2022 Consolidated Business Combination Revenue of ~$75,000,000 and Positive Adjusted EBITDA

2023 Consolidated Forecasted Revenue of $100,000,000 and Positive Adjusted EBITDA

BOCA RATON, Fla., Jan. 31, 2023 (GLOBE NEWSWIRE) — Stem Holdings, Inc. (OTCQB: STMH, CSE: STEM) (“Stem” or the “Company”) is pleased to announce that it has executed a term sheet (“Term Sheet”) for a proposed business combination (the “Transaction”) with Headwaters, LLC, (“HDWTR” or “Headwaters”). Pursuant to the Term Sheet, the Transaction will result in a reverse takeover of the Company and, subject to the satisfaction of all listing conditions, the listing of the combined entity on the Canadian Securities Exchange (the “CSE”) and the OTCQB Venture. Following the closing of the Transaction, it is expected that the former equity holders of HDWTR will own approximately 80% of the issued and outstanding shares of the Company.

The Transaction is subject to, among other matters, the execution of a mutually agreeable definitive agreement (the “Definitive Agreement”), completion of due diligence and subject to several conditions including, but not limited to, stockholder approval, delivery of acceptable financial statements, board of directors’ approval and satisfaction of all regulatory and stock exchange approvals. The Transaction is expected to be completed by way of an amalgamation, merger or other form of business combination to be determined by the parties following receipt of securities, corporate and tax law advice.

“Over the past 12 months, Stem has worked tirelessly to find the right company to transact a business combination with. We could not be more excited about combining forces with Headwaters, LLC,” said Matthew Cohen, Chief Executive Officer of Stem. “Not only will this transaction bring world-renowned cultivation processes, but by combining with Stem and our existing footprint of brands and retail locations, we instantly become a pre-eminent vertically integrated and profitable cannabis company with a new platform and a vision to bolster on even more accretive transactions in the future.”

“Currently, Headwaters, located in California is a leading greenhouse cultivator, wholesale and distributor, with an emergent brand called Mr. Zips. We’re ready to grow our business to the next level, and the Stem team enables us to do just that. With access to capital markets and Stem’s valuable network, Headwaters is well positioned to continue disrupting the world’s largest cannabis market and to expand into new territories. We couldn’t think of a better partner to help us achieve our goal of maintaining and continue to be one of California’s largest and most profitable cultivation companies,” said Tristan Strauss, Founder and CEO of Headwaters.

About Stem Holdings:

Stem is a leading cannabis and hemp branded products company in the U.S. with proprietary capabilities in sustainable cultivation, processing, extraction, and R&D, as well as retail and distribution operations aligned with state-by-state regulations. Stem’s award-winning owned and partner-brands including TJ’s Gardens and Yerba Buena are the foundation of the Company’s expansion within current as well as new segments and markets, with exceptional and disruptive brands, and products that benefit well-being. Stem’s expertise and scale will drive growth domestically and internationally with a continuing commitment to social responsibility and shareholder equity as a leader in the cannabis industry.

About Headwaters:

Headwaters’ origin story is humble and authentic, born a decade ago in Humboldt County as a small outdoor medical farm. Despite its small beginnings, Headwaters’ vision is predicated on executing across core values of community, sustainability, and operational excellence. Headwaters owes the entirety of its success to our team and leadership’s dedication to these values.

Over the past five years the business has experienced rapid growth in highly volatile market conditions. Headwaters ventured into consumer products in 2017 by supplying the first white label products on California’s largest e-commerce delivery platform. Two years later the company launched a novel comprehensive partnership program that supported farmers up and down the state with nursery, cultivation management, post-harvest processing, and distribution services. Since then, Headwaters has been widening its intellectual property moat through genetic selection, SOP optimization, and development of its proprietary technology, Cultivation Grid©. Headwaters it is well positioned to operate at scale efficiently and effectively.

