Safety Shot Stockholder Questions and Answers

 

Q:	When and where is the Safety Shot Meeting?

 

A: The Safety Shot Meeting will be held on [●], 2025 at [●] (Eastern time) and will be held in a virtual format. Safety Shot Stockholders may participate by logging in online at www.virtualshareholdermeeting.com/SHOT2025SM, where they will be able to virtually attend the Safety Shot Meeting via live audio webcast. Online check-in will begin at [●] (Eastern time), and Safety Shot encourages you to allow ample time for the online check-in procedures. To participate in the Safety Shot Meeting, Safety Shot Stockholders will need their unique 16-digit control number included on their Safety Shot proxy card (printed in the box and marked by the arrow) or the instructions that accompanied the proxy materials.

 

Q:	What am I voting on?

 

A.	You are being asked to consider and vote on the following proposals:

 

1.

to approve the Safety Shot Share Issuance Proposal;

 

2.

to approve the Safety Shot Incentive Plan Proposal;

 

3.

to approve the Safety Shot Settlement Proposal;

 

4.

to approve the Safety Shot Nasdaq Change of Control Proposal;

 

5.

to approve the Safety Shot Reverse Stock Split Proposal; and

 

6.

subject to the provisions of the Arrangement Agreement, to approve the adjournment of the Safety Shot Meeting, if necessary or appropriate, to solicit additional proxies if there are not sufficient votes to approve the Safety Shot Share Issuance Proposal, the Safety Shot Incentive Plan Proposal, the Safety Shot Settlement Proposal, the Safety Shot Nasdaq Change of Control Proposal, and the Safety Shot Reverse Stock Split Proposal or to establish a quorum.

 

The Safety Shot Share Issuance Proposal, the Safety Shot Incentive Plan Proposal, the Safety Shot Settlement Proposal, the Safety Shot Nasdaq Change of Control Proposal, the Safety Shot Reverse Stock Split Proposal and the Safety Shot Adjournment Proposal are collectively referred to as the “Safety Shot Proposals”.

 

Please note that the approval by Safety Shot Stockholders of each of the Safety Shot Share Issuance Proposal and the Safety Shot Incentive Plan Proposal is required in order to complete the Arrangement.

 

Q:	Does the Safety Shot Board support the Safety Shot Proposals?

 

A: Yes. The Safety Shot Board has unanimously determined that the Safety Shot Proposals are in the best interests of Safety Shot and the Safety Shot Stockholders and recommends that the Safety Shot Stockholders vote FOR each of the Safety Shot Proposals.

 

In making its recommendation regarding the Safety Shot Proposals, the Safety Shot Board considered a number of factors as described in this Joint Proxy Statement/Circular under “Description of the Arrangement — Recommendation of the Safety Shot Board”, and “Description of the Arrangement — Reasons Considered by the Safety Shot Board; Recommendation of the Safety Shot Share Issuance Proposal by the Safety Shot Board”.

 

The Safety Shot Proposals are further described in this Joint Proxy Statement/Circular, including under “General Information Concerning the Safety Shot Meeting and Voting — Purpose of the Safety Shot Meeting”.

 

 

Q:	What is the purpose of the Safety Shot Incentive Plan Proposal?

 

A: The Safety Shot Board has unanimously determined that it is in the best interest of Safety Shot and the Safety Shot Stockholders to increase the Safety Shot Shares available under the Plan to maintain a sufficient pool of Safety Shot Shares available for grant under the Plan in order to retain, incentivize and reward current Safety Shot and Yerbaé employees, consultants, officers and directors and attract new employees, officers and consultants and, where appropriate, new director candidates. Safety Shot currently has approximately [●] participants in the Plan and Yerbaé estimates that 23 new participants will be participating in the Plan following closing of the Arrangement.

 

Q:	What approvals are required by Safety Shot Stockholders at the Safety Shot Meeting?

 

A: Except for the Safety Shot Adjournment Proposal, the vote required to approve all of the Safety Shot Proposals listed herein assumes the presence of a quorum at the Safety Shot Meeting.

 

No.		Proposal		Votes Necessary
1.		Safety Shot Share Issuance Proposal		Approval requires the affirmative vote of a majority of the number of Safety Shot Shares present in person or represented by proxy at the Safety Shot Meeting and entitled to vote at the Safety Shot Meeting.
2.		Safety Shot Incentive Plan Proposal		Approval requires the affirmative vote of a majority of the number of Safety Shot Shares present in person or represented by proxy at the Safety Shot Meeting and entitled to vote at the Safety Shot Meeting.
3.		Safety Shot Settlement Proposal		Approval requires the affirmative vote of a majority of the number of Safety Shot Shares present in person or represented by proxy at the Safety Shot Meeting and entitled to vote at the Safety Shot Meeting.
4.		Safety Shot Nasdaq Change of Control Proposal		Approval requires the affirmative vote of a majority of the number of Safety Shot Shares present in person or represented by proxy at the Safety Shot Meeting and entitled to vote at the Safety Shot Meeting.
5.		Safety Shot Reverse Stock Split Proposal		Approval requires the affirmative vote of a majority of the votes cast by stockholders present at the Safety Shot Meeting and entitled to vote at the Safety Shot Meeting; provided that the Safety Shot common stock is listed on Nasdaq immediately before the Safety Shot Reverse Stock Split becomes effective and meets the listing requirements of Nasdaq relating to the minimum number of holders immediately after the Safety Shot Reverse Stock Split becomes effective (the “Listing Condition”). If the Listing Condition is not met, the Safety Shot Reverse Stock Split Proposal must receive the affirmative vote of the holders of a majority of issued and outstanding shares of Safety Shot common stock as of the Safety Shot Record Date.
6.		Safety Shot Adjournment		Approval requires the affirmative vote of a majority of the of the Safety Shot Shares present or represented by proxy at the Safety Shot Meeting.

 

 

Only registered Safety Shot Stockholders (each, a “Registered Safety Shot Stockholder”) are entitled to vote at the Safety Shot Meeting. Each Registered Safety Shot Stockholder has one vote for each Safety Shot Share held at the close of business on the Safety Shot Record Date. As of the Safety Shot Record Date, there were [●] Safety Shot Shares outstanding.

 

Any abstentions with respect to the Safety Shot Share Issuance Proposal, the Safety Shot Incentive Plan Proposal, the Safety Shot Settlement Proposal, the Safety Shot Nasdaq Change of Control Proposal and the Safety Shot Adjournment Proposal will be counted for purposes of determining whether a quorum is present at the Safety Shot Meeting and have the same effect as a vote against such proposal. Banks, brokers and other nominees that hold their customers’ shares in street name may not vote their customers’ shares on “non-routine” matters without voting instructions from their customers. As each of the Safety Shot Share Issuance Proposal, the Safety Shot Incentive Plan Proposal, the Safety Shot Settlement Proposal, the Safety Shot Nasdaq Change of Control Proposal and the Safety Shot Adjournment Proposal to be voted upon at the Safety Shot Meeting are considered “non-routine,” such organizations do not have discretion to vote on any of these proposals for which they do not receive voting instructions from their customers (this is referred to in this context as a “broker non-vote”). Therefore, if you fail to provide your bank, broker or other nominee with any voting instructions regarding how to vote your Safety Shot Shares with respect to the Safety Shot Share Issuance Proposal, the Safety Shot Incentive Plan Proposal, the Safety Shot Settlement Proposal, the Safety Shot Nasdaq Change of Control Proposal and the Safety Shot Adjournment Proposal, your Safety Shot Shares will not be voted on these proposals.

 

Any abstentions with respect to the Safety Shot Reverse Stock Split Proposal will be counted for purposes of determining whether a quorum is present at the Safety Shot Meeting, provided the Listing Condition is met, have no effect on the Safety Shot Reverse Stock Split Proposal. If the Listing Condition is not met, any abstentions with respect to the Safety Shot Reverse Stock Split Proposal will have the same effect as a vote against the proposal. As the Safety Shot Reverse Stock Split Proposal is not contingent upon the closing of the Arrangement and it is the intention of the Safety Shot Board to implement the Safety Shot Reverse Stock Split regardless of whether the Transaction is approved and consummated, the Safety Shot Reverse Stock Split Proposal is considered “routine.” Accordingly, banks, brokers and other nominees that hold their customers’ shares in street name may vote their customers’ shares without voting instructions from their customers on the Safety Shot Reverse Stock Split Proposal and such organizations have discretion to vote on the Safety Shot Reverse Stock Split Proposal if they do not receive voting instructions from their customers. Therefore, if you fail to provide your bank, broker or other nominee with any voting instructions regarding how to vote your Safety Shot Shares with respect to the Safety Shot Reverse Stock Split Proposal, your Safety Shot Shares will be considered present at the Safety Shot Meeting, will be counted for purposes of determining the presence of a quorum at the Safety Shot Meeting and may be voted by your bank, broker or other nominee with respect to the Safety Shot Reverse Stock Split Proposal.

 

Q:	Are Safety Shot Stockholders entitled to appraisal rights?

 

A: No Safety Shot Stockholders are not entitled to appraisal rights under the Delaware General Corporation Law (“DGCL”).

 

 

Q:	How do I vote on the Safety Shot Proposals?

 

A: If you are a Registered Safety Shot Stockholder, you may vote during the Safety Shot Meeting, vote by proxy over the telephone, vote by proxy through the internet or vote by proxy using a proxy card that you may request or that Safety Shot may elect to deliver at a later time. Whether or not you plan to attend the Safety Shot Meeting, Safety Shot urges you to vote by proxy to ensure that your vote is counted. You may still attend and vote during the Safety Shot Meeting even if you have already voted by proxy.

 

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To vote during to the Safety Shot Meeting, go to www.virtualshareholdermeeting.com/SHOT2025SM to complete an electronic proxy card. You will be asked to provide your unique 16-digit control number. Any previous votes or proxies that you submitted will be superseded by the vote that you cast at the Safety Shot Meeting.

 

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To vote using the proxy card, simply complete, sign and date the proxy card that may be delivered and return it promptly in the envelope provided with the proxy card. If Safety Shot receives your signed proxy card by 11:59 p.m. (Eastern time) on [●], 2025, Safety Shot will vote your Safety Shot Shares as you direct.

 

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To vote over the telephone, dial toll-free 1-800-690-6903 using a touch-tone phone and follow the recorded instructions. You will be asked to provide your unique 16-digit control number. Your telephone vote must be received by 11:59 p.m. (Eastern time) on [●], 2025 to be counted.

 

●

To vote through the internet, go to www.virtualshareholdermeeting.com/SHOT2025SM to complete an electronic proxy card. You will be asked to provide your unique 16-digit control number. Your internet vote must be received by 11:59 p.m. (Eastern time) on [●], 2025 to be counted.

 

If you are a beneficial owner of Safety Shot Shares registered in the name of your broker, bank or other agent, you should have received a notice containing voting instructions from that organization rather than from Safety Shot. Please follow the voting instructions in that notice to ensure that your vote is counted. To vote during the Safety Shot Meeting, you must contact your broker, bank or other agent in advance of the Safety Shot Meeting to obtain a legal proxy or broker’s proxy card.

 

Internet proxy voting may be provided to allow you to vote your Safety Shot Shares online, with procedures designed to ensure the authenticity and correctness of your proxy vote instructions. However, please be aware that you must bear any costs associated with your computing device and internet access, such as the cost of such device and the software thereon and usage charges from internet access providers and telephone companies.

 

Q:	What happens if Safety Shot Stockholders approve the Safety Shot Share Issuance Proposal, but do not approve one or more of the other Safety Shot Proposals?

 

A: If the Safety Shot Incentive Plan Proposal is not approved but the Safety Shot Share Issuance Proposal is approved, Safety Shot would not be required to complete the Arrangement even if all other conditions precedent have been satisfied. If the Safety Shot Adjournment Proposal is not approved but the Safety Shot Share Issuance Proposal and the Safety Shot Incentive Plan Proposal are approved, Safety Shot would be required to complete the Arrangement if all other conditions precedent have been satisfied. If the Safety Shot Reverse Stock Split Proposal, the Safety Shot Settlement Proposal or the Safety Shot Nasdaq Change of Control Proposal is not approved, Safety Shot would be able to complete the Arrangement if all other conditions precedent have been satisfied.

 

 

Q:	If my Safety Shot Shares are held by a broker, will they vote my Safety Shot Shares for me?

