Hill Street Provides Update on CFO Transition

Toronto, Ontario–(Newsfile Corp. – August 31, 2022) – Hill Street Beverage Company Inc. (TSXV: HILL) (“Hill Street“, or the “Company“) announces that further to its March 29, 2022 announcement, the resignation of Hinta Chambers as Chief Financial Officer (“CFO“) of the Company is now effective. However, the Company also announces today that following Ms. Chambers’ resignation, she has been appointed as the Company’s interim CFO, continuing to ensure a smooth transition as the Company progresses in its search for her permanent successor.

Ms. Chambers has served as the Company’s CFO for over four years, and she has been instrumental in supporting the evolution of the Company’s focus from the domestic beverage business towards building a global multi-business company pioneering the space where premium crafted consumer products meet bioscience. Her continued support in transitioning to new financial leadership of the Company provides important stability as the Company continues to deliver impressive growth and strong financial metrics as outlined in the most recent CEO update.

About Hill Street Beverage Company Inc. (TSXV: HILL)

Hill Street Beverage Company Inc. is a progressive non-alcoholic beverage and cannabis solutions company. We are pioneering the space where craft consumer products meet bioscience by combining our deep CPG expertise and our rights to use Lexaria Bioscience Corp.’s ground-breaking DehydraTECH™ patent portfolio for product development, licensing and B2B sales of cannabis ingredients.

Hill Street Beverages brands include Vin(Zero) alcohol-free wines, and Hill Avenue Cannabis Brands include (V)ia Regal Pink and White Grape Sparklers.

For more information on our business activities or to check out Hill Street’s award-winning alcohol-free line-up and order product to be delivered straight to your home go to www.hillstreetbeverages.com.

For more information:

Craig Binkley, Chief Executive Officer
craig@hillstreetbevco.com

FORWARD-LOOKING STATEMENTS

Statements in this press release may contain forward-looking information. Any statements in this press release that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are often identified by terms such as “may”, “should”, “would”, “anticipate”, “expects”, and similar expressions. The reader is cautioned that assumptions used in the preparation of any forward-looking information may prove to be incorrect. Events or circumstances, such as future availability of capital on favourable terms, may cause actual results to differ materially from those predicted, as a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of the Company. The reader is cautioned not to place undue reliance on any forward-looking information. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this press release are expressly qualified by this cautionary statement. The forward-looking statements contained in this press release are made as of the date of this press release. The Company does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as required by securities law.

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

Not for dissemination in the United States.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/135550

Hill Street Provides FY2022 Recap Letter from the CEO to Shareholders

Toronto, Ontario–(Newsfile Corp. – August 11, 2022) – Hill Street Beverage Company Inc. (TSXV: HILL) (“Hill Street“, or the “Company“), is pleased to provide a letter to all shareholders from CEO Craig Binkley, with a summary of the Company’s operational advances over the past fiscal year.

Dear Hill Street Shareholders,

June 30, 2022 closed the most successful fiscal year in the history of Hill Street Beverage Company Inc. (“Hill Street” or the “Company“) and as I write this, we are now deeply into the detailed year-end close and audit processes. While we won’t have those audited Q4 and full fiscal year 2022 financials ready for release until later in the fall, I wanted to take this opportunity to summarize the Company’s operational advances over this past fiscal year and to provide a brief recap of the financial strength that has been reported through Q3 of the fiscal year. Consistent with my April update, I want to ensure that we provide a broader perspective on the business over time versus relying on isolated quarterly results and news of the moment.

As we look forward to reviewing our Q4 FY22 and Full Year FY22 results, I want to take this opportunity to remind you of the underlying strength of the Company’s sustained financial performance over the past eight quarters, with this excerpt from the FY2022 Q3 Management’s Discussion and Analysis, a copy of which is available on the Company’s SEDAR profile:

As the following graph shows, the financial results for Hill Street have been solid now for a full eight quarters. Trailing Twelve Month (TTM) net revenues have been continuously increasing between 24% – 53% vs. the prior year and gross profit has been even stronger at +38% to +131%. In fact, the key gross profit figures show that TTM gross profit dollars have more than tripled for the FY22 Q3 period vs. just two years ago for the FY20 Q3 period. As we’ve noted, the dramatic growth in gross profit dollars is accompanied by a significant improvement in our gross profit margins – which have increased as a percentage of net revenue from a low of 31% in fiscal year 2020 to over 50% in each of the past four quarters. As we’ve often mentioned, this significant improvement in gross profit dollars and gross profit margins does not yet show the impact of the DehydraTECHTM licensing deals announced with Lume in Michigan or the expansion of Dehydr8’s commercialization efforts into Illinois, Massachusetts, or Oregon.

Cannot view this image? Visit: https://hillincorporated.com/wp-content/uploads/2023/01/133529_8159f5d8248df8b7_001.jpg

Graph 1

To view an enhanced version of Graph 1, please visit:
https://images.newsfilecorp.com/files/5205/133529_8159f5d8248df8b7_001full.jpg

A Look Back at Fiscal Year 2022 – The Company Has Delivered Strong Profitable Growth While Driving a Transformation of the Business

Here is a snapshot of where the Company’s three revenue-generating business units stood as we began FY 2022 on July 1, 2022:

  • Alcohol-Free Wine Business: Our VIN(ZERO) alcohol-free wine business operated almost exclusively within a Canadian footprint, with an emerging online direct-to-consumer channel that had seen a bit of a boost due to changes in consumer buying behaviour and newly available delivery choices resulting from the COVID pandemic.
  • DehydraTECHTM Patent and Technology Licensing Business: We had just completed our first six months of integrating the transformative DehydraTECH™ licensing business into the Company following the December 2020 DehydraTECH™ rights acquisition from Lexaria Bioscience Corp. (“Lexaria“) The Company’s only licensee acquired in the rights acquisition that was operating live in-market with DehydraTECH™ THC-infused initiatives in July 2021 was the owner of the brand 1906 with their 1906 drops, then available in four U.S. states, and their cannabis-infused chocolate products, available primarily in Colorado. Those four operating states – Colorado, Illinois, Massachusetts, and Oklahoma – gave us access to a total addressable cannabis market population of 29.5MM1 and estimated 2022 cannabis sales of approximately $8B USD2.
  • (V)ia Regal Cannabis Beverage Business: Our (V)ia Regal cannabis-infused beverage initiative in Canada was approximately six weeks into its initial launch through our Health Canada‐licensed manufacturing and sales partner Molecule Inc. (“Molecule“) and we had secured listing in the Ontario Cannabis Store (OCS). This (V)ia Regal business is our first cannabis initiative in Canada, which has a total addressable market population slightly larger than the four U.S. states mentioned above at 38MM, but with smaller addressable cannabis market sales, which were estimated to be just under $4B CAN3 in 2021.
  • Financially, FY 2022 began by building on the base of FY 2021 that had delivered record net revenue, crossing $2MM for the first time with approximately $2,195K (+27% vs FY 2020) and record gross profit, crossing $1MM for the first time with approximately $1,124K (+55% vs. FY 2020).

Q1 of FY 2022 – Aggressive Starts for All Three Businesses

Q1 of FY 2022 delivered a fast start to the year, with key operating activities happening across all three business units.

  • DehydraTECH™ Licensing Business

Most importantly, in July we launched the critical pilot program for DehydraTECH™ licensing in Michigan with our new licensee and commercialization partner Dehydr8, LLC (“Dehydr8“). Beyond opening a net-new state for DehydraTECH™ licensing revenues in Michigan with its population of ~10MM and its rapidly growing top-five U.S. estimated 2022 cannabis sales market of $2B USD4, this new relationship with Dehydr8 provided the foundation for the Company and its partners to begin developing a portfolio of DehydraTECH™-powered THC products and manufacturing and commercialization solutions for prospective new brands and licensees that could be used as we expand to new legal geographies. As we’ve mentioned before, this initiative was critical as we looked to fundamentally grow the business beyond Canada into global markets, beyond beverages into cannabis technology, and beyond B2C into B2B scale opportunities.

Until July 2021, the licensing relationships we acquired with the DehydraTECH™ rights were exclusively based on licensing the technology to B2C consumer product companies. The Michigan pilot is where we began developing the strategies, processes, and solutions to scale B2B DehydraTECH™ licensing business globally alongside a roadmap of continually increasing legal geographies.

By the end of August 2021, Dehydr8 had licensing agreements in place with LPs in Michigan and we began intense product development on a wide range of consumer product formats, from foods and beverages to topicals and other product forms that would benefit from the use of DehydraTECH™ technology in their manufacturing processes and would result in enhanced consumer experiences. Because of the different recipes, ingredients and manufacturing processes of these product concepts, our collective team implemented a broad range of product development initiatives to bring new products and form factors to life, which were now made possible because of DehydraTECH™ technology.

