Canbud Distribution Corporation (CNSX:CBDX) entered into a non-binding letter of intent to acquire Steep Hill, Inc. for CAD 7.4 million on August 7, 2021. Canbud Distribution Corporation entered into a definitive merger agreement to acquire Steep Hill, Inc., for CAD 7.4 million on December 7, 2021. The proposed transaction is expected to be structured as by way of a statutory merger, share purchase or other similar form of transaction and the holders of common shares of Steep Hill, immediately prior to the acquisition would receive an aggregate of 82 million common shares of Canbud Distribution Corporation in exchange for their common shares of Steep Hill. As per agreed terms, following execution of the Letter of Intent, the Canbud Distribution Corporation has made available to Steep Hill a loan of $0.25 million (CAD 0.31 million), to be used by SH for working capital purposes. In the event that the definitive agreement is terminated, then the principal amount advanced under the Loan would become due and payable within 90 days. Upon closing of the Transaction, all directors of Steep Hill are expected to resign, while key Steep Hill management personnel are expected to continue in their respective positions of the merged entity carrying on the business of Steep Hill. Current Steep Hill, Inc., shareholders are expected to own approximately 34% of Canbud Distribution Corporation's common shares on a non-diluted basis, and 27.1% on a fully-diluted basis, before giving effect to the issuance of any finder's fee shares. Prior to closing, all outstanding debt of Steep Hill, Inc., will be converted into equity. The common shares of Canbud Distribution Corporation issued in exchange for Steep Hill, Inc., common shares would be subject to resale restrictions, such that the holders would be permitted to trade 25% of such shares only after three months from closing and a further 25% of such shares after each successive three-month period thereafter until the date that is 15 months from the closing date. Completion of the proposed transaction would be subject to a number of conditions, including, without limitation, the following: receipt of the required approval for the proposed transaction from the shareholders of Steep Hill, Inc., by September 15, 2021; receipt of all regulatory approvals (including applicable CSE approvals for the listing of the common shares of Canbud Distribution Corporation issuable to the security holders of Steep Hill, Inc.); confirmation that there having been no acquisitions or disposals (other than in the ordinary course of business), no debt or equity capital raisings (excepting for Canbud Distribution Corporation), no new material contracts (excepting for Canbud Distribution Corporation) or related party transactions and no loss of any material license; no material adverse change affecting Steep Hill, Inc., or Canbud Distribution Corporation; and such other conditions as the parties decide are reasonable in the context of the proposed transaction. The Canbud shares issued in exchange for Steep Hill shares will be subject to resale restrictions.
As of January 10, 2022, the transaction has been approved by the shareholders of Steep Hill, Inc.

Canbud Distribution Corporation (CNSX:CBDX) completed the acquisition of Steep Hill, Inc. on January 31, 2022. Other former holders of Steep Hill Shares are entitled to receive CAD 0.048 in cash for each of their Steep Hill Shares, for a total of CAD 37,753 in cash consideration payable. On completion of the Transaction, all of Steep Hill's operating management remained with Steep Hill and its directors and officers resigned from their respective offices.