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Atlas closes GreenSeal acquisition, increasing export capacity and strengthening value chain

May 2, 2023  By Grow Opportunity Staff

(Globe Newswire) Edmonton, Alta., Chatham, Ont., Tel-Aviv, Israel – Atlas Global Brands Inc., a cannabis company with expertise across the value chain, has closed its acquisition of GreenSeal Cannabis Company, Ltd. and GreenSeal Nursery Ltd., a privately-owned Ontario-based licensed cannabis producer and nursery.

On February 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 $8.0 million 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, Ont. 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. 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.” – Bernie Yeung, CEO, Atlas Global


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 per cent 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 per cent 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.

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