• Headquartered in Carpinteria, CA
• Chief Executive Officer and Founder Tristan Strauss is a proven leader in horticultural agriculture and cannabis business. Mr. Strauss co-founded two California medical cannabis companies previously: Canigou Inc. and Helios, both known as the brand, State Wellness.
• Operates four greenhouses in the Carpinteria area totaling over 23 acres of production and nursery canopy
• Company has 4 distinct sales channels:
  • Bulk Wholesale: Sourcing and selling of cannabis flower, smalls, trim, and derivative products in bulk format
  • Agricultural Services: Selling of clones propagated and rooted from proprietary genetics and partnerships
  • Branded Products: Development and sale of CPG products into licensed retail channels
  • Technology Services: Proprietary IP for cultivation and post-harvest processing
• Sold 230,000 pounds of bulk cannabis and 1,700,000 clones in 2021

Reader Advisory

Completion of the Transaction is subject to a number of conditions, including but not limited to CSE acceptance. There can be no assurance that the Transaction will be completed as proposed or at all. The CSE has in no way passed upon the merits of the proposed Transaction and has neither approved nor disapproved the contents of this press release.

Cautionary Note Regarding Forward-Looking Information

This press release contains statements that constitute “forward-looking information” within the meaning of applicable securities laws, including statements regarding the plans, intentions, beliefs and current expectations of the management of Stem with respect to future business activities. Forward-looking information is often identified by the words “may,” “would,” “could,” “should,” “will,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “expect” or similar expressions and includes information regarding: (i) the ability of the surviving entity to integrate the combined operations of the parties; (ii) the closing of the Transaction, together with expectations around the accretive nature of the Transaction; (iii) the expansion of the surviving entity’s market following the closing of the Transaction and the ability to scale operations; (iv) the expected cost savings and other efficiencies following the closing of the Transaction; and (v) the forecasted revenue and EBITDA of the combined company. Investors are cautioned that forward-looking information is not based on historical facts but instead reflects the management of the Company’s expectations, estimates or projections concerning future results or events based on the opinions, assumptions and estimates of management considered reasonable at the date the statements are made. Although the Company believes that the expectations reflected in such forward-looking information are reasonable, such information involves risks and uncertainties, and undue reliance should not be placed on such information, as unknown or unpredictable factors could have material adverse effects on future results, performance or achievements of the surviving entity. Among the key factors that could cause actual results to differ materially from those projected in the forward-looking information are the following: changes in general economic, business and political conditions, including changes in the financial markets; the ability of the surviving entity to raise debt and equity capital in the amounts and at the costs that it expects; adverse changes in the public perception of cannabis; construction delays; decreases in the prevailing prices for cannabis and cannabis products in the markets that the surviving entity will maintain operations; adverse changes in applicable laws; adverse changes in the application or enforcement of current laws, including those related to taxation; the inability to locate and acquire suitable companies, properties and assets necessary to execute on the surviving entity’s business plans; political risk; and increasing costs of compliance with extensive government regulation. This forward-looking information may be affected by any number of risks and uncertainties affecting the business of the surviving entity and applicable market conditions.

Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking information prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated, or expected. Although the parties to the Transaction have attempted to (and will continue efforts) to identify important risks, uncertainties and factors which could cause actual results to differ materially, there may be others that cause results not to be as anticipated, estimated or intended. The Company does not assume any obligation to update this forward-looking information except as otherwise required by applicable law.

No securities regulatory authority has in any way passed upon the merits of the proposed transactions described in this news release or has approved or disapproved of the contents of this news release.

Financial Outlook

This news release contains a financial outlook within the meaning of applicable securities laws. The financial outlook has been prepared by management of the Company to provide an outlook for the Company’s and Headwaters’ forecasted revenue and EBITDA and may not be appropriate for any other purpose. The financial outlook has been prepared based on a number of assumptions including the assumptions discussed under the heading “Cautionary Note Regarding Forward-Looking Statements”. The actual results of the Company’s operations for any period will likely vary from the amounts set forth in these projections and such variations may be material. The Company and its management believe that the financial outlook has been prepared on a reasonable basis. However, because this information is highly subjective and subject to numerous risks, including the risks discussed under the heading “Cautionary Note Regarding Forward-Looking Statements”, it should not be relied on as necessarily indicative of future results.