As we were developing and launching products in Michigan with Dehydry8, including the first ever DehydraTECH™ THC-infused multi-serve fast-acting dissolvable powder and DehydraTECH™ THC-infused gummies, we also focused on expansion opportunities with our pre-existing DehydraTECH™ licensees that we acquired with the December 2020 rights acquisition.

In August 2021, the Company’s licensee Boldt Runners Corporation (“Boldt Runners“), owner of Cannadips, the leading brand of smokeless nicotine and tobacco free dips in the US, announced that it would begin production of a new DehydraTECH™-powered THC-infused line of its top-selling CBD Cannadips products in California for launch in November 2021. This launch alone nearly doubled the total addressable population in the Company’s U.S. footprint to almost 79MM people and put operations into states with a combined $16B USD in estimated 2022 cannabis sales. For perspective, California alone has a greater population than all of Canada, with 90% higher equivalized estimated cannabis sales. Getting a foothold in California and intensifying our licensing relationship with the owner of the Cannadips brand were two major achievements that the Company has continued to build upon.

  • (V)ia Regal Cannabis Beverage Business

In Canada, our (V)ia Regal initiative was fully into in-market launch activities as we entered FY 2022. Given the new nature of the business and systems, there was significant activity around integrating into the OCS vendor systems as they continued to evolve, as well as new sales and dispensary support activities developed with Molecule. Molecule also began to present the brand to additional provinces as they accelerated their roll-out initiatives beyond Ontario.

  • VIN(ZERO) Alcohol Free Wine Business

One of the major opportunities in our VIN(ZERO) alcohol-free wine business as we entered FY 2022 was to look beyond Canada and take a more global view of its potential, as we have significant global beverage experience on our team, and we also work very closely with a globally-focused manufacturing partner. In August 2021, we launched a new distribution and promotional program in the U.S. with New York-based alcohol-free retailer Boisson, with their progressive retail concept that was created to serve the fast-growing movement toward a conscious approach of “better and better for you” consumption. We also expanded our sales much further geographically with new distribution in Australia, despite the intense pandemic situation in that country at the time. These expansions were early outcomes of the broader strategic re-engineering of our alcohol-free wine business to capture more profitable growth in the attractive global non-alcoholic beverage category.

Q2 of FY 2022 – Continued Expansion of DehydraTECH™ and (V)ia Regal, Normalized Sales and Inventories on the Alcohol-Free Wine Business

  • DehydraTECH™ Licensing Business

As we transitioned into Q2 of FY 2022, we continued the intense DehydraTECH™-powered product development and testing initiatives in the Michigan pilot market and we also expanded the Dehydr8 licensing rights into Illinois to begin building relationships and R&D programs across the lake. As DehydraTECH™-powered 1906 Drops were then already available in Illinois, this license grant did not represent a net-new market for DehydraTECHTM licensing, but it did represent the opportunity for further B2B development in another top five U.S. state for cannabis sales.

Hill Street also continued to build upon the pre-existing DehydraTECH™ licensee relationships in Q2, as the Cannadips THC product launch went live in California in November 2021 and as we worked with the owners of the 1906 brand on additional state launches that were in their pipeline.

  • (V)ia Regal Cannabis Beverage Business

In Canada, Molecule received its initial orders of (V)ia Regal cannabis beverages from new provinces British Columbia and Northwest Territories, as Molecule expanded their distribution beyond Ontario.

  • VIN(ZERO) Alcohol Free Wine Business

The VIN(ZERO) alcohol-free business continued to operate on a strong track through the first half of FY 2022, although the Q2 FY 2022 financial results showed a normalization when compared to an extraordinary Q2 FY 2021. In Q2 FY 2021, sales were shifted and elevated dramatically beyond normal due to retailers and distributors restocking empty shelves and pipeline inventories that were emptied by global pandemic and supply chain issues in Q1 FY 2021. After this normalization and coupled with the Company’s discontinuation of its unprofitable alcohol-free beer business, we finished the first half of FY 2022 with 9% growth in net revenue and 12% growth in gross profit on a consolidated basis.

Q3 of FY 2022 – Full-Time CEO, Stock Ticker Change to HILL, and Significant DehydraTECHTM Expansion with Multiple Licensees

We turned the calendars to 2022 in January and Q3 began with some significant changes on the corporate side. I accepted the full-time CEO role in January 2022 after serving as interim co-CEO with fellow Board member Lori Senecal since February 2021. In addition to my belief in the future of Hill Street, its major shareholder HoldCo St. Catharines Ltd. also showed continued support of the strategic and operating direction of the Hill Street team by exercising warrants it held and making significant Hill Street stock purchases on the open market. Additionally, we made the important change of our ticker from BEER to HILL, reflecting the Company’s growth and evolution beyond the Canadian beverage business towards building a global, multi-business company pioneering the space where premium crafted consumer products meet bioscience.

  • DehydraTECH™ Licensing Business

Q3 was also another quarter of significant advances in the Company’s DehydraTECH™ licensing business. 1906 Drops, the leading multi-state brand of fast-acting, low-dose, swallowable pills were launched into Arizona in March 2022, adding yet another top ten net-new state to our U.S. footprint with a total addressable population of 7.3MM people and estimated 2022 cannabis sales of $2B USD5. This marked an important first new state launch for 1906 Drops since becoming Hill Street’s licensee in December 2020, demonstrating an aggressive rollout plan that would see a steady stream of new state launches following closely thereafter.

Dehydr8, further amplifying its successes in the Michigan pilot, entered into a new DehydraTECHTM sublicensing deal in March 2022 with Lume Cannabis Co. (“Lume“), the top vertically integrated cannabis operator in Michigan and the largest single-state cannabis operator in the U.S.6 The launch of Lume DehydraTECHTM-powered THC products is expected later this month.

In Q3, we also expanded the DehydraTECHTM licensing rights for Dehydr8 beyond the Great Lakes to Massachusetts in March. Massachusetts is another strong top-five market where 1906 Drops was already operational, and we wanted to activate broader B2B commercialization in the state through Dehydr8. That expansion led to the July 2022 announcement of a licensing agreement with NEO Alternatives, LLC, owner of the “Root 66” brand of CBD extract products, who will launch a new line of fast-acting THC products that are expected to hit shelves this month.

  • (V)ia Regal and VIN(ZERO) Businesses

In Canada, we continued to work closely with Molecule on sales and distribution efforts for (V)ia Regal. We also worked with our supply chain and go-to-market partners on our VIN(ZERO) alcohol-free wine business to continue re-engineering our approaches and business models to drive increased profitability and growth.

  • Strong Financial Results Through Nine Months

In terms of the financial results through the first three quarters of FY 2022, net revenue for the 9-month period was already approaching the $2MM threshold that we had cracked for all of FY 2021, with approximately $1,994K in net revenue representing a 19% increase vs. prior year. We have also already surpassed the $1MM mark on gross profit year-to-date, with approximately $1,066K in gross profit representing a 23% increase vs. prior year. Gross margin as a percentage of net revenue increased from 51.7% to 53.4% as the Company’s DehydraTECH™ licensing revenues grew as a percentage of the consolidated revenues.

Q4 of FY 2022 Through Now – Continuing Aggressive DehydraTECH™ Licensing Growth, Adapting (V)ia Regal to Market Conditions and Re-Engineering the Alcohol-Free Business

  • DehydraTECH™ Licensing Business

As we began the final quarter of FY 2022, we added yet another net-new U.S. state to our footprint in May as we expanded Dehydr8’s DehydraTECH™ rights into Oregon, and Dehydr8 immediately signed up Folium Farms as a sub-licensee LP. That brought our fiscal year-end DehydraTECH™ operating addressable U.S. footprint to eight states, doubling the number with which we started the fiscal year. The real impact, however, was even greater than double, as our ending eight states represent a population of over 90 million people (+305% vs. the 29.5MM with which we started the FY) with estimated 2022 cannabis sales of $19.2B USD (+240% above where we began the FY at $8B USD)7.

Importantly, many of the new state or licensing deals that have been announced in FY 2022 are only beginning to impact our financials in Q1 FY 2023. For example, while Lume was granted DehydraTECH™ rights in March, its product launch in Michigan is expected to occur later this month, as is the Massachusetts launch of Root 66 DehydraTECH™-powered THC-infused products, which rights were granted in July. Similarly, the Oregon product launch from Folium Farms is expected to hit retail shelves in September.

As we close our fiscal year, we must also note the significant progress that has been made to expand the DehydraTECH™ product portfolio and form factor concepts that are now available to licensees for multi-state launch. At the beginning of the year, 1906 Drops and 1906 chocolates were the only DehydraTECH™-powered THC consumer products being sold. By the end of the fiscal year, we had added DehydraTECH™-powered THC gummies, multi-serve dissolvable powder, dip pouches, and dissolvable tablets, with other form factors being developed for launch in FY 2023.

