News Business Cultivation Production
Atlas Global Brands to acquire GreenSeal, scaling for international markets

(Globe Newswire) Edmonton — On February 24, 2023, Atlas Global Brands Inc. signed a definitive agreement to acquire GreenSeal Cannabis Company, Ltd. and GreenSeal Nursery, Ltd., a privately-owned Ontario-based licensed cannabis producer.

GreenSeal is expected to be accretive to Atlas’ international strategy, adding a GACP and CUMCS certified facility with a vertical cultivation model. This is expected to expand the company’s annual production capacity by approximately 3,500 kg and adds a nursery program with hundreds of exotic genetics, further establishing Atlas Global’s international footprint.

GreenSeal

Upon completion of the acquisition, Atlas Global will own 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. The 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 and 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 grow product in a cost effective indoor vertical grow environment.

The Share Purchase Agreement

Pursuant to the Share Purchase Agreement, Atlas Global will issue up to 11,500,000 common shares in Atlas Global to acquire 100 per cent ownership of the issued and outstanding common and preferred shares of GreenSeal. The price of the consideration shares will be equal to the 20-day VWAP of the company’s common shares on the CSE to the date of closing.

Approximately CAD $5.5 million in bank debt and CAD $0.6 million in long-term related party loans will remain with GreenSeal post-closing, repayable from free cash flows generated within the business.

The consideration shares will be subject to a 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 of acquisition, until the 36-month anniversary of the closing of the acquisition. If, however, the average closing price per share for the 20 trading days preceding the releases on the 18, 24, and 30-month release dates is at least $2.00, an additional 5 per cent of the consideration shares will be released on the respective release date, reducing equivalently the final release on the 36-month anniversary.

Closing of the acquisition is subject to receipt of customary closing conditions, including regulatory approvals. 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. The acquisition is expected to close in Q1 of 2023. No finder’s fees are payable in respect of the acquisition.