Citizen Stash Completes $1.5 Million Debenture Offering to The Valens Company and Files Information Circular in Connection with Arrangement Agreement

Rhea-AI Summary

Citizen Stash Cannabis Corp. has completed a $1.5 million investment from The Valens Company through a secured convertible debenture. A virtual special meeting for securityholders is scheduled for November 1, 2021, to discuss the arrangement with Valens. This arrangement offers Citizen Stash shareholders a premium of approximately 35.1% per share and promises ownership in a stronger entity with enhanced financial resources. The debenture has a 6.0% interest, convertible into shares at $0.39, and the financing will support growth initiatives.

Positive

• Completion of $1.5 million investment enhances financial resources.
• Shareholders to receive a 35.1% premium on shares.
• Access to Valens' capital markets and expertise expected.

Negative

• None.

Citizen Stash to hold Special Meeting of Securityholders on Monday, November 1, 2021

NOT FOR DISTRIBUTION TO UNITED STATES NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

VANCOUVER, BC / ACCESSWIRE / October 5, 2021 / Citizen Stash Cannabis Corp. ("Citizen Stash") (formerly Experion Holdings Ltd.) (TSXV:CSC) (OTCQB:EXPFF) (FRANKFURT:MB31) is pleased to announce the completion of the previously announced $1.5 million investment from The Valens Company Inc. ("Valens") in Citizen Stash by way of a secured convertible debenture entered into between Citizen Stash and Valens (the "Debenture" or the "Financing").

As well, Citizen Stash is pleased to announce it has filed its management information circular dated September 28, 2021 (the "Circular") under its profile at www.sedar.com, together with related materials, for the virtual-only special meeting (the "Meeting") of the holders of common shares ("Citizen Stash Common Shares") and options of Citizen Stash to be held at the following date, time and location:

WHEN: Monday, November 1, 2021 10:00 a.m. (Vancouver time)

ONLINE AT: https://meetnow.global/MRKLMQG

In addition to the Circular, which includes additional information regarding the anticipated benefits and risks of the Arrangement (as defined below), Citizen Stash shareholders can also refer to the summary presentation prepared by Valens and available at https://thevalenscompany.com/investors. Below is a summary of certain anticipated benefits of the Arrangement for Citizen Stash's shareholders.

• Ownership in a Larger, Stronger Company Focused on Cannabis Production. Following completion of the Arrangement, Citizen Stash shareholders will have an ownership interest in Valens, which is expected to have an enhanced capital markets profile, and a more robust financial profile with a strong balance sheet and financial position. With Valens, Citizen Stash is expected to be able to better realize the potential of its brands and products as a result of Valens' additional financial resources and expertise.
• Citizen Stash Products Will Bolster Value of Combined Company. The addition of Citizen Stash's innovative product offerings to Valens' existing product offerings is expected to provide a strong base for potential future partnerships in Canada, the United States and internationally. Valens is expected to enjoy greater access to capital markets and a lower cost of capital, allowing Citizen Stash shareholders to participate in the combined entity's efforts to execute on a strong pipeline of organic growth initiatives.
• Premium to Citizen Stash Shareholders. The consideration that will be received by Citizen Stash's shareholders under the Arrangement implies a premium per Citizen Stash Common Share of approximately 35.1% based on the 15-day volume weighted average price of the Citizen Stash Common Shares on the TSX-V and the Valens Shares on the TSX as of the close of markets on August 27, 2021.
• Citizen Stash Shareholders Will Become Shareholders of Valens. Following the completion of the Arrangement, Citizen Stash shareholders will hold common shares of Valens and will participate in any future increases in value of the common shares of Valens that could result from, among other things, the potential synergies that may be achieved through a combination of Valens and Citizen Stash, and greater combined capitalization and liquidity following the Arrangement and the complementary nature and shared values of both companies' management and technical teams.

Financing

The Debenture is on customary terms, bears interest at 6.0% and will be due April 5, 2022, subject to earlier termination under certain circumstances. The principal amount of the Debenture will be convertible into Citizen Stash Common Shares at a conversion price of $0.39 per Citizen Stash Common Share at any time prior to maturity. The accrued interest under the Debenture will be convertible into Citizen Stash Common Shares at any time prior to maturity at a conversion price being the greater of $0.39 per Citizen Stash Common Share and the Market Price (as defined in the policies of the TSX Venture Exchange) at the time of conversion. In connection with the Financing, Citizen Stash also issued Valens warrants to acquire 1,923,076 Citizen Stash Common Shares at an exercise price of $0.585 per Citizen Stash Common Share for a period of one year (the "Warrants").

The Financing was provided in connection with the arrangement agreement between Valens and Citizen Stash that was previously announced on August 31, 2021 (the "Arrangement Agreement"), pursuant to which the proposed Arrangement will occur. The proceeds of the Financing will be used by Citizen Stash for growth and general corporate purposes.

Mr. Jarrett Malnarich, Chief Executive Officer of Citizen Stash, said "As stated previously and described in the Circular, our Board of Directors unanimously supports this transaction with Valens as outlined in the Arrangement Agreement. Our Board and management team believe that to remain competitive we would need access to additional financial resources and, after a thorough strategic review of our various options, joining forces with Valens was the unequivocal superior choice for our business and our shareholders to bring Citizen Stash and its products to the next level".

The Debenture, the Warrants and the Citizen Stash Common Shares underlying the Debenture and the Warrants will be subject to a statutory hold period until February 6, 2022. This news release does not constitute an offer to sell or the solicitation of an offer to buy any securities.

