Big Rock Brewery 2021 Capital Program

For Immediate Release

BIG ROCK BREWERY INC. ANNOUNCES STRATEGIC CAPITAL PLAN IN CALGARY AND CONCURRENT CREDIT FACILITY EXPANSION

Highlights:

• The Big Rock Board of Directors has approved a 2021 capital plan of $8.8 million focused on enhanced packaging capabilities at its Calgary facility, IT and digital transformation projects and maintenance capital;

• Upon completion scheduled for early fourth quarter 2021, Big Rock will have over 1.6 million hectolitres of total packaging capacity with significant flexibility for various can formats, bottles and kegs; and

• The expansion of Big Rock’s existing credit facilities with ATB Financial to a total capacity of $16.0 million, an increase of 45% from $11.0 million.
February 9, 2021 — Calgary, Alberta — Big Rock Brewery Inc. (TSX: BR) (“Big Rock” or the “Corporation”), Western Canada’s largest independent brewer, today announced its Board of Directors (the “Board”) has approved an $8.8 million 2021 capital plan focused on strategic equipment investments to expand the packaging capabilities at its Calgary facility and the modernization of its production, sales, marketing and finance processes through investments in information technology (“IT”). The capital plan supports the Corporation’s growth strategy with its current owned brands, new innovations and its rapidly growing co-packing business.  We believe Big Rock is one of the best positioned manufacturers in Western Canada to capitalize on the significant increase in demand for packaged beverage alcohol products and today’s announcement is consistent with our growth strategy for owned and co-packed volumes produced in Calgary over the coming years,” said President & CEO Wayne Arsenault, “Today’s announcement represents Big Rock’s commitment to driving economic stimulus and job growth in Alberta and our commitment to our existing and future customers and consumers as one of Canada’s premier beverage alcohol manufacturers. It is an exciting time to be a Big Rocker.  Despite achieving attractive growth in our co-packing business over the last few years, we have been unable to pursue several material growth opportunities due to constraints in our packaging capabilities. This capital program addresses such constraints and will allow us to compete for material co-packing arrangements, near-term, in addition to supporting the Corporation’s rapidly expanding portfolio of beverage alcohol products. The pipeline of growth opportunities remains robust and supports an attractive return profile to be realized on the 2021 investments, beginning in 2022,” continued Mr. Arsenault.

The 2021 capital program will achieve the following:

• Enhanced packaging capabilities on the Corporation’s high-speed can-line;

• Enhanced consistency of finished goods production and significant waste reduction;

• Increased shelf-life and removes the need for preservatives in select products;

• Positions the Calgary facility for greater operational cost efficiencies to be realized with growth; and

• Modernization of IT infrastructure combined with a realignment of processes across all departments to improve efficiency, quality, security and overall customer experience.
In addition, the Corporation is pleased to announce that it has agreed to amended terms under its existing credit agreement with ATB Financial (“ATB”) which includes an increase to the Corporation’s total committed credit from $11 million to $16 million between two separate facilities (collectively, the “Credit Facilities”): a $6 million revolving operating loan facility and a $10 million 5-year evergreen term loan facility. Both facilities will bear interest rates at prime plus 75-basis points and are subject to a 25-basis point standby-fee on committed amounts undrawn. The amendments also include an extension of the maturity date to March 23, 2026. The proceeds will be used for, but not limited to, funding capital projects, financing working capital requirements and general corporate purposes. The Corporation is currently drawn approximately $4.4 million on the Credit Facilities.
“The focus on strengthening the balance sheet over the last two years has enabled us to move forward on this strategic capital program with the continued support from our sole lender, ATB,” said Chief Financial Officer Don Sewell, “The strategic equipment investments and concurrent modernization efforts through enhanced IT and digital transformation projects will enable us to achieve sustainable and profitable growth in 2022 and beyond.”
The Corporation completed the planning and engineering for the strategic capital plan in the fourth quarter of 2020 and expects the equipment to be fully installed and commissioned at the Corporation’s Calgary facility by the fourth quarter of 2021. The Corporation does not anticipate any downtime in production related to the strategic capital plan.