 

A: Except with respect to the Safety Shot Reverse Stock Split Proposal, a broker will vote the Safety Shot Shares held by you only if you provide instructions to such broker on how to vote or which election to make. If you fail to give proper instructions, those Safety Shot Shares will not be voted on your behalf except with respect to the Safety Shot Reverse Stock Split Proposal as described below. Safety Shot Stockholders should instruct their brokers to vote their Safety Shot Shares on their behalf by following the directions on the voting instruction form provided to them by their intermediaries. Unless your intermediary gives you its proxy to vote the Safety Shot Shares at the Safety Shot Meeting, you cannot vote those Safety Shot Shares owned by you at the Safety Shot Meeting. For more information, see “General Information Concerning the Safety Shot Meeting and Voting – Beneficial Safety Shot Stockholders”.

 

Banks, brokers and other nominees that hold their customers’ shares in street name may vote their customers’ shares without voting instructions from their customers on the Safety Shot Reverse Stock Split Proposal because it is considered “routine,” and such organizations have discretion to vote on this proposal if they do not receive voting instructions from their customers. Therefore, if you fail to provide your bank, broker or other nominee with any voting instructions regarding how to vote your Safety Shot Shares with respect to the Safety Shot Reverse Stock Split Proposal, your Safety Shot Shares will be considered present at the Safety Shot Meeting, will be counted for purposes of determining the presence of a quorum at the Safety Shot Meeting and will be voted by your bank, broker or other nominee with respect to the Safety Shot Reverse Stock Split Proposal.

 

Q:	Can I revoke my vote after I have voted by proxy?

 

A: Yes. A Registered Safety Shot Stockholder who has submitted a proxy may revoke it at any time prior to it being exercised. If the Safety Shot Stockholder is a registered holder, the Safety Shot Stockholder can do this in one of four ways: (i) a Safety Shot Stockholder may submit another timely and properly completed proxy card with a later date; (ii) a Safety Shot Stockholder may grant a subsequent timely proxy by telephone or through the internet; (iii) a Safety Shot Stockholder may send a timely written notice that such Safety Shot Stockholder is revoking the proxy to Safety Shot, Inc., 1061 E. Indiantown Rd., Ste. 110, Jupiter, Florida 33477, Attention: Corporate Secretary; and (iv) a Safety Shot Stockholder may attend and vote during the Safety Shot Meeting. Simply attending the Safety Shot Meeting will not, by itself, revoke a proxy. For more information, see “General Information Concerning the Safety Shot Meeting and Voting – Participation at the Safety Shot Meeting”.

 

If you have instructed a broker to vote your Safety Shot Shares and wish to change your vote, you must follow the directions received from your broker to change those instructions. For more information, see “General Information Concerning the Safety Shot Meeting and Voting – Revocation of Proxies”.

 

Q:	Who can help answer my questions?

 

A: If you have any questions about this Joint Proxy Statement/Circular or the matters described in this Joint Proxy Statement/Circular, please contact your professional advisor. Safety Shot Stockholders who would like additional copies, without charge, of this Joint Proxy Statement/Circular or have additional questions about the procedures for voting Safety Shot Shares or making an election, should contact their broker or Safety Shot at Safety Shot, Inc., 1061 E. Indiantown Rd., Ste. 110, Jupiter, Florida 33477, Attention: Corporate Secretary.

 

 

Summary

 

This summary highlights the key aspects of the matters to be considered at the Yerbaé Meeting and the Safety Shot Meeting, but it does not contain all of the information that is important to you. You should carefully read this entire document and the other documents Safety Shot and Yerbaé refer you to for a more complete understanding of the matters being considered at the meetings. This summary is qualified in its entirety by the more detailed information appearing elsewhere in this Joint Proxy Statement/Circular, including the Appendices (which are incorporated into and form part of this Joint Proxy Statement/Circular).

 

The Companies

 

Yerbaé

 

Yerbaé Brands Corp. develops plant-based energy drinks that contain no added sugar or artificial ingredients. Yerbaé was founded by Todd and Karrie Gibson in 2016 to create plant-based energy drinks containing Yerba Mate, a South American herb and a natural source of caffeine. Yerbaé’s first beverage was launched in the first quarter of 2017.

 

Yerbaé is engaged in the development, marketing, sale and distribution of plant-based energy beverages that do not contain calories, carbohydrates or sugar. Yerbaé’s line of beverages are blended with non-GMO plant-based ingredients and offer the benefits of Yerba Mate and White Tea, sustainably sourced from Brazil and other growing regions in South America.

 

Yerbaé beverages are created to provide products targeted at consumers seeking healthier beverages as an alternative to existing energy drinks and focused on health, wellness and fitness. The products are formulated to provide a more refreshing taste than coffee, with additional benefits to existing sodas and sparkling waters, along with healthier ingredients than traditional energy drinks. Yerbaé’s products complement a variety of healthy lifestyles, such as non-GMO, Keto, Vegan, Kosher, Paleo and gluten-free diets.

 

Yerbaé offers two primary beverage lines with a total of fourteen flavors. Yerbaé’s two primary product lines are the 12oz Plant-Based Energy Seltzer Water and 16oz Plant-Based Energy Drink.

 

Yerbaé was formed by way of a reverse triangular merger on February 8, 2023, whereby: (i) Kona Bay Technologies (Delaware) Inc. merged with and into Yerbaé Brands Co., both Delaware companies, pursuant to the provisions of the Delaware General Corporation Law (“DGCL”), and (ii) Yerbaé (then, Kona Bay Technologies Inc.) completed a plan of arrangement conducted pursuant to the provisions of the BCBCA, which also resulted in the amalgamation (the “Amalgamation”) of Yerbaé (then, Kona Bay Technologies Inc.) with 1362283 B.C. Ltd. (“FinCo”) under the name “Yerbaé Brands Corp.”.

 

Yerbaé’s head office and principal address is 18801 N. Thompson Peak Parkway, Suite D-380, Scottsdale, Arizona, 85255, USA, and its registered and records office is located at Bentall 5, Suite 2501 – 550 Burrard Street, Vancouver, British Columbia, V6C 2B5. Yerbaé is a reporting issuer in the provinces of Alberta and British Columbia whose Yerbaé Shares are listed for trading on the facilities of the TSXV under the symbol “YERB.U” and on the OTCQX under the symbol “YERBF”.

 

For more information on Yerbaé, see “Information Concerning Yerbaé”.

 

 

Safety Shot

 

Safety Shot Inc. (NASDAQ: SHOT) was formerly known as Jupiter Wellness Inc. In August 2023, Safety Shot successfully completed the asset purchase of the Safety Shot Dietary Supplement from GBB Drink Lab, Inc. (“GBB”), thereby gaining ownership of various assets, including the intellectual property, trade secrets, and trademarks associated with its dietary supplement (the “Safety Shot Dietary Supplement”). Concurrently with the asset purchase, Safety Shot changed its name to Safety Shot, Inc. and changed its NASDAQ trading symbol to SHOT. Safety Shot launched its e-commerce sale of the Safety Shot Dietary Supplement in December 2023. On October 9, 2024, Safety Shot renamed the Safety Shot Dietary Supplement as the “Sure Shot Dietary Supplement.”

 

The Sure Shot Dietary Supplement has been formulated to reduce the accumulation of blood alcohol. Noteworthy is the fact that the Sure Shot Dietary Supplement comprises 28 active ingredients, all falling under the Generally Regarded As Safe (GRAS) category. Under sections 201(s) and 409 of the Federal Food, Drug, and Cosmetic Act (the Act), any substance that is intentionally added to food is a dietary supplement, that is subject to premarket review and approval by the FDA, unless the substance is generally recognized, among qualified experts, as having been adequately shown to be safe under the conditions of its intended use, or unless the use of the substance is otherwise excepted from the definition of a dietary supplement.

 

It’s crucial to note that the Sure Shot Dietary Supplement is currently manufactured in a facility adhering to Good Manufacturing Practices, ensuring the highest standards of quality and safety throughout its production process. Safety Shot currently maintains a workforce comprising eight full-time employees of its own.

 

Specializing in Consumer Packaged Goods, Safety Shot’s focus centers on the commercialization of a 12-ounce product positioned as a dietary supplement. Beyond Safety Shot existing product, Safety Shot has introduced new product lines, including a convenient powdered stick pack version and a 4-ounce version of the Sure Shot Dietary Supplement.

 

Safety Shot has discontinued the historical product lines of Jupiter Wellness which included a diverse range of products, such as hair loss treatments, vitiligo solutions, and sexual wellness products, that catered to different health and wellness needs and Safety Shot’s commitment to supporting health and wellness by developing innovative solutions to a range of conditions. In connection therewith, on September 24, 2024, Safety Shot entered into a Separation and Exchange Agreement with its subsidiary Caring Brands, Inc. whereby Caring Brands will seek to commercialize this product line. Caring Brands will be responsible for all costs associated with the operation of that line of business. Safety Shot will focus its efforts on the commercialization of the Sure Shot Dietary Supplement. Safety Shot will retain ownership of 3,000,000 shares of Caring Brands, Inc.

 

Safety Shot entered into a stock exchange agreement (the “Exchange Agreement”) with SRM Entertainment, Inc. (“SRM”) to govern the separation of SRM and Safety Shot. On May 26, 2023, we amended and restated the Exchange Agreement (the “Amended and Restated Exchange Agreement”) to include additional information regarding the distribution and the separation of SRM and Safety Shot. The separation as set forth in the Amended and Restated Exchange Agreement with Safety Shot closed August 14, 2023. Pursuant to the Amended and Restated Exchange Agreement, on May 31, 2023, SRM issued to Safety Shot 6,500,000 shares of SRM Common Stock (representing 79.3% of SRM’s outstanding shares of common stock) in exchange for 2 ordinary shares of SRM Ltd owned by Safety Shot (representing all of the issued and outstanding ordinary shares of SRM) (the “Share Exchange”). On August 14, 2023, SRM consummated its Initial Public Offering (“IPO”), pursuant to which it sold 1,250,000 shares of its common stock at a price of $5.00 per share. In connection with the Share Exchange and SRM’s IPO, Safety Shot distributed 2,000,000 shares of SRM’s common stock to Safety Shot’s stockholders and certain warrant holders (out of the 6.5 million shares issued in May 2023) which occurred on the effective date of the Registration Statement but prior to the closing of the IPO. Following such distribution, Safety Shot owns 4.0 million of the 9,450,000 shares of common stock outstanding and SRM is now a minority owned subsidiary of Safety Shot.

 

 

To achieve Safety Shot’s mission, Safety Shot relies on its team of highly skilled and experienced professionals who are committed to advancing its vision of health and wellness. Safety Shot’s team includes individuals with scientific backgrounds, an experienced researcher, product developers, and business experts who collaborate to create new products and enhance existing ones. Safety Shot also seeks to partner with industry leaders and organizations to gain access to the latest technologies and expand its reach.

 

The Sure Shot Dietary Supplement is currently sold through e-commerce and in retail stores. In addition, Safety Shot is seeking to collaborate with other companies to license its intellectual property, to create additional revenue streams and expand its global presence. At present, Safety Shot does not experience concentration risk or dependence on major customers.

 

Safety Shot maintains a diverse network of raw material suppliers that are integral to its production processes. Acquisition strategies encompass both direct procurement and collaborative efforts with its co-packers. The selection of suppliers is contingent upon various factors, including ingredient specificity, availability, and other essential considerations. Notably, these suppliers coincide with those currently providing materials to other facilities engaged in the manufacturing of drinks, powders, tablets, and capsules. Safety Shot’s roster of suppliers comprises reputable entities such as Jiaherb, Compound Solutions, Kyowa-Hakko, Mitsubishi Ingredients, Nura, Sensapure Flavors, Brenntag, E3 Ingredients, Ingredients Online, among others. This strategic alliance with established industry players underscores its commitment to sourcing high-quality raw materials essential for the production of its innovative product line. Furthermore, Safety Shot’s approach to supplier relationships reflects a dedication to maintaining a seamless and reliable supply chain. Safety Shot believes that this not only ensures the consistency of its current offerings but also positions them favorably for future developments. Safety Shot’s Management believes that as it continues to expand its product portfolio, Safety Shot believes that these partnerships with trusted suppliers play a pivotal role in upholding the standards that Safety Shot expect of its brand.

 

For additional information about Safety Shot, see “Information Concerning Safety Shot”

 

Background to the Arrangement

 

The Arrangement Agreement is the result of extensive arm’s length negotiations between Yerbaé and its legal and financial advisors, on the one hand, and Safety Shot and its legal and financial advisors, on the other hand. See “Description of the Arrangement — Background to the Arrangement” for a summary of the main events that led to the execution of the Arrangement Agreement, including certain meetings, negotiations, discussions and actions of the parties that preceded the execution of the Arrangement Agreement and the public announcement of the Arrangement.