FY 2023 Is Already Off to a Good Start with 1906 Drops Expansions

In July 2022, 1906 launched their signature line of 1906 Drops into Michigan, further adding to the number of DehydraTECH™ form factors and products that are available to consumers in that key market. Continuing the aggressive footprint expansion, 1906 also just announced the 1906 Drops launch in Pennsylvania through a multi-state agreement with TILT Holdings Inc. Under that agreement, Ohio is expected to follow later in August.

Both Pennsylvania and Ohio will be net-new states for the DehydraTECHTM THC footprint, adding a total addressable market of almost 25MM population and $2.3B USD in estimated 2022 cannabis sales. So, we expect to end August with an operating footprint in the U.S. that covers ten states with a population of 115MM and approximately $21.5B USD in estimated 2022 cannabis sales. That footprint covers states generating almost two-thirds of the projected $33B USD in total U.S. cannabis sales for 2022, up from our coverage of less than one-quarter of total U.S. cannabis sales at the beginning of FY 2022.

Cannadips Sets the Stage for International Expansion of its CBD Dip Pouches

DehydraTECHTM licensee Boldt Runners, owner of Cannadips – the leading brand of dip pouches – also announced in July 2022 that it had expanded manufacturing agreements for its CBD products with Lexaria to include Europe, Japan, and South Africa. Boldt Runners licenses DehydraTECHTM technology from Hill Street for production of its THC line of products, and from Lexaria for production of its CBD line of products.

Like Hill Street, Lexaria and Cannadips are looking at global opportunities for DehydraTECHTM expansion as we build our roadmaps beyond FY 2023.

  • (V)ia Regal Cannabis Beverage Business

During Q4, we also continued sales and distribution efforts on our (V)ia Regal business as Molecule engaged the sales agency Humble + Cannabis Solutions Inc. to drive retail support of its LP portfolio, including the (V)ia Regal products. In addition, the decision was made together with the Ontario Cannabis Store to lower the retail price of (V)ia Regal products in Q4 to encourage broader consumer trial. While the Company’s (V)ia Regal products are made with high‐quality premium ingredients producing a superior product, the Company felt that a price reduction was warranted given that consumers in the early‐stage, highly competitive and fragmented Canadian cannabis beverage market were still quite price sensitive in their trial choices, Additionally, the significant regulatory and legal challenges in Canada limited the Company’s ability to effectively market the brand’s premium ingredients in Canada to support higher pricing.

  • VIN(ZERO) Alcohol-Free Wine Business

In Q4, we completed several significant changes in our business model for VIN(ZERO) as we looked to streamline the business, eliminate costs, and improve the overall financials on this important business. However, we will be in a better position to outline those specific changes and the resulting financial impacts once we have fully closed Q4 and announce the audited Q4 and final FY 2022 financial results.

Summary

In summary, we had a transformative fiscal year 2022 with major operational advances leading in front of strong financial performance that we’ve reported through the first three quarters and over the past two full years. We enter fiscal year 2023 with the impact of many of those fiscal 2022 operating successes expected to hit our financial results in Q1 FY 2023, as well as several important new wins that have kicked off this fiscal year.

While the business results have been strong, as shown in the April update, our share price performance and valuation have been depressed, with declines being similar to those across the entire sector over time. However, we are committed to building awareness of our positive profitable growth story, even as we manage our precious cash resources very conservatively.

We have now done significant work internally on the Hill Street corporate reputation strategies and plans for both B2B industry awareness and investor relations support. We have signed an agreement with The Panther Group to help drive many of these reputation-building activities with us through their network and programs. The Panther Group is an organization founded to solve business problems that impede growth for companies in the cannabis industry. They provide core solutions essential to growth marketing, business improvement, and capital raising, and we expect them to be an integral partner to our efforts throughout the rest of this year. We have engaged The Panther Group to amplify our efforts at major industry events including Benzinga Capital Conferences, MJ Unpacked and MJ Biz, as well as other key events and opportunities that they provide.

We are very pleased with the successes of FY 2022 and are extremely excited for FY 2023 and the positive momentum that we are confident that we can accelerate even further this year. We appreciate your support and hope you share our excitement about the coming year.

Sincerely,

Craig Binkley, CEO

About Hill Street Beverage Company Inc. (TSXV: HILL)

Hill Street Beverage Company Inc. is a progressive non-alcoholic beverage and cannabis solutions company. We are pioneering the space where craft consumer products meet bioscience by combining our deep CPG expertise and our rights to use Lexaria Bioscience Corp.’s ground-breaking DehydraTECH™ patent portfolio for product development, licensing and B2B sales of cannabis ingredients.

Hill Street’s beverage brands include award-winning VIN(ZERO) alcohol-free wines, and premium cannabis-infused (V)ia Regal Pink and White Grape Sparklers made from grapes imported from European vineyards.

For more information on our business activities or to check out Hill Street’s award-winning alcohol-free line-up and order product to be delivered straight to your home go to https://hillstreetbeverages.com/wines/.

For more information:

Craig Binkley, Chief Executive Officer
craig@hillstreetbevco.com.

FORWARD-LOOKING STATEMENTS

Statements in this press release may contain forward-looking information. Any statements in this press release that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are often identified by terms such as “may”, “should”, “would”, “anticipate”, “expects”, and similar expressions. The reader is cautioned that assumptions used in the preparation of any forward-looking information may prove to be incorrect. Events or circumstances, such as future availability of capital on favourable terms, may cause actual results to differ materially from those predicted, as a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of the Company. The reader is cautioned not to place undue reliance on any forward-looking information. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this press release are expressly qualified by this cautionary statement. The forward-looking statements contained in this press release are made as of the date of this press release. The Company does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as required by securities law.

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

Not for dissemination in the United States.

_________________________________

1 US Census Bureau, https://www.census.gov/quickfacts/fact/table/US/PST045221

2 MJBiz Factbook 2022

3 https://www2.deloitte.com/content/dam/Deloitte/ca/Documents/consumer-business/ca-en-consumer-business-cannabis-annual-report-2021-AODA.pdf

4 MJBiz Factbook 2022

5 MJBiz Factbook 2022

6 https://www.wxyz.com/news/community-connection/an-inside-look-at-lume-cannabis-co-the-top-marijuana-producer-in-michigan-and-the-country

7 US Census Bureau, https://www.census.gov/quickfacts/fact/table/US/PST045221

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/133529

Hill Street Announces Major New U.S. DehydraTECH(TM) Licensing Deal, Resignation of CFO, and Equity Grants

Toronto, Ontario–(Newsfile Corp. – March 29, 2022) – Hill Street Beverage Company Inc. (TSXV: HILL) (“Hill Street“, or the “Company“) is pleased to announce that Dehydr8, LLC (“Dehydr8“), Hill Street’s licensee of the patented DehydraTECH™ fast-acting cannabis delivery system technology, has entered into a new sublicensing deal with Attitude Wellness, LLC doing business as Lume Cannabis Co. (“Lume“), the top vertically-integrated cannabis operator in Michigan and the largest single-state cannabis operator in the U.S.1. The deal involves multi-year licensing of the DehydraTECH™ technology by Lume and related services to be provided by Dehydr8, to power a range of THC-infused consumer products by Lume utilizing the patented DehydraTECH™ process. This deal represents an expansion of the DehydraTECH™-powered consumer product formats available for sale in the U.S. with large scale production by Lume expected in Michigan in short order.

DehydraTECH™ is a patented drug delivery technology developed by Lexaria Bioscience Corp. (“Lexaria“). DehydraTECH™ improves the way active pharmaceutical ingredients (APIs) enter the bloodstream by promoting more effective oral delivery. DehydraTECH has repeatedly demonstrated the ability to increase bio-absorption with cannabinoids in some instances by as much as 27x compared to standard industry formulations, to reduce time of onset from 1 – 2 hours to minutes, and to mask unwanted tastes, addressing several of the key issues with cannabis-infused edible products. Lexaria operates a licensed in-house research laboratory and holds a robust intellectual property portfolio with 23 patents granted and over 50 patents pending worldwide. Hill Street acquired the usage rights to DehydraTECH™ fast-acting cannabinoid delivery system technology in connection with non-pharmaceutical products containing 0.30% or greater tetrahydrocannabinol (“THC“) in December 2020.

Hill Street CEO Craig Binkley states that, “The strength of the Dehydr8 team in Michigan has been evident since we began work with them last year. Developing this new relationship and commercial business model with Lume will create a step-change in the availability of DehydraTECH™ – powered products for cannabis consumers in Michigan, as Lume has thirty-one (31) dispensaries operating across the state. We expect a similar pattern of success for Hill Street in Illinois and Massachusetts following the February 2022 expansion of the Dehydr8 licensing relationship to those states. We are excited that we now have operating footprints for DehydraTECH™ to support THC-infused consumer products in seven U.S. states representing a population of 86MM and over $14 billion in cannabis sales.”

Resignation of CFO

The Company also announces today that Hinta Chambers has resigned as Chief Financial Officer (“CFO“) of the Company, effective August 30, 2022, to take on new challenges. Over the next several months, Ms. Chambers will remain focused on the delivery of the Company’s FY2022 results and on ensuring an effective transition of her responsibilities.

