CALGARY, AB, Nov. 16, 2020 /CNW/ - YSS Corp.™ (the
"Company" or "YSS") (TSXV: YSS) (WKN: A2PMAX), a
premier Canadian cannabis retailer with operations under the
YSSTM and Sweet TreeTM brands and a trusted
destination to explore and discover cannabis in Canada, is
pleased to announce that it has entered into a letter of
intent (the "LOI") with an institutional lender (the
"Lender") in respect of a senior secured term loan of
up to $4.0 million (the
"Facility").
The Facility, which can be drawn in $1.0
million increments, will enhance the Company's financial
flexibility and position for further organic growth in 2021.
As at September 30, 2020, the Company
had $2.9 million of cash on the
balance sheet and remains on target to exit 2020 with positive
run-rate corporate EBITDA1.
The Facility is expected to close in December 2020 and is subject to due diligence and
the satisfaction of certain conditions, including the execution of
definitive loan documentation. The Facility is
non-convertible and matures three years from the date of
closing. Amounts drawn will bear an interest rate equal to
the Canadian 3-Month Banker's Acceptance Rate, subject to a 1.75%
minimum, plus 8.00% per annum. Pursuant to the LOI, 12.0
million share purchase warrants ("Facility Warrants") will
be issued to the Lender upon closing. Subject to the terms of
the certificate representing the Facility Warrants, each Facility
Warrant will entitle the Lender to purchase one common share of YSS
at a price of $0.14 for a period of 5
years. The Facility Warrants will vest and become exercisable as
to: (i) 6.0 million on the date of the first draw; and (ii) an
additional 2.0 million on each subsequent draw. Pursuant to
applicable securities laws, the Facility Warrants and any common
shares of YSS issued upon the exercise of the warrants will be
subject to a hold period of four months plus one day following the
date of issuance of the warrants. The issuance of the
Facility Warrants is subject to approval of the TSX Venture
Exchange.
1 Non-IFRS
measure. Store-level EBITDA is defined as revenue less cost
of goods sold and operating costs before corporate general &
administrative expenses. Corporate EBITDA is defined as store-level
EBITDA less corporate general & administrative costs. See
disclaimers below.
|
Additional Information
For information on store locations, updates on promotions, store
openings and to access the Company's click and collect service
please visit www.ysscorp.ca, www.sweettreecannabis.com and follow
us on social media.
For additional information regarding YSS Corp., please see the
Company's website at www.ysscorp.ca/investors and filings available
under the Company's profile on SEDAR at www.sedar.com.
About YSS Corp.
With retail operations under the YSSTM and
Sweet TreeTM brands, YSS Corp. is a premium
cannabis retailer and the trusted destination to explore and
discover cannabis in Canada.
YSS operates 18 stores across Alberta and in Saskatchewan under the YSS and Sweet Tree
brands. In addition, YSS maintains a strategic
portfolio of under construction, secured and prospective locations
that represent future organic growth potential for the Company.
YSS management brings proven expertise across capital
markets, retail operations, hospitality, cannabis, financial
management and a strong commitment to deliver shareholder value by
leveraging high-quality opportunities within this exciting new
industry. The YSS retail experience is built on our five
fundamental pillars: convenience, value, selection, team, and above
all else, trust.
This news release may include forward-looking statements
including opinions, assumptions, estimates, the Company's
assessment of future plans and operations, and, more
particularly, statements concerning: the closing of the Facility
and the timing thereof and the use of proceeds therefrom; YSS'
retail cannabis business strategy, including organic growth and
strategic activities; the Company's operations and retail
experience; the Company having capital to
support ongoing existing store growth and its planned new store
growth while maintaining the financial flexibility to evaluate and
pursue strategic opportunities; the Company's projection and
objective to exit 2020 with positive run-rate corporate EBITDA; and
information relating to future promotions, store openings and the
Company's click-and-collect service.
When used in this press release, the words "will,"
"anticipate," "believe," "estimate," "expect," "intent," "may,"
"project," "should," and similar expressions are intended to be
among the statements that identify forward-looking
statements.
