DEFM14A: Safety Shot and Yerba Brands Corp. Announce Merger Agreement, Aiming to Dominate Functional Beverage Market

Safety Shot, Inc. and Yerba Brands Corp. are set to merge, creating a combined entity poised to capitalize on the growing demand for functional beverages.

Summary

• Safety Shot and Yerba have entered into an arrangement agreement for a business combination.
• Safety Shot will acquire all outstanding common shares of Yerba.
• Yerba shareholders will receive 0.2918 of a Safety Shot share for each Yerba share they own.
• Post-arrangement, Safety Shot stockholders are expected to own approximately 75.8% and Yerba shareholders approximately 24.2% of the combined company on a fully diluted basis.
• Both Yerba and Safety Shot are holding special meetings for their shareholders to vote on the proposed arrangement.
• The Yerba board unanimously recommends that Yerba shareholders vote in favor of the arrangement.
• The Safety Shot board unanimously recommends that Safety Shot stockholders vote for each of the Safety Shot proposals.
• Assuming all conditions are met, the arrangement is expected to become effective during the second quarter of 2025.

Sentiment

Score: 7

Explanation: The document is generally positive, outlining the benefits of the merger and the recommendations of the boards of directors. However, it also includes risk factors and potential negatives, indicating a balanced and realistic outlook.

Positives

• The merger may strengthen Safety Shot's balance sheet and improve financial flexibility.
• The merger may expand Safety Shot's revenue base and diversify its product offerings.
• The merger may lead to distribution synergies and cost efficiencies.
• Yerba shareholders will gain access to the Nasdaq through Safety Shot shares, providing greater liquidity.
• Safety Shot's stronger cash reserves may allow for reinvestment into Yerba's operations and market expansion.

Negatives

• The arrangement will generally be a taxable transaction for Yerba Shareholders who are residents of Canada.
• Yerba Shareholders who are U.S. Holders should generally recognize a gain or a loss as a result of the Arrangement for U.S. federal income tax purposes.
• The pendency of the arrangement may have a negative impact on Yerba's business relationships.
• The arrangement could be terminated under certain circumstances.
• Safety Shot Stockholders and Yerba Shareholders will have a reduced ownership and voting interest in, and will exercise less influence over the management of, the Combined Company following the completion of the Arrangement as compared to their current ownership and voting interest in their respective companies.

Risks

• The completion of the arrangement is subject to a number of conditions precedent and may not occur.
• If the arrangement is not completed, the market price of Yerba Shares and Safety Shot Shares may be adversely affected.
• The pending arrangement may divert the attention of management of Yerba and Safety Shot.
• The Combined Company may be required to seek additional indebtedness.
• The Safety Shot Shares to be received by Yerba Shareholders as a result of the Arrangement will have different rights from the Yerba Shares.

Future Outlook

Assuming all conditions are satisfied or waived, Yerba and Safety Shot expect the arrangement to become effective during the second quarter of 2025.

Management Comments

• Todd Gibson, Chief Executive Officer of Yerba Brands Corp., stated, 'We thank you for your consideration and continued support.'
• Jarrett Boon, Chief Executive Officer of Safety Shot, Inc., stated, 'We urge you to read the enclosed materials carefully and to promptly vote by following the instructions in the enclosed materials.'

Industry Context

The merger reflects a trend in the beverage industry towards consolidation and diversification of product offerings to cater to health-conscious consumers.

Comparison to Industry Standards

• The document references several comparable companies in the beverage and wellness sectors, including Monster Beverage Corporation, Celsius Holdings, Inc., and National Beverage Corp.
• The document includes a fairness opinion from Evans & Evans, Inc., which is a common practice in mergers and acquisitions to ensure the transaction is fair to shareholders.
• The document includes a fairness opinion from Newbridge Securities Corporation, which is a common practice in mergers and acquisitions to ensure the transaction is fair to shareholders.

Management Changes

Stakeholder Impact

• Yerba Shareholders will receive Safety Shot Shares, providing them with access to a more liquid market.
• Safety Shot Stockholders will see their ownership diluted but may benefit from the combined company's growth potential.
• Employees of both companies may experience changes in roles and responsibilities.
• Customers may benefit from a broader range of products and services.

Next Steps

• Yerba Shareholders to vote on the Yerba Arrangement Resolution.
• Safety Shot Stockholders to vote on the Safety Shot Proposals.
• Obtain the Final Order from the Supreme Court of British Columbia.
• Satisfy all other conditions outlined in the Arrangement Agreement.
• Complete the arrangement during the second quarter of 2025.

Key Dates

Keywords

merger, acquisition, Safety Shot, Yerba, shareholders, arrangement, beverage, stock, proposals, meeting