Hill Street thanks Ms. Chambers for her service over the past four years as she has been instrumental in supporting the evolution of the Company’s focus from the domestic beverage business towards building a global multi-business company pioneering the space where premium crafted consumer products meet bioscience. The Company will be conducting a search to appoint a successor to Ms. Chambers and a further announcement will be made when appropriate.

RSU and Option Grants

The Company also announces that it has granted an aggregate of 11,671,223 restricted share units (the “RSUs“) and 750,000 stock options (the “Stock Options“) to senior management.

The RSUs are being granted subject to the Company’s RSU Plan approved by shareholders in 2021 and each vested RSU entitles the holder to acquire one common share of the Company. Of the newly granted RSUs, approximately 4.7 million are performance-based RSUs that vest only on the Company achieving certain financial performance metrics, and the remainder vest over various time-vesting periods.

These are the first RSU grants that the Company has made since the Company’s RSU plan was approved by shareholders at its Annual General and Special Meeting of Shareholders held on March 20, 2021 and leaves approximately 2.5 million shares reserved and available for grant under the RSU plan.

The Stock Options are being granted pursuant to the Company’s shareholder-approved stock option plan, have an exercise price of $0.04, which represents the closing market price of the Company’s common shares on the TSX Venture Exchange as of March 25, 2022, and expire on March 28, 2027. The Stock Options will be immediately vested.

The Company’s RSU and stock option plans aim to recognize and reward its directors, officers and employees for working towards the Company’s long-term objectives and in alignment with the shareholders’ best interests.

Jack Fraser, Chairman of the Board of the Company states, “The granting of RSUs and stock options to officers and employees are important tools for the Company to bridge the compensation gap and to attract and retain key members of management who will be instrumental to the success of the Company. With these incentives in place, we can confidently move forward to execute on our growth agenda for the benefit of all shareholders.”

About Hill Street Beverage Company Inc. (TSXV: HILL)

Hill Street Beverage Company Inc. is a progressive non-alcoholic beverage and cannabis solutions company. We are pioneering the space where craft consumer products meet bioscience by combining our deep CPG expertise and our rights to use Lexaria Bioscience Corp.’s ground-breaking DehydraTECH™ patent portfolio for product development, licensing and B2B sales of cannabis ingredients.

Hill Street Beverages brands include Vin(Zero) alcohol-freewines, and Hill Avenue Cannabis Brands include (V)ia Regal Pink and White Grape Sparklers.

For more information on our business activities or to check out Hill Street’s award-winning alcohol-free line-up and order product to be delivered straight to your home go to www.hillstreetbeverages.com.

For more information:

Craig Binkley, Chief Executive Officer

craig@hillstreetbevco.com

FORWARD-LOOKING STATEMENTS

Statements in this press release may contain forward-looking information. Any statements in this press release that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are often identified by terms such as “may”, “should”, “would”, “anticipate”, “expects”, and similar expressions. The reader is cautioned that assumptions used in the preparation of any forward-looking information may prove to be incorrect. Events or circumstances, such as future availability of capital on favourable terms, may cause actual results to differ materially from those predicted, as a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of the Company. The reader is cautioned not to place undue reliance on any forward-looking information. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this press release are expressly qualified by this cautionary statement. The forward-looking statements contained in this press release are made as of the date of this press release. The Company does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as required by securities law.

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

Not for dissemination in the United States.


1 https://www.wxyz.com/news/community-connection/an-inside-look-at-lume-cannabis-co-the-top-marijuana-producer-in-michigan-and-the-country

Hill Street Provides Update Letter From The CEO to Shareholders

Toronto, Ontario–(Newsfile Corp. – April 5, 2022) – Hill Street Beverage Company Inc. (TSXV: HILL) (“Hill Street“, or the “Company“), is pleased to provide a letter from CEO, Craig Binkley with an analysis of the Company’s historical financials and update to all shareholders.

Dear Shareholders,

We would first like to thank all our shareholders for their support of Hill Street. Whether you’re a long-term investor or someone who’s joined us more recently, we recognize how important you are to our mission. Hill Street has come a long way from its original Canadian ‘MADD Virgin Drinks’ heritage to our current three-business revenue model, focused on the intersection of craft, premium consumer products and bioscience.

Last week, we completed Q3 of our fiscal year 2022 – my first official quarter since I became the full-time CEO in January 2022. Our team has been working aggressively against the growth agenda and business strategies that were laid out in the AGM at the beginning of last month. If you have not had a chance to review the materials from the AGM, I encourage you to access them here for an update: https://hillstreetbeverages.com/wp-content/uploads/2022/03/2022-AGM-Deck-Website-2.pdf.

Our Q3 results will be available to the public near the end of May 2022, however, we wanted to take this opportunity to provide a more holistic perspective on the health of the business over time. All financial information included herein is historic and includes financial information for the Company up to and including December 31, 2021.

Hill Street Trailing 12-Month Metrics Tell a Strong Growth Story

Our financial results over time provide the best key metrics with which to begin an analysis because of the more recent impact of the DehydraTECH™ licensing and (V)ia Regal cannabis-infused beverage businesses beginning in fiscal year 2021. Additionally, significant quarterly variations in the alcohol-free beverage business due to seasonality and global supply chain issues have impacted inventory levels and created shifts in quarterly performance.

Graph 1 shows the consolidated quarterly trailing 12-month figures (TTM) for net revenue and gross profit from September 2019 to December 2021, which represents the period from Q1 FY 2020 through Q2 FY 2022. The figures above each line represent the change vs. prior year. Additionally, the figures in the green boxes represent the gross profit margin expressed as a % of net revenue.



Graph 1

To view an enhanced version of Graph 1, please visit:
https://orders.newsfilecorp.com/files/5205/119315_d5e0386c442bbaad_001full.jpg.

As you can see, the financial results for Hill Street have been strong for the past seven quarters. Net revenues have been continuously increasing between 24% – 53% vs. the prior year and gross profit has been even stronger at +52% to +131%. The last quarter ending December 31, 2021 shows moderated growth on the trendlines due to the comparison to the extraordinary Q2 of the prior year, yet still shows 32% growth in net revenue and 52% growth in gross profit. For more on this Q2 FY 2022 to Q2 FY 2021 comparison, please refer to the Company’s Q2 FY 2022 Management Discussion and Analysis available on SEDAR. As we’ve noted in previous communications, the dramatic growth in net revenue and gross profit dollars is accompanied by a strong improvement in our gross profit margins – which increased as a percentage of net revenue from a low of 31% in fiscal year 2020 to over 50% in the past three quarters.

The significant focus we have made every day to drive the business forward is showing impressive results, and we have a very positive outlook for our opportunities and the positive contribution they will make to the business. We are just beginning to see the impact of our DehydraTECH™ licensing expansions in the US on our revenue numbers and the impact of those revenues on our margins. As we have communicated before, our DehydraTECH™ business has fundamentally transformed our overall business financially, operationally, and geographically. We now have DehydraTECH™ licensees operating in US states with a combined population of 86 million people and annual cannabis sales of over $14 billion USD, and we are working on adding multiple additional states.

Market Capitalization Has Not Grown Proportionately to the Company’s Strong Business Growth

Given the strength of the business results over a consistent period, we can compare them to the market capitalization[1] (valuation) trends of the Company. The outstanding share count of the Company increased over the past several years, as new share and warrant issuances were made to finance the Company. Additionally, a significant number of the Company’s shares were issued as consideration to Lexaria Bioscience Corp. (“Lexaria“) for the DehydraTECH™ asset acquisition transaction. This increase in the outstanding share count has brought in numerous new investors at varying cost bases.

Using a reference point of the last ten quarters as shown in Graph 1, in Graph 2 we see the corresponding market capitalization and weighted outstanding shares for the same period. At September 30, 2019, there were approximately 97 million shares issued and outstanding and at the most recent quarter ended December 31, 2021, this has grown to over 212 million. The market capitalization shown is the approximate value of the Company at the end of the respective period and is based on the daily share price (weighted by trading volume) and the average number of shares outstanding for that quarter.



Graph 2

To view an enhanced version of Graph 2, please visit:
https://orders.newsfilecorp.com/files/5205/119315_d5e0386c442bbaad_002full.jpg.

In Graph 3 we have overlaid another key indicator to illustrate the insight into the relationship between the 12-month financial performance and the market capitalization, with the valuation of Hill Street represented as a multiple of net revenue[2]. The graph shows the implied multiple of net revenue over time in blue, based on the approximate quarterly market cap and the trailing 12-month financials for that quarter.



Graph 3

To view an enhanced version of this graphic, please visit:
https://orders.newsfilecorp.com/files/5205/119315_d5e0386c442bbaad_003full.jpg.