Media Contact:
Regina Costa
Director of Public Relations
561-948-5410
[email protected]

This article was published by CFN Enterprises Inc. (OTCQB: CNFN), owner and operator of CFN Media, the industry’s leading agency and digital financial media network dedicated to the burgeoning CBD and legal cannabis industries. Call +1 (833) 420-CNFN for more information.

About Ryan Allway

Mr. Allway has over a decade of experience in the financial markets as both a private investor and financial journalist. He has been actively involved in the cannabis industry since its inception, covering public and private companies.

Strategic Partnership with NR Instant Produce Subsidiary, Golden Triangle Health  to Manufacture and Market CBD and Hemp-Infused Product Lines in Thailand

Partnership to Benefit from Golden Triangle Health’s  Well-Established Distribution Networks in Thailand, Driving Strategic Entry into New Global Markets

LAS VEGAS, Nov. 3, 2021 /PRNewswire/ – Terry Booth, CEO, of AUDACIOUS (CSE: AUSA) (OTC: AUSAF) (“AUSA”, “AUDACIOUS”, or the “Company”),  is proud to announce the Company has entered into a term sheet in regards to the formation of a strategic partnership with Golden Triangle Health (GTH), a subsidiary of NR Instant Produce PCL (“NRF”), a leading southeast Asian food manufacturer and distributor based in Thailand, producing its own signature brands private label products and co-packaging lines.

Terry Booth, CEO, said, “This is an Audacious partnership whereby we will take our know-how and IP and help our partner optimize operations, product development and utilize our joint marketing and influencer networks to establish a leader in the rapidly growing Asian CBD market. Tom, who we know firsthand as an exceptional business executive with a strong track record in execution, and his team have built an amazing company already. We had been in talks for some time, but everything accelerated due to our presence at MJBizCon, which enabled us to meet face to face and execute on what we believe will be an exceptional opportunity to establish the AUDACIOUS brand internationally. We are very proud of this partnership that makes us, to the best of our knowledge, the first international company with an operational presence in the Asian legal cannabis market.”

Mr. Booth added “We believe in the many benefits of CBD and we have the science to prove it. Our discussions with GTH have been diligent and the entire group is aligned with a strong strategy going forward. Tom is a charismatic man with tonnes of positive energy and a force to be reckoned with in Southeast Asia. AUDACIOUS look forward to building our relationship with GTH and their partners globally.”

Tom Kruesopon, Director of GTH, added, “While we have strong brand equity in Thailand and large parts of Asia already, combining with AUDACIOUS will lift our recognition to the next level. The combined know-how and our existing partnerships form a very solid foundation to build what we believe can be one of the most meaningful players in the Asian CBD market. I look forward to working closely with Terry and the amazing team at AUDACIOUS and bring our existing and new product lines to the Asian markets and likely beyond.”

Strategic Rationale

• The Thai market for CBD products is in its infancy, as GTH projects the market to reach approximately $1 billion in Thailand at maturity.
• Hemp was authorized as legal in January 2021, and a limited number of licenses were granted by the authorities to date, providing early mover advantage to GTH
• Provides AUDACIOUS with a well-established partner in a CBD derived from hemp market, poised for rapid growth
• Positions AUDACIOUS for further international expansion
• Provides an early mover advantage due to the limited number of licenses granted to date
• Well aligned with the AUDACIOUS strategy for capital light expansion, as under the deal terms, AUDACIOUS is not required to provide capital for construction, working capital or other purposes
• Through GTH’s parent company, the partnership will have access to large, well-established distribution networks throughout Thailand, Asia and North America
• GTH is authorized to distribute products through e-commerce and B2C networks
• Partnership will benefit from being the exclusive distribution partner for Cookies in Asia (excluding Japan). Cookies is the iconic California brand, founded by Berner, one of the most respected entrepreneurs in the cannabis space, among others due to their attention to high-quality genetics.
• GTH has access to a broad portfolio of infused and non-infused (industrial hemp) products, diversifying revenue streams
• GTH provides AUDACIOUS with the ability to leverage its network of Asian influencers to expand brand and company recognition in this market

The partnership

The purpose of the partnership is to develop GTH into the most meaningful CBD player in the Asian market. AUDACIOUS will provide advisory services, operational intelligence, including cultivation, manufacturing, and product development, and expansion of brand visibility in Thailand and beyond. Further, the potential exists for AUDACIOUS to become an export partner for GTH’s Thai product portfolio, to include CBD and Hemp consumables, topicals and other hemp derived commodities. Products will be sold under the GTH brand, as well as through B2B channels under white label agreements.

