Simply Solventless Concentrates (TSXV: HASH) has seen Canadabis Capital (TSXV: CANB) attempt to walk away from a proposed merger that was announced back in March. Simply Solventless however is claiming that the grounds for walking away from the deal are invalid.
On Monday, CanadaBis announced that it had terminated the arrangement agreement effective immediately. The arrangement was terminated as a result of an “SCC Material Adverse Change” under the arrangement agreement, however Canadabis failed to provide further information on the matter. The company subsequently cancelled the planned special meeting of shareholders related to the transaction.
Simply today publicly addressed the termination announcement from Canadabis, stating that the company “categorically denies that there is any SSC Material Adverse Change,” while continuing on to state that the arrangement agreement was not validly terminated. The company again failed to state what the alleged material adverse change was.
READ: Simply Solventless To Acquire CanadaBis Capital For $0.116 A Share In All-Stock Deal
Simply in the interim has demanded that the $1.2 million break fee associated with the transaction be paid out by Canadabis no later than April 30. Canadabis notably raised $4.04 million via convertible debentures in April following the announcement of the transaction, with that debt converting at $0.10 per share.
Simply meanwhile today indicated that it had failed to file its audited annual financial statements on time due to a delay in the audit process, which it says is unrelated to the Canadabis transaction. An application for a management cease trade order is said to have been filed.
“SSC refutes that any material adverse change has happened to our business and SSC is pursuing all legal remedies against CanadaBis, including payment of a $1.2 million break fee, for the invalid termination of the Arrangement Agreement. CanadaBis raised $4.1 million capital after the Arrangement Agreement was announced, while SSC incurred cost and worked in good faith to close the transaction. We are not deterred, and upon filing our financial statements we are steadfastly committed to our business plan,” commented Jeff Swainson, CEO of Simply Solventless.
Simply Solventless last traded at $0.50 on the TSX Venture.
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