For some context on market multiples, in 2019, the overall cannabis market had higher valuations and many companies such as Hill Street were still at that time pre-revenue cannabis companies, with cannabis edibles only becoming legal in Canada in October 2019. Hill Street was, in fact, generating $1,280,200 in net revenues solely from its alcohol-free beverage business for fiscal year 2019 ending June 30, 2019. However, the 34% gross margin was well below the 52% margin that we’ve generated in our last two quarters (Q1 and Q2 FY2022). A lot of attention in 2019 was being given to future potential and the markets then corrected substantially through the first quarter of calendar year 2020.

To illustrate the sector-wide trend, Graph 4 adds the performance of the Canadian Cannabis LP Index[3] to the Hill Street market capitalization and implied multiples of net revenue over the same time period. The pattern is clear when looking side-by-side at the trends of Hill Street vs. the index which include twenty-four well-known companies in the Canadian cannabis space.



Graph 4

To view an enhanced version of Graph 4, please visit:
https://orders.newsfilecorp.com/files/5205/119315_d5e0386c442bbaad_004full.jpg.

We continue to believe in the strength of the new business strategies and ongoing development of new revenue streams with DehydraTECH™ licensing added to our beverage businesses. Our financial performance and key metrics of the business have improved substantially, and we are expanding geographically on the early success of DehydraTECH™ licensing with multiple licensees.

Beyond the improvement in the key financial metrics shown here, the balance sheet is also dramatically stronger than it has been over the past several years. For the period ended December 31, 2021, working capital improved to $1.655M compared to $0.292M the year prior. In addition, for the same period, the debt-to-equity ratio improved considerably, reducing from 3.3 to 0.98 with the conversion of the outstanding convertible debt during the quarter ended December 31, 2021.

Our View of the Company’s Future

Net, we believe that the Company, the financial performance and the financial health of the business are quite strong and we are confident in our future potential. We have three revenue-generating businesses driving our growth agenda and all three are on-trend in growing segments of the market.

As we discussed at the March 1, 2022 AGM, we are looking to broaden the awareness and reputation of Hill Street behind these positive business results and the momentum we now have in place. We have generated strong proof points and foundational business results and would like to see a correlative improvement in our share value. I will be heading to the Benzinga Cannabis Capital Conference in late April 2022 and will be socializing our story with the investment community. We will keep you informed as our broader communication plans evolve, but we ask that you consider that we must constantly balance our resources – financial and human – that are focused on driving the operations and actual business results.

Again, thank you for your support of Hill Street. I know that many of you have been invested for quite a while and possibly came in under very different investment theses – either lines of business or geographic focus – than what’s driving the strong profitable growth today. A mere fifteen months ago, we were an alcohol-free beverage company with almost all of our revenues in Canada. We have evolved tremendously since then. We believe in our strong growth agenda and the strategies and plans that are showing success in the market. Our focus is on executing with excellence to deliver continued positive business results, as we couple that with renewed efforts against the corporate reputation and valuation that will accrue value to all shareholders. I look forward to sharing the success with you and all the key members of our Hill Street ecosystem.

Sincerely,

Craig Binkley

About Hill Street Beverage Company Inc. (TSXV: HILL)

Hill Street Beverage Company Inc. is a progressive non-alcoholic beverage and cannabis solutions company. We are pioneering the space where craft consumer products meet bioscience by combining our deep CPG expertise and our rights to use Lexaria Bioscience Corp.’s ground-breaking DehydraTECH™ patent portfolio for product development, licensing and B2B sales of cannabis ingredients.

Hill Street Beverages brands include Vin(Zero) alcohol-freewines, and Hill Avenue Cannabis Brands include (V)ia Regal Pink and White Grape Sparklers.

For more information on our business activities or to check out Hill Street’s award-winning alcohol-free line-up and order product to be delivered straight to your home go to www.hillstreetbeverages.com.

For more information:

Craig Binkley, Chief Executive Officer

craig@hillstreetbevco.com

FORWARD-LOOKING STATEMENTS

Statements in this press release may contain forward-looking information. Any statements in this press release that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are often identified by terms such as “may”, “should”, “would”, “anticipate”, “expects”, and similar expressions. The reader is cautioned that assumptions used in the preparation of any forward-looking information may prove to be incorrect. Events or circumstances, such as future availability of capital on favourable terms, may cause actual results to differ materially from those predicted, as a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of the Company. The reader is cautioned not to place undue reliance on any forward-looking information. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this press release are expressly qualified by this cautionary statement. The forward-looking statements contained in this press release are made as of the date of this press release. The Company does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as required by securities law.

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

Not for dissemination in the United States.


[1] Market capitalization is not a measure recognized under IFRS and does not have a standardized meaning prescribed by IFRS. It is calculated in this press release based on the daily share price (weighted by trading volume) and the average number of shares outstanding for that quarter.

[2] Valuation based on a multiple of net revenue is not a measure recognized under IFRS and does not have a standardized meaning prescribed by IFRS. It is calculated by dividing market capitalization for the quarter (as calculated above) by net revenue for the quarter.

[3] https://www.newcannabisventures.com/canadian-cannabis-lp-index/.

Hill Street Reports FY 2022 Q3 & Year-to-Date Results That Continue to Show a Significant Growth Story

Highlights:

  • Delivered strong 34% growth in Q3 consolidated net revenues versus same quarter previous year, growing net revenues on all three verticals of the Company’s multi-business-line model
  • Q3 consolidated gross profit increased even more dramatically than revenues, growing by a full 40% vs. the same quarter previous year
  • Gross profit margin increased from 44% to 48% reflecting the positive financial impact of the DehydraTECH™ licensing business
  • Continued impressive trend in trailing 12 months (TTM) financial metrics, making eight straight quarters of strong growth

Toronto, Ontario–(Newsfile Corp. – May 31, 2022) – Hill Street Beverage Company Inc. (TSXV: HILL) (“Hill Street” or the “Company“) reported its fiscal year 2022 third quarter results for the three-month and nine-month periods ended March 31, 2022. A complete set of financial statements and Management’s Discussion & Analysis has been filed at www.sedar.com. All dollar figures are quoted in Canadian dollars unless otherwise stated.

THIRD QUARTER 2022 FINANCIAL HIGHLIGHTS

Q3 consolidated net revenues grew an impressive 34% versus same quarter of the previous year

Solid revenue growth was delivered across all three business units, including 65% growth on DehydraTECH™ licensing revenues and 19% net revenue growth on the alcohol-free beverage business, with licensing revenues expected from several major recently announced DehydraTECH™ licensing deals not even yet impacting reported revenues this quarter.

Q3 consolidated gross profit increased even more dramatically than revenues, growing by a full 40% vs. the same quarter previous year

In addition to driving gross profit dollar growth, gross profit as a percentage of gross revenue increased to 48% in Q3, up from 44% in the prior year. This increase in gross profit margin was achieved despite significant increases in freight costs related to the global supply chain problems and continues to show the positive impact of the higher margin DehydraTECH™ licensing business.

Long-term growth trend continues in trailing 12-month (TTM) for key financial metrics

Q3 continues to demonstrate the strong financial results that Hill Street has shown now for a full eight quarters. TTM net revenues have been continuously increasing between 24% and 53% vs. the prior year and gross profit has been even stronger at +38% to +131%. TTM gross profit dollars have more than tripled for the FY22 Q3 period vs. just two years ago for the FY20 Q3 period. The dramatic growth in gross profit dollars is accompanied by a significant improvement in gross profit margins, which have increased as a percentage of net revenue from a low of 31% in fiscal year 2020 to over 50% in each of the past four quarters.

HIGHLIGHTS OF THIRD QUARTER 2022 BUSINESS OPERATIONS

Major new DehydraTECH™ licensee signed in the Michigan pilot market to bring Michigan consumers more products powered by DehydraTECH™

During the quarter, the Company’s US commercialization partner Dehydr8 signed a major new licensing deal in the Michigan market with Lume Cannabis Co. (“Lume“), the top vertically integrated cannabis operator in Michigan and the largest single-state cannabis operator in the U.S. The deal involves multi-year licensing of the DehydraTECH™ technology by Lume and related services to be provided by Dehydr8, to power a range of THC-infused consumer products by Lume utilizing the patented DehydraTECH™ process. Lume has thirty-one (31) dispensaries operating in the state.

Important R&D and product innovation efforts advanced in the Michigan pilot market

The Hill Street team, together with the team that has been assembled in Michigan, collectively have extensive experience in developing innovative and differentiated consumer products and product formats to meet a wide range of consumer needs, from edibles to topicals, and have been using that experience to develop and test new THC consumer products and product formats that are now, for the first time, made possible through the use of the DehydraTECH™ technology.

Expanded DehydraTECH™ licensing relationship with DeHydr8 to enter new markets and to drive broader consumer product formats and further the commercialization of the B2B and B2C DehydraTECH™ businesses

Based on the success of D8’s team in signing top quality Michigan licensed producers to produce THC products powered by DehydraTECH™, in Q3, the Company expanded the reach of D8’s DehydraTECH™ rights to add the states of Illinois and Massachusetts. Hill Street and Dehydr8 have used their joint experiences gained in Michigan to create a scalable operating model for state-by-state expansion of the DehydraTECH™ licensing business.