Under the terms of the agreement, AUDACIOUS and GTH will enter into a share swap in two tranches whereby a total of up to $4 million in shares will be exchanged, contingent upon GTH reaching certain milestones. Each tranche is of equal size (US$2 million), with the second tranche payable only upon GTH achieving profitable operations. Upon completion, AUDACIOUS will obtain an ownership interest of up to 25% in GTH, as well as three board seats.

GTH

GTH was co-founded by Tom Kruesopon, who was one of the co-founders of Asia’s first low-cost airline, AirAsia X, which was sold in a successful exit. Mr. Kruesopon, known as Mr. Weed Thailand and the person responsible for helping to legalize cannabis in Thailand, previously was advisor to the former prime minister in Thailand, as well as CEO of Tune Insurance and President of Panda Securities.

GTH has secured a five-year contract with Khon Kaen university to utilize their land (up to 1,000 acres) for cultivation, as well as the university’s harvesting and processing equipment for the production of hemp-based products. Product lines will include CBD infused, as well as fiber and oil-based supplements.

The company has developed a number of products that it is currently selling on the Thai market. Upon execution of the final agreement, the companies will work together on developing brand and additional infrastructure, with ALPS providing facility design services for a new indoor facility to augment the existing outdoor grow, as well as crop consulting services to improve yields of the outdoor facility.

AUDACIOUS will be nominating three directors for the GTH board, namely Hanoz Kapadia (Chairman of the Board at AUDACIOUS), Dr. Duke Fu (AUDACIOUS COO) and Maximilian Weinberg (Director, International Regulatory Affairs, AUDACIOUS).

Hanoz Kapadia

• Experienced entrepreneur, with over 23 years of experience advising on regulatory, tax and finance matters in public, private, and non-profit enterprises.
• Managing Partner at Kapadia & Associates, a high net-worth accounting and advisory firm
• Former Chair of Finance and Governance at Ontario Cannabis Retail Corporation, served as Chair of the By-law review committee and has also previously served as interim Chairman of the Board of Directors at Ontario Cannabis Retail Corporation.
• Chair of the advisory board at Huex Labs, a leading artificial intelligence company and is a former member of the board at Optimal Research Corporation, a medical research company.

Dr Fu

• Exceptional and experienced leader in biotech and pharmaceutical industries.
• Co-founded Green Therapeutics, an award-winning Nevada-based cannabis company.
• Co-Founder and former president of MedMen (2014-2015)
• Directed one of the most advanced and progressive nuclear pharmacies in the nation at Cardinal Health.
• Joint Doctor of Pharmacy / MBA degree from University of Mexico and post doctorate work at Purdue University.

Maximilian Weinberg

• Director of Business Development, AUDACIOUS
• Former Head of Business Development for Aurora Europe
• Part of small team awarded one of three governmental production licenses for medical cannabis in Germany
• Oversaw subsidiaries and registration of cannabis-based medications in six European countries, including Germany and Poland
• Founder of Can4med – fully licensed narcotic wholesaler in Poland specializing on trading cannabis medications in Europe.

Leveraging Major Partner

GTH is a spin-off from NRF (https://www.nrinstant.com), a US$360 million (by market cap)  Thai public company, founded in 1991, specialized in the production and distribution of oriental and plant-based food products. NRF is the leading plant base food in Southeast Asia, traded on the Thailand stock exchange and has just been named as part of the Thai SET benchmark 100. AUDACIOUS, NRF and GTH will be collaborating closely to drive and accelerate growth of GTH in Thailand and other global jurisdictions.

