Strengthens Balance Sheet and Supports Growth Initiatives
Cizzle Brands Corporation (trading on Cboe Canada under the symbol CZZL, OTCQB: CZZLF, and Frankfurt: 8YF) has announced a significant milestone in its corporate financing strategy with the successful closing of a senior secured convertible note transaction alongside Ascent Partners Fund LLC. The financing, which brings in gross proceeds of US$6.2 million, represents a key step in strengthening the company’s financial foundation as it accelerates the expansion of its sports nutrition and hydration business across North America and international markets.
In addition to the senior secured convertible note issued to Ascent Partners Fund LLC, the company has also secured a commitment for an additional C$1.0 million unsecured convertible note from a single accredited investor. However, this portion of the financing remains subject to approval from Cboe Canada. Collectively, these two funding arrangements are referred to as the “Financings” by the company.
Strategic Purpose of the Financing
According to Cizzle Brands, the primary objective of the capital raise is to enhance working capital and support general corporate requirements. More specifically, the company plans to allocate proceeds toward the continued expansion of its flagship hydration product, CWENCH Hydration™, in both the United States and Canadian retail markets. This includes scaling distribution channels, increasing brand visibility, and supporting ongoing partnerships with major retail outlets.
The company also intends to use the funds to support operational growth at its CWENCH Hydration Factory, which plays a central role in its vertically integrated production and supply chain strategy. As demand for its products continues to increase, the facility is expected to serve as a critical infrastructure asset enabling consistent supply, improved margins, and faster market responsiveness.
Management has emphasized that the financing arrives at a strategically important time for the company, as it transitions from early-stage commercial expansion into a broader phase of scaling and market penetration across multiple geographies.
Detailed Structure of the Ascent Financing
The senior secured convertible note issued to Ascent Partners Fund LLC is structured with a principal amount of US$6,720,867.21. However, Ascent purchased the note for US$6,200,000, reflecting an original issue discount built into the financing structure. Alongside the note, Ascent received additional equity-linked instruments, including 21,460,534 common share purchase warrants and 429,210 common shares issued as a one-time closing fee.
The closing shares represent 1.5% of the principal value of the note and were issued at a valuation of C$0.32 per share. This structure is commonly used in convertible debt financing to align investor incentives with company performance while providing immediate capital efficiency to the issuer.
The note carries an 18-month maturity period and bears interest at an annual rate of 9.5%, payable monthly in arrears. Importantly, interest payments are contractually guaranteed for the full term of the note, providing additional security to the investor. The company retains optional flexibility to settle scheduled amortization and interest payments in either cash or common shares, subject to customary equity payment conditions being met. This optionality provides the company with additional liquidity management flexibility during its expansion phase.
Conversion Features and Warrants
The convertible nature of the note allows the holder, Ascent Partners Fund LLC, to convert all or part of the outstanding principal (excluding portions tied to the original issue discount) into common shares of the company. The conversion price is set at the U.S. dollar equivalent of C$0.32 per common share, subject to standard anti-dilution protections that are typical in such agreements.
In addition to the conversion feature, the warrants issued alongside the financing provide Ascent with the right to purchase additional common shares at the same exercise price of C$0.32 per share, also adjusted into U.S. dollar terms. These warrants remain valid for a five-year period, offering a long-term equity participation mechanism.
A notable feature of the warrant structure is the inclusion of a forced exercise provision. Under this clause, the company may compel warrant exercise if the ten-day volume-weighted average price (VWAP) of its common shares reaches or exceeds C$0.96, provided certain trading volume conditions are satisfied. This mechanism is designed to allow the company to potentially accelerate equity conversion in favorable market conditions.
Security and Collateral Structure
The Ascent Note is secured by a second-priority subordinated lien over substantially all assets of Cizzle Brands and certain of its subsidiaries. This means that while the note is secured, it ranks behind existing senior credit facilities. The structure is subject to intercreditor agreements and standstill provisions involving the company’s existing senior lenders, including OIC Investment Agent, LLC, RI Flow Sub LLC, and eCapital Asset Based Lending Corp.
Certain subsidiaries of the company have also provided guarantees to support the obligations under the note, further strengthening the security package provided to Ascent. This layered structure reflects a balance between providing investor protection while maintaining flexibility for existing debt arrangements.
Prepayment Conditions and Capital Discipline
The financing agreement includes prepayment obligations tied to future capital raises. Specifically, the company is required to prepay 20% of net proceeds from certain equity or debt issuances up to US$10 million. For issuances exceeding US$10 million, the prepayment requirement increases to 33% of net proceeds.
These provisions are subject to the holder’s conversion rights and other customary exceptions. Such clauses are commonly included in structured financing agreements to ensure that lenders participate in upside liquidity events while still allowing operational flexibility for the issuer.
Leadership Commentary and Strategic Outlook
John Celenza, Founder, Chairman, and Chief Executive Officer of Cizzle Brands, described the financing as a transformative development for the company at a critical stage in its growth trajectory. He highlighted that the company is entering what he considers its most commercially significant phase, driven by expanding retail distribution and increased production capacity.
According to Celenza, CWENCH Hydration™ is now available through major retail partners, including Walmart Canada and Target in the United States, with distribution reaching more than 6,000 points across North America and Europe. This expansion reflects the company’s growing international footprint and increasing brand traction in the competitive sports hydration category.
He further noted that the CWENCH Hydration Factory is currently ramping up production capacity, which will enable the company to meet rising demand while maintaining supply chain efficiency. The newly secured capital is expected to provide the necessary financial flexibility to support these operational scaling efforts, fund additional retail expansion initiatives, and advance strategic partnerships.
Celenza also expressed appreciation for the continued support of existing shareholders and welcomed Ascent Partners Fund LLC as a new institutional investor. He characterized the financing as an endorsement of the company’s long-term vision and execution strategy.
Placement Agent and Transaction Execution
Joseph Gunnar & Co., LLC served as the exclusive placement agent for the Ascent Financing. In recognition of its role in structuring and executing the transaction, the company paid a cash placement fee and issued compensation warrants to the firm or its designated affiliates. These fees were determined in accordance with the engagement agreement dated March 5, 2026.
Regulatory and Securities Disclaimer
Cizzle Brands emphasized that the press release does not constitute an offer to sell or a solicitation to purchase securities in any jurisdiction. The securities issued under the financing arrangements have not been registered under the United States Securities Act of 1933 or applicable state securities laws. As a result, they may not be offered or sold within the United States unless registered or exempt from registration requirements.
About Cizzle Brands Corporation
Cizzle Brands Corporation is a vertically integrated sports nutrition company that is elevating the game in health and wellness. Through extensive collaboration and testing with leading athletes and trainers across several sports, Cizzle Brands has launched three game-changing brands: (i) CWENCH Hydration™, abetter-for-you sports drink that is now carried in over 6,200 locations in Canada, the United States, and Europe; (ii) Spoken™ Nutrition, a premium brand of athlete-grade nutraceuticals that carry the prestigious NSF Certified for Sport® qualification; and (iii) HappiEats™, upgrading everyday eats with high-performance foods such as Sport Pasta™ and SnakStars™ Sport Bites. It also owns and operates The CWENCH Hydration Factory, a manufacturing facility that produces CWENCH Hydration and other leading beverage brands in Tetra Pak packaging. All Cizzle Brands products are designed to help people of all ages achieve their best in competitive sports and in living a healthy, vibrant, active lifestyle.