 

 

Reasons Considered by the Yerbaé Board

 

In reaching its decision to unanimously approve the Arrangement Agreement and the transactions contemplated thereby, including the issuance of Safety Shot Shares to Yerbaé Shareholders in connection with the Arrangement, the Yerbaé Board considered the following factors, all of which they viewed as supporting its decisions to approve the Arrangement Agreement and the transactions contemplated thereby:

 

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Evans & Evans Fairness Opinion. Evans & Evans Inc. (“Evans & Evans”) delivered an opinion to the Yerbaé Board that, as of December 30, 2024 (the “Evans & Evans Fairness Opinion”) and based upon and subject to the assumptions, limitations and qualifications set forth therein, concluded that the consideration to be received by Yerbaé Shareholders pursuant to the Arrangement is fair, from a financial point of view, to the Yerbaé Shareholders. The Yerbaé Board also considered the compensation arrangements of Evans & Evans, in particular that Evans & Evans was engaged to provide the Evans & Evans Fairness Opinion on a fixed fee basis that was not contingent on the conclusions reached in such fairness opinion or the completion of the Arrangement.

 

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Business Issues and Trends. In considering the status quo as an alternative to pursuing the Arrangement, the Yerbaé Board assessed potential synergies and opportunities to leverage shared logistics and supply chain efficiencies, Yerbaé’s current strategic direction and business plan in light of anticipated future opportunities, challenges and risks associated with such plan, including Yerbaé’s expected future financial and liquidity requirements, the investments required to achieve such plan, the risks associated with the functional energy drink industry generally, the competitive landscape of the industry in which Yerbaé operates, as well as the other risks and uncertainties set forth in Yerbaé’s most recent Annual Report on Form 10-K and the potential impact of such factors on the future trading price of the Yerbaé Shares, and ultimately concluded that the Arrangement is an attractive proposition and fair outcome for Yerbaé Shareholders relative to the status quo.

 

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Access to Great Liquidity. In considering whether to the enter into the Arrangement Agreement, the Yerbaé Board considered the enhanced liquidity completing the Arrangement may provide Yerbaé Shareholders. Specifically, the acquisition of Yerbaé by Safety Shot, whose Safety Shot Shares are listed on the Nasdaq, have significantly greater trading volume and liquidity compared to the Yerbaé Shares. The Yerbaé Board also believes that in consummating the Arrangement, the Combined Company can lead to improved visibility for Yerbaé, as well as its brand and products. Accordingly, Yerbaé could potentially benefit from higher growth trajectory.

 

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Financial Outlook and Alternative Transactions. After careful consideration of Yerbaé’s current financial outlook, which is less favorable than desired, and despite efforts to secure additional financing, the ability to obtain such financing on favorable terms has proven challenging and have not met Yerbaé’s expectations. In evaluating various alternatives, the Yerbaé Board determined that these financing options and alternative transaction avenues presented as less favorable an opportunities in contrast to the Transaction. After thorough review and consultation with financial and legal advisors, the Yerbaé Board believes that this Transaction offers the best path forward to address Yerbaé’s financial challenges and maximize value for its shareholders given its current situation.

 

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Stronger Financial Position and Cash Assets. Safety Shot’s stronger cash reserves provide a cushion for strategic investments and potential for reinvestment into Yerbaé’s operations, R&D or market expansion. With greater cash flow and reserves, Safety Shot may also have the resources to fund innovation, marketing campaigns or further expansion of Yerbaé’s products both domestically and abroad, benefiting both companies in the long run.

 

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Improved Competitive Positioning. The combination of businesses of Yerbaé and Safety Shot may offer opportunities for Yerbaé and Safety Shot to expand its product offerings and geographic reach, especially in regions or markets where the acquirer has a more substantial presence. The Transaction may also lead to cost efficiencies, shared resources and consolidated supply chains, which could result in reduced operating costs and increased profitability.

 

 

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Arm’s Length Negotiations. The terms of the Arrangement and the Arrangement Agreement are the result of a negotiation process that was undertaken at arm’s length between Yerbaé, with the assistance of and advice from its financial and legal advisors, on the one hand, and Safety Shot and its advisors, on the other hand. The Yerbaé Board held meetings to consider and review the terms of the initial proposal put forward by Safety Shot to acquire Yerbaé leading up to the execution of the non-binding letter of intent dated July 5, 2024, as amended on December 10, 2024 (together, the “LOI”), and the results of subsequent negotiations with Safety Shot which resulted in the entry by the parties of the Arrangement Agreement.

 

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Arrangement Agreement Terms. The terms and conditions of the Arrangement Agreement are, in the judgment of the Yerbaé Board, following consultations with its and Yerbaé’s legal advisors, reasonable and were the result of extensive arm’s length negotiations between Yerbaé and Safety Shot. In particular:

 

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Conditions to Closing. Completion of the Arrangement is subject to a certain number of conditions which the Yerbaé Board believes are reasonable in the circumstances.

 

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Ability to Change Recommendation. The Arrangement Agreement permits the Yerbaé Board to, in certain circumstances, change its recommendation that Yerbaé Shareholders vote for the Yerbaé Arrangement Resolution where, among other things, the Yerbaé Board has received an Acquisition Proposal (as defined in the Arrangement Agreement), Yerbaé is otherwise in compliance with its non-solicit obligations under the Arrangement Agreement and Yerbaé pays Safety Shot the Termination Fee of $1,750,000 plus up to $250,000 of Safety Shot’s transaction expenses, and has determined that the Yerbaé Acquisition Proposal constitutes a Superior Proposal (as defined in the Arrangement Agreement).

 

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Expense Reimbursement Fee. If the Safety Shot Board, among other things, withdraws or changes its recommendation with respect to the Safety Shot Stockholder Approval, in which case Safety Shot will be obligated to pay to Yerbaé the Expense Reimbursement Fee; a fee of $500,000 plus up to $250,000 of transaction expenses.

 

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Shareholder and Court Approvals Required.

 

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The Arrangement will become effective only if it is approved by: (i) at least two-thirds (66 2/3%) of the votes cast by Yerbaé Shareholders present or represented by proxy and entitled to vote at the Yerbaé Meeting; and (ii) the affirmative vote of at least a simple majority of the votes cast by Yerbaé Shareholders, voting as a single class, present or represented by proxy and entitled to vote at the Yerbaé Meeting, after excluding the votes cast by certain persons whose votes may not be included in determining minority approval of a business combination pursuant to MI 61-101; and (iii) a simple majority (more than 50%) of the votes cast by Safety Shot Stockholders present or represented by proxy and entitled to vote at the Safety Shot Meeting.

 

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Completion of the Arrangement is subject to the approval of the Court, after considering the procedural and substantive fairness of the Arrangement at a hearing at which Yerbaé Shareholders and others are entitled to be heard.

 

 

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Continuing Interest in Safety Shot. Following the Arrangement, Yerbaé will no longer exist as a public company and the Yerbaé Shares will be delisted from the TSXV and OTCQX. However, Yerbaé Shareholders will have the opportunity to participate in the potential benefits of a continued investment in Yerbaé, including any future increase in value that might result from future growth and the potential achievement of Yerbaé’s long-term strategic plans, through their holding of Safety Shot Shares, which are listed on Nasdaq, following closing of the Arrangement.

 

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Dissent Rights. Registered Yerbaé Shareholders who do not vote their Yerbaé Shares for the Arrangement are entitled to exercise right of dissent with respect to the Arrangement and receive “fair value” for their Yerbaé Shares as determined by the Court.

 

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Other Stakeholders. The Yerbaé Board considered the impact of the Arrangement on all of Yerbaé’s stakeholders, including the Yerbaé Shareholders, the holders of the Convertible Debentures (as defined below), employees, suppliers, vendors, customers and the communities in which Yerbaé operates. In the view of the Yerbaé Board, the terms of the Arrangement Agreement treat such stakeholders equitably and fairly.

 

In making its recommendation with respect to the Arrangement, the Yerbaé Board also considered a number of potential risks and potential negative factors, which the Yerbaé Board concluded were outweighed by the positive substantive and procedural factors described above, including, among others, the following:

 

●

Risks to the Business of Non-Completion. There are risks to Yerbaé if the Arrangement is not completed despite the parties’ efforts or completion of the Arrangement is unduly delayed, even if the Yerbaé Arrangement Resolution is not approved, including the potential for lawsuits, actions or proceedings in respect of the Arrangement Agreement or the Arrangement, the potential resulting negative impact on Yerbaé’s business, vendor and customer relationships, the potential loss of value to the Yerbaé Shareholders and the possible reduction of the trading price of the Yerbaé Shares. Additionally, failure to complete the Arrangement could lead to missed opportunities in expanding product offerings and reaching new markets, ultimately impacting long-term sustainability and profitability. The Yerbaé Board determined that the Arrangement presented a strategic solution to these risks, aligning with Yerbaé’s growth objectives and enhancing its competitive position in the market.

 

●

Transaction Costs and Expenses. Yerbaé has incurred and will continue to incur significant transaction costs and expenses in connection with the Arrangement, regardless of whether the Arrangement is completed. These costs include, but are not limited to, fees for legal, financial and advisory services, as well as due diligence, regulatory filings and other professional services necessary for the Transaction. If the Arrangement does not proceed to completion, these expenses will be unrecoverable, representing a financial burden.

 

●

Diversion of Management’s Attention. There are risks that management’s attention and other resources will be diverted from the operation of Yerbaé’s business, including other strategic opportunities and operational matters, while working towards the completion of the Arrangement. The complexity of the Transaction also requires significant time and focus from Yerbaé’s management team potentially leading to delays in executing other key initiatives, such as new product launches, market expansion plans or ongoing efficiency improvements. Balancing the demands of the Arrangement with the need to maintain operational effectiveness and capitalize on existing opportunities was a key consideration in the Yerbaé Board’s evaluation of the Arrangement.

 

 

●

Pendency of the Arrangement. The pendency of the Arrangement may have a negative impact on Yerbaé’s business, including its relationship with its employees, customers, suppliers and local communities in which Yerbaé operates.

 

●

Termination of the Arrangement Agreement. Safety Shot has the right to terminate the Arrangement Agreement in certain circumstances, including if holders of more than 10% of the Yerbaé Shares that are issued and outstanding as at the deadline for the exercise of dissent rights specified in the Plan of Arrangement exercise dissent rights.

 

●

Yerbaé Termination Fee. The Termination Fee is payable by Yerbaé to Safety Shot if the Arrangement is not completed and the Arrangement Agreement is terminated in certain circumstances.

 

●

Non-Solicitation Obligations. The terms of the Yerbaé Voting Support Agreements, Yerbaé’s non-solicitation obligations under the Arrangement Agreement and the Termination Fee payable by Yerbaé to Safety Shot in certain circumstances under the Arrangement Agreement may discourage other parties from making a Superior Proposal. The Yerbaé Board was advised, and understood, that such restrictions would further limit the possibility that a Superior Proposal will emerge.

 

●

Restrictions on Operations. The Arrangement Agreement imposes various restrictions on the conduct of Yerbaé’s business during the period between the entering into of the Arrangement Agreement and the consummation of the Arrangement that could delay or prevent Yerbaé from undertaking business opportunities that may arise pending completion of the Arrangement. Specifically, the Arrangement Agreement requires that Yerbaé and the Yerbaé Subsidiaries operate only in the ordinary and normal course consistent with past practice, and prohibits any actions outside of this scope unless explicitly approved by the other party to the Arrangement Agreement. As a result, Yerbaé is limited in its ability to pursue new investments or explore acquisitions, partnerships or other strategic initiatives that could potentially otherwise enhance its competitive position. This restriction could hinder Yerbaé’s agility in responding to market changes or capitalizing on time-sensitive opportunities. Furthermore, if significant business opportunities or operational needs arise during this period, any inability to act on them could result in a loss of potential value or competitive disadvantage, all while the Arrangement is still pending. The Yerbaé Board carefully weighed these limitations against the potential benefits of completing the Arrangement, understanding that while necessary for the Transaction, these restrictions could create operational challenges for Yerbaé in the interim.

 

●

Interests of Certain Persons. Certain of the directors and executive officers of Yerbaé may have interests in the Arrangement that are different from, or in addition to, those of the Yerbaé Shareholders, including the right to receive collateral benefits (as such term is defined under MI 61-101) that differ from, or are in addition to, the Consideration Shares to be received by the Yerbaé Shareholders under the Arrangement. For more information see “Description of the Arrangement – Interests of Yerbaé’s Directors and Management in the Arrangement”.

 

●

Taxable Transaction. The Arrangement will generally be a taxable transaction and, as a result, the Yerbaé Shareholders who are residents of Canada for purposes of the Tax Act will, depending on the original acquisition cost of the Yerbaé Shares, incur a taxable loss or gain as a result of receiving the Consideration Shares pursuant to the Arrangement.

