CEBI CE Brands Inc

CALGARY, AB, Nov. 20, 2023 /CNW/ - CE Brands Inc. (TSXV: CEBI) ("CE Brands"), a data-driven consumer-electronics company, is pleased to announce that it has filed a preliminary short form prospectus (the "Preliminary Prospectus") with the securities regulatory authorities in Alberta, British Columbia, Manitoba, New Brunswick, Nova Scotia, Ontario, Prince Edward Island, and Saskatchewan, in connection with a public offering (the "Offering") of common shares in the capital of CE Brands (the "Shares"), for minimum gross proceeds of $4,000,000 and maximum gross proceeds of $5,000,000. 

CE Brands is also pleased to announce that it has entered into arrangements with investment vehicles advised or managed by Vesta Wealth Partners Ltd. ("Vesta") and an arrangement with Happy CP Company Limited ("CMC") to restructure portions of CE Brands' outstanding debt (the "Debt Restructuring").

"We are very happy to announce the Offering and Restructuring" said Kalvie Legat, Interim CEO of CE Brands. "With the recent management changes, a narrowing scope in strategy, and now the continued support of our key lenders, CMC and Vesta, we believe CE Brands is on the right track, with a much healthier balance sheet, to recover from a turbulent three years. Together with the previously announced shares-for-debt transactions, the Offering and Debt Restructuring represent a turning point for us and we look forward to the coming quarters of growth".

CE Brands has engaged Integral Wealth Securities Limited ("Integral") as the sole agent for the Offering, to use commercially reasonable efforts to market the Offering. The number of Shares to be distributed and the issue price for the Shares (the "Issue Price") will be determined by negotiation between CE Brands and Integral in the context of the market.

The Company has agreed to grant to Integral an option, exercisable in whole or in part at any time until the date that is 30 days after the closing of the Offering, to market for sale up to an additional 10% of the number of Shares sold pursuant to the Offering on the same terms as the Shares (the "Over-Allotment Shares").

In exchange for marketing the Offering, CE Brands will pay to Integral a cash commission equal to 8% of the gross proceeds of the Offering. The Corporation has also agreed to grant to Integral such number of agent warrants (the "Agent Warrants") as is equal to 8% of the aggregate number of Shares and Over-Allotment Shares sold under the Offering. Each Agent Warrant will entitle the holder to purchase one Share, at the Issue Price, for a period of 12 months following the closing date of the Offering.

CE Brands will apply to list the Shares on the TSX Venture Exchange (the "TSXV"). The Offering is subject to a number of conditions, including, without limitation, receipt of all regulatory approvals, including approval of the TSXV, and the completion of a consolidation of the common shares in the capital of CE Brands on a ten-for-one basis. CE Brands has called a special meeting of shareholders to be held on December 4, 2023, to seek shareholder approval of the proposed consolidation. CE Brands and Vesta have entered into a voting agreement under which Vesta has agreed to cause the investment vehicles that it advises and manages to vote in favour of the proposed consolidation at the special meeting of shareholders. A copy of the voting agreement is available on SEDAR+.

CE Brands intends to use the proceeds of the Offering to launch its Vitalist smartwatches, smart rings, and related health products; fund the expansion of its line of Moto smartwatches; and further reduce indebtedness. Further details are disclosed in the Preliminary Prospectus, available at www.sedarplus.ca.

Pursuant to a Letter of Intent dated November 14, 2023, the Corporation and Vesta agreed to restructure the senior secured debentures of CE Brands in the aggregate principal amount of $5,000,000, which are held by investment vehicles advised or managed by Vesta, by extending the maturity date of those debentures from April 30, 2024, to at least July 1, 2025.

Pursuant to an Amendment of Sale and Purchase of Future Receivables Agreement dated November, 15, 2023, between CE Brands and CMC, a copy of which is available on SEDAR+, CE Brands has agreed to repay a total of US$1,442,400 to CMC in accordance with the following repayment plan: 

Monthly repayments beginning in December 2025 will be calculated as the greater of the amounts shown in the foregoing table or 5% of net revenue of CE Brands for the same period.

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 about CE Brands, please visit www.cebrands.ca.

To be added to the CE Brands' distribution list, please register at www.cebrands.ca/investors.

CE Brands develops products with leading manufacturers under multiple brand names. With global distribution capability, our innovative, highly repeatable product development process aims to create an optimal growth path for CE Brands to be a nimble player in the consumer electronics sector.

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. In particular, the forward-looking information in this press release relates to the terms of the Offering, the completion of the Offering, the anticipated listing of the Shares on the TSXV and the receipt of applicable regulatory approvals, and the use of proceeds of the Offering. 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 it 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. A detailed description of risk factors that may cause actual results to differ materially ‎from forward-looking information can be found in the Preliminary Prospectus and in CE Brands' annual information form and management's discussion and analysis on the SEDAR+ website at www.sedarplus.ca. Although CE Brands has attempted to identify in its public disclosure important factors that could cause actual results to ‎differ materially from those contained in forward-looking information, there may be other factors that cause results ‎not to be as anticipated, estimated or intended. Readers are cautioned that the risk factors in its public disclosure may not ‎be exhaustive. Readers are further cautioned not to place undue reliance on forward-looking information as there can ‎be no assurance that the plans, intentions or expectations upon which they are placed will occur. Forward-looking ‎information contained in this press release is expressly qualified by this cautionary statement. The forward-looking ‎information contained in this press release represents the expectations of CE Brands as of the date of this press ‎release and, accordingly, is subject to change after such date. However, CE Brands expressly disclaims any intention ‎or obligation to update or revise any forward-looking information, whether as a result of new information, future ‎events or otherwise, except as expressly required by applicable securities law.

SOURCE CE Brands Inc.