VANCOUVER, BC, Sept. 27, 2021
/CNW/ - Kiaro Holdings Corp. (TSXV: KO) ("Kiaro'' or the
"Company"), a national omni-channel cannabis retailer and wholesale
distributor, is pleased to announce that further to its news
release dated July 13, 2021, the
Company completed a transaction (the "Transaction") with Aegis
Brands Inc. ("Aegis") to acquire all the issued and outstanding
shares of its subsidiary, 2734524 Ontario Inc. (dba Hemisphere
Cannabis Co. or "Hemisphere"), which comprises a portfolio of 7
excellent retail locations in Ontario (the "Existing Locations") and two
more locations subject to potential future development.
In connection with the Transaction, Kiaro issued to Aegis an
aggregate of 61,300,000 common shares of Kiaro ("Kiaro Shares") and
6,700,000 common share purchase warrants, with each warrant
exercisable to acquire one additional Kiaro Share at an exercise
price of $0.16, subject to customary
adjustments. Aegis is also entitled to receive a further 6,700,000
Kiaro Shares on achievement of certain commercial milestones
concerning the Existing Locations within the first year following
the closing of the Transaction. As part of the purchase price paid
to Aegis, Kiaro also issued to Aegis a secured, non-interest
bearing and non-convertible promissory note in the amount of
$104,628.90, which is secured against
the assets of Kiaro, and is repayable on or before September 24, 2022. Concurrent with the
closing of the Transaction and pursuant to the share purchase
agreement dated July 12, 2021,
Steve Pelton has been appointed as a
director of the Company.
KEY TRANSACTION HIGHLIGHTS INCLUDES NEW
FORECASTED ANNUAL REVENUE OF $42.7
MILLION
The completion of the Transaction has doubled Kiaro's retail
footprint and allows Kiaro to strategically establish a significant
presence in the Ontario cannabis
retail market. Combined with Kiaro's existing cannabis retail
portfolio (6 in BC, 2 in Saskatchewan, 1 in Ontario) Kiaro now owns 16 licensed cannabis
retail stores. The Hemisphere portfolio adds to Kiaro's cash
generating assets while providing the scale to achieve EBITDA
positive returns in the next 12 months.
As a result, the Company expects annual forecasted revenue to
increase to $42.7M with a gross
margin of $13.7M immediately
following closing. Moreover, after the opening of Kiaro's
Kelowna location and the 2
Hemisphere potential development locations, the operational
footprint will climb to up to 18 stores.
"The closing of this transaction is monumental for Kiaro. So far
this fiscal year, we have more than doubled our retail footprint,
from 7 stores in February to 16 stores today. The continued
increase in our retail footprint to a potential of 18 stores by the
end of the fiscal year will be beneficial for shareholders as we
drive towards $50M in target revenue.
Kiaro's past operational successes combined with our objective of
exponential revenue and EBITDA growth demonstrate our performance
advantage within the Cannabis Industry" stated Daniel Petrov, Chief Executive Officer of
Kiaro.
"The management at Kiaro are best in class when it comes to
retail professionals. We are happy to have our locations and our
investment joined forces with a well positioned company like Kiaro"
said Steven Pelton, President and
CEO of Aegis Brands Inc.
Haywood Securities acted as financial advisor to Kiaro Holdings
Corp. with respect to the Transaction. Kronos Capital Partners
acted as financial advisor to Aegis Brands Inc with respect to the
Transaction. MLT Aikens LLP acted as legal advisor to Kiaro
Holdings Corp. Goodmans LLP acted as legal advisor to Aegis Brands
Inc.
Transaction Approvals
The Transaction has largely
received all necessary regulatory approvals with only certain
customary post-closing deliverables required to applicable
regulators.
Kiaro Holdings Corp.
Based in Vancouver, British Columbia, Kiaro is an
independent, omni-channel cannabis retailer and distributor.
Through existing storefronts across British Columbia, Saskatchewan, Ontario and with the completion of the recent
acquisition of Hemisphere Cannabis from Aegis Brands, Kiaro has 16
stores in operation and another two expected by Q1 of 2022. This is
in addition to a wholesale distribution division servicing
Saskatchewan; ecommerce sites in
Canada, the US and Australia; and plans for continued national
expansion. Kiaro is driven to introduce new and experienced
consumers to a lifelong exploration of cannabis. With more than 70
years of collective retail and wholesale focused experience,
Kiaro's leadership team has a proven track record of growing brands
across North America and plans to
open multiple retail locations nationwide over the coming
years.
Aegis Brands Inc.
Aegis Brands Inc. owns and operates
a portfolio of brands including Bridgehead Coffee. For more
information, please visit www.aegisbrands.ca or find the Company on
Facebook and Twitter.
Erin Richards, (416) 627-5728,
erin@hypepr.ca
Forward-Looking Information
This news release contains statements that may constitute
"forward-looking information" within the meaning of applicable
Canadian securities legislation. Forward-looking information may
include, among others, statements regarding the future plans,
costs, objectives or performance of Kiaro, or the assumptions
underlying any of the foregoing. In this news release, words such
as "may", "would", "could", "will", "likely", "believe", "expect",
"anticipate", "intend", "plan", "estimate" and similar words and
the negative form thereof are used to identify forward-looking
statements. In this news release, forward-looking statements
relate, among other things, to: completion of the Transaction and
regulatory and other applicable approvals, proposed retail
expansion plans and management's ability to execute on same,
overall growth of the Canadian cannabis market and retail
opportunities, the integration and financial projections of
combined retail portfolio, the award of new operating permits and
licenses in various jurisdictions, and the timing and amount of any
dispositions of the Company's common shares. Forward-looking
statements should not be read as guarantees of future performance
or results, and will not necessarily be accurate indications of
whether, or the times at or by which, such future performance will
be achieved. No assurance can be given that any events anticipated
by the forward-looking information will transpire or occur.
Forward-looking information is based on information available at
the time and/or management's good-faith belief with respect to
future events and are subject to known or unknown risks,
uncertainties, assumptions and other unpredictable factors, many of
which are beyond Kiaro's control. These risks, uncertainties and
assumptions include, but are not limited to, those described in the
Kiaro Filing Statement dated September 29,
2020, a copy of which is available on SEDAR at
www.sedar.com, and could cause actual events or results to differ
materially from those projected in any forward-looking statements.
Furthermore, any forward looking information with respect to future
expansion plans is subject to the qualification that management of
Kiaro may decide, and the assumptions that any construction or
conversion would not be cost prohibitive, required permits will be
obtained and the labour, materials and equipment necessary to
complete such construction or conversion will be available.
Accordingly, readers should not place undue reliance on the
forward-looking statements and information contained in this news
release. Kiaro does not intend, nor undertake any obligation, to
update or revise any forward-looking information contained in this
news release to reflect subsequent information, events or
circumstances or otherwise, except if required by applicable
laws.
Neither TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in policies
of the TSX Venture Exchange) accepts responsibility for the
adequacy or accuracy of this release.
For more information, visit investors.kiaro.com
For our most recent analyst report, click here
Daniel Petrov
Chief Executive Officer
SOURCE Kiaro Holdings Corp.