 

 

After considering these factors and through discussions with Yerbaé’s management and outside legal and financial advisors, the Yerbaé Board concluded that the potential benefits of entering into the Arrangement Agreement outweighed the uncertainties and risks. In view of the factors considered in connection with its evaluation of the Arrangement and the complexity of these matters, the Yerbaé Board did not find it useful and did not attempt to quantify or assign any relative or specific weights to the various factors that it considered in reaching its determination to approve the Arrangement and the Arrangement Agreement and to make its recommendation to Yerbaé Shareholders. In addition, individual members of the Yerbaé Board may have given differing weights to different factors and applied his or her own personal business judgment to the process. The Yerbaé Board unanimously determined that the Arrangement, the negotiation of and entry into the Arrangement Agreement and the other transactions and matters contemplated in the Arrangement Agreement or in connection therewith, including the exchange of 0.2918 Safety Shot Shares for each issued and outstanding Yerbaé Share (including the Yerbaé Shares to be issued on the settlement of all of the Yerbaé PSUs and Yerbaé RSUs, which will be settled immediately prior to the Effective Time), for an aggregate of approximately 20 million Safety Shot Shares, based on the anticipated capitalization of Yerbaé at closing , to be issued to Yerbaé Shareholders in connection with the Arrangement, were in the best interests of, and were advisable to, Yerbaé and the Yerbaé Shareholders and approved the Arrangement Agreement and the transactions contemplated by the Arrangement Agreement.

 

For more information, see “Description of the Arrangement – Reasons Considered by the Yerbaé Board and the Yerbaé Board”.

 

Reasons Considered by the Safety Shot Board; Recommendation of the Share Issuance Proposal by the Safety Shot Board

 

In reaching its decision to unanimously approve the Arrangement Agreement and the transactions contemplated thereby, including the issuance of Safety Shot Shares to Yerbaé Shareholders in connection with the Arrangement, the Safety Shot Board considered the following factors, all of which they viewed as supporting its decisions to approve the Arrangement Agreement and the transactions contemplated thereby:

 

●

Strategic Factors. The Safety Shot Board evaluated the following key strategic factors supporting its approval of and entry into the Arrangement Agreement:

 

●

that the Arrangement may strengthen Safety Shot’s balance sheet, improve financial flexibility, provide significant growth funding and an accelerated path to cash flow breakeven and profitability;

 

●

that the Arrangement may expand Safety Shot’s revenue base across a broader portfolio of wellness and functional beverages facilitating greater resiliency to market dynamics;

 

●

that the Arrangement may provide the opportunity to enhance its product offerings to Safety Shot’s current customers and create opportunities for cross-promotion and bundling strategies;

 

●

that the Arrangement may allow for greater and more consistent nationwide category and brand awareness;

 

●

that the Safety Shot Board believes that the Arrangement would be accretive to the current trading price of the Safety Shot Shares;

 

 

●

that the Arrangement may diversify the Safety Shot stockholder base and enhance trading liquidity;

 

●

that the Arrangement would be more favorable compared to the alternative transactions and business opportunities that may have been available to Safety Shot given market conditions;

 

●

that the Arrangement is expected to result in distribution synergies, including access to established retail partnerships and high-volume markets where demand for functional and energy beverages is growing rapidly, optimization of distribution costs to improve margins and reduced time-to-market for Safety Shot’s product lines;

 

●

that the Arrangement is expected to improve the supply chain, including by delivering scalability to meet demand through improved logistics and infrastructure, potential shared warehousing, transportation, and fulfillment resources and the leveraging of efficiencies and scale through shared supply chain support;

 

●

that the Arrangement is expected to result in cost savings and efficiencies, including the streamlining of professional services and the elimination of redundant overhead and shared processes and infrastructure to drive efficiency;

 

●

that the Arrangement could spark product innovation based on shared expertise from brand and product innovation and improved market responsiveness to evolving consumer trends;

 

●

that the Arrangement will allow the Combined Company to cross-leverage Yerbaé’s strong customer relationships which could enable Safety Shot to tap into existing retail programs and promotional initiatives; and

 

●

that the Arrangement will allow Safety Shot to access Yerbaé’s proven expertise in launching and scaling products, which can be applied to Safety Shot’s product lines.

 

●

Other Factors Considered by the Safety Shot Board. In addition to considering the strategic factors described above, the Safety Shot Board considered the following additional factors, all of which it viewed as supporting its decision to approve the Arrangement:

 

●

its knowledge of Safety Shot’s business, operations, financial condition, earnings and prospects on a standalone basis and of Yerbaé’s business, operations, financial condition, earnings and prospects, taking into account the results of Safety Shot’s due diligence review of Yerbaé;

 

●

the opinion of Newbridge Securities Corporation (“Newbridge”) dated January 7, 2025 (the “Newbridge Fairness Opinion”), as to the fairness, from a financial point of view, to Safety Shot of the Consideration, subject to certain assumptions, factors and qualifications set forth therein;

 

 

●

the terms and conditions of the Arrangement Agreement, including the completion of the Arrangement, are subject to a limited number of customary conditions the Safety Shot Board consider to be reasonable in the circumstances and the Arrangement is not subject to antitrust or foreign investment approval conditions;

 

●

the terms and conditions of the Arrangement Agreement are the result of a rigorous arm’s length negotiation process; and

 

●

the reasonableness of the potential Termination Fee in the amount of $1,750,000, plus Safety’s Shot’s expenses for the Transaction not to exceed $250,000, which could become payable by Yerbaé if the Arrangement Agreement is terminated in certain circumstances.

 

The Safety Shot Board weighed the advantages and opportunities listed above against a number of other factors identified in its deliberations as weighing negatively against the Arrangement, including:

 

●

the risk that the transaction and integration costs may be greater than anticipated;

 

●

the cost of the Transaction, including dilution to Safety Shot Stockholders, as compared to other alternative transactions and business opportunities that may have been available to Safety Shot (including a financing);

 

●

the cost, including the time spent by Safety Shot’s management, associated with a decision to pursue a strategic transaction, as well as the potential ongoing liabilities of Yerbaé;

 

●

the impact that the announced Transaction could have on Safety Shot’s stock price and on Safety Shot’s ability to raise additional capital or engage in certain business development discussions during the pre-closing period;

 

●

the risk that the Transaction might not be consummated in a timely manner or at all and its likely detrimental effect on Safety Shot’s cash position and stock price;

 

●

the risk that strategic benefits, operating synergies, cashflow projections and other anticipated benefits might not be realized or may take longer than expected to achieve;

 

●

the fact that either party has the ability to terminate the Arrangement Agreement under certain circumstances in connection with a superior proposal;

 

●

the restrictions imposed pursuant to the Arrangement Agreement on the conduct of Safety Shot’s business and operations during the period between the execution of the Arrangement Agreement and the consummation of the Arrangement or the termination of the Arrangement Agreement;

 

●

the possibility of disruptive stockholder litigation following announcement of the Arrangement; and

 

●

various other risks associated with Yerbaé and the Arrangement, including the risks described in “Risk Factors”, and the matters described under “Information Concerning Forward-Looking Statements”.

 

 

After considering these factors and through discussions with Safety Shot’s management and outside legal and financial advisors, the Safety Shot Board concluded that the potential benefits of entering into the Arrangement Agreement outweighed the uncertainties and risks. In view of the factors considered in connection with its evaluation of the Arrangement and the complexity of these matters, the Safety Shot Board did not find it useful and did not attempt to quantify or assign any relative or specific weights to the various factors that it considered in reaching its determination to approve the Arrangement and the Arrangement Agreement and to make its recommendation to Safety Shot Stockholders. In addition, individual members of the Safety Shot Board may have given differing weights to different factors and applied his or her own personal business judgment to the process. The Safety Shot Board unanimously determined that the Arrangement, the negotiation of and entry into the Arrangement Agreement and the other transactions and matters contemplated in the Arrangement Agreement or in connection therewith, including the issuance of Safety Shot Shares to Yerbaé Shareholders in connection with the Arrangement, were in the best interests of, and were advisable to, Safety Shot and the Safety Shot Stockholders and approved the Arrangement Agreement and the transactions contemplated by the Arrangement Agreement.

 

For more information, see “Description of the Arrangement – Reasons Considered by Safety Shot Board; Recommendation of the Share Issuance Proposal by the Safety Shot Board”.

 

Recommendations of the Boards of Directors

 

Yerbaé Board Recommendation

 

On January 7, 2025, the Yerbaé Board unanimously determined that the Arrangement, the negotiation of and entry into the Arrangement Agreement and the other transactions and matters contemplated in the Arrangement Agreement or in the connection therewith are in the best interests of, and are advisable to, Yerbaé and the Yerbaé Shareholders. In addition, Evans & Evans, Yerbaé’s independent corporate financial advisor, has rendered an opinion that, as of December 30, 2024, the date of the Evans & Evans Fairness Opinion and based upon and subject to the assumptions, limitations and qualifications set forth therein, the consideration to be received by Yerbaé Shareholders pursuant to the Arrangement is fair, from a financial point of view, to the Yerbaé Shareholders. For more information, see “Description of the Arrangement – Fairness Opinion of Evans & Evans”.

 

Accordingly, the Yerbaé Board unanimously recommends that Yerbaé Shareholders vote FOR the Yerbaé Arrangement Resolution.

 

Safety Shot Board Recommendation

 

On January 7, 2025, after careful consideration and consultation with its financial and legal advisors, the Safety Shot Board unanimously determined that the Arrangement, the negotiation of and entry into the Arrangement Agreement and the other transactions and matters contemplated in the Arrangement Agreement or in connection therewith are in the best interests of, and are advisable to, Safety Shot and the Safety Shot Stockholders.

 

Accordingly, the Safety Shot Board unanimously recommends that Safety Shot Stockholders vote FOR each of the Safety Shot Proposals.

 

For more information, see “Description of the Arrangement – Recommendation of the Yerbaé Board” and “Description of the Arrangement – Recommendation of the Safety Shot Board”.

 

 

Fairness Opinion of Evans and Evans, Inc.

 

Yerbaé retained Evans & Evans to render a fairness opinion to the Yerbaé Board as to the fairness, from a financial point of view, to Yerbaé Shareholders of the Consideration Shares. On December 30, 2024, Evans & Evans delivered an oral opinion, subsequently confirmed in writing, to the Yerbaé Board to the effect that as at the date thereof, based upon and subject to the assumptions, limitations and qualifications set forth in the Evans & Evans Fairness Opinion, that, as of December 30, 2024, the consideration to be received by Yerbaé Shareholders pursuant to the Arrangement is fair, from a financial point of view, to the Yerbaé Shareholders. The Evans & Evans Fairness Opinion is not a recommendation as to how any Yerbaé Shareholder should vote or act on any matter relating to the Arrangement. The Evans & Evans Fairness Opinion is being included in this Joint Proxy Statement/Circular by Yerbaé as part of the disclosure to Yerbaé Shareholders as it was one of the factors considered by the Yerbaé Board in their evaluation of the Arrangement and is not being included by Safety Shot for the benefit of Safety Shot Stockholders. For more information, see “Description of the Arrangement – Fairness Opinion of Evans & Evans”.

 

The full text of the Evans & Evans Fairness Opinion, setting out the scope of review, assumptions made, matters considered and limitations and qualifications on the review undertaken in connection with the Evans & Evans Fairness Opinion is attached as Appendix “F-1” to this Joint Proxy Statement/Circular. This summary of the Evans & Evans Fairness Opinion is qualified in its entirety by reference to the full text of the Evans & Evans Fairness Opinion. Yerbaé Shareholders are urged to read the Evans & Evans Fairness Opinion in its entirety for the assumptions made, procedures followed, and other matters considered and limitations of the review by Evans & Evans.

 

Opinion of Newbridge Securities Corporation

 

Safety Shot engaged Newbridge to provide financial advisory services and to assist the Safety Shot Board in the consideration and evaluation of a potential strategic transaction with Yerbaé. At a meeting of the Safety Shot Board held on January 7, 2025 to evaluate the Arrangement Agreement, Newbridge delivered to the Safety Shot Board an oral opinion, which opinion was confirmed by delivery of the Newbridge Fairness Opinion dated January 7, 2025, to the effect that, as of that date and based upon and subject to certain assumptions, factors and qualifications set forth in the written opinion, the Consideration was fair, from a financial point of view, to Safety Shot. For purposes of the Newbridge Fairness Opinion, the term “Consideration” refers to a fraction of a Safety Shot Share equal to the Exchange Ratio (as defined below in “Description of the Arrangement – Opinion of Newbridge”). Newbridge did not express any view on, and the Newbridge Fairness Opinion did not address, any other term or aspect of any other agreements or arrangements contemplated by the Arrangement Agreement or the Plan of Arrangement or entered into or amended in connection with the transactions contemplated thereby.

