PureK Holdings Corp. (the "
Company") (TSX
Venture: PKAN), along with its majority-owned CBD subsidiary
company, PureKana LLC, (“
PureKana”), is pleased to
announce that effective today it has entered into a binding letter
of intent (“
LOI”) with DTC Brands, LLC to acquire
No B.S. Life, LLC (“
No B.S. Skincare”), the
industry-leading clean-formula skin care and beauty company. The
transaction is an arm’s length acquisition and all figures in this
news release are in U.S. dollars, unless otherwise indicated.
Under the terms of the binding LOI, PureK
Holdings Corp. and its PureKana subsidiary will acquire all of the
issued and outstanding membership units 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.
at the discretion of PureK Holdings Corp. on or before twenty-four
(24) months following the date of closing. A cash payment of
$500,000 will be made within six (6) months of the date of closing.
Current members of DTC Brands, LLC 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. Other than the issuance of the unsecured convertible
debentures noted above, there is no long term debt being assumed.
The parties intend to complete these transactions as soon as is
practicable and will use commercially reasonable efforts for the
closing to occur no later than January 31, 2021.
No B.S. Skincare was founded to provide
consumers an all-natural and environmentally friendly alternative
to the excesses of the beauty industry. The company’s products are
made with potent, plant-based and scientifically proven natural
ingredients and – unlike other skincare solutions - with absolutely
no harmful chemicals like parabens, sulfates, or phthalates, and no
synthetic fragrances. All of the company’s products are responsibly
made in America and are never tested on animals.
“We are thrilled about joining forces with PureK
and leveraging the synergies to catapult the No B.S. business to
the next level, while extending our mission to serve consumers with
radically clean products that deliver powerful results,” said Diana
Briceno, CEO of No B.S. Skincare.
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. Their extremely talented team will indeed expand our
expertise and capability.”
As previously disclosed on December 22, 2020,
the Company secured $10 million in loan financing under the Federal
Reserve’s Main Street Lending Program. The loan provides PureKana
LLC with low-cost capital to grow its business in its core CBD and
evolving wellness products both within the US as well as within
select international markets. For more information, please see the
Company’s news release dated December 22, 2020.
About PureK Holdings Corp.
PureK Holdings Corp. indirectly owns a 50.1%
equity interest in PureKana. PureKana is recognized as a Top 10
cannabidiol ("CBD") brand in the United States and
has operated a profitable direct-to-consumer online business since
its inception in 2017. Its product lineup includes high quality
CBD that can be consumed in the form of tinctures, capsules,
topicals, patches, and gummies. PureKana's brand and
direct-to-consumer marketing expertise has helped to establish
PureKana as one of the leading online CBD brands in the United
States. The online presence is now being expanded into broader
retail outlets, as well as into additional countries. PureKana
operates legally in the jurisdictions where it carries on
business. PureKana's website is:
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 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) signing of employment agreements, or approval of existing
employment agreements with key individuals as determined by
Purchasers (which employment agreements will include
non-competition and non-solicitation restrictions, among other
provisions), (vi) 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/057c2126-8397-44da-90eb-2f7207c8e48b
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