Mr. Jeff Swainson reports

SIMPLY SOLVENTLESS ANNOUNCES ACQUISITION OF LAMPLIGHTER BRAND AND APPOINTS VICE PRESIDENT, COMMERCIAL

Simply Solventless Concentrates Ltd. has acquired the popular Lamplighter recreational cannabis brand. Simply Solventless has also appointed Randeep Gill to the position of vice-president, commercial.

Lamplighter acquisition

On Jan. 15, 2024, the company entered into agreements with a Canadian licensed producer (the vendor), providing for the sale of assets and inventory relating to the production and sale of Lamplighter to the company.

Lamplighter provides premium, ready-to-consume (RTC) cannabis products to markets across Canada, including Ontario, Alberta and British Columbia. These products currently consist of ultrahigh-potency vape cartridges and infused prerolls.

Jeff Swainson, president and chief executive officer of SSC, stated: "With Canadian LPs exiting the business-to-consumer market in Canada to focus on international sales, SSC has the opportunity to complement our strong organic revenue growth with acquisitions of quality assets that are accretive to revenue and profitability. Accordingly, we are pleased to announce the acquisition of the popular Lamplighter brand, which provides ultrahigh-potency RTC cannabis products across Canada. The purchase price of $600,000 will be paid from future Lamplighter cash flow, and the purchase price equals the net book value of the tangible assets acquired. With projected 2023 Lamplighter gross revenue of $6.8-million, and similar revenue projected for 2024, we believe the acquisition will contribute value to our shareholders."

Mr. Swainson added: "SSC and Lamplighter had a projected combined 2023 gross revenue of $13.8-million, compared to current SSC enterprise value of $2-million, representing a gross revenue multiple of 0.14 times. Further near-term upside comes from SSC's new brand Frootyhooty, which launched nine initial SKUs in Alberta during December, 2023. Frootyhooty will launch 13 additional SKUs in Alberta and Ontario during February, 2024, with launches in other provinces to follow."

SSC expects first Lamplighter sales in February, 2024, and for the integration of the Lamplighter brand to be completed by May, 2024.

Lamplighter acquisition benefits

The anticipated benefits of this acquisition for SSC are as follows:

• Adds up to 21 additional product listings in Ontario, Alberta and British Columbia in large product categories;
• Provides sales access to B.C., a province that SSC does not currently participate in;
• Adds projected gross revenue of $6.8-million per year (2023 projected Lamplighter run rate);
• Adds material projected gross margin with minimal incremental fixed operating costs;
• The $600,000 consideration will be paid to the vendor when the Lamplighter products are sold to the provinces. This limits SSC's risk on the acquisition;
• Leverages unutilized facility capacity;
• Reduces sales, general and administration costs as a percentage of revenue;
• Diversifies product portfolio into high-potency distillate vapes and prerolls;
• Complements SSC's popular Frootyhooty (live rosin amplified) and Astrolab (solventless) brands.

Appointment of vice-president, commercial

SSC is pleased to announce that Mr. Gill has been appointed to the position of vice-president, commercial. Mr. Gill will work closely with SSC's corporate, operations, supply chain, quality assurance and sales teams, with the goal of driving sales velocity and achieving operational and commercial excellence. Mr. Gill has 10 years of commercial, production and quality assurance experience in the pharmaceutical and cannabis industries, including three years with SSC. Mr. Gill holds a bachelor of science degree in pharmacy, a pharmaceutical QA/QC (quality assurance/quality control) postgraduate diploma, and a plant production and facility management diploma.

Mr. Swainson added: "The appointment of Randeep Gill to the position of vice-president, commercial, will help to ensure that SSC continues to execute its ambitious commercialization strategy, which includes both organic and inorganic growth initiatives."

Corporate presentation posted to website

SSC has posted a new corporate presentation to its website.

About Simply Solventless Concentrates Ltd.

SSC is a public company incorporated under the Business Corporations Act (Alberta). SSC's mission is to provide pure, potent, terpene-rich, ready-to-consume cannabis products to discerning cannabis consumers.

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