The Company changed its ticker symbol from “BEER” to “HILL” on March 3, 2022

The “HILL” ticker symbol better reflects the Company’s growth and evolution beyond the domestic beverage business towards building a global, multi-business company, pioneering the space where premium crafted consumer products meet bioscience.

RESULTS OF OPERATIONS

The following table summarizes certain financial information of the Company for the three months and nine months ended March 31, 2022, and the three months and six months ended March 31, 2021.

Results for the Period EndedQuarter Ended March 31, 2022Quarter Ended
March 31, 2021
Nine Months Ended
March 31, 2022
Nine Months Ended
March 31, 2021
Gross Revenue$988,549$774,747$2,225,654$2,034,726
Chargebacks, finance fees, and listing fees-$107,606-$119,488-$231,235-$359,006
Net Revenue$880,943$655,259$1,994,419$,1,675,720
Direct Costs-$406,183-$317,155-$928,780-$809,701
Gross profit$474,760$338,104$1,065,639$866,019
Operating Expenses (excl. One-time & non-Cash)$732,113$835,460$2,177,067$2,092,925
Other One-time Expenses$9,500$47,643$25,646$71,479
Non-Cash Expenses$217,790$195,477$624,383$401,711
 
Loss before other Income (Expense)-$484,643-$740,476-$1,761,457-$1,700,096
 
Other income (Expenses)
Gain (Loss) on Foreign Exchange-$1,744$15,463$7,370-$13,483
Gain (Loss) on favourable interest rate$0$6,541$0$6,541
Gain (Loss) on Settlement of liability$3,878$59,253$1,158$65,983
Gain (Loss) on fair value of consideration$62,834$0$48,363$0
Loss on Settlement of Debt$0-$1,168$0-$1,168
Write off of Equipment-$16,638$0-$16,638$0
Write-off of inventory$0$0-$20,579-$1,535
Other Income$2,620$0$9,054$30
Loss and comprehensive loss for the period$433,693$660,387$1,732,729$1,616,762
Basic and diluted loss per common share($0.00)($0.00)($0.01)($0.01)
Weighted average number of common shares outstanding214,948,996141,905,150212,060,433125,375,081

  
About Hill Street Beverage Company Inc. (TSXV: HILL)

Hill Street Beverage Company Inc. is a progressive non-alcoholic beverage and cannabis solutions company. We are pioneering the space where craft consumer products meet bioscience by combining our deep CPG expertise and our rights to use Lexaria Bioscience Corp.’s ground-breaking DehydraTECH™ patent portfolio for product development, licensing and B2B sales of cannabis ingredients.

Hill Street Beverages brands include Vin(Zero) alcohol-freewines and Hill Street Craft Brewed Lager, and have won numerous medals and accolades around the world. Hill Avenue Cannabis Brands include (V)ia Regal Pink and White Grape Sparklers.

For more information on our business activities or to check out Hill Street’s award-winning alcohol-free line-up and order product to be delivered straight to your home go to www.hillstreetbeverages.com

For more information:

Craig Binkley, Chief Executive Officer,
craig@hillstreetbevco.com.

FORWARD-LOOKING STATEMENTS

Statements in this press release may contain forward-looking information. Any statements in this press release that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are often identified by terms such as “may”, “should”, “would”, “anticipate”, “expects”, and similar expressions. The reader is cautioned that assumptions used in the preparation of any forward-looking information may prove to be incorrect. Events or circumstances, such as future availability of capital on favourable terms, may cause actual results to differ materially from those predicted, as a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of the Company. The reader is cautioned not to place undue reliance on any forward-looking information. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this press release are expressly qualified by this cautionary statement. The forward-looking statements contained in this press release are made as of the date of this press release. The Company does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as required by securities law.

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

Not for dissemination in the United States.

Hill Street Announces New DehydraTECH U.S. State Expansion and Licensing Deal in Oregon, and Expiry of Warrants

Toronto, Ontario–(Newsfile Corp. – May 24, 2022) – Hill Street Beverage Company Inc. (TSXV: HILL) (“Hill Street“, or the “Company“) is pleased to announce that its patented DehydraTECH™ fast-acting cannabis delivery technology is now available for license by cannabis licensed producers, contract manufacturers and brands in the State of Oregon. The addition of Oregon represents a new licensing expansion deal between Hill Street and Dehydr8, LLC (“Dehydr8“), Hill Street’s DehydraTECH™ commercialization partner already driving operations in Michigan, Massachusetts, and Illinois.

Blazing the Oregon trail by being first in the state to enter into a licensing deal with Dehydr8 to produce DehydraTECH™-powered THC products is Folium Farms, LLC, an Oregon vertically integrated cannabis producer “with soul, driven by data and science” with distribution in over 300 dispensaries across the state, the Company also announces today. The deal involves multi-year licensing of the DehydraTECH™ technology by Folium Farms and related services to be provided by Dehydr8, to power a range of THC-infused consumer products by Folium Farms utilizing the patented DehydraTECH™ process.

DehydraTECH™ is a patented drug delivery technology developed by Lexaria Bioscience Corp. (“Lexaria“). DehydraTECH™ improves the way active pharmaceutical ingredients (APIs) enter the bloodstream by promoting more effective oral delivery. DehydraTECH™ has repeatedly demonstrated the ability to increase bio-absorption with cannabinoids in some instances by as much as 27x compared to standard industry formulations, to reduce time of onset from 1 – 2 hours to minutes, and to mask unwanted tastes, addressing several of the key issues with cannabis-infused edible products. Lexaria operates a licensed in-house research laboratory and holds a robust intellectual property portfolio with 23 patents granted and over 50 patents pending worldwide. Hill Street acquired the usage rights to DehydraTECH™ fast-acting cannabinoid delivery system technology in connection with non-pharmaceutical products containing 0.30% or greater THC in December 2020.

“The expansion of DehydraTECH™ licensing operations into Oregon continues to demonstrate the ability to work with our Dehydr8 team to build strong relationships with quality LPs in key U.S. states,” said Hill Street CEO Craig Binkley. “Bringing Folium Farms into our licensing ecosystem right away shows how quickly we can move in additional launch states, leveraging the foundation and approaches that we have built from our original launch with Dehydr8 in Michigan. With this announcement today, we are excited to be adding a market with a population of 4.25MM and over USD$1.18B in annual cannabis sales to the Company’s US footprint”.

Update on Warrants Expiry Extension

The Company also announces that, further to its announcement that it applied to the TSX Venture Exchange to extend the expiry date of 12,993,000 warrants (“Warrants“) of the Company that were set to expire on May 1, 2022, it did not receive the approval of the TSX Venture Exchange to such extension, and hence, the Warrants expired on May 1, 2022.

About Hill Street Beverage Company Inc. (TSXV: HILL)

Hill Street Beverage Company Inc. is a progressive non-alcoholic beverage and cannabis solutions company. We are pioneering the space where craft consumer products meet bioscience by combining our deep CPG expertise and our rights to use Lexaria Bioscience Corp.’s ground-breaking DehydraTECH™ patent portfolio for product development, licensing and B2B sales of cannabis ingredients.

Hill Street Beverages brands include Vin(Zero) alcohol-freewines, and Hill Avenue Cannabis Brands include (V)ia Regal Pink and White Grape Sparklers.

For more information on our business activities or to check out Hill Street’s award-winning alcohol-free line-up and order product to be delivered straight to your home go to www.hillstreetbeverages.com.

For more information:

Craig Binkley, Chief Executive Officer

craig@hillstreetbevco.com

FORWARD-LOOKING STATEMENTS

Statements in this press release may contain forward-looking information. Any statements in this press release that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are often identified by terms such as “may”, “should”, “would”, “anticipate”, “expects”, and similar expressions. The reader is cautioned that assumptions used in the preparation of any forward-looking information may prove to be incorrect. Events or circumstances, such as future availability of capital on favourable terms, may cause actual results to differ materially from those predicted, as a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of the Company. The reader is cautioned not to place undue reliance on any forward-looking information. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this press release are expressly qualified by this cautionary statement. The forward-looking statements contained in this press release are made as of the date of this press release. The Company does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as required by securities law.

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

Not for dissemination in the United States.

Hill Street Applies to Extend Expiry of Existing Warrants

Toronto, Ontario–(Newsfile Corp. – April 30, 2022) – Hill Street Beverage Company Inc. (TSXV: HILL) (“Hill Street“, or the “Company“) announces today that it has applied to extend the expiry date of 12,993,000 warrants (“Warrants“) of the Company that were set to expire on May 1, 2022, until August 1, 2022, The Warrants were issued by the Company in connection with a convertible debenture financing of the Company completed on May 1, 2020, and each Warrant entitles the holder thereof to purchase one common share in the capital of the Company at a price of CDN$0.05 per share. Approval of such extension is subject to the approval of the TSX Venture Exchange.

