Limestone Announces Proposed Acquisition of Ebbtide Holdings, LLC and Offering of Up to $17 Million of Convertible Debentures

Limestone Announces Proposed Acquisition of Ebbtide Holdings, LLC and Offering of Up to $17 Million of Convertible Debentures

COLLINGWOOD, Ontario, March 29, 2021 (GLOBE NEWSWIRE) — The Limestone Boat Company Limited (Limestone” or the “Company”) (TSXV: BOAT) has entered into a Letter of Intent (the “LOI”) to purchase 100% of Ebbtide Holdings, LLC (“Ebbtide”) of White Bluff, Tennessee (the “Acquisition”). The purchase price of the Acquisition is comprised of USD$5,280,000 in cash and the assumption and payment of USD$4,043,800 Ebbtide’s existing debt. The Acquisition and working capital will be financed through the issuance of up to $17.0 million of convertible debentures of the Company through a non-brokered private placement (the “Offering”).

Acquisition of Ebbtide

Ebbtide manufactures the Aquasport and Boca Bay brands for their own account, as well as the Limestone line-up under contract for Limestone. The Acquisition will allow for the expanded production of all of these brands, in an effort to meet the growing market demand for marine products. Following the closing of the Acquisition, Limestone will have over 50 independent dealer locations servicing the Great Lakes and the East and Gulf Coasts of the United States. “The acquisition of Ebbtide Holdings is a keystone transaction in the continued and rapid growth of our company. The combination of heritage brands Limestone and Aquasport provides continuity in reputation for safety, performance and quality, coupled with the addition of the Boca Bay and Ebbtide brands further diversifying the Company’s offering. Our team members in Collingwood, Ontario will be responsible for directing product development and North American sales, marketing, distribution and finance, allowing the team in Tennessee to focus primarily on production and regional sales. By securing expanded manufacturing capacity and a broad dealer network, we are well positioned to become a significant force in the North American marine industry” said Scott Hanson, CEO of the Company. All boats will continue to be manufactured in Ebbtide’s recently upgraded 145,000 square foot facility in White Bluff, Tennessee.

Benefits to Limestone:

  • Full control of manufacturing process: Brings manufacturing in-house, giving Limestone full control of the process and ability to capture margin at various stages of production.
  • Significantly increases production capacity: Recently upgraded 145,000 square-foot manufacturing plant with annual capacity of ~1,300 boats.
  • Expanded and diversified brand portfolio: Adds Aquasport heritage brand with large consumer following to complement the Limestone brand, along with Boca Bay and Ebbtide brands.
  • Strengthened dealer distribution network: Nearly triples the number of dealer locations and deepens Limestone’s presence along the US East Coast, Southeast Coast and Gulf Coast.
  • Accretive to Limestone shareholders: Significantly increases pro forma revenue and profitability.

Offering of Convertible Debentures

The Company intends to complete a non-brokered private placement of up to $17.0 million aggregate principal amount of unsecured, convertible debentures (the “Debentures“), which mature 3 years from their date of issuance (the “Term“). The Debentures will bear interest at a rate of 10% per annum, payable annually in arrears. The Debentures will be convertible at any time at the option of the holder into common shares of the Company (“Common Shares”) at a conversion price of $0.36 per Common Share (the “Conversion Price“). If at any time following 120 days from the date of issuance of the Debentures (the “Closing Date“) and prior to the date that is 30 days prior to the end of the Term, the volume weighted average closing price of the Common Shares on the TSX Venture Exchange, or such other exchange on which the Common Shares may be listed, (the “Exchange“), is equal to or higher than $0.50 per Common Share for 20 consecutive trading days, the Company may notify the holders of the Debentures that the Debentures will be automatically converted into Common Shares at the Conversion Price 30 days following the date of such notice.

The Company will pay qualified brokers a cash commission of 8% of the gross proceeds from each Debenture subscription and compensation options equal to 8% of the common shares underlying the Debentures (the “Compensation Options”). Each Compensation Option will be exercisable into one Common Share at an exercise price of $0.36 for a period of 18 months from the Closing Date.

The Acquisition and Offering are subject to a number of customary conditions, including satisfactory due diligence, receipt of applicable regulatory and third-party approvals, including the approval of the Exchange and completion of definitive documentation in respect of the Acquisition and the Offering. Subject to the satisfaction of applicable closing conditions, the Offering and Acquisition are expected to close by April 30, 2021.

Grant of Options

On March 27, 2021 the Company granted to Mr. David Grandin, a director of the Company, one million options to acquire Common Shares of the Company at a price of $0.33 cents per Common Share, which options shall vest over three years from the date of grant.

About Limestone

Limestone is a North American designer and manufacturer of recreational and commercial powerboats. Limestone is a heritage brand with a 35-year legacy, renowned for its timeless design, big water performance, quality manufacturing and durability. Crafted in a centrally located manufacturing facility in Tennessee, Limestone features an evolved and expanded product line that will appeal to a growing number of boaters coast to coast.

Limestone is a brand focused Company, dedicated to the wellbeing of all stakeholders, including our customers, employees and shareholders. It is with great pride that the Company continues to expand the legacy of Limestone boats and its original designer, Mark Ellis of Connecticut. Scott Hanson, Mark Ellis and the Limestone design team have worked diligently to modernize the Limestone configurations, designs, adding outboard power, while maintaining the original hull design that has made the Limestone brand famous for its’ big water performance. Please visit www.limestoneboats.com to see the new designs.

Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this news release.

Cautionary Note Regarding Forward-Looking Statements

Certain statements contained in this press release constitute forward-looking information. These statements relate to future events or future performance. The use of any of the words “anticipate”, “believe”, “could” “should”, “would”, “estimate”, “expect”, “forecast”, “indicate”, “intend”, “likely, “may”, “plan”, “potential”, “project”, “outlook”, “seek”, “target”, “trend” or “will” and similar expressions and statements relating to matters that are not historical facts are intended to identify forward-looking information and are based on the parties’ current belief or assumptions as to the outcome and timing of such future events. Actual future results may differ materially. In particular, there are no assurances that the transactions will be completed on the terms or timeframe indicated herein or at all. If these transactions are ultimately completed, the Company will be subject to a number of risks relating to integration and go-forward operations, certain of which are more particularly described in the Company’s public filings available on SEDAR. The forward-looking information contained in this release is made as of the date hereof and the parties are not obligated to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable securities laws. Because of the risks, uncertainties and assumptions contained herein, investors should not place undue reliance on forward looking information. The foregoing statements expressly qualify any forward-looking information contained herein.

Many factors could cause actual results, level of activity, performance or achievements or future
events or developments to differ materially from those expressed or implied by the forward-looking statements. All the forward-looking statements made in this press release are qualified by these cautionary statements and other cautionary statements or factors in this press release. There can be no assurance that the actual results or developments will be realized or, even if substantially realized, will have the expected consequences to, or effects on, the Company. Unless required by applicable securities law, the Company does not intend and does not assume any obligation to update these forward-looking statements.

The securities forming part of the Offering have not been, nor will they be, registered under the United States Securities Act of 1933, as amended (the “1933 Act”), and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. This news release will not constitute an offer to sell or the solicitation of an offer to buy nor will there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

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