Atlas Global Brands Inc. (CNSX:ATL) entered into a definitive agreeement to acquire GreenSeal Cannabis Company, Ltd. and GreenSeal Nursery, Ltd. for CAD 8.4 million on February 24, 2023. As Consideration, Atlas Global will issue up to 11,500,000 common shares in Atlas Global for the issued and outstanding common and preferred shares of GreenSeal, these shares will be subject to a lock-up pursuant to which 15% 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 CAD 2.00, an additional 5% of the Consideration Shares will be released on the respective release date, reducing equivalently the final release on the 36-month anniversary.

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 related party loans will remain with GreenSeal post-closing, repayable from free cash flows generated within the business. The deal is subject to regulatory approvals. The transaction is expected to close in Q1 of 2023.

The transaction is expected to be accretive to Atlas’ international strategy.