StickIt's High-Stakes Gamble: Cannabis Tech Firm Restructures Amid 'Serious Financial Difficulty'

VANCOUVER, BC – January 02, 2026 – StickIt Technologies Inc. (CSE: STKT), a company built on a patented technology for converting cigarettes into cannabis products, is undertaking a series of drastic financial maneuvers to secure its future. In a move that highlights both its innovative ambition and its precarious financial state, the company has amended the terms of a significant share consolidation and a concurrent private placement, citing “serious financial difficulty” as the catalyst for fast-tracking the capital raise.

Effective January 7, 2026, the company will consolidate its common shares on a one-for-five basis, a reverse stock split designed to lift its struggling share price. This move will reduce the number of issued and outstanding shares from over 127.5 million to approximately 25.5 million. Concurrently, StickIt aims to raise between $700,000 and $1,050,000 through a private placement. While these actions are positioned as efforts to “increase the Company’s flexibility,” they also paint a stark picture of a firm fighting for survival in the volatile cannabis technology sector.

A Strategy Born from Distress

The decision to restructure comes after the Canadian Securities Exchange (CSE) granted StickIt an exemption from seeking shareholder approval for its private placement. This exception is reserved for companies in “serious financial difficulty,” a designation that underscores the urgency of the capital injection. The move allows management to bypass a potentially lengthy and uncertain voting process to secure funds it deems critical for continued operations.

The 1-for-5 share consolidation is a classic tactic for companies whose stock has fallen to fractional penny levels. StickIt's shares were trading at a mere $0.005 CAD prior to the announcement, a price point that deters many institutional investors and can risk delisting from exchanges. By consolidating shares, the company will artificially boost its per-share price, theoretically making the stock more attractive. As stated in a previous release, the Board of Directors believes the move is “in the best interest of shareholders.”

However, the consolidation is inextricably linked to the private placement, which will be offered at a post-consolidation price of $0.025 per unit. The proceeds are expected to be used for working capital and to stabilize the company's strained balance sheet, though specific allocations were not detailed in the announcement. The press release did confirm that no related parties or insiders of the company will participate in the placement, a measure likely intended to assure outside investors of impartial governance during this critical fundraising period.

The Double-Edged Sword for Shareholders

For existing shareholders, the restructuring is a complex event fraught with potential pitfalls, most notably significant dilution of their ownership stake. While the initial 1-for-5 consolidation does not change an investor's percentage of ownership, the subsequent private placement will immediately dilute it. If StickIt successfully raises the maximum target of $1,050,000 at $0.025 per unit, it will issue 42 million new shares. This issuance would nearly triple the post-consolidation share count, meaning current shareholders would see their stake in the company dramatically reduced.

More alarming for investors, however, are the terms of the warrants included in each private placement unit. Each unit contains one common share and one purchase warrant. This warrant allows the holder to buy another common share for $0.025 for a period of three years, but with a highly unusual condition: the warrants cannot be exercised until the company completes a further consolidation of its share capital, whereby every two (2) existing shares will be consolidated into one (1) new share.

This clause is a significant red flag, as it implies that the company and its new investors anticipate the stock price may decline again, necessitating yet another reverse stock split in the future. It essentially pre-authorizes a second round of share consolidation, creating a layered structure of future dilution. For current investors, this means that even if the company survives its immediate crisis, their equity is at risk of being diluted twice over—once by the private placement and again by the eventual exercise of warrants following a second consolidation.

Patented Promise Meets Financial Peril

The company's dire financial situation stands in stark contrast to its innovative product and business model. StickIt's core asset is its patented “Cannabis Sticks” technology, developed by its Israeli subsidiary. The product is a toothpick-like matrix infused with condensed cannabis oil, allowing consumers to easily convert a standard cigarette into a cannabis or hemp cigarette. With patents already granted in the USA, Europe, Israel, and Canada, the company holds a protected position in this niche market.

StickIt's global strategy is an asset-light joint venture model. The company partners with local licensees in legal cannabis markets, who then establish and fund production facilities. StickIt provides the raw, non-cannabis sticks and the proprietary know-how, while the partner infuses the product with locally sourced cannabinoids and manages sales and distribution. This model is designed to facilitate rapid international expansion with minimal capital outlay from the parent company.

However, the success of this model hinges on the parent company's stability and ability to support its partners. The admission of “serious financial difficulty” raises questions about StickIt's capacity to execute this global rollout and maintain its R&D edge. The company's financial struggles could hinder its ability to attract new, high-quality joint venture partners or support existing ones, potentially stalling the very growth engine its technology was designed to fuel. Recent forays into adjacent markets, such as a medical straw for delivering vitamins, may represent a strategic pivot to diversify revenue streams away from the capital-intensive cannabis sector.

With the consolidation and private placement now set in motion, the path forward for StickIt Technologies is one of guarded optimism at best. The capital raised may provide a crucial lifeline to continue operations and fund its unique business model. However, the deeply dilutive terms of the deal and the explicit warning of financial distress signal that the road to recovery will be challenging. Investors and industry observers will be watching closely to see if this financial restructuring is the beginning of a turnaround or merely a temporary reprieve for a company whose promising technology is at risk of being overshadowed by its financial troubles.