PureK Holdings Corp. (the "
Company" or
"
PureK") (TSX Venture: PKAN) is pleased to
announce that it has executed a definitive agreement (the
"
Agreement") with Felicity Management Group LLC,
Rhodes Management Corp. and 2443904 Ontario Inc. (collectively, the
"
Sellers"), to acquire all of the outstanding
membership interests of Nirvana Group, LLC
("
Nirvana"), a Florida-based company specializing
in the development, manufacturing, and distribution of all-natural
pet wellness products and which includes the BudaPets brand.
According to a recent report from Fior Markets,
the global pet care industry is expected to reach approximately
$358.6 billion by 2027, at a compound annual growth rate (CAGR) of
six percent.1 Another recent report by Mordor Intelligence found
that significant opportunity exists in the U.S. pet care market as
consumer demand for all-natural pet products continues to increase,
with consumers becoming ever more conscious about maintaining their
pets’ health.
The BudaPets brand joins the Company’s existing
pet care portfolio, which includes PureKana Pet, a division of the
Company’s market-leading CBD company, PureKana, LLC
("PureKana"). As previously announced in a news
release dated February 1, 2021, PureK and PureKana also recently
executed a definitive agreement to acquire No B.S. Skincare, the
industry-leading clean-formula skin care and beauty company. The
Company’s planned acquisition of both brands serves to strengthen
its foothold in some of the fastest-growing global market
categories.
"We are excited to welcome the BudaPets brand
into the PureK Holdings portfolio to address a broader base of
consumers as well as the wellness needs of their best friends,"
said Kathy Casey, CEO of PureK. "BudaPets fits perfectly into PureK
Holdings’ growth strategy focusing on the global pet care,
skincare, and plant-based food and beverage categories. BudaPets
now joins the PureKana and No B.S. brands in our mission to lead
category innovation where nature meets science."
BudaPets’ product line includes Calming, Hip and
Joint, Omega Bites, and Dental Chews products. All of BudaPets’
products are created with the highest-quality CBD from hemp extract
and natural ingredients to improve the quality of life of pets and
of livestock. All BudaPets products are manufactured and processed
in the United States and adhere to strict manufacturing standards.
In January 2020, BudaPets received National Animal Supplement
Council (NASC) certification for its natural hemp-derived pet
supplement product line, one of the highest-level certifications in
the pet care industry.
"We are thrilled to join PureK Holdings Corp.
and their growing family of all-natural, plant-based wellness
brands," said Diana Albadan, founder of BudaPets. "We are dedicated
to promoting the well-being of pets by creating high-quality,
natural products informed by science. BudaPets looks forward to
working with the PureK Holdings Corp. family of brands to provide
consumers with both animal health and natural wellness products on
a singular platform."
The Agreement
Under the terms of the Agreement, PureK will
acquire all of the issued and outstanding membership units of
Nirvana, including the BudaPets brand. PureK will issue USD$1.5
million in unsecured convertible debentures, with 3.25%
non-compounding interest per annum, with a maturity date that is
twenty-four (24) months following the date of closing (the
"Maturity Date"). Under the terms of the
convertible debenture, the Sellers will have the option, on a
monthly basis, to convert any portion of the convertible debentures
into common shares of the Company ("Common
Shares") at a price equal to the higher of (i) the 15-day
volume weighted average price of the Common Shares on the TSX
Venture Exchange as of the date of conversion; or (ii) CAD $10.50.
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.
In addition, current members of Nirvana will be
eligible to receive earnout compensation of USD$500,000, payable in
Common Shares, if sales from Nirvana’s products equals or exceeds
USD$1 million for the 2021 fiscal year, and an additional USD$1
million payable in Common Shares if sales from Nirvana’s products
exceeds USD$2.5 million for the 2022 fiscal year. The transactions
are at arm’s length, and, other than the issuance of the unsecured
convertible debentures noted above, there is no long-term debt
being assumed. Closing of the acquisition is subject to customary
closing conditions, including approval of the TSX Venture
Exchange.
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 Statements and 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 Company’s
financial condition and development plans do not change as a result
of unforeseen events and that the Company obtains regulatory
approval. PKAN’s obligation to close will be 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) no material adverse effect, (iii) the absence of
litigation, restraining orders, injunctions or other legal
restraints and (iv) receipt of required regulatory and third party
consents, legal opinions, officers' and secretary's certificates,
(v) 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.
___________________________________1
https://www.globenewswire.com/news-release/2020/09/28/2099985/0/en/Global-Pet-Care-Market-Is-Expected-to-Reach-USD-358-62-billion-by-2027-Fior-Markets.html
A photo accompanying this announcement is available
at https://www.globenewswire.com/NewsRoom/AttachmentNg/9a1358d1-2053-4d7c-bbce-193bf7c7ff52
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