Meeting

Citizen Stash was granted an interim order from the Supreme Court of British Columbia on September 28, 2021 authorizing various matters, including the holding of the Meeting and the mailing of the Circular.

The business of the Meeting will be to consider and, if thought advisable, to pass, with or without variation, a special resolution (the "Arrangement Resolution") to approve a plan of arrangement pursuant to section 192 of the Canada Business Corporations Act involving Valens, Citizen Stash and the securityholders of Citizen Stash (the "Arrangement"). The board of directors of Citizen Stash, after receiving legal and financial advice, unanimously determined that the proposed Arrangement, pursuant to the Arrangement Agreement, is fair to the shareholders of Citizen Stash, and recommends that the shareholders and optionholders of Citizen Stash vote for the Arrangement Resolution.

Shareholders and optionholders of Citizen Stash of record as of the close of business on September 23, 2021 are entitled to receive notice of and vote at the Meeting. The Circular contains additional information concerning the Arrangement and the Meeting, including instructions on how to attend the virtual meeting or vote by proxy. Citizen Stash shareholders and optionholders are encouraged to review the Circular carefully and to vote well before the proxy deadline of 10:00 a.m. (Vancouver time) on October 28, 2021.

Due to concerns regarding the coronavirus outbreak and to assist in protecting the health and well-being of our shareholders and employees, Citizen Stash is holding the Meeting as a virtual-only meeting, which will be conducted via live audio online webcast, where registered Citizen Stash shareholders, optionholders and duly appointed proxyholders, regardless of geographic location, will have an opportunity to participate at the Meeting. The Meeting cannot be attended in person.

About Citizen Stash Cannabis Corp.

Citizen Stash is the parent company of Experion Biotechnologies Inc., a Health Canada licensed cultivator and processor of cannabis, based in Mission, BC.

Citizen Stash is best known as a rapidly growing adult-use premium cannabis brand offered nationally in seven provinces and territories. Citizen Stash has invested and developed a portfolio of premium cannabis genetics, strains and products with a unique growth strategy incorporating a highly scalable aggregation and distribution business model to drive revenues across its national sales network.

Citizen Stash trades on the TSX Venture Exchange as a Tier 1 issuer under the symbol "CSC" on the OTCQB Venture under the symbol "EXPFF" and on the Frankfurt Stock Exchange under the symbol "MB31".

For further information, please visit Citizen Stash's website www.experionwellness.com or contact Investor Relations, Email: IR@experionwellness.com.

Notice Regarding Forward Looking Statements

This news release includes certain statements that constitute "forward-looking statements", and "forward-looking information" within the meaning of applicable securities laws (collectively "forward-looking statements"). When used in this news release, words such as "anticipate", "believe", "expected", "potential", "proposed" and similar expressions are intended to identify these forward-looking statements as well as phrases or statements that certain actions, events or results "could", "may", "should", "will", "would" or the negative connotation of such terms. As well, forward-looking statements may relate to future outlook and anticipated events, such as the timing, location and business of the Meeting, the timing, consummation and benefits of the Arrangement and the use, conversion or payment of the principal amount under the Financing. These forward-looking statements involve numerous risks and uncertainties, including those relating to required shareholder and regulatory approvals, exercise of any termination rights under the Arrangement Agreement, meeting other conditions in the Arrangement Agreement, material adverse effects on the business, properties and assets of Valens and Citizen Stash, whether any superior proposal will be made and such other risk factors detailed from time to time in Citizen Stash's public disclosure documents including, without limitation, those risks identified in the Circular and Citizen Stash's management's discussion and analysis for the year ended November 30, 2020, which are available on SEDAR at www.sedar.com. Forward-looking statements are based on information available at the time those statements are made and/or management's good faith belief as of that time with respect to future events and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Forward-looking statements speak only as of the date those statements are made. Except as required by applicable law, Citizen Stash assumes no obligation to update or to publicly announce the results of any change to any forward-looking statement contained or incorporated by reference herein to reflect actual results, future events or developments, changes in assumptions or changes in other factors affecting the forward-looking statements. If Citizen Stash updates any one or more forward-looking statements, no inference should be drawn that it will make additional updates with respect to those or other forward-looking statements. All forward-looking statements contained in this news release are expressly qualified in their entirety by this cautionary statement.

Information contained on any website or document referred to or hyperlinked in this news release shall not be deemed to form part of this news release. All information contained in the summary presentation regarding the Arrangement, which is located at https://thevalenscompany.com/investors, has been prepared solely by Valens and, as such, Citizen Stash does not assume any obligation or provide any representations regarding the statements made therein.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE: Citizen Stash Cannabis Corp.

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https://www.accesswire.com/666868/Citizen-Stash-Completes-15-Million-Debenture-Offering-to-The-Valens-Company-and-Files-Information-Circular-in-Connection-with-Arrangement-Agreement

FAQ

What is the significance of the $1.5 million investment from Valens for Citizen Stash (EXPFF)?

The $1.5 million investment enhances Citizen Stash's financial resources, facilitating growth and development.

How much premium will Citizen Stash shareholders receive under the arrangement with Valens (EXPFF)?

Shareholders will receive a premium of approximately 35.1% per share.

When is the special meeting of Citizen Stash shareholders scheduled to take place?

The special meeting is scheduled for November 1, 2021, at 10:00 a.m. Vancouver time.

What are the terms of the secured convertible debenture issued by Citizen Stash (EXPFF)?

The debenture bears 6.0% interest and can be converted into shares at a price of $0.39.

What are the expected benefits of the arrangement between Citizen Stash and Valens (EXPFF)?

Benefits include ownership in a larger company, enhanced market capabilities, and potential for growth.