 

The full text of the Newbridge Fairness Opinion is attached to this Joint Proxy Statement/Circular as Appendix “F-2” and is incorporated into this Joint Proxy Statement/Circular by reference. The description of the Newbridge Fairness Opinion set forth in this Joint Proxy Statement/Circular is qualified in its entirety by reference to the full text of such opinion. Safety Shot Stockholders are encouraged to read the Newbridge Fairness Opinion carefully and in its entirety for a description of the procedures followed, assumptions made, matters considered and qualifications and limitations on the review undertaken by Newbridge in connection with the Newbridge Fairness Opinion. The Newbridge Fairness Opinion was addressed to the Safety Shot Board, was only one of many factors considered by the Safety Shot Board in its evaluation of the Arrangement and only addresses the fairness, from a financial point of view and as of the date of the Newbridge Fairness Opinion, of the Consideration to Safety Shot. The Newbridge Fairness Opinion does not address the relative merits of the Arrangement as compared to other business strategies or transactions that might be available to Safety Shot, nor does it address the underlying business decision of Safety Shot to proceed with the transactions contemplated by the Arrangement Agreement. The Newbridge Fairness Opinion was directed to and for the information of the Safety Shot Board only (in its capacity as such) in connection with its evaluation of the transactions contemplated by the Arrangement Agreement and does not constitute advice or a recommendation to the Safety Shot Board, any Safety Shot Stockholder or any other person as to how the Safety Shot Board, such Safety Shot Stockholder or such other person should vote with respect to the transactions contemplated by the Arrangement Agreement or otherwise act on any other matter with respect to the Arrangement Agreement. The Newbridge Fairness Opinion is being included in this Joint Proxy Statement/Circular by Safety Shot as part of the disclosure to Safety Shot Stockholders as it was one of the factors considered by the Safety Shot Board in its evaluation of the Arrangement and is not being included by Yerbaé for the benefit of Yerbaé Shareholders. For more information, see “Description of the Arrangement – Opinion of Newbridge”.

 

 

The full text of the Newbridge Fairness Opinion, setting out the scope of review, assumptions made, matters considered and limitations and qualifications on the review undertaken in connection with the Newbridge Fairness Opinion is attached as Appendix “F-2” to this Joint Proxy Statement/Circular. This summary of the Newbridge Fairness Opinion is qualified in its entirety by reference to the full text of the Newbridge Fairness Opinion. Safety Shot Stockholders are urged to read the Newbridge Fairness Opinion in its entirety for the assumptions made, procedures followed, and other matters considered and limits of the review by Newbridge.

 

Interests of Yerbaé’s Directors and Management in the Arrangement

 

In considering the recommendation of the Yerbaé Board with respect to the Arrangement, Yerbaé Shareholders should be aware that certain directors and executive officers of Yerbaé may have interests in connection with the Arrangement or may receive benefits in connection therewith that differ from, or are in addition to, the interests of Yerbaé Shareholders generally, including that certain executive officers of Yerbaé will become members of the management of Safety Shot after completion of the Arrangement, which may present them with actual or potential conflicts of interest in connection with the Arrangement. The Yerbaé Board are aware of these interests and considered them along with other matters described herein.

 

Other than the interests and benefits described below and elsewhere in this Joint Proxy Statement/Circular, none of the directors or executive officers of Yerbaé or, to the knowledge of the directors and executive officers of Yerbaé, any of their respective associates or affiliates, has any material interest, direct or indirect, by way of beneficial ownership of securities or otherwise in any matter to be acted upon in connection with the Arrangement or that would materially affect the Arrangement.

 

For more information, see “Description of the Arrangement – Interests of Yerbaé’s Directors and Management in the Arrangement”.

 

Court Approval

 

The Arrangement under the BCBCA requires Court approval. Subject to the terms of the Arrangement Agreement, and upon obtaining approval of the Yerbaé Arrangement Resolution by the Yerbaé Shareholders at the Yerbaé Meeting in the manner required by the Interim Order and the approval of the Safety Shot Stockholder Matters at the Safety Shot Meeting, Yerbaé will apply to the Court for the Final Order. The hearing in respect of the Final Order is scheduled to take place before the Court on [●], 2025 at [●] a.m./p.m. (Vancouver time), or as soon after such time as counsel may be heard. At the Final Order hearing, any Yerbaé Shareholders, as well as holders of Yerbaé RSUs or Yerbaé PSUs (collectively, the “Yerbaé Securityholders”) entitled to receive Consideration Shares pursuant to the Arrangement wishing to appear in person or to be represented by counsel at the hearing of the motion for the Final Order may do so but must comply with certain procedural requirements described in the Interim Order. A copy of the Notice of Application for the Final Order is attached as Appendix “E” to this Joint Proxy Statement/Circular.

 

 

The Court has broad discretion under the BCBCA when making orders with respect to the Arrangement and the Court, in hearing the application for the Final Order, will consider, among other things, the fairness of the Arrangement to Yerbaé Securityholders. The Court may approve the Arrangement, in any manner the Court may direct, and determine appropriate.

 

For more information, see “Description of the Arrangement – Court Approval”.

 

Letter of Transmittal

 

A letter of transmittal has been mailed, together with this Joint Proxy Statement/Circular, to each person who was a Registered Yerbaé Shareholder on the Yerbaé Record Date. Each Registered Yerbaé Shareholder must forward a properly completed and signed letter of transmittal, with accompanying Yerbaé share certificate(s) and all other required documents, as applicable as set out in the letter of transmittal, in order to receive their respective portion of the Consideration to which such Yerbaé Shareholder is entitled under the Arrangement. It is recommended that Yerbaé Shareholders complete, sign and return the letter of transmittal with accompanying Yerbaé Share certificate(s) to a depositary (the “Depositary”) appointed by Safety Shot, to act as depositary in relation to the Arrangement, as soon as possible.

 

Any letter of transmittal, once deposited with the Depositary, shall be irrevocable and may not be withdrawn by a Yerbaé Shareholder except that all letters of transmittal will be automatically revoked if the Depositary is notified in writing by Yerbaé and Safety Shot that the Arrangement Agreement has been terminated or that the Arrangement is not completed. If a letter of transmittal is automatically revoked, the share certificate(s) for the Yerbaé Shares received with the letter of transmittal will be promptly returned to the Yerbaé Shareholder submitting the same at the address specified in the letter of transmittal.

 

For more information, see “Description of the Arrangement – Letter of Transmittal”.

 

Issue and Resale of Safety Shot Shares Received in the Arrangement

 

The issuance of Safety Shot Shares pursuant to the Arrangement will constitute distributions of securities which are exempt from the prospectus requirements of Canadian securities laws and, subject to certain disclosure and regulatory requirements and to customary restrictions applicable to distributions of shares that constitute “control distributions” may be resold in each province and territory in Canada, subject in certain circumstances, to the usual conditions that no unusual effort has been made to prepare the market or create demand. Recipients of Safety Shot Shares are urged to obtain legal advice to ensure that their resale of such securities complies with laws applicable to them, including Canadian securities laws. For more information, see “Description of the Arrangement – Regulatory Matters – Canadian Securities Law Matters – Qualification – Resale of Safety Shot Shares”.

 

The Safety Shot Shares to be issued pursuant to the Arrangement have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “U.S. Securities Act”) and will be issued in reliance on the exemption afforded by Section 3(a)(10) of the U.S. Securities Act and corresponding exemptions from the registration or qualification requirements of state securities laws. Section 3(a)(10) of the U.S. Securities Act exempts from registration the offer and sale of a security which is issued in specified exchange transactions where, among other things, the fairness of the terms and conditions of such exchange are approved after a hearing on the fairness of such terms and conditions, at which all persons to whom it is proposed to issue securities in such exchange have the right to appear, by a court or governmental authority expressly authorized by law to grant such approval and to hold such a hearing. Accordingly, the Final Order, if granted by the Court, constitutes a basis for the exemption from the registration requirements of the U.S. Securities Act with respect to the Safety Shot Shares issued in connection with the Arrangement.

 

 

For more information, see “Description of the Arrangement – Regulatory Matters – U.S. Securities Law Matters – Exemption Relied Upon from the Registration Requirements of the U.S. Securities Act”.

 

The Safety Shot Shares to be issued pursuant to the Arrangement will not be subject to resale restrictions under the U.S. Securities Act, except that the U.S. Securities Act imposes restrictions on the resale of Safety Shot Shares received pursuant to the Arrangement by persons who are at the time of a resale, or who were within three months before the resale, “affiliates” of Safety Shot. An “affiliate” of an issuer is a person that, directly or indirectly, through one or more intermediaries, controls, or is controlled by, or is under common control with, the issuer. Typically, persons who are executive officers, directors or 10% or greater shareholders of an issuer may be considered to be its “affiliates”.

 

For more information, see “Description of the Arrangement – Regulatory Matters – U.S. Securities Law Matters – Resale of Safety Shot Shares Within the United States”.

 

Pro Forma Economic Ownership of the Combined Company

 

Upon completion of the transactions contemplated by the Arrangement Agreement, it is estimated that the issuance of the Consideration Shares in exchange for Yerbaé Shares will result in Yerbaé Shareholders and Safety Shot Stockholders owning approximately 75.8% and 24.2%, respectively, of the outstanding economic interest in the Combined Company.

 

For more information, see “Description of the Arrangement — Pro Forma Economic Ownership of the Combined Company”.

 

Stock Exchange Listing and Reporting Issuer Status

 

The Safety Shot Shares currently trade on the Nasdaq under the symbol “SHOT”. Safety Shot will apply to list the Safety Shot Shares issuable under the Arrangement on the Nasdaq and it is a condition of closing that the Safety Shot Shares to be issued under the Arrangement are listed on the Nasdaq. The Yerbaé Shares are currently quoted on the TSXV under the symbol “YERB.U” and on the OTCQX under the symbol “YERBF”. If the Arrangement is completed, Safety Shot intends to have the Yerbaé Shares delisted from the TSXV and OTCQX and deregistered the Yerbaé Shares under the U.S. Exchange Act.

 

If the Arrangement is completed, Safety Shot intends to cause Yerbaé to apply to cease to be a reporting issuer under the securities legislation of British Columbia and Alberta.

 

Safety Shot is currently not a reporting issuer in any province or territory of Canada and, if the Arrangement is completed, Safety Shot will, as a result of the Arrangement, become a reporting issuer in British Columbia and Alberta upon the completion of the Arrangement. Safety Shot may be exempted from certain Canadian statutory financial and certain other continuous and timely reporting requirements. See the section titled “Description of the Arrangement – Regulatory Matters – U.S. Securities Law Matters” and “Description of the Arrangement – Regulatory Matters – Canadian Securities Law Matters”.

 

 

Treatment of Outstanding Yerbaé Equity Awards

 

Incentive Awards of Yerbaé

 

Immediately before the Effective Time, (i) each Yerbaé PSU issued under the Incentive Plan that is outstanding immediately prior to the Effective Time (whether vested or unvested), will be deemed to be unconditionally fully vested, and thereafter such Yerbaé PSU will, without any further action by or on behalf of the holder of such Yerbaé PSU, be deemed to be settled and the holders of such Yerbaé PSUs will be issued a number of Yerbaé Shares equal to the number of Yerbaé PSU s outstanding immediately prior to the Effective Time; (ii) each Yerbaé RSU issued under the Incentive Plan that is outstanding immediately prior to the Effective Time (whether vested or unvested), will be deemed to be unconditionally fully vested, and thereafter such Yerbaé RSU will, without any further action by or on behalf of the holder of such Yerbaé RSU, be deemed to be settled and the holder thereof of such Yerbaé RSU will be issued such number of Yerbaé Shares equal to the number of Yerbaé RSUs outstanding immediately prior to the Effective Time; and (iii) each Yerbaé Option issued under the Incentive Plan (whether vested or unvested) outstanding immediately prior to the Effective Time, will be deemed to be exchanged for a Replacement Option entitling the holder to purchase Safety Shot Shares. The number of Safety Shot Shares underlying each Replacement Option will equal the number of Safety Shot Shares underlying the Replaced Option multiplied by the Exchange Ratio. The exercise price of each Replacement Option will equal the exercise price of the corresponding Replaced Option divided by the Exchange Ratio and each Replacement Option will be fully vested.

 

For more information, see “Description of the Arrangement – Treatment of Outstanding Yerbaé Convertible Securities – Incentive Awards of Yerbaé”.