The forward-looking statements are founded on the basis of
expectations and assumptions made by the Company that
include, but are not limited to, the execution of definitive
documentation in respect of the Facility and the timely receipt of
all required regulatory and third-party approvals, including TSXV
approval of the Facility Warrants. Forward-looking statements are
subject to a wide range of risks and uncertainties and, although
the Company believes that the expectations represented by such
forward-looking statements are reasonable, there can be no
assurance that such expectations will be realized. Any number of
important factors could cause actual results to differ materially
from those in the forward-looking statements including, but not
limited to: the terms and conditions of the Facility; risks
relating to the COVID-19 pandemic, governmental responses thereto,
measures taken by the Company in response thereto and the impact
thereof on the global economy, capital markets, the cannabis retail
industry and the Company; the success of the Company's operations;
ability to execute its business strategy and future plans of
operations; risks relating to acquisitions; third party credit
risks; accuracy and reliability of data analytics relied on by the
Company; ability to obtain, amend or renew necessary licences,
permits and authorizations for the Company's operations in a timely
and cost-efficient manner; ability to obtain and maintain liability
insurance on acceptable terms; development of new stores including
construction delays; increased competition; ability to locate and
secure acceptable store sites and maintain retail leases on
acceptable terms; ability to obtain quality and diversified
cannabis products and cannabis accessories; ability to attract and
retain key personnel and customers; dependence on key personnel;
labour costs, shortages and labour relations; supply interruption
or delays; dependence on suppliers; intellectual property and
cybersecurity risks; risks related to product recalls, product
liability and health and safety; unfavourable publicity and
consumer perception with respect to cannabis, cannabis products and
cannabis accessories; industry conditions and events; the size of
the recreational cannabis market; changing customer habits; the
state of the economy including general economic conditions in
Canada, the U.S. and globally; the
unpredictability and volatility of the price of the common shares;
restrictions on potential growth; availability of sufficient
financial resources to fund the Company's capital expenditures;
changes in tax rates and government mark-ups; the state of domestic
capital markets; the ability to obtain financing on satisfactory
terms; changes in general market conditions; and other factors more
fully described from time to time in the reports and filings made
by the Company with securities regulatory authorities. Please refer
to the Company's management's discussion and analysis for the year
ended December 31, 2019 and for the
quarter ended June 30, 2020 (the
"MD&A") and the Company's annual information form for the year
ended December 31, 2019 for
additional risk factors relating to the Company, which can be
accessed under the Company's profile on
www.sedar.com.
Except as required by applicable laws, the Company does not
undertake any obligation to publicly update or revise any
forward-looking statements.
This news release contains future-oriented financial
information and financial outlook information (collectively,
"FOFI") about the Company's EBITDA and proceeds from
the Facility, which are subject to the same assumptions,
risk factors, limitations, and qualifications as set forth in the
above paragraphs. FOFI contained in this press release was approved
by management as of the date of this press release and was provided
for the purpose of providing further information about YSS' future
business operations. YSS disclaims any intention
or obligation to update or revise any FOFI contained in this press
release, whether as a result of new information, future events or
otherwise, unless required pursuant to applicable law. Readers are
cautioned that the FOFI contained in this press release should not
be used for purposes other than for which it is disclosed
herein.
Store-level EBITDA (Earnings Before Interest Tax Depreciation
Amortization) and Corporate EBITDA are not measures recognized by
International Financial Reporting Standards ("IFRS") and do not
have standardized meanings prescribed by IFRS. Investors are
cautioned that these measures should not be relied on as an
indicator of the Company's financial performance, of its cash flows
from operating, investing and financing activities or be relied on
as measures of its liquidity and cash flows. The Company's method
of calculating the aforementioned non-IFRS financial measures, may
differ from the methods used by other issuers. Therefore, these
measures may not be comparable to similar measures presented by
other issuers. Please refer to the MD&A for additional
information relating to non-IFRS measures.
Neither the TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this news
release.
SOURCE YSS Corp.