PureK Holdings Corp. (the "
Company") (TSX
Venture: PKAN), along with its majority-owned CBD subsidiary
company, PureKana, LLC, ("
PureKana"), is pleased
to announce that it has executed a definitive agreement (the
"
Agreement") with DTC Brands, LLC (the
"
Seller") to acquire all of the outstanding
membership interests of No B.S. Life, LLC ("
No B.S.
Skincare"), an industry-leading clean-formula skin care
and beauty company. All figures in this news release are in U.S.
dollars, unless otherwise indicated.
No B.S. Skincare was founded to provide
consumers a clean and environmentally friendly alternative to the
excesses of the beauty industry. No B.S. Skincare’s products are
made with potent, plant-based and scientifically proven ingredients
and – unlike other skincare solutions - with absolutely no harmful
chemicals like parabens, sulfates, or phthalates, and no synthetic
fragrances. All of their products are responsibly made in America
and are never tested on animals.
In addition to the execution of the Agreement,
the Company is pleased to announce that all No B.S. Skincare
products, including its Award-Winning Caffeine Eye Cream and
Retinol Night Cream, Charcoal Peel-Off Mask, Moisturizers, Serums,
Toner, Cleanser, and Acne Patches, will become available through
the website of major retailer Target beginning on or about February
28, 2021.
Key focuses of growth for PureK Holdings Corp.
are in the skincare and pet categories, global market entries and
omni-channel expansion. With the addition of No B.S. Skincare to
its portfolio, PureK Holdings Corp. is positioned to capitalize on
what is expected to be strong growth in both the global skin care
and beauty markets and in the CBD consumer products market. The
global CBD-infused skincare market is expected to reach $3.2
billion by 2025, with an estimated compound annual growth rate
(CAGR) of over 25% in that time, according to Allied Market
Research. The global skincare market was estimated to total
approximately $198.3 billion by 2025, according to Statista.
Moreover, the Company sees significant tailwinds in its current
plant-based portfolio. According to Meticulous Research, the
plant-based products category is forecast to reach $74.2 billion by
2027, growing at a CAGR of 11.9%.
“No B.S. Skincare’s unique approach to its
portfolio is a perfect fit to fuel PureK Holdings’ holistic
wellness growth strategy,” said Kathy Casey, CEO of PureK Holdings
Corp. “We see synergies in our joint mission to democratize
plant-based wellness through the powerful combination of nature and
science.”
The Agreement
Under the terms of the Agreement, PureK Holdings
Corp. and its majority-owned subsidiary, PureKana, will acquire all
of the issued and outstanding membership interests of No B.S. Life,
LLC, with 65% of the purchase price to be paid by PureK Holdings
Corp. and 35% to be paid by PureKana, with resulting proportional
ownership interests.
PureK Holdings Corp. will issue $4 million
payable in unsecured convertible debentures, with 3.25%
non-compounding interest, payable in cash or common shares of PureK
Holdings Corp., with a maturity date of twenty-four (24) months
following the date of closing. Under the terms of the convertible
debentures, the Seller has the option, on a monthly basis after the
issuance of the convertible debentures, to convert any portion
thereof (including accrued interest on such portion) into common
shares of the Company, provided that the Seller shall not hold, at
any time, in excess of 7% of the then current issued and
outstanding common shares of the Company. Any portion or all of the
convertible debentures which have not been so converted into common
shares shall be payable in cash at the maturity date. The
conversion price of the convertible debentures shall be the higher
of CAD$10.00 and the volume weighted average price of the Company's
shares determined based on the 15 trading days immediately
preceding the date of notice of conversion (the
"VWAP"). In addition, the Company will make a cash
payment of $500,000 within six (6) months of the date of closing.
PureKana has paid a refundable deposit in the amount of $1.5
million and will pay an additional $1 million in cash on
closing.
The Seller will be eligible to receive earnout
compensation of $1 million if the company’s revenues and EBITDA
equal or exceed $6 million and $360,000, respectively, in fiscal
2021, and/or $2.5 million if the company’s revenues and EBITDA
exceed $8 million and $480,000, respectively, in fiscal 2022. Any
earnout amounts will be payable in cash or in the form of common
shares of the Company, valued using the higher of CAD$10.00 and the
VWAP at the time of payment.
The Company's obligation and ability to close
the acquisition is subject to TSX Venture Exchange approval and
standard closing conditions for transactions of this nature.
About PureK Holdings Corp.
PureK Holdings Corp. leads an international omni-channel
platform with diversified assets in the emerging plant-based and
holistic wellness consumer product categories. The company’s
mission is focused on leading innovation for the informed
Millennial and Generation Z generations in the rapidly growing
plant-based, natural, and clean ingredient space. The company
continues to focus on expansion into high-growth consumer product
categories including CBD products, plant-based food and beverage,
and the global pet care and skin care industries. For more
information on PureK Holdings Corp., please visit
https://purekana.com/investor-relations/.
For further information:
Brian MeadowsChief Financial OfficerPh: +1 (855) 553-7441Email:
ir@purekana.com
Daniel NussbaumMedia and Investor RelationsPh: +1 (917)
232-8960Email: Daniel@amwpr.com
Forward-Looking Information
Certain statements contained in this news
release constitute "forward-looking information" and
"forward-looking statements" as such terms are used in applicable
Canadian securities laws. Forward-looking statements and
information are based on plans, expectations and estimates of
management at the date the information is provided and are subject
to certain factors and assumptions, including, that the closing
conditions in the Agreement are satisfied or waived and the
acquisition of No B.S. Skincare will be completed, that regulatory
approval of the acquisition of No B.S. Skincare will be obtains,
that the Company’s financial condition and development plans do not
change as a result of unforeseen events and that the Company
obtains regulatory approval. The Company's obligation and ability
to close the acquisition is subject to TSX Venture Exchange
approval and standard closing conditions for transactions of this
nature, including, among other things, (i) accuracy of
representations and warranties and compliance with covenants and
obligations, (ii) receipt of required regulatory and third party
consents, officers' and secretary's certificates, and (iii) other
customary closing documentation and conditions. Forward-looking
statements and information are subject to a variety of risks and
uncertainties and other factors that could cause plans, estimates
and actual results to vary materially from those projected in such
forward-looking statements and information. Factors that could
cause the forward-looking statements and information in this news
release to change or to be inaccurate include, but are not limited
to, the risk that any of the assumptions referred to prove not to
be valid or reliable, that occurrences such as those referred to
above are realized and result in delays, or cessation in planned
work, that the Company’s financial condition and development plans
change, and delays in regulatory approval, as well as the other
risks and uncertainties applicable to the CBD industry and to the
Company, as set forth in the Company’s Filing Statement in respect
of its qualifying transaction filed under the Company’s profile at
www.sedar.com. The Company undertakes no obligation to update the
forward-looking statements and information, other than as required
by applicable law.
Neither the TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this press release.
A photo accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/8c6552fb-add9-4129-91c4-86fece9fab03
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