 

Warrants and Debentures of Yerbaé

 

At the Effective Time, Safety Shot will assume all obligations of Yerbaé in connection with all outstanding Yerbaé Warrants and the Convertible Debentures. Upon exercise or conversion, as applicable, the holder will be entitled to receive, in substitution for the number of Yerbaé Shares originally issuable under the terms of such Yerbaé Warrant or Convertible Debenture, a number of Safety Shot Shares, adjusted in accordance with the Exchange Ratio. The adjustment seeks to ensure that the value of the Yerbaé Warrants and Convertible Debentures is preserved in the context of the Arrangement, reflecting the exchange between Yerbaé and Safety Shots securities.

 

For more information, see “Description of the Arrangement – Treatment of Outstanding Yerbaé Convertible Securities – Warrants and Debentures of Yerbaé”.

 

The Arrangement Agreement

 

On January 9, 2025, Yerbaé entered into the Arrangement Agreement with Safety Shot pursuant to which, subject to the terms and conditions set forth in the Arrangement Agreement, at the Effective Time, all of the Yerbaé Shares then issued and outstanding immediately prior to the Effective Time (including the Yerbaé Shares to be issued on the settlement of all of the Yerbaé PSUs and Yerbaé RSUs, which will be settled immediately prior to the Effective Time) will be acquired by Safety Shot in consideration for the right to receive 0.2918 Safety Shot Shares per Yerbaé Share, (including the Yerbaé Shares to be issued on the settlement of all of the Yerbaé PSUs and Yerbaé RSUs, which will be settled immediately prior to the Effective Time), for an aggregate of approximately 20 million Safety Shot Shares, based on the anticipated capitalization of Yerbaé at closing. Post closing of the Transaction, the Safety Shot Stockholders are expected to own approximately 75.8% and the Yerbaé Shareholders are expected to own approximately 24.2% of the combined company.

 

 

The terms of the Arrangement Agreement were the result of arm’s length negotiation between Yerbaé and Safety Shot and their respective advisors. For more information, see “The Arrangement Agreement and Related Agreements”.

 

Termination

 

The Arrangement Agreement may be terminated prior to the Effective Time by either party under certain conditions, including (i) by mutual agreement; (ii) if the Effective Time has not occurred on or before the Outside Date (as defined in the Arrangement Agreement); (iii) if either the Yerbaé Shareholder Approval or the Safety Shot Stockholder Approval has not been obtained; (iv) if a change in recommendation by either party occurs; (v) a Safety Shot Material Adverse Effect (as defined below) or Yerbaé Material Adverse Effect (as defined below) occurs and is continuing; (vi) breach of any representation or warranty or failure to perform any covenant or agreement and would cause the applicable conditions precedent not to be satisfied and such conditions are incapable of being satisfied by the Outside Date; or (vii) the Yerbaé Board has authorized a written agreement with respect to a superior proposal. Under certain conditions, either party may be entitled to a Termination Fee equal to $1,750,000 plus certain expenses pertaining to the Transaction. For more information about termination under the Arrangement Agreement, see “The Arrangement Agreement and Related Agreements - Termination”.

 

Procedure for the Plan of Arrangement to Become Effective

 

The Arrangement will be implemented by way of a court-approved plan of arrangement under the BCBCA pursuant to the terms of the Arrangement Agreement. The following procedural steps must be taken in order for the Arrangement to become effective:

 

●

the Court must grant the Interim Order;

 

●

the approval by the Yerbaé Shareholders of the Yerbaé Arrangement Resolution must be obtained;

 

●

the approval by Safety Shot Stockholders of the Safety Shot Share Issuance Proposal and the Safety Shot Incentive Plan Proposal must each be obtained;

 

●

the Court must grant the Final Order approving the Arrangement;

 

●

all requirements under Part 8 Division 5 of the BCBCA must be satisfied; and

 

●

if all other conditions precedent to the Arrangement set out in the Arrangement Agreement, including the approval of the Safety Shot Share Issuance Proposal and the Safety Shot Incentive Plan Proposal, have been satisfied or waived by the appropriate party, the Arrangement will become effective at the Effective Time.

 

For more information, see “Description of the Arrangement – Procedure for the Plan of Arrangement to Become Effective”. For a description of the other conditions precedent to the completion of the Arrangement, see “The Arrangement Agreement and Related Agreements – Conditions to Completion of the Arrangement”.

 

 

Effect of the Arrangement

 

If the Yerbaé Arrangement Resolution is approved by Yerbaé Shareholders, and the Safety Shot Share Issuance Proposal is approved by Safety Shot Stockholders and all other conditions to closing of the Arrangement are satisfied or waived and the Arrangement is completed, among other things, Safety Shot will acquire all of the issued and outstanding Yerbaé Shares and Yerbaé will become a wholly-owned subsidiary of Safety Shot.

 

Pursuant to the Arrangement, each Yerbaé Shareholder (other than Yerbaé Dissenting Shareholders (as defined below)) will receive, for each Yerbaé Share a certain number of Consideration Shares that is expected to result in Safety Shot Stockholders and Yerbaé Shareholders owning approximately 75.8% and 24.2% of the combined company, respectively.

 

For more information, see “Description of the Arrangement – Recommendation of the Yerbaé Board” and “The Arrangement Agreement and Related Agreements – Consideration and Consideration Shares”.

 

The Yerbaé Board has determined that the Arrangement is in the best interest of Yerbaé. The Yerbaé Board unanimously recommends that Yerbaé Shareholders vote FOR the Yerbaé Arrangement Resolution.

 

Safety Shot Equity Incentive Plan

 

The Plan is intended to enable those persons to acquire or increase an ownership interest in Safety Shot in order to strengthen the mutuality of interests between them and the Safety Shot Stockholders, and to provide those such persons with performance incentives to expend their maximum efforts in the creation of stockholder value. For more information on the Plan, see “Description of Equity Incentive Plan”.

 

Corporate Governance and Rights of Certain Yerbaé Shareholders

 

Yerbaé and Safety Shot have agreed that, on or before the Effective Time, Safety Shot will appoint Todd Gibson, Chief Executive Officer of Yerbaé, to the board of directors of the Combined Company (the “Combined Company Board”). The Combined Company Board will consist of seven (7) directors, six (6) of whom currently serve as directors of the Safety Shot Board.

 

For more information, see “Governance and Management of the Combined Company – Board of Directors of the Combined Company”.

 

Following the completion of the transactions contemplated by the Arrangement Agreement, Safety Shot will have principal offices in the United States.

 

Safety Shot is a Delaware corporation. Yerbaé is a company incorporated under the BCBCA. Upon completion of the Arrangement, Yerbaé Shareholders will become Safety Shot Stockholders and their rights as stockholders will be governed by the Certificate of Incorporation of Safety Shot filed on November 25, 2024 (as amended from time to time, the “Current Safety Shot Charter”) and the Bylaws of Safety Shot dated as of July 14, 2020 (as amended from time to time, the “Current Safety Shot Bylaws”, and together with the Current Safety Shot Charter, the “Shot Organizational Documents”) and the DGCL. Certain of the rights associated with the Safety Shot Shares under the DGCL are different from the rights associated with Yerbaé Shares under the BCBCA. For a discussion of the different rights associated with Yerbaé Shares, see “Comparison of Rights of Yerbaé Shareholders and Safety Shot Stockholders” in Appendix “G” to this Joint Proxy Statement/Circular.

 

 

The Meetings

 

Yerbaé Meeting

 

The purpose of the Yerbaé Meeting is for Yerbaé Shareholders to consider and vote on the Yerbaé Arrangement Resolution.

 

The Yerbaé Board unanimously recommends that Yerbaé Shareholders vote FOR the Yerbaé Arrangement Resolution.

 

For more information, see “General Information Concerning the Yerbaé Meeting and Voting – Yerbaé Arrangement Resolution” for additional information.

 

Safety Shot Meeting

 

The purpose of the Safety Shot Meeting is for Safety Shot Stockholders to consider and vote on the Safety Shot Share Issuance Proposal, the Safety Shot Incentive Plan Proposal and the Safety Shot Adjournment Proposal.

 

The Safety Shot Board unanimously recommends that Safety Shot Stockholders vote FOR each of the Safety Shot Proposals.

 

For more information, see “General Information Concerning the Safety Shot Meeting and Voting — Safety Shot Proposal 1: Safety Shot Share Issuance Proposal”, “General Information Concerning the Safety Shot Meeting and Voting – Safety Shot Proposal 2: Safety Shot Incentive Plan Proposal”, “General Information Concerning the Safety Shot Meeting and Voting – Safety Shot Proposal 3: Safety Shot Incentive Proposal”, “General Information Concerning the Safety Shot Meeting and Voting—Safety Shot Proposal 4: Safety Shot Nasdaq Change of Control Proposal”, “General Information Concerning the Safety Shot Meeting and Voting--Safety Shot Proposal 5: Safety Shot Reverse Stock Split Proposal” and “General Information Concerning the Safety Shot Meeting and Voting – Safety Shot Proposal 6: Safety Shot Adjournment Proposal” for additional information.

 

Approval of the Yerbaé Arrangement Resolution

 

The vote required to approve the Yerbaé Arrangement Resolution listed herein assumes the presence of a quorum at the Yerbaé Meeting.

 

No.		Proposal		Votes Necessary
1.		Yerbaé Arrangement Resolution		The Arrangement will become effective only if it is approved by: (i) at least two-thirds (66 2/3%) of the votes cast by Yerbaé Shareholders present or represented by proxy and entitled to vote at the Yerbaé Meeting; and (ii) the affirmative vote of at least a simple majority of the votes cast by Yerbaé Shareholders, voting as a single class, present or represented by proxy and entitled to vote at the Yerbaé Meeting, after excluding the votes cast by certain persons whose votes may not be included in determining minority approval of a business combination pursuant to MI 61-101; and (iii) a simple majority (more than 50%) of the votes cast by Safety Shot Stockholders present or represented by proxy and entitled to vote at the Safety Shot Meeting.

 

 

Abstentions and broker non-votes will not be treated as votes cast, and therefore will have no effect on the outcome of the vote.

 

For more information, see “General Information Concerning the Yerbaé Meeting and Voting – Required Vote”.

 

Approval of the Safety Shot Proposals

 

Except for the Safety Shot Adjournment Proposal, the vote required to approve all of the Safety Shot Proposals listed herein assumes the presence of a quorum at the Safety Shot Meeting.

 

No.		Proposal		Votes Necessary
1.		Safety Shot Share Issuance Proposal		Approval requires the affirmative vote of a majority of the number of Safety Shot Shares present in person or represented by proxy at the Safety Shot Meeting and entitled to vote at the Safety Shot Meeting.
2.		Safety Shot Incentive Plan Proposal		Approval requires the affirmative vote of a majority of the number of Safety Shot Shares present in person or represented by proxy at the Safety Shot Meeting and entitled to vote at the Safety Shot Meeting.
3.		Safety Shot Settlement Proposal		Approval requires the affirmative vote of a majority of the number of Safety Shot Shares present in person or represented by proxy at the Safety Shot Meeting and entitled to vote at the Safety Shot Meeting.
4.		Safety Shot Nasdaq Change of Control Proposal		Approval requires the affirmative vote of a majority of the number of Safety Shot Shares present in person or represented by proxy at the Safety Shot Meeting and entitled to vote at the Safety Shot Meeting.
5.		Safety Shot Reverse Stock Split Proposal		Approval requires the affirmative vote of a majority of the votes cast by stockholders present at the Safety Shot Meeting and entitled to vote at the Safety Shot Meeting; provided that the Safety Shot common stock is listed on Nasdaq immediately before the Safety Shot Reverse Stock Split becomes effective and meets the listing requirements of Nasdaq relating to the minimum number of holders immediately after the Safety Shot Reverse Stock Split becomes effective (the “Listing Condition”). If the Listing Condition is not met, the Safety Shot Reverse Stock Split Proposal must receive the affirmative vote of the holders of a majority of issued and outstanding shares of Safety Shot common stock as of the Safety Shot Record Date.
6.		Safety Shot Adjournment Proposal		Approval requires the affirmative vote of a majority of the of the Safety Shot Shares present or represented by proxy at the Safety Shot Meeting.

 

Only Registered Safety Shot Stockholders are entitled to vote at the Safety Shot Meeting. Each Registered Safety Shot Stockholder has one vote for each Safety Shot Share held at the close of business on the Safety Shot Record Date. As of the Safety Shot Record Date, there were [●] Safety Shot Shares outstanding.

