1933 Industries and Day One Beverages Mutually Terminate Binding Letter of Intent

Rhea-AI Summary

1933 Industries Inc. and Day One Beverages have mutually terminated their binding Letter of Intent regarding the acquisition of Day One. This decision follows revelations about Day One's greater-than-expected capital requirements. As part of the agreement, Day One will repay a loan of US$482,571.24 by June 30, 2022, along with an additional US$30,051.84 for incurred costs due by June 9, 2022. Should the repayment not occur, 1933 Industries retains the right to convert the loan into shares at a valuation of US$4,500,000.

Positive

• 1933 Industries retains the option to convert the loan into equity, potentially benefiting from future growth.

Negative

• Termination of the LOI indicates an inability to meet expectations, reflecting potential operational challenges for Day One.
• Cash recovery from Day One is dependent on timely repayments, which could present liquidity risks.

VANCOUVER, BC / ACCESSWIRE / May 11, 2022 / 1933 Industries Inc. (the "Company" or "1933 Industries") (CSE:TGIF) (OTCQB:TGIFF), a Nevada-focused cannabis consumer packaged goods company, and Day One Beverages, Inc. ("Day One") announce that they have mutually agreed to terminate their previously announced binding Letter of Intent ("LOI") whereby 1933 Industries agreed to acquire 100% of all of the authorized and issued shares of Day One (refer to news release dated January 18, 2022).

The Company and Day One have agreed to terminate the LOI after determining that it is in each party's best interest to continue operating as independent companies. Day One will repay a loan made by 1933 Industries pursuant to the terms of the LOI in the amount of US$482,571.24 including repayment of the outstanding principal balance, interest accrued, and other fees accrued (the "Loan Repayment"). The Loan Repayment is due and payable in full on or before June 30, 2022. In addition, Day One will reimburse 1933 Industries for costs incurred of US$30,051.84, which is due on or before June 9, 2022. While intended to be a full and final settlement of the terms of the LOI, in the event the Loan Repayment is not made by June 30, 2022, the Company will retain all its rights under the LOI and the initial loan agreement, including the right to convert the loan balance into shares of Day One at a pre-negotiated valuation of Day One at US$4,500,000.

Mr. Paul Rosen, Chairman and CEO of 1933 Industries, stated, "Over the last number of months it became evident to both parties that Day One's capital needs far exceeded modelled projections, and with that updated insight both parties concluded it was in their respective best interests to not complete the transaction. We wish them the best of luck as they progress on their business, and we look forward to continued collaboration between the companies including a continuation of our co-packing arrangement for our best-selling relief creams".

About 1933 Industries Inc.

1933 Industries is a Nevada-based, growth-orientated company, focusing on the cultivation and manufacturing of a large portfolio of cannabis consumer-packaged goods in a variety of formats for both the wholesale and retail markets. Its product offerings include: THC flower, pre-rolls, and extracted products under the AMA and Level X brands for the Nevada market; Canna Hemp™, national cannabidiol (CBD) brand of infused wellness products including CBD tinctures, gummies, topicals and sport recovery products. The Company owns 91% of Alternative Medicine Association, LC (AMA) and 100% of Infused MFG LLC (Infused).

www.1933industries.com

About Alternative Medicine Association

AMA is a licensed medical and adult-use cannabis cultivation and extraction subsidiary that produces its own branded line of unique cannabis products. AMA's extensive menu of cannabis products include: craft cannabis flower, pre-rolls, full spectrum oils, high quality distillates, proprietary blends of terpenes, vaporizer products and boutique concentrates such as shatter, crumble, batter, sugar wax, diamonds, and live resin. Ultra-craft brand Level X is an exclusive collection of exotic strains, selected specifically for their distinctive terpene profiles, high THC levels, and flavonoids. With state-of-the-art cultivation and extraction facilities based in Las Vegas, Nevada, AMA seeks to offer medical patients and recreational users alike a cannabis experience that's exceptional, potent, and consistent in quality. www.amanev.com

AMA is also licensed in Nevada as an adult-use cannabis distributor.

About Canna Hemp™

With an extensive product line that includes CBD topicals, CBD creams, CBD gummies, CBD vaporizers, CBD tinctures, CBD capsules, CBD pre and post workout recovery sports products, and CBG and CBN tinctures, 1933 Industries' proprietary Canna Hemp™ brand utilizes the power of hemp-extracted cannabinoids to bring natural wellness.

For further information please contact:
Alexia Helgason, VP, IR, Marketing, Media
604-728-4407
alexia@1933industries.com

Paul Rosen, CEO
paul@1933industries.com

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

Notice regarding Forward Looking Statements: This news release contains forward-looking statements relating to the settlement of transactions between the Company and Day One. The use of any of the words "anticipate", "continue", "estimate", "expect", "may", "will", "project", "should", "believe" and similar expressions are intended to identify forward-looking statements. Although the Company believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because the Company can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. These statements speak only as of the date of this news release. Actual results could differ materially from those currently anticipated due to a number of factors and risks including various risk factors discussed in the Company's disclosure documents, which can be found under the Company's profile on www.sedar.com. 1933 Industries undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law.

SOURCE: 1933 Industries Inc.

View source version on accesswire.com:
https://www.accesswire.com/700900/1933-Industries-and-Day-One-Beverages-Mutually-Terminate-Binding-Letter-of-Intent

FAQ

What led to 1933 Industries terminating the LOI with Day One Beverages?

The decision arose from Day One's capital needs exceeding initial projections, leading both parties to conclude that remaining independent was in their best interests.

What is the financial impact of Day One repaying the loan to 1933 Industries?

Day One is required to repay a total of US$512,623.08, including a loan of US$482,571.24 and additional costs of US$30,051.84, which could impact its liquidity.

What happens if Day One fails to repay its loan to 1933 Industries by the set date?

If Day One does not repay the loan by June 30, 2022, 1933 Industries can convert the loan into shares at a pre-negotiated valuation of US$4,500,000.

What are the future implications for 1933 Industries following the termination of the LOI?

The termination may allow 1933 Industries to reallocate resources but reflects potential challenges in acquisition strategies.

What is the stock symbol for 1933 Industries?

The stock symbol for 1933 Industries is TGIFF.