Spartan Acquisition Corp. Announces Completion of $3.6 Million Dollar Forbidden Spirits Financing

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KELOWNA, BC, April 28, 2021 /CNW/ - Spartan Acquisition Corp. (TSXV: VDKA.P) (the "Company" or "Spartan"), a capital pool company, and Forbidden Distillery Inc. ("Forbidden") are pleased to announce that Forbidden has completed its previously announced private placement (the "Concurrent Financing") of subscription receipts (the "Subscription Receipts") for total aggregate gross proceeds of approximately $3,600,000, including the repayment of a total of $607,594 in debt (the "Securities forDebt").

The Concurrent Financing is required to be completed by Forbidden in connection with the previously announced business combination between Spartan and Forbidden (the "Proposed Transaction") to create a new entity to be called "Forbidden Spirits Distilling Corp.", the shares of which are anticipated to be listed on the TSX Venture Exchange (the "Exchange") under the ticker symbol "VDKA".  It is a condition to the completion of the Amalgamation that Forbidden complete a concurrent financing for aggregate gross proceeds of a minimum of $3,600,000 and up to maximum gross proceeds of $4,500,000.

Forbidden CEO Blair Wilson commented that "We are happy to reach our goal of raising $3.6 million dollars and we look forward to the progress we can make expanding our portfolio of ultra-premiums spirits in Canada and overseas."

Forbidden has issued an aggregate total of 12,000,000 Subscription Receipts at a purchase price (or, in the case of the Securities for Debt, a deemed purchase price) of $0.30 per Subscription Receipt for aggregate gross proceeds of $3,600,000 which includes the repayment of $607,954 in debt owing to a related party. Each Subscription Receipt entitles the holder thereof to receive, without payment of any additional consideration and without further action on the part of each subscriber, subject to adjustment, one unit of Forbidden (a "Unit") in accordance with the terms of a subscription receipt agreement entered into between Spartan, Forbidden and TSX Trust Company (the "Subscription Receipt Agreement"), including the satisfaction or waiver of the escrow release conditions described in the Subscription Receipt Agreement.

Upon the closing of the Proposed Transaction, the Units issued pursuant to the conversion of the Subscription Receipts will be automatically exchanged for one common share (a "Resulting Issuer Share") in the capital of the Resulting Issuer (as defined in Exchange policy 2.4) and one-half of one Resulting Issuer Share purchase warrant (each whole Resulting Issuer Share purchase warrant, a "Warrant"). Each Warrant will entitle the holder to acquire one (1) additional Resulting Issuer Share at a price of $0.50 for a period of two years following the date of issuance.  If, at any time following the issuance of the Warrants, the daily volume weighted average trading price of the Resulting Issuer Shares on the Exchange, or such other stock exchange on which the Resulting Issuer Shares are listed, is greater than $0.75 for the preceding 10 consecutive trading days, the Resulting Issuer may, upon providing written notice to the holders of Warrants, accelerate the expiry date of the Warrants to the date that is 30 days following the delivery of such written notice.

Updated CPC Policy

The Company also announces that, due to changes made to the Exchange's Policy 2.4 - Capital Pool Companies, which become effective as at January 1, 2021 (the "Updated CPC Policy"), the Company intends to implement certain amendments to align its policies with the Updated CPC Policy.

Pursuant to the Updated CPC Policy, in order for the Company to align certain of its policies with the Updated CPC Policy it is required to obtain the approval of disinterested shareholders of the Company.  As a result, the Company will be seeking such approval at its next annual general and special meeting of shareholders (the "Meeting"), for the following matters: (i) to remove the consequences of failing to complete a Qualifying Transaction within 24 months of the Company's date of listing on the Exchange (the "Listing Date"); and (ii) to amend the escrow release conditions and certain other provisions of the Company's escrow agreement dated February 4, 2020 among the Company, TSX Trust Company and certain shareholders of the Company (the "Escrow Agreement"). These proposed amendments are described in further detail below.

Removal of the Consequences of Failing to Complete a QT within 24 Months of the Listing Date

Under the Exchange's former Policy 2.4 – Capital Pool Companies (as at June 14, 2010) (the "Former Policy") there are certain consequences if a QT was not completed within 24 months of the Listing Date. These consequences included a potential for Shares to be delisted or suspended, or, subject to the approval of the majority of the Company's shareholders, transferring Shares to list on the NEX and cancelling certain seed shares. The Updated CPC Policy has removed these consequences assuming disinterested shareholder approval is obtained. The Company intends to ask disinterested shareholders to approve the removal of such consequences at the Meeting, as it believes that it will afford the Company greater flexibility to complete a QT that is beneficial to all interested parties and will also allow the Company to better withstand market volatility.