 

 

Any abstentions with respect to the Safety Shot Share Issuance Proposal, the Safety Shot Incentive Plan Proposal, the Safety Shot Settlement Proposal, the Safety Shot Nasdaq Change of Control Proposal and the Safety Shot Adjournment Proposal will be counted for purposes of determining whether a quorum is present at the Safety Shot Meeting and have the same effect as a vote against such proposal. Banks, brokers and other nominees that hold their customers’ shares in street name may not vote their customers’ shares on “non-routine” matters without voting instructions from their customers. As each of the Safety Shot Share Issuance Proposal, the Safety Shot Incentive Plan Proposal, the Safety Shot Settlement Proposal, the Safety Shot Nasdaq Change of Control Proposal and the Safety Shot Adjournment Proposal to be voted upon at the Safety Shot Meeting are considered “non-routine,” such organizations do not have discretion to vote on any of these proposals for which they do not receive voting instructions from their customers (this is referred to in this context as a “broker non-vote”). Therefore, if you fail to provide your bank, broker or other nominee with any voting instructions regarding how to vote your Safety Shot Shares with respect to the Safety Shot Share Issuance Proposal, the Safety Shot Incentive Plan Proposal, the Safety Shot Settlement Proposal, the Safety Shot Nasdaq Change of Control Proposal and the Safety Shot Adjournment Proposal, your Safety Shot Shares will not be voted on these proposals. Broker non-votes with respect to these proposals will not be treated as votes cast, and therefore will have no effect on the outcome of the vote.

 

Any abstentions with respect to the Safety Shot Reverse Stock Split Proposal will be counted for purposes of determining whether a quorum is present at the Safety Shot Meeting, provided the Listing Condition is met, have no effect on the Safety Shot Reverse Stock Split Proposal. If the Listing Condition is not met, any abstentions with respect to the Safety Shot Reverse Stock Split Proposal will have the same effect as a vote against the proposal. As the Safety Shot Reverse Stock Split Proposal is not contingent upon the closing of the Arrangement and it is the intention of the Safety Shot Board to implement the Safety Shot Reverse Stock Split regardless of whether the Transaction is approved and consummated, the Safety Shot Reverse Stock Split Proposal is considered “routine.” Accordingly, banks, brokers and other nominees that hold their customers’ shares in street name may vote their customers’ shares without voting instructions from their customers on the Safety Shot Reverse Stock Split Proposal and such organizations have discretion to vote on the Safety Shot Reverse Stock Split Proposal if they do not receive voting instructions from their customers. Therefore, if you fail to provide your bank, broker or other nominee with any voting instructions regarding how to vote your Safety Shot Shares with respect to the Safety Shot Reverse Stock Split Proposal, your Safety Shot Shares will be considered present at the Safety Shot Meeting, will be counted for purposes of determining the presence of a quorum at the Safety Shot Meeting and may be voted by your bank, broker or other nominee with respect to the Safety Shot Reverse Stock Split Proposal.

 

For more information, see “General Information Concerning the Safety Shot Meeting and Voting — Required Vote”.

 

Yerbaé Shareholder Dissent Rights

 

The Interim Order expressly provides Registered Yerbaé Shareholders with the right to dissent (the “Dissent Rights”) from the Yerbaé Arrangement Resolution. Any Registered Yerbaé Shareholder who dissents from the Yerbaé Arrangement Resolution in accordance with Division 2 of Part 8 of the BCBCA, as modified by the Interim Order, the Final Order and the Plan of Arrangement (each, a “Yerbaé Dissenting Shareholder”), will be entitled to be paid the fair value of the Yerbaé Shares held by such Yerbaé Dissenting Shareholder determined as of the close of business on the day before the Yerbaé Arrangement Resolution is adopted.

 

Failure to strictly comply with the requirements set forth in Division 2 of Part 8 of the BCBCA, as modified by the Interim Order, the Final Order and the Plan of Arrangement, may result in the loss of any right of dissent.

 

If you wish to exercise Dissent Rights, you should review the requirements summarized in this Joint Proxy Statement/Circular carefully and consult with your legal advisor. For more information, see “Description of the Arrangement – Dissent Rights of Yerbaé Shareholders”, “General Information Concerning the Yerbaé Meeting and Voting – Yerbaé Dissenting Shareholders’ Rights”, and Appendix “H” of this Joint Proxy Statement/Circular.

 

 

Accounting Treatment

 

The acquisition of Yerbaé by Safety Shot is expected to be accounted for as a business combination in accordance with Accounting Standards Codification Topic 805-10, Acquisition of a Business, because the acquired set of assets and activities include a substantive process. Accordingly, the cost of the net assets is expected to be allocated to the acquired assets and assumed liabilities based upon their relative fair values at the Effective Time. The excess fair value of net assets acquired over the fair value of the stock consideration provided by Safety Shot is expected to be recognized as goodwill in Safety Shot’s balance sheets.

 

For more information, see “Description of the Arrangement – Accounting Treatment”.

 

Certain Canadian Federal Income Tax Considerations

 

Yerbaé Shareholders should carefully read the information in this Joint Proxy Statement/Circular under “Certain Canadian Federal Income Tax Considerations”, which qualifies the information set out below, and should consult their own tax advisors as to the particular consequences that may apply to them as a result of the Arrangement.

 

Yerbaé Shareholders who are residents of Canada for purposes of the Tax Act should be aware that the exchange of Yerbaé Shares for Safety Shot Shares under the Arrangement will generally be a taxable transaction for Canadian federal income tax purposes.

 

Yerbaé Shareholders who are not residents of Canada for purposes of the Tax Act and that do not hold their Yerbaé Shares as “taxable Canadian property” (as defined in the Tax Act) will generally not be subject to tax under the Tax Act on the disposition of their Yerbaé Shares under the Arrangement.

 

Certain U.S. Federal Income Tax Considerations

 

Yerbaé Shareholders should carefully read the information in this Joint Proxy Statement/Circular under “Certain U.S. Federal Income Tax Considerations”, which qualifies the information set out below, and should consult their own tax advisors as to the particular consequences that may apply to them as a result of the Arrangement.

 

Yerbaé Shareholders who are U.S. Holders (as defined below under “Certain U.S. Federal Income Tax Considerations”) should generally recognize gain or loss as a result of the Arrangement for U.S. federal income tax purposes in an amount equal to the difference, if any, between the fair market value as of the Effective Date of the Safety Shot Shares received by such holders in the Arrangement and the adjusted tax basis of the Yerbaé Shares surrendered in the Arrangement.

 

Yerbaé Shareholders who are Non-U.S. Holders (as defined under “Certain U.S. Federal Income Tax Considerations”) generally should not be subject to U.S. federal income tax on any gain.

 

No Fractional Shares

 

In no event will any Yerbaé Shareholder be entitled to a fractional Safety Shot Share. Where the aggregate number of Safety Shot Shares to be issued to a Yerbaé Shareholder as consideration under the Arrangement would result in a fraction of a Safety Shot Share being issuable, the number of Safety Shot Shares to be received by such Yerbaé Shareholder will be rounded to the nearest whole Safety Shot Share.

 

 

For more information, see “Description of the Arrangement – Exchange Procedure – No Fractional Shares”.

 

Risk Factors

 

There are a number of risk factors relating to the Arrangement, the business of Yerbaé, the business of Safety Shot and the business of the Combined Company, government regulation and taxes all of which should be carefully considered by Yerbaé Shareholders and Safety Shot Stockholders.

 

For more information, see “Risk Factors – Risks Related to the Arrangement”, “Risk Factors – Risks Related to the Combined Company”, “Risk Factors – Risks Related to Government Regulation”, “Risk Factors – Risks Related to Taxes” and “Information Concerning Safety Shot – Risks and Uncertainties”.

 

Depositary

 

Yerbaé and Safety Shot have retained the services of the Depositary for the receipt of the letters of transmittal and the certificates representing Yerbaé Shares and for the delivery of the Consideration for the Yerbaé Shares under the Arrangement. The Depositary will receive reasonable and customary compensation for its services in connection with the Arrangement, will be reimbursed for certain reasonable out-of-pocket expenses and will be indemnified against certain liabilities, including liabilities under securities laws and expenses in connection therewith.

 

For more information, see “Description of the Arrangement – Depository”.

 

Yerbaé Selected Historical Financial Information

 

The following tables set forth selected historical consolidated financial information of Yerbaé for the periods presented. The consolidated statements of comprehensive loss and consolidated balance sheets information for the years ended December 31, 2024 and 2023 and the other financial information as of December 31, 2024 have been derived from Yerbaé’s audited consolidated financial statements and related notes included in Yerbaé’s Annual Report on Form 10-K for the year ended December 31, 2024, which are incorporated by reference into this Joint Proxy Statement/Circular.

 

 

The historical results presented below are not necessarily indicative of the results to be expected for any future period. You should read carefully the following selected information in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Yerbaé’s Annual Report on Form 10-K for the year ended December 31, 2024 and 2023 and Yerbaé’s historical consolidated financial statements and the notes thereto, each of which are incorporated by reference into this Joint Proxy Statement/Circular.

 

Consolidated Statements of Comprehensive Loss

 

		For the Year Ended December 31,
		2024				2023
Revenues		$	5,905,541			$	12,016,378
Cost of sales			2,891,334				5,976,077
Gross profit		$	3,014,207			$	6,040,301
General and administrative		$	11,058,479			$	719,299,491
Sales, advertising and marketing			1,239,443				6,905,303
Total expenses		$	12,297,922			$	26,204,794
Net loss before other income (expense)			(9,283,715	)			(20,164,493	)
Interest and accretion expense			1,334,972				659,546
Net loss before income taxes			(10,618,687	)			(20,824,039	)
Income tax expense			-				-
Net loss and comprehensive loss		$	(10,618,687	)		$	(20,824,039	)
Basic and diluted loss per share		$	(0.17	)		$	(0.39	)
Basic and diluted weighted average shares outstanding			62,258,734				53,850,285

 

 

Consolidated Balance Sheets

 

		Year ended December 31,
		2024				2023
CURRENT ASSETS
Cash		$	124,214				977,373
Accounts receivable			364,886				1,020,056
Inventory			676,020				962,288
Prepaid expenses			452,903				721,432
Other current assets			150,000				150,000
Total current assets		$	1,768,023				3,831,149
NONCURRENT ASSETS
Property, plant and equipment, net			26,740				60,453
Right of use asset			119,445				210,208
Total noncurrent assets		$	145,915				270,661
Total assets		$	1,913,938				4,101,810
CURRENT LIABILITIES
Accounts payable		$	2,377,758				1,689,407
Accrued expenses			1,076,832				840,426
Notes payable, current portion			3,989,533				340,178
Note payable, related party			337,667				-
Lease liability, current portion			131,563				117,660
Advances			225,000				-
Total current liabilities		$	8,138,353				2,987,671
NONCURRENT LIABILITIES
Notes payable, non-current portion			10,977				2,234,038
Lease liability, non-current portion			23,544				155,107
Total noncurrent liabilities		$	34,521				2,389,145
Total liabilities		$	8,172,874				5,376,816
SHAREHOLDERS’ DEFICIENCY
Preferred shares - 100,000,000 authorized, zero issued and outstanding as of both December 31, 2024 and December 31, 2023		$	-
Common shares - without par value, 63,085,228 and 58,822,126 shares issued and outstanding at December 31, 2024 and December 31, 2023, respectively.			-
Additional paid-in capital			38,847,388				33,212,631
Accumulated deficit			(45,106,324	)			(34,487,637	)
Total deficiency		$	(6,258,936	)			(1,275,006	)
Total Liabilities & shareholders’ deficiency		$	1,913,938				4,101,810

 

 

Safety Shot Selected Historical Financial Information

 

The following tables set forth selected historical financial information of Safety Shot for the periods presented. The statement of operations information for the years ended December 31, 2024 and 2023 and the other financial information as of December 31, 2024 have been derived from Safety Shot’s audited financial statements and related notes included in Safety Shot’s Annual Report on Form 10-K for the year ended December 31, 2024, which are incorporated by reference into this Joint Proxy Statement/Circular.

 

The historical results presented below are not necessarily indicative of the results to be expected for any future period. You should read carefully the following selected information in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Safety Shot’s Annual Report on Form 10-K for the year ended December 31, 2024, and Safety Shot’s historical financial statements and the notes thereto, each of which are incorporated by reference into this Joint Proxy Statement/Circular.