• NRF CEO Dan Pathomvanij was recently named CEO of the year by Thailand Tatler, a leading society and business publisher in Thailand
• NRF will be working with GTH to distribute hemp-base food products to add on to its already successful plant base food line
• NRF and GTH are in discussions or have entered into multiple partnerships with many of Thailand’s leading health/wellness brands for the development of CBD-based products under white label agreements. Partners include:
  • leading Thai companies such as Siang Pure oil (the country’s oldest and most successful herbal medicine brand), Smooth E (Thailand’s leading cosmetics brand), Dentiste (Thailand’s number 1 dental care brand), and Divana, Thailand’s number 1 spa brand
  • GTH is also collaborating and doing R&D on developing CBD-infused drinks with Thailand’s leading energy drink brand
• NRF and GTH have also cemented a partnership with two of Thailand’s leading B2B distributors of consumer goods who service major retail operators, including Unilever, 7Eleven, P&F Super Drug, Boots Asia, and others. GTH is also set up for B2C online sales and distribution.

Thai Market

• As of January 29, 2021, the production of hemp and usage became legal
• Products can range from cosmetics to food and beverages, as well as products for the medical and food supplements market
• THC levels are required to be under 1%
• A limited number of licenses were granted by the authorities to date, providing early mover advantage to GTH

The Thai market for CBD products is in its infancy, but AUDACIOUS partner GTH projects the market to reach approximately $1 billion in Thailand at maturity.

About AUDACIOUS

AUDACIOUS is at its roots a community and culture-based cannabis company. After the completion of a dissident shareholder battle that ended with convincing shareholder approval, Terry Booth, former Aurora CEO, who had to step away from AUSA upon spin off, re-joined AUSA as CEO on March 9, 2021. Since then, the company has reset the direction of AUSA and in just 7 months closed multiple accretive transactions, improved legacy contracts, established a world class Executive Team, and resolved previous executive and board exits.

Also, in the same time frame, AUSA with its acquisition of ALPS has entered the global Sustainable Controlled Environment Agriculture Industry, a rapidly growing segment of the global horticulture market. ALPS provides customized designs along with multiple services that allow operators to maximize yield and quality while minimizing inputs and resources, including labor. ALPS at present is active in cannabis and traditional horticulture projects across the globe, including the U.S., Canada, Denmark Finland, Iceland, Germany, Netherlands, Bahrein, United Arab Emirates, Southeast Asia, Australia, as well as other jurisdictions.

Total Capex committed by ALPS’ clients since Aurora divested its interest just 17 short months ago during the Covid crisis, stands at approximately $1 billion, with a rapidly growing business development pipeline with over $4 billion in total Capex planned to be spent by potential clients.

AUSA’s business assets include: a 51% ownership interest in ALPS, a milestone weighted deal with an option to acquire the remaining 49% of ALPS –- AUSA and Green Therapeutics, an award-winning MSO, have finalized and agreed to all terms with respect to AUSA’s 100% acquisition (subject to regulatory state licensing approvals). AUSA also owns land assets in Bellingham, Washington – as well as the iconic West Coast brand Mr. Natural and the ingestibles brand LOOS with a footprint in the California market. The Company is in the process of completing the acquisition of a retail facility in San Jose, which comes with the ability to cultivate and manufacture, as well as a state-wide partnership with Eaze, the largest legal delivery services in the U.S. AUDACIOUS also has a partnership with the PBR, the (Professional Bull Riders group). Under the partnership, the Company is launching a PBR endorsed line of topical CBD products under the Wreck-Relief brand. Expected to launch with the PBR Event “Release the Beast” in early November 2021.

AUSA also has a supply partnership with Belle Fleur, founded by the team behind Rapper Weed. AUSA and Belle Fleur are working towards a broader arrangement to include brand partnerships in Massachusetts and other jurisdictions the companies intend entering into. The Belle Fleur project in Massachusetts is well underway with ALPS being awarded the engineering and design contract.

In San Jose, CA, the Company is completing the acquisition of the Herbs dispensary, which comes with a distribution partnership with Eaze, the largest legal cannabis delivery service in North America.

