Aegis Brands Signs New $4 Million Secured Loan Agreement with CWB Franchise Finance

MISSISSAUGA, ON, Dec. 7, 2020 /CNW/ - Aegis Brands Inc. (TSX: AEG) ("Aegis" or the "Company"), formerly The Second Cup Ltd., today announced it has entered into a loan agreement with CWB Franchise Finance ("CWB"), a division of Canadian Western Bank Financial Group, pursuant to which a revolving credit facility of $4.0 million has been made available to Aegis.

This new credit facility will be available for a period of 24 months and its continuance will be reviewed by CWB on an annual basis. The revolving credit facility is secured by the assets of the Second Cup and Bridgehead businesses and is expected to be used for general corporate purposes.

"CWB Franchise Finance is a financial partner that is an advocate for Canadian innovation and is dedicated to supporting us in our expansion efforts," said Steven Pelton, President and CEO of Aegis. "Given our expertise in the Canadian retail and foodservice industry, combined with access to top tier real estate assets across the country, the possibilities for growth of Aegis are very exciting."

"We are happy to partner with Second Cup, a Canadian brand with deep historical roots and recognition across the country," says Dimitri Mazur, Senior Manager, CWB Franchise Finance. "Our commitment to Aegis, the parent company, is evidence that CWB believes strongly in the restaurant industry, and that it will recover from the challenges caused by COVID-19. Now more than ever, the restaurant industry needs financial partners that know their business and understand how strong relationships lead to successful outcomes. We look forward to providing experienced brands with proactive solutions, including properly structured debt."

Aegis was created with the vision of building a portfolio of independent brands that can flourish with access to premium resources and shared services required to help them thrive. The Company has made great strides in the transformation from a single coffee brand to Aegis while adjusting and adapting to meet the dramatic changes in the foodservice and retail landscape heading into 2021.

Second Cup plans to open 17 "non-traditional" café locations in the remainder of 2020 and 2021, in addition to two drive-thru locations before year-end. The affinity for the Bridgehead Coffee brand remains strong despite the pandemic as evidenced by significant increases in its e-commerce and wholesale volume. The first three locations of the Company's Hemisphere cannabis subsidiary have pivoted during the most recent lockdown in Toronto to provide curbside and delivery options. Management is also optimistic about another four Hemisphere locations ready to be opened and new opportunities to expand in Alberta.

About Aegis Brands Inc.

Founded in 1975, Aegis Brands Inc., formerly The Second Cup Ltd., was a Canadian specialty coffee retailer operating franchised and company-owned cafés across Canada. In November 2019, the Company announced its intention to implement a new operating structure in support of its new strategy. The Company now owns and operates the existing Second Cup Coffee Co. business as part of a portfolio of brands that also includes Bridgehead Coffee and Hemisphere Cannabis Co. For more information, please visit www.aegisbrands.ca or find the brands on Facebook, Instagram and Twitter.

About CWB Franchise Finance

CWB Franchise Finance, a division of CWB Financial Group, specializes in financing for regional and national restaurants and hotels and is a leading lender to the Canadian restaurant and hospitality industries. Previously GE Capital Canada's franchise financing arm, CWB Franchise Finance was acquired by CWB Financial Group in 2016 following a successful track record of more than 800 clients with upwards of 1,525 property locations over 14 years. To date, more than $3 billion has been invested in the Canadian hotel and restaurant space.

About CWB Financial Group

CWB Financial Group is a diversified financial services organization known for a highly proactive client experience serving businesses and individuals across Canada. CWB Financial Group's key business lines include full service business and personal banking offered through branch locations of CWB and Internet banking services provided by Motive Financial. Highly responsive nation-wide specialized financing is delivered under the banners of CWB Optimum Mortgage, CWB Equipment Financing, CWB National Leasing, CWB Maxium Financial and CWB Franchise Finance. Trust services are offered through CWB Trust Services. Comprehensive wealth management services are provided through CWB Wealth Management and its affiliate brands, including T.E. Wealth, Leon Frazer & Associates, CWB McLean & Partners, and Canadian Western Financial. As a public company on the Toronto Stock Exchange (TSX), CWB trades under the symbols "CWB" (common shares), "CWB.PR.B" (Series 5 Preferred Shares), "CWB.PR.C" (Series 7 Preferred Shares) and "CWB.PR.D" (Series 9 Preferred Shares). Learn more at www.cwb.com.