About Big Rock Brewery Inc.
In 1985, Ed McNally founded Big Rock to contest the time’s beer trends. Three bold, European-inspired offerings – Bitter, Porter and Traditional Ale – forged an industry at a time heavy on easy drinking lagers and light on flavour. Today, our extensive portfolio of signature beers, ongoing seasonal offerings, six ciders (Rock Creek Cider® series), custom-crafted private label products and other notable, beverage alcohol products keeps us at the forefront of the craft beer revolution and still proudly contesting the beer and beverage alcohol trends of today. Big Rock has brewing operations in Calgary, Alberta, Vancouver, British Columbia, and Toronto, Ontario. Big Rock trades on the TSX under the symbol “BR”. For more information on Big Rock visit bigrockbeer.com

Forward-Looking Information
Certain statements contained in this news release constitute forward-looking statements. These statements relate to future events or Big Rock’s future performance. All statements, other than statements of historical fact, may be forward-looking statements. Forward-looking information are not facts, but only predictions and generally can be identified by the use of statements that include words or phrases such as, “anticipate”, “believe”, “continue”, “could”, “estimate”, “expect”, “intend”, “likely” “may”, “project”, “predict”, “propose”, “potential”, “might”, “plan”, “seek”, “should”, “targeting”, “will”, and similar expressions. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Big Rock believes that the expectations reflected in those forward-looking statements are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this news release should not be unduly relied upon by readers, as actual results may vary materially from such forward-looking statements. These statements speak only as of the date of this news release and are expressly qualified, in their entirety, by this cautionary statement.  In particular, this news release contains forward-looking statements pertaining to the following:

• the timing of completion of its 2021 capital program, including the installation and commissioning of components thereof;

• Big Rock’s total packaging capacity and flexibility upon completion of its 2021 capital program;

• Management’s expectations with regard to Big Rock’s position as a manufacturer in Western Canada;

• Big Rock’s growth strategy for owned and co-packed volumes produced in Calgary over the coming years;

• the impact and results of the 2021 capital program on Big Rock, including, but not limited to, that it will allow Big Rock to compete for material co-packing arrangements; support the Corporation’s rapidly expanding portfolio of beverage alcohol products; enhance packaging capabilities on its high-speed can-line; materially enhance consistency of finished goods production and near elimination of micro-contamination risk; increase shelf-life and remove the need for preservatives on select products; position Big Rock for operational cost efficiencies to be realized with growth; mitigate business continuity risk presented by old-aged packaging equipment; and modernize IT infrastructure and realign processes across all departments to improve efficiency, quality, security and overall customer experience.

• that the strategic equipment investments and concurrent modernization efforts through enhanced IT and digital transformation projects will enable Big Rock to achieve sustainable and profitable growth in 2022 and beyond

• that the Corporation does not anticipate any downtime in production related to the strategic capital plan.

Certain of the above listed forward-looking statements constitute future-oriented financial information and financial outlook information (collectively, “FOFI”) about Big Rock’s prospective financial position assuming completion of 2021 capital program, including that operational cost efficiencies to be realized within growth and that the 2021 capital program will result in sustainable and profitable growth in 2022 and beyond. FOFI contained in this press release were made as of the date hereof and is provided for the purpose of describing Big Rock’s anticipated future business operations. Big Rock disclaims any intention or obligation to update or revise any FOFI contained in this press release, whether as a result of new information, future events or otherwise, unless required pursuant to applicable law. Readers are cautioned that the FOFI contained in this press release should not be used for purposes other than for which it is disclosed herein.
With respect to the forward-looking statements and FOFI listed above and contained in this news release, management has made assumptions regarding, among other things:

• volumes in the current fiscal year will remain constant or will increase;

• input costs for brewing and packaging materials will not materially increase or decrease;

• there will be no material change to the regulatory environment in which Big Rock operates;

• there will be no material supply issues with Big Rock’s vendors; and

• that the duration and extent of the COVID-19 pandemic will not be long-term.

Some of the risks which could affect future results and could cause results to differ materially from those expressed in the forward-looking information and statements contained herein include the risk factors set out in the Corporation’s annual information form and also include, but are not limited to:

• the inability to maintain the current AGLC beer mark-up policy in Alberta;

• the inability to maintain the current AGLC mark-up rates applicable to RTD beverages in Alberta;

• the inability to grow demand for Big Rock’s products;

• the worldwide economic and social impact of COVID-19; and

• the duration and extent of the COVID-19 pandemic.

Readers are cautioned that the foregoing list of assumptions and risk factors is not exhaustive. The forward-looking statements and FOFI contained herein are expressly qualified in their entirety by this cautionary statement. The forward-looking statements and FOFI included in this news release are made as of the date hereof and Big Rock does not undertake any obligation to publicly update such forward-looking information and statements to reflect new information, subsequent events or otherwise unless so required by applicable securities laws.
For further information, please contact:

Wayne Arsenault, President & Chief Executive Officer, or Don Sewell, Chief Financial Officer:
Phone: (403) 720-3239
Fax: (403) 720-3641
Email: investors@bigrockbeer.com