AUSA furthermore has investments in Body and Mind Inc., a U.S. MSO, Quality Green, a Canadian licensed producer and Cocoon, a company changing the dispensary customer user experience through self-service kiosks. The Company also has entered into a sponsorship agreement with Endeavour owned Professional Bull Riders, as well as executed a term sheet for a JV partnership with 3 Rivers Biotech for plant tissue culture, genetics clean-up and micro propagation.

AUSA and ALPS have secured contracts or are in late-stage negotiations in the following jurisdictions: Australia, UAE, Bahrain, Canada, Finland, Germany, Iceland, Jordan, Kuwait, Netherlands, Saudi Arabia, Denmark, Massachusetts, Arizona, Nevada, Washington, Michigan, Missouri, Oklahoma, Colorado, Florida, Illinois, Maine, Maryland, New Mexico, Pennsylvania, Wyoming, and California, with other deals in other states presently being evaluated and negotiated. Audacious are laser focused on New York and New Jersey as well.

The Company’s common shares trade on the CSE under the symbol “AUSA” and on the OTCQB under the symbol “AUSAF”.

“Terry Booth“
________________________________
Terry Booth

Chief Executive Officer

Forward-Looking Statement

This press release contains “forward-looking information” within the meaning of applicable securities legislation. All statements, other than statements of historical fact, included herein is forward-looking information. Generally, forward-looking information may be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “proposed”, “is expected”, “budgets”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases, or by the use of words or phrases which state that certain actions, events or results may, could, would, or might occur or be achieved. In particular, this press release contains forward-looking information in relation to: the ability of ALPS to convert its pipeline into contracts; the impact of the changes to U.S. federal and state statutory developments with respect to the cannabis industry and the opportunities this may present for the Company; and the Company’s current liquidity. This forward-looking information reflects the Company’s current beliefs and is based on information currently available to the Company and on assumptions the Company believes are reasonable. These assumptions include but are not limited to the ability of the Company to successfully satisfy the conditions to closing the proposed transaction; the ability of the Company to successfully execute on its plans for the Company and GT; legal changes relating to the cannabis industry proceeding as anticipated.

Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information. Such risks and other factors may include, but are not limited to: general business, economic, competitive, political and social uncertainties; general capital market conditions and market prices for securities; the actual results of the Company’s future operations; competition; changes in legislation affecting the Company; the timing and availability of external financing on acceptable terms; lack of qualified, skilled labour or loss of key individuals; risks related to the COVID-19 pandemic including various recommendations, orders and measures of governmental authorities to try to limit the pandemic, including travel restrictions, border closures, non-essential business closures, service disruptions, quarantines, self-isolations, shelters-in-place and social distancing, disruptions to markets, economic activity, financing, supply chains and sales channels, and a deterioration of general economic conditions that could limit the Company’s ability to obtain external financing.

A description of additional risk factors that may cause actual results to differ materially from forward-looking information can be found in the Company’s disclosure documents on the SEDAR website at www.sedar.com. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. Accordingly, readers should not place undue reliance on forward-looking information. Readers are cautioned that the foregoing list of factors is not exhaustive. Readers are further cautioned not to place undue reliance on forward-looking information as there can be no assurance that the plans, intentions or expectations upon which they are placed will occur. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated.

Forward-looking information contained in this press release is expressly qualified by this cautionary statement. The forward-looking information contained in this press release represents the expectations of the Company as of the date of this press release and, accordingly, are subject to change after such date. However, the Company expressly disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable securities law.

The CSE has neither approved nor disapproved the contents of this news release. Neither the CSE nor its Regulation Services Provider (as that term is defined in the policies of the CSE) accept responsibility for the adequacy or accuracy of this release.

SOURCE Australis Capital Inc.

Related Links

www.ausa-corp.com

This article was published by CFN Enterprises Inc. (OTCQB: CNFN), owner and operator of CFN Media, the industry’s leading agency and digital financial media network dedicated to the burgeoning CBD and legal cannabis industries. Call +1 (833) 420-CNFN for more information.

About Ryan Allway

Mr. Allway has over a decade of experience in the financial markets as both a private investor and financial journalist. He has been actively involved in the cannabis industry since its inception, covering public and private companies.