Amendments to the Escrow Agreement

The Company intends to ask disinterested shareholders to approve the Company making certain amendments to the Escrow Agreement, including allowing the Company's escrowed securities to be subject to an 18 month escrow release schedule as detailed in the Updated CPC Policy, rather than the current 36 month escrow release schedule in the Former Policy. In addition, the Company wishes to amend the Escrow Agreement such that all options granted prior to the date the Exchange issues a final bulletin for the QT ("Final QT Exchange Bulletin") and all Shares that were issued upon exercise of such options prior to the date of the Final QT Exchange Bulletin will be released from escrow on the date of the Final QT Exchange Bulletin, other than options that (a) were granted prior to the initial public offering with an exercise price that is less than the issue price of the Shares issued in the initial public offering and (b) any Shares that were issued pursuant to the exercise of such options, which will be released from escrow in accordance with the 18 month escrow release schedule as detailed in the Updated CPC Policy.

About Spartan Acquisition Corp.

Spartan is a Capital Pool Company whose principal business is to identify and evaluate assets or businesses with a view to completing a Qualifying Transaction.  Subject to approval of the Exchange, Spartan intends the Proposed Transaction to constitute its Qualifying Transaction.

About Forbidden Distillery Inc.

Forbidden is a distillery licensed by the province of British Columbia to manufacture, market and sell spirits direct to consumers from its on-line store, as well as direct to off-premises retail liquor stores and direct to on-premises restaurants, hotels, pubs, bars, golf courses and yacht clubs. Forbidden currently ferments, distills, bottles and distributes a portfolio of ultra-premium brands including: REBEL Vodka, Eve's Original Gin, Adam's Apple Brandy, Forbidden Fire, Forbidden Spirits Vodka, and Wallace Hill Whisky. In response to COVID-19 Forbidden re-tooled its distillation plant in order to manufacture and supply front line workers and its surrounding community with FREE Serpent Hand & Surface Sanitizer.

Additional information with respect to Forbidden and its portfolio of ultra-premium spirits can be found on Forbidden's website at www.ForbiddenSpirits.ca.

Spartan and Forbidden continue to work diligently toward the completion of the Proposed Transaction, including with respect to the preparation of the materials required to be submitted to the Exchange and, ultimately, to shareholders for their consideration. The parties currently anticipate that the Proposed Transaction will be completed in the third quarter of fiscal 2021.

Cautionary Note

The Proposed Transaction is subject to a number of conditions including, without limitation, approval of the Exchange. There can be no assurance that the Proposed Transaction will be completed as proposed or at all.

ON BEHALF OF THE BOARD OF DIRECTORS:

Blair Wilson,
Chief Executive Officer

Disclaimer for Forward-Looking Information

This press release contains forward-looking statements and information that are based on the beliefs of management and reflect Spartan's current expectations. When used in this press release, the words "estimate", "project", "belief", "anticipate", "intend", "expect", "plan", "predict", "may" or "should" and the negative of these words or such variations thereon or comparable terminology are intended to identify forward-looking statements and information. The forward-looking statements and information in this press release include information relating to the Proposed Transaction (including receipt of the requisite approvals for the Proposed Transaction, the closing of the Proposed Transaction and the timing thereof). Such statements and information reflect the current view of Spartan. Risks and uncertainties that may cause actual results to differ materially from those contemplated in those forward-looking statements and information.

By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.

Such factors include, among others, the risk that Spartan and Forbidden do not obtain all requisite approvals for the Proposed Transaction or fulfill all the conditions and obligations of the Proposed Transaction Agreement, including the approval of the Exchange (which may be conditional upon amendments to the terms of the Proposed Transaction).

There are a number of important factors that could cause Spartan's actual results to differ materially from those indicated or implied by forward-looking statements and information. Such factors include, among others: currency fluctuations; limited business history of Spartan; disruptions or changes in the credit or security markets; disruption of results of operation activities and development of projects of Forbidden; unanticipated costs and expenses, the COVID-19 pandemic and general market and industry conditions.

Spartan cautions that the foregoing list of material factors is not exhaustive. When relying on Spartan's forward-looking statements and information to make decisions, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Spartan has assumed that the material factors referred to in the previous paragraph will not cause such forward-looking statements and information to differ materially from actual results or events. However, the list of these factors is not exhaustive and is subject to change and there can be no assurance that such assumptions will reflect the actual outcome of such items or factors.

THE FORWARD-LOOKING INFORMATION CONTAINED IN THIS PRESS RELEASE REPRESENTS THE EXPECTATIONS OF SPARTAN AS OF THE DATE OF THIS PRESS RELEASE AND, ACCORDINGLY, IS SUBJECT TO CHANGE AFTER SUCH DATE. READERS SHOULD NOT PLACE UNDUE IMPORTANCE ON FORWARD-LOOKING INFORMATION AND SHOULD NOT RELY UPON THIS INFORMATION AS OF ANY OTHER DATE. WHILE SPARTAN MAY ELECT TO, IT DOES NOT UNDERTAKE TO UPDATE THIS INFORMATION AT ANY PARTICULAR TIME EXCEPT AS REQUIRED IN ACCORDANCE WITH APPLICABLE LAWS.

This press release is not an offer of the securities for sale in the United States.  The securities have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an exemption from registration.  This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful.

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

SOURCE Spartan Acquisition Corp.