPs nationwide, some for up to five years, ANC specializes in crafting traditional, cigarette-style, blunts and infused pre-rolls, ensuring quality and innovation in every product. ANC holds intellectual property, some of which is patented, and has a capacity of up to 5,000,000 prerolls per month. ANC recently launched its infused pre-roll brand "Status" into the Canadian recreational market, with the products selling out within a week of launching.

On a proforma basis, SSC expects strong normalized net income of approximately $10 million annualized by 2024 exit. For further information regarding the Transaction, including consideration, structure, ANC's profile, proforma figures, and Acquisition synergies, please see the news release dated September 26, 2024.

In conjunction with closing of the Acquisition, SSC issued to ANC shareholders: (i) promissory notes totalling $7 million, with up to an additional maximum of $3.5 million earnout (such contingent consideration payable 50% in common shares ("Common Shares") and 50% as an election of either Common Shares or cash) and an unknown, contingent patent earnout comprised of 0.2x EBITDA on only patent income and (ii) 6,000,000 units of SSC ("Units") at a deemed price of $0.50 per Unit. Each Unit consists of one Common Share and one-half of one common share purchase warrant ("Warrant") of SSC, with each whole Warrant being exercisable for one Common Share of SSC at a price of $0.75 per share for a period of two years from the date of issue.

Accelerated Expiry of $0.20 August 2026 Warrants

SSC has provided notice to all holders of 2026 Warrants that it is accelerating the expiry date of the 2026 Warrants to October 26, 2024. The 2026 Warrants are exercisable at a price of $0.20 per 2026 Warrant.

To date, approximately 5,500,000 of the available 15,000,000, 2026 Warrants have been exercised for proceeds of $1,100,000. Of the remaining 9,500,000 warrants, the holders of 7,500,000 Warrants have committed to exercise prior to the expiry date of October 26, 2024 and materially all of the remaining 2,000,000 balance are expected to be exercised. If all of the approximately 15,000,000 outstanding 2026 Warrants are exercised, SSC will receive proceeds of approximately $3,000,000. As noted above, SSC intends to use the net proceeds of the 2026 Warrant exercises, cash on hand, and cash flow from operations to fund the payments stipulated under the ANC acquisition.

Manitoba Product Launches

SSC is pleased to announce that Astrolab, Frootyhooty, and Lamplighter are now entering the Manitoba market with the launch of 25 SKUs. The following products will launch in October, 2024:

Astrolab:

1. Summer Cherry Punch 1g Lightspeed Cold Cured Live Rosin.
2. Cereal Milk 1g Lightspeed Cold Cured Live Rosin.
3. Guavacot Kush 1g Lightspeed Cold Cured Live Rosin.
4. Gummy Hash 2g.
5. Dab Light CBD 2.5g Baller Jar.

Frootyhooty:

1. Watermelon Coconut Distillate + Live Rosin Pre-Rolls 3 x 0.5g.
2. Poppin' Peach Distillate + Live Rosin Pre-Rolls 3 x 0.5g.
3. Gargantuan Grape Distillate + Live Rosin Pre-Rolls 3 x 0.5g.
4. Pink Lemonade Distillate + Live Rosin Pre-Rolls 3 x 0.5g.
5. Frooty Hash Taster Pack.
6. Watermelon Coconut 1g Distillate + Live Rosin 510 Cart.
7. Poppin' Peach 1g Distillate + Live Rosin 510 Cart.
8. Gargantuan Grape 1g Distillate + Live Rosin 510 Cart.
9. Watermelon Coconut 1g Distillate + Live Rosin Disposable.
10. Poppin' Peach 1g Distillate + Live Rosin Disposable.
11. Gargantuan Grape 1g Distillate + Live Rosin Disposable.
12. Watermelon Coconut Diamonds & Live Rosin Sauce.
13. Poppin' Peach Diamonds & Live Rosin Sauce.
14. Gargantuan Grape Diamonds & Live Rosin Sauce.

Lamplighter:

1. Tiger Berry Vape Cartridge 1g.
2. Lychee Bubble Tea 1g Disposable.
3. Tiger Berry 1g Disposable.
4. Tutti Frutti 1g Disposable.
5. Tiger Berry Infused Pre-Rolls.
6. Pineapple Coconut Escape Liquid Diamond Dabber.

About Simply Solventless Concentrates Ltd.

SSC is a public company incorporated under the Business Corporations Act (Alberta). SSC's mission is to provide pure, potent, terpene-rich ready to consume cannabis products to discerning cannabis consumers.

For more information regarding SSC, please see www.simplysolventless.ca.

Third-Party Information

All third-party information contained herein, including information regarding ANC which has been provided by management of ANC, has not been independently verified by SSC. While SSC believes such information to be reliable, SSC makes no representation or warranty as to the accuracy of such information.

Notice on Forward Looking Information

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 Acquisition, financial projections and synergies of the Acquisition, the number of 2026 Warrants exercised, capitalizing on SSC's business plan and SSC's results of operations and performance. 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 realize expected revenue and cost synergies of the Acquisition on the timelines expected, the risk that the businesses will not be integrated successfully, 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 normalized net income of SSC, which are 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 future business operations assuming closing of the Acquisition. 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.

Non-IFRS Financial Measures

This press release includes references to "normalized net income" which is not defined under International Financial Reporting Standards (IFRS). The intent of this non-IFRS measure is to provide additional useful information to investors and analysts. The non-IFRS measure does not have standardized meanings prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other entities. As such, the non-IFRS measure should not be considered in isolation or used as a substitute for measures of performance prepared in accordance with IFRS.

Normalized net income is calculated as income plus non-recuring expenses, one-time gains/(losses) and share compensation expense. Normalized net income is considered as a useful measure by management of SSC to understand the profitability of SSC excluding the effects of certain non-operating items.

The following table reconciles net income (loss) to normalized net income:

This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction.

Neither 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.

SOURCE Simply Solventless Concentrates Ltd.

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