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CBD Global Sciences Inc. dba Global Sciences (OTCPK:CBDNF) (CSE:CBDN) (Frankfurt:GS3.F) (Munich:GS3.MU) has closed an asset purchase agreement dated September 8, 2022, as amended on December 12, 2022, with New Age Beverage Corporation and NABC Properties, LLC (collectively, “NABC”), to acquire NABC’s direct store distribution division, and related leases and assets, as a going concern (the “DSD operation”). The DSD operation consists of operations that have grown over the last 20 years to distribute beverages and snacks to over 5,000 grocers, big box retailers and convenience stores in the Colorado community.
Legacy Distribution Group, a wholly-owned subsidiary of the corporation, completed the acquisition of the DSD operations from New Age Beverage Corporation, a Colorado corporation and a wholly-owned subsidiary of New Age, Inc. The purchase price, after adjustments, was $2 million on closing, with $250,000 due within 60 days of closing, for an aggregate purchase price of $2.3 million The DSD operations will continue to be operated by the management team in place, along with hundreds of existing employees.
Legacy Distribution obtained an asset-based, ledgered line of credit (the “ABL facility”) for the purposes of acquiring the DSD operation and for ongoing working capital, from a US-based private lender which provides accounts receivable financing services intended for start-ups and established businesses. The ABL facility is for a term of three years and carries an annual interest rate of prime plus 8.5%. Advances under the ABL facility are subject to the lender’s assessment of the borrowing base for the DSD operation comprised of up to 90% of eligible accounts receivable and eligible inventory. Early repayment of the ABL facility will attract a 3% fee which declines to 2% if repaid in year two of the term and 1% if repaid in year three of the term.
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