DISCLAIMER REGARDING FORWARD LOOKING STATEMENTS

This press release may contain forward-looking information that represents internal expectations, estimates or beliefs concerning, among other things, future activities or future operating results and various components thereof. The use of any of the words "anticipate", "continue", "expect", "may", "will", "project", "should", "believe", and similar expressions suggesting future outcomes or events are intended to identify forward-looking information. Forward-looking statements include the Company's expectations with respect to the use of proceeds of the CWB loan, the growth and strategy of the Company moving forward, the Company's plans to open additional Second Cup and Hemisphere locations and other related matters on the Company's business, operations and financial performance. Statements regarding such forward-looking information reflect management's current beliefs and are based on information currently available to management.

These statements are not guarantees of future performance and are based on management's estimates and assumptions that are subject to inherent risks and uncertainties, some of which are beyond the Company's control, which could cause the Company's actual performance and financial results in future periods to differ materially from the forward-looking information contained in this press release. The dynamic nature of the COVID-19 pandemic and the events and circumstances resulting from or associated with the pandemic mean that management can offer no assurance that forward-looking information or forward-looking statements will occur or be accurate in the circumstances. This is further discussed under the heading "Risk Factors" in the Company's annual information form available at www.sedar.com.

Management's estimates and assumptions include: the ability to manage the risks (economic, operational, financial, and other risks) associated with the COVID-19 pandemic, the ability to identify new acquisition opportunities and to successfully integrate past and future acquisition targets into the Company's business, the ability to open additional Second Cup locations and further expand into the retail cannabis market in both Ontario and Alberta, and the ability to negotiate satisfactory leasing arrangements in respect of any new locations to be opened. Risks and uncertainties include: the ability to achieve anticipated benefits of the corporate reorganization; risks relating to the identification and integration of acquisitions; risks associated with the COVID-19 pandemic; financial, operational and regulatory risks associated with the Company's continued expansion into the retail cannabis market; and risks that leasing arrangements for new locations may not be negotiated on terms satisfactory to the Company or at all. Although the forward-looking information contained in this press release is based upon what management believes are reasonable assumptions, there can be no assurance that actual results will be consistent with these forward-looking statements. Readers, therefore, should not place undue reliance on any such forward-looking statements.

The risks associated with the COVID-19 pandemic include: the ultimate extent, duration and severity of the pandemic itself and the associated government restrictions; effects on consumer and commercial behavior and other factors associated with or resulting from such pandemic, including that the outbreak of the COVID-19 pandemic could result in additional cafés temporarily suspending operations; a decrease in the willingness of guests to patronize the Company's cafés; shortages of employees to staff the Company's cafés; interruption of supplies from third parties upon which the Company relies; the imposition of governmental regulations that adversely impact the Company's business; the availability of the CECRA program; landlord willingness to consider franchisees' requests for deferrals of rent or loan repayments and/or the Company's requests to amend or terminate certain café leases; that franchisees may request that the Company take certain steps to support its franchisees (whether financially or otherwise); and that the pandemic and the consumer, governmental and commercial response to it could materially impact economic activity in general and otherwise have a material adverse effect on the Company's business, financial condition and results of operations. Such adverse effects could be rapid and unexpected.

All forward-looking information in this press release is qualified by these cautionary statements. Forward-looking information in this press release is presented only as of the date made. Except as required by law, the Company disclaims any intention or obligation to update or revise any forward-looking statements to reflect subsequent events or circumstances.

SOURCE Aegis Brands Inc.

Ba Linh Le, Chief Financial Officer, [phone], [email protected] or Erin Richards, [phone], [email protected]