About Hill Street Beverage Company Inc. (TSXV: HILL)

Hill Street Beverage Company Inc. is a progressive non-alcoholic beverage and cannabis solutions company. We are pioneering the space where craft consumer products meet bioscience by combining our deep CPG expertise and our rights to use Lexaria Bioscience Corp.’s ground-breaking DehydraTECH™ patent portfolio for product development, licensing and B2B sales of cannabis ingredients.

Hill Street Beverages brands include Vin(Zero) alcohol-freewines, and Hill Avenue Cannabis Brands include (V)ia Regal Pink and White Grape Sparklers.

For more information on our business activities or to check out Hill Street’s award-winning alcohol-free line-up and order product to be delivered straight to your home go to www.hillstreetbeverages.com.

For more information:

Craig Binkley, Chief Executive Officer

craig@hillstreetbevco.com

FORWARD-LOOKING STATEMENTS

Statements in this press release may contain forward-looking information. Any statements in this press release that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are often identified by terms such as “may”, “should”, “would”, “anticipate”, “expects”, and similar expressions. The reader is cautioned that assumptions used in the preparation of any forward-looking information may prove to be incorrect. Events or circumstances, such as future availability of capital on favourable terms, may cause actual results to differ materially from those predicted, as a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of the Company. The reader is cautioned not to place undue reliance on any forward-looking information. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this press release are expressly qualified by this cautionary statement. The forward-looking statements contained in this press release are made as of the date of this press release. The Company does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as required by securities law.

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

Not for dissemination in the United States.

Hill Street Issues Final Tranche of Payment Shares to Lexaria for DehydraTECH(TM) Patent Rights Acquisition

Toronto, Ontario–(Newsfile Corp. – April 12, 2022) – Hill Street Beverage Company Inc. (TSXV: HILL) (“Hill Street“, or the “Company“) announces today that it has issued 4,188,948 common shares (the “Consideration Shares“) to Lexaria CanPharm ULC (“Lexaria“), a cannabis-related division of Lexaria Bioscience Corp., as the third and final tranche of shares to be issued in satisfaction of a deferred payment obligation for the previously announced acquisition by Hill Street of the exclusive global rights to use Lexaria’s ground-breaking DehydraTECHTM patent portfolio to produce non-pharmaceutical products containing 0.3% or greater THC and other psychoactive cannabinoids.

“The acquisition of the rights to DehydraTECH™ has transformed our business financially, operationally and geographically, as evidenced by the Company’s strong growth and financial performance detailed in the update we shared last week,” stated Hill Street CEO Craig Binkley. “The key metrics of the business have improved substantially since this acquisition was completed sixteen months ago, and we are expanding geographically on the early success of DehydraTECH™ licensing with multiple licensees.”

In accordance with the terms of the acquisition, the Consideration Shares were issued at a deemed price of $0.085 per share, being the closing price of Hill Street’s common shares on the TSX Venture Exchange on November 18, 2020, the date that the acquisition agreement was executed.

The Consideration Shares will be subject to a statutory hold period expiring on the date that is four (4) months and one day from the issuance date.

About Hill Street Beverage Company Inc. (TSXV: HILL)

Hill Street Beverage Company Inc. is a progressive non-alcoholic beverage and cannabis solutions company. We are pioneering the space where craft consumer products meet bioscience by combining our deep CPG expertise and our rights to use Lexaria Bioscience Corp.’s ground-breaking DehydraTECH™ patent portfolio for product development, licensing and B2B sales of cannabis ingredients.

Hill Street Beverages brands include Vin(Zero) alcohol-freewines, and Hill Avenue Cannabis Brands include (V)ia Regal Pink and White Grape Sparklers.

For more information on our business activities or to check out Hill Street’s award-winning alcohol-free line-up and order product to be delivered straight to your home go to www.hillstreetbeverages.com.

For more information:

Craig Binkley, Chief Executive Officer

craig@hillstreetbevco.com

FORWARD-LOOKING STATEMENTS

Statements in this press release may contain forward-looking information. Any statements in this press release that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are often identified by terms such as “may”, “should”, “would”, “anticipate”, “expects”, and similar expressions. The reader is cautioned that assumptions used in the preparation of any forward-looking information may prove to be incorrect. Events or circumstances, such as future availability of capital on favourable terms, may cause actual results to differ materially from those predicted, as a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of the Company. The reader is cautioned not to place undue reliance on any forward-looking information. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this press release are expressly qualified by this cautionary statement. The forward-looking statements contained in this press release are made as of the date of this press release. The Company does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as required by securities law.

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

Not for dissemination in the United States.

Hill Street Confirms Stock Ticker Symbol Change To “HILL” as of March 3, 2022 (TSXV: HILL)

Toronto, Ontario–(Newsfile Corp. – March 2, 2022) – Hill Street Beverage Company Inc. (TSXV: HILL) (the “Company“) is pleased to confirm that it has received the approval of the TSX Venture Exchange to change the Company’s stock ticker symbol from “BEER” to “HILL”, and that the change will be effective at market open on March 3, 2022.

This ticker change reflects the Company’s growth and evolution beyond the domestic beverage business towards building a global, multi-business company pioneering the space where premium crafted consumer products meet bioscience.

No action is required by existing shareholders with respect to the ticker symbol change and the CUSIP/ISIN numbers assigned to the Company’s common shares will not be changed.

About Hill Street Beverage Company Inc. (TSXV: HILL)

Hill Street Beverage Company Inc. is a progressive non-alcoholic beverage and cannabis solutions company. We are pioneering the space where craft consumer products meet bioscience by combining our deep CPG expertise and our rights to use Lexaria Bioscience Corp.’s ground-breaking DehydraTECH™ patent portfolio for product development, licensing and B2B sales of cannabis ingredients.

Hill Street Beverages brands include Vin(Zero) alcohol-freewines and Hill Street Craft Brewed Lager, and have won numerous medals and accolades around the world. Hill Avenue Cannabis Brands include (V)ia Regal Pink and White Grape Sparklers.

For more information on our business activities or to check out Hill Street’s award-winning alcohol-free line-up and order product to be delivered straight to your home go to www.hillstreetbeverages.com

For more information:

Craig Binkley, Chief Executive Officer
craig@hillstreetbevco.com

FORWARD-LOOKING STATEMENTS

Statements in this press release may contain forward-looking information. Any statements in this press release that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are often identified by terms such as “may”, “should”, “would”, “anticipate”, “expects”, and similar expressions. The reader is cautioned that assumptions used in the preparation of any forward-looking information may prove to be incorrect. Events or circumstances, such as future availability of capital on favourable terms, may cause actual results to differ materially from those predicted, as a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of the Company. The reader is cautioned not to place undue reliance on any forward-looking information. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this press release are expressly qualified by this cautionary statement. The forward-looking statements contained in this press release are made as of the date of this press release. The Company does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as required by securities law.

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

Not for dissemination in the United States.

Hill Street Reports FY 2022 Q2 & Year-to-Date Results, Expansion of DehydraTECH(TM) Licensing Business into New States, and Ticker Change to Reflect Hill Street’s Growth and Evolution

Highlights:

  • Increased gross profit for the six months ended December 31, 2021 by 12% Year over Year with a 9% increase in net revenue Year over Year
  • Grew gross profit margin for the six months ended December 31, 2021 from 42% to 48% Year over Year, reflecting the improved financial impact of the DehydraTECH™ licensing business
  • Expanded rights in Illinois and Massachusetts to existing partner Dehydr8, LLC for licensing of DehydraTECH™ fast-acting cannabinoid delivery system technology to IL and MA contract manufacturers and licensed producers for B2B and B2C THC applications
  • Intends to obtain approval of the TSX Venture Exchange to change the Company’s ticker symbol from “BEER” to “HILL”, to reflect the Company’s growth and evolution

Toronto, Ontario–(Newsfile Corp. – March 1, 2022) – Hill Street Beverage Company Inc. (TSXV: BEER) (“Hill Street” or the “Company“) reported its fiscal year 2022 second quarter results for the three-month and six-month periods ended December 31, 2021. A complete set of financial statements and Management’s Discussion & Analysis has been filed at www.sedar.com. All dollar figures are quoted in Canadian dollars unless otherwise stated.

HIGHLIGHTS OF SECOND QUARTER BUSINESS OPERATIONS

Hill Avenue Cannabis Technologies continued its expansion into new geographic markets and with new product formats

The Company expanded the reach of a number of its DehydraTECH™ licensees as the licensees introduced their popular DehydraTECH™-powered products into new states and launched new products in the quarter. In FY2022 Q2, Nuka Enterprises LLC (1906)’s best-selling signature line of fast-acting swallowable THC pills (known as Drops) hit shelves in Arizona, and Cannadips launched a THC version of their popular original CBD pouches in California.

