CEBI CE Brands Inc

CALGARY, AB, Oct. 25, 2023 /CNW/ - CE Brands Inc. (TSXV: CEBI) (the "Company") announces that it has entered into definitive agreements to issue an aggregate of 421,974,842 common shares of the Company (the "New Shares"), at a deemed price of $0.02 per New Share, to certain creditors of the Company to settle aggregate debts of $8,439,497 (the "Transaction").  Following the Transaction, the Company intends to consolidate all its issued and outstanding common shares, including the New Shares (the "Consolidation"), on a ten-for-one basis.

Under the terms of the definitive agreements, the Company will issue an aggregate of 382,265,941 New Shares, representing 85.47% of the outstanding common shares of the Company on a post-Transaction basis, to investment vehicles advised or managed by Vesta Wealth Partners Ltd. ("Vesta"), a "related party" of the Company under Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions ("MI 61-101"), and issue 39,708,901 New Shares, representing 8.88% of the outstanding common shares of the Company on a post-Transaction basis, to an arm's length third party to the Company.

Vesta is a related party of the Company, and the issuance of New Shares to investment vehicles advised or managed by Vesta constitute "related party transactions" under MI 61-101, as Mr. Jared Wolk, a director of the Company, is also a senior officer of Vesta. The board of directors of the Company and all the directors of the Company that are independent in respect of the related party transactions have determined that the related party transactions are exempt from the formal valuation requirements and minority shareholder approval requirements under MI 61-101 on the grounds that: (a) the Company is in serious financial difficulty; (b) the related party transactions are designed to improve the financial position of the Company; (c) the terms of the related party transactions are reasonable in the circumstances of the Company; and (d) the related party transactions are not subject to bankruptcy or insolvency proceedings.

The Transaction is subject to the acceptance of the TSX Venture Exchange (the "TSXV").

The Consolidation will be subject to TSXV acceptance and the approval of the shareholders of the Company.  Management of the Company plans to hold a special meeting of shareholders for the purpose of obtaining shareholder approval of the Consolidation in November 2023.

Assuming receipt of TSXV acceptance and shareholder approval of the Consolidation, the Company expects there to be approximately 42,197,484 post-Consolidation common shares of the Company issued and outstanding on a non-diluted basis. Investment vehicles advised or managed by Vesta will have ownership or control or direction over an aggregate of approximately 38,226,594 post-Consolidation common shares.

The Company plans to provide further information on the terms of the Consolidation and the special meeting of shareholders of the Company to approve the Consolidation in due course.  

The Company develops products with leading manufacturers and iconic brand licensors by utilizing proprietary data that identifies key market opportunities.

Neither the TSX Venture Exchange nor its regulation services provider (as defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.

This press release may contain forward-looking information within the meaning of securities legislation. In general, forward-looking information refers to disclosure about future conditions, courses of action, and events. The use of any of the words "anticipates", "expects", "intends", "will", "would", and similar expressions are intended to identify forward-looking information. The forward looking information in this news release relates to the terms, and the approval of, the Transaction and the Consolidation. This forward-looking information is based on certain key expectations and assumptions. Although the Company believes that the expectations and assumptions on which its forward-looking information is based are reasonable, undue reliance should not be placed on the forward-looking information because the Company 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. Certain of these risks and uncertainties are more particularly described in the documents filed by the Company from time to time on SEDAR+ (see www.sedarplus.ca). 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 for anything other than its intended purpose. The Company 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.

SOURCE CE Brands Inc.