 

Consolidated Balance Sheets

 

		For the Years Ended December 31,
		2024				2023
Assets
Cash		$	348,816			$	3,833,349
Marketable Securities			54,720				842,976
Inventory			233,510				795,824
Accounts and other receivables			283,561				5,585
Prepaid expenses and deposits			920,189				1,469,733
Investment in Yerbae Brands			225,000				-
Investment in SRM & Affiliates			3,000				657,183
Other current assets			-				86,174
Note Receivable			511,557				-
Total current assets			2,580,353				7,690,824
Right of Use assets			299,722				479,027
Intangible assets, net of amortization			4,364,321				4,511,057
Fixed assets, net of depreciation			94,007				28,272
Total assets		$	7,338,403			$	12,709,180
Liabilities and Shareholders’ Equity
Accounts payable		$	2,218,810			$	1,493,809
Convertible notes			5,250,000				1,500,000
Current portion of lease liability			212,964				214,752
Accrued expenses			1,433,245				269,152
Accrued liabilities			234,360				60,450
Covid-19 SBA Loan			47,928				48,974
Total current liabilities			9,397,307				3,587,137
Long-term portion lease liability			114,148				304,907
Total liabilities			9,511,455				3,892,044
Preferred stock, $0.001 par value, 100,000 shares authorized, of which none are issued and outstanding			-				-
Common stock, $0.001 par value, 250,000,000 shares authorized, of which 62,640,314 and 45,634,154 shares were issued and outstanding as of December 31, 2024 and 2023			62,640				45,634
Additional paid-in capital			110,856,719				73,726,987
Common stock payable			1,997,936				725,230
Accumulated deficits			(115,090,347	)			(65,680,715	)
Total Shareholders’ Equity (Deficit)			(2,173,052	)			8,817,136
Total Liabilities and Shareholders’ Equity		$	7,338,403			$	12,709,180

 

 

Consolidated Statement of Operations

 

		For the Years Ended December 31,
		2024				2023
Revenue
Sales		$	701,967			$	202,670
Cost of Sales			3,147,724				277,127
Gross profit (loss) from continuing operations			(2,445,757	)			(74,457	)
Operating expense
General and administrative expenses			39,611,915				12,524,869
Total operating expenses			39,611,915				12,524,869
Other income / (expense)
Interest income			57,602				57,340
Interest expense			(175,927	)			(171,433	)
Other income / (expense)			(5,373,426	)			(1,243,676	)
Unrecognized gain / (loss) on equity investment			(862,407	)			(864,418	)
Total other income (expense)			(6,354,158	)			(2,222,187	)
Net (loss) from continuing operations		$	(48,411,830	)		$	(14,821,513	)
Income (loss) from discontinued operations			(997,802	)			(261,528	)
Net (loss)		$	(49,409,632	)		$	(15,083,041	)
Deemed Dividend			(2,293,301	)			-
Loss attributable to shareholders		$	(51,702,933	)			(15,083,041	)
Net (loss) per share:
Basic		$	(0.91	)		$	(0.49	)
Diluted		$	(0.91	)		$	(0.49	)
Loss per share attributed to common shareholders		$	(0.95	)		$	-
Weighted average number of shares
Basic			54,441,190				30,877,804
Diluted			54,441,190				30,877,804

 

 

Consolidated Statement of Cash Flows

 

		For the Years Ended December 31,
		2024				2023
Cash flows from continuing operating activities:
Net (loss)		$	(48,411,830	)		$	(14,821,513	)
Depreciation & Amortization			428,828				214,142
Gain on sale of fixed assets			-				(23,308	)
Fair value of stock-based compensation			5,120,300				1,118,155
Fair value of options issued for services			15,013,755				108,263
Fair value of warrants issued for services			-				910,663
Fair value of shares issued from Convertible note extinguishment			(84,219	)			1,120,333
Unrealized loss on equity investment			599,155				864,418
Realized gain/loss on sale of marketable securities			269,723				(238,834	)
Unrealized loss on marketable securities			101,088				1,511,488
Bad debt expense			89,328				7,022
Gain on sale of SRM stock			(431,972	)			-
Accrued losses on settlements			7,389,092				-
Adjustment to reconcile net income to net cash provided by (used in) operating activities
Prepaid expenses and deposits			635,718				(1,045,861	)
Right of Entry asset			179,305				164,950
Accounts receivable			(367,304	)			367,024
Inventory			562,314				(608,004	)
Other assets			-				(86,174
Accounts payable			725,001				(255,750	)
Accrued expenses			284,517				141,842
Lease liability			(192,547	)			(164,170	)
Net cash (used in) continuing operating activities			(18,089,748	)			(10,715,314	)
Cash flows from discontinued operating activities:
Income (loss) from discontinued operations			(997,802	)			(261,528	)
Reclassification of assets and liabilities to held for sale			-				863,065
Cash provided from discontinued operations			(997,802	)			601,537
Cash flows from investing activities:
Cash paid for purchase of assets			(87,162	)			(106,153	)
Cash paid for investment			(739,557	)			-
Cash paid for marketable securities			-				(545,130	)
Cash paid for purchase of intangible assets			-				(2,200,000	)
Cash paid for SRM Inc.			-				(390,478	)
Cash received from SRM Ltd. loan repayment			-				1,534,814
Cash received for sale of marketable securities			490,000				869,834
Net change to value of marketable securities			-				467,966
Cash paid for intangible assets			417,445				-
Purchase of equipment			(85,665	)			-
Proceeds from sale of assets			-				39,100
Net cash (used in) investing activities			(4,939	)			(330,047	)
Cash flows from financing activities:
Cash received upon exercise of options			76,000				-
Cash received upon warrant conversions			3,962,714				13,456,912
Deconsolidation of subsidiary			943,722				-
Shares issued for private placements			10,625,519				-
Loans to affiliates			-				(699,952	)
Borrowings on debt			-				199,097
Payments on debt			-				(156,436	)
Net cash (used in) provided by financing activities			15,607,955				12,799,621
Net increase (decrease) in cash and cash equivalents			(3,484,534	)			2,355,797
Cash and cash equivalents at the beginning of the period			3,833,349				1,477,552
Cash and cash equivalents at the end of the period		$	348,816			$	3,833,349
SUPPLEMENTAL CASH FLOW INFORMATION:
Non-cash items:
Reclassification of Held to Maturity investments to Marketable Securities		$	-			$	3,417,100
Shares issued from stock payable for services		$	113,500			$	192,000
Shares issued for GBB asset purchase		$	175,000			$	2,468,500
Reclassification for SRM Ltd deconsolidation		$	-			$	146,800
Conversion of promissory note for common stock		$	1,542,457			$	500,000
Common stock issued from stock payable on extinguishment of debt		$	245,044				-
Common stock issued from stock payable on convertible note		$	344,196			$	-

 

 

Summary Unaudited Pro Forma Combined Financial Information

 

The table “Unaudited Pro Forma Condensed Combined Financial Information and Per Share Data” shows summary selected unaudited pro forma condensed combined financial information (the “Summary Pro Forma Information”) about the financial condition and results of operations of Safety Shot as of and for the periods indicated above after giving effect to the Arrangement. The Summary Pro Forma Information is based on the historical financial statements of Safety Shot and the historical financial statements of Yerbaé and has been prepared to reflect the Arrangement. The Summary Pro Forma Information is presented for illustrative purposes only and does not necessarily reflect the results of operations or the financial position of Safety Shot that actually would have resulted had the Arrangement occurred at the date indicated, nor project the results of operations or financial position of Safety Shot for any future date or period.

 

The Summary Pro Forma Information should be read in conjunction with the unaudited pro forma condensed combined financial statements of Safety Shot that give effect to the Arrangement included in this Joint Proxy Statement/Circular, the historical financial statements and related notes of Safety Shot in its Annual Report on Form 10-K for the year ended December 31, 2024 which is incorporated by reference into this Joint Proxy Statement/Circular and the information under “Risk Factors”.

 

For more information, see “Unaudited Pro Forma Condensed Combined Financial Information and Per Share Data”.

 

Basis of Presentation and Business Combination

 

The following Unaudited Pro Forma Condensed Combined Balance Sheet as of December 31, 2024, and the summary Unaudited Pro Forma Condensed Combined Statements of Operations for the year ended December 31, 2024 presents the combination of (a) the financial information of Safety Shot, Inc. and Yerbaé Brands Corp. and b) related pro forma adjustments described in the accompanying notes to the Unaudited Pro Forma Condensed Combined Financial Information. The Pro Forma financial information has been prepared in accordance with Article 11 of Regulation S-X.

 

The Unaudited Pro Forma Condensed Combined Balance Sheet as of December 31, 2024 combines the historical balance sheet of Safety Shot, Inc. and Yerbaé Brands Corp. on a pro forma basis as if the Business Combination had been consummated on December 31, 2024. The Unaudited Pro Forma Condensed Combined Statements of Operations for the year ended December 31, 2024 combines the historical statements of operations of Safety Shot, Inc. and Yerbaé Brands Corp. for such period on a pro forma basis as if the transaction, summarized below, had been consummated on January 1, 2024, the beginning of the earliest period presented.

 

The unaudited pro forma condensed combined financial information is based on and should be read in conjunction with the historical financial statements of each of Safety Shot, Inc. and Yerbaé Brands Corp. and the notes thereto included in this filing.

 

 

Safety Shot, Inc. and Yerbaé Brands Corp.

Unaudited Pro Forma Condensed Combined Balance Sheet

As of December 31, 2024

 

		As of December 31, 2024								Transaction						As of December 31, 2024
		Safety Shot, Inc. (Historical)				Yerbae Brands Corp. (Historical)				Accounting Adjustments						Pro Forma Combined
ASSETS
Current assets:
Cash and cash equivalents		$	348,816			$	124,214			$	(124,214	)		A		$	348,816
Accounts receivable			283,561				364,886										648,447
Marketable securities			54,720				-										54,720
Inventory			233,510				676,020										909,530
Prepaid expenses			920,189				452,903										1,373,092
Investment in SRM & Affiliates			3,000				-										3,000
Investment in Yerbae Brands			225,000				-										-
Notes Receivable			511,557				-										511,557
Other current assets			-				150,000										150,000
Total current assets			2,580,353				1,768,023				(124,214	)					3,999,162
Non-current assets:
Right of Use assets			299,722				119,445										419,167
Goodwill			-				-				18,055,150			B			18,055,150
Intangible assets, net of amortization			4,364,321				-				2,728,000			C			7,092,321
Fixed assets, net of depreciation			94,007				26,470										120,477
Total non-current assets			4,758,050				145,915				20,783,150						25,687,115
TOTAL ASSETS			7,338,403				1,913,938				20,658,936						29,686,277
LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS’ DEFICIT
Accounts payable		$	2,218,810			$	2,377,758									$	4,596,568
Convertible note payable			5,250,000				-										5,250,000
Current portion of lease liability			212,964				131,563										344,527
Accrued liabilities			1,667,605				1,076,832				500,000			D			3,244,437
Covid-19 SBA Loan			47,928				-										47,928
Notes payable, current portion			-				3,989,533										3,989,533
Notes payable, related party			-				337,667										337,667
Advances			-				225,000										225,000
Total current liabilities			9,397,307				8,138,353				500,000						18,035,660
Non-current liabilities:
Long term portion of lease liability			114,148				23,544				-						137,692
Notes payable, non-current portion			-				10,977										10,977
Total non-current liabilities			114,148				34,521				-						148,669
Total liabilities			9,511,455				8,172,874				500,000						18,184,329
COMMITMENTS AND CONTINGENCIES
Stockholders’ equity (deficit):
Preferred stock, $0.001 par value, 100,000 shares authorized, of which none are issued and outstanding			-				-				-						-
Common stock, $0.001 par value, 250,000,000 shares authorized, of which 62,640,314 shares were issued and outstanding as of December 31, 2024			62,640				-				20,000			E			82,640
Preferred shares - 100,000,000 authorized, zero issued and outstanding as of December 31, 2024			-				-										-
Common shares - without par value, 63,085,228 shares issued and outstanding at December 31, 2024			-				-										-
Additional paid-in capital			110,856,719				38,847,388				14,380,000			E			125,236,719
											(38,847,388	)		F
Common stock payable			1,997,936				-										1,997,936
Accumulated deficit			(115,090,347	)			(45,106,324	)			45,106,324			F			(115,590,347	)
											(500,000	)		D
Total stockholders’ equity (deficit)			(2,173,052	)			(6,258,936	)			20,158,936						11,726,948
TOTAL LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS’ EQUITY (DEFICIT)		$	7,338,403			$	1,913,938			$	20,658,936					$	29,911,277
Check			-				-				-						-

 

Adjustments to Unaudited Pro Forma Condensed Combined Balance Sheet

 

The pro forma adjustments included in the Unaudited Pro Forma Condensed Combined Balance Sheet as of December 31, 2024, are as follows:

 

	(A)	Reflects the removal of Yerbaé’s cash and cash equivalents as the amount will not be acquired as part of the transaction.
	(B)	Represents goodwill recognized as part of the transaction.
	(C)	Represents the fair value of intangible assets recognized as part of the transaction.
	(D)	Represents estimated transactions costs incurred subsequent to December 31, 2024. All transaction costs incurred have been expensed in accordance with ASC 805.
	(E)	Represents the increase to equity based on 20 million shares assumed to be issued by the acquirer.
	(F)	Represents reversal of Yerbaé’s additional-paid-in-capital and accumulated deficit balance due to the acquisition.