Added Distribution of Hill Avenue Cannabis Brands’ (V)ia Regal beyond Ontario into new provinces British Columbia and Northwest Territories

In FY2022 Q2, Hill Street’s co-packing partner Molecule Inc. secured orders from the provincial cannabis boards of British Columbia and the Northwest Territories for the original (V)ia Regal Pink Grape Sparkler and the newly-launched (V)ia Regal White Grape Sparkler, both premium cannabis-infused sparklers made from grapes imported from European vineyards.

Submitted application for a New Health Canada Cannabis Research License and continued progress on securing a Cannabis Processing License for the Ontario Lucknow Facility

The Company submitted an application for a Health Canada research license for its Lucknow cannabis facility in Mississauga, Ontario and also continued preparations for obtaining the Health Canada Standard Processor License for the facility, which will enable the Company to produce DehydraTECH™ fast-acting cannabinoid powder for potential B2B and B2C sales in Canada. The Company has begun construction at the facility, but delays related to municipal permits for the build-out are impacting the timing for submission of that Standard Processor License application to Health Canada.

Permanent CEO named subsequent to the quarter

Subsequent to the end of Q2, on January 6, 2022, the Company announced the appointment of Craig Binkley as CEO. Binkley had been operating in the interim Co-CEO role along with fellow board member Lori Senecal since February 9, 2021. Lori Senecal has transitioned out of the interim Co-CEO role and will continue in her Board of Director role.

FINANCIAL HIGHLIGHTS FOR THE SIX MONTHS ENDING DECEMBER 31, 2021

Financial results for the six months year-to-date show significant improvements that reflect the growing impact of the DehydraTECH™ business on the Company’s financial fundamentals.

Net revenue increased 9% for the six-month period ending December 31, 2021 compared to the same period prior year, while gross profit increased 12% and gross profit margin improved six points from 42% to 48%. After adjusting for the impact of discontinued alcohol-free beer operations and inventory valuation adjustments made in the first half of FY 2021, net revenue for the first six months of FY 2022 increased 13%, while gross profit increased a full 30% and gross profit margin improved nine points from 39% to 48% for the six-month period.

“The year-to-date performance continued to exhibit the transformative power of our DehydraTECH™ licensing business on the overall financial measures of Hill Street”, commented Craig Binkley, CEO of Hill Street. “The consolidated revenues, gross profit and gross profit margin are all improved by the escalating impact of this critical growth driver”.

Q2 FINANCIAL HIGHLIGHTS

While the six-month year-to-date financial results show strong positive trends, second quarter comparisons to year ago were negatively impacted by a quarterly shift in alcohol-free beverage revenues in the prior year.

Q2 FY21 was an extraordinary quarter for Hill Street alcohol-free beverage revenues, as sales were shifted from Q1 FY21 and elevated dramatically beyond normal by the impact of retailers and distributors restocking empty shelves and pipeline inventories that were emptied by global pandemic and supply chain issues in Q1 FY21. Comparative revenues year ago also included the alcohol-free beer business that has since been discontinued.

As a result of the quarterly revenue shift and the discontinuation of alcohol-free beer, consolidated net revenues for Q2 FY22 declined 32% vs. Q2 prior year, moderating the six-month net revenue growth to 9%. After the quarterly shift and recovery in inventories, future net revenues are expected to reflect positive category trends in alcohol free wine and growth for the fiscal year.

The quarterly shift in revenue also resulted in gross profit declining 33%, moderating the six-month gross profit gain to 12%. The increasing importance of the DehydraTECH™ licensing business allowed the Q2 gross profit margin to remain equal to year ago at 44%, although below the 48% margin for the full six-month period ending December 31, 2021.

RESULTS OF OPERATIONS

The following table summarizes certain financial information of the Company for the three months and six months ended December 31, 2021, and the three months and six months ended December 31, 2020.

Consolidated Results for the Period EndedQuarter Ended
 December 31,
2021
Quarter Ended
December 31,
 2020
Six Months Ended
December 31,
2021
Six Months Ended
December 31,
2020
Gross Revenue$576,622$875,529$1,237,105$1,259,979
Chargebacks, finance fees, and listing fees-$67,885-$129,780-$123,629-$239,518
Net Revenue$508,737$745,749$1,113,476$1,020,461
Direct Costs-$252,280-$363,840-$522,597-$492,546
Gross profit$256,457$381,909$590,879$527,915
     
Operating Expenses (excl. One-time & non-Cash)$794,938$757,466$1,444,954$1,208,186
Other One-time Expenses$0$19,337$16,146$23,837
Non-Cash Expenses$187,291$88,891$406,592$255,513
     
Loss before other Income (Expense)-$725,772-$483,785-$1,276,813-$959,620
     
Other income (Expenses)    
Foreign exchange gain (loss)$7,872-$3,497$9,114-$1,980
(Loss) gain on Settlement of liability-$2,933$6,730-$2,720$6,730
Loss) gain on fair value of Consideration$20,945$0-$14,471$0
Write-off of inventory-$2,522-$0-$20,579-$1,535
Other Income$2,934$30$6,434$30
Loss and comprehensive loss for the period-$699,476-$480,522-$1,299,036-$956,375
Basic and diluted loss per common share($0.00)($0.00)($0.01)($0.01)
Weighted average number of common shares outstanding212,294,452122,399,917210,647,548117,289,721

OTHER ANNOUNCEMENTS

Signed new DehydraTECH™ Licensing Agreements with existing Michigan partner DeHydr8, LLC (“D8”) for expansion of D8’s rights into Illinois and Massachusetts for potential B2B and B2C applications

Based on the success of D8’s team since acquiring DehydraTECH™ rights in Michigan in signing top-quality Michigan licensed producers to produce THC products powered by DehydraTECH™, the Company is pleased to announce that it has expanded the reach of D8’s DehydraTECH™ rights to add the new states of Illinois and Massachusetts.

Granting DehydraTECH™ rights to D8 in Illinois and Massachusetts represent further steps that the Company is taking to rapidly mobilize and monetize the patented DehydraTECH™ technology by deploying a state-by-state US rollout model to continue to accelerate the Company’s financial and operational progress. Hill Street and D8 have used their joint experiences gained in Michigan to create a scalable operating model for state-by-state expansion of the DehydraTECH™ licensing business that progresses from start to monetization over an approximately 5-month period.

Approval Sought from TSX Venture Exchange for Ticker Change from “BEER” to “HILL”

The Company is pleased to announce that it intends to obtain the approval of the TSX Venture Exchange to change the Company’s ticker symbol from “BEER” to “HILL”. The Company expects that its common shares will begin trading on the TSX Venture Exchange under the new symbol “HILL” at market open on March 3, 2022.

This ticker change reflects the Company’s growth and evolution beyond the domestic beverage business towards building a global, multi-business company pioneering the space where premium crafted consumer products meet bioscience.

No action is required by existing shareholders with respect to the ticker symbol change and the CUSIP/ISIN numbers assigned to the Company’s common shares will not be changed.

Re-Filing of FY 2022 Q1 Financial Statements

The Company also announces today that it has re-filed its unaudited condensed interim consolidated financial statements for the three-month period ended September 30, 2021 in order to incorporate a notice advising the reader that the statements have not been reviewed by an auditor. The re-filed financial statements replace and supersede the previously filed original financial statements filed on November 29, 2021 and will be available on SEDAR on March 1, 2022.

About Hill Street Beverage Company Inc. (TSXV: BEER)

Hill Street Beverage Company Inc. is a progressive non-alcoholic beverage and cannabis solutions company. We are pioneering the space where craft consumer products meet bioscience by combining our deep CPG expertise and our rights to use Lexaria Bioscience Corp.’s ground-breaking DehydraTECH™ patent portfolio for product development, licensing and B2B sales of cannabis ingredients.

Hill Street Beverages brands include Vin(Zero) alcohol-freewines and Hill Street Craft Brewed Lager, and have won numerous medals and accolades around the world. Hill Avenue Cannabis Brands include (V)ia Regal Pink and White Grape Sparklers.

For more information on our business activities or to check out Hill Street’s award-winning alcohol-free line-up and order product to be delivered straight to your home go to www.hillstreetbeverages.com.

For more information:

Craig Binkley, Chief Executive Officer
craig@hillstreetbevco.com.

FORWARD-LOOKING STATEMENTS

Statements in this press release may contain forward-looking information. Any statements in this press release that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are often identified by terms such as “may”, “should”, “would”, “anticipate”, “expects”, and similar expressions. The reader is cautioned that assumptions used in the preparation of any forward-looking information may prove to be incorrect. Events or circumstances, such as future availability of capital on favourable terms, may cause actual results to differ materially from those predicted, as a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of the Company. The reader is cautioned not to place undue reliance on any forward-looking information. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this press release are expressly qualified by this cautionary statement. The forward-looking statements contained in this press release are made as of the date of this press release. The Company does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as required by securities law.

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

Not for dissemination in the United States.