HempFusion Wellness Inc. (TSX:CBD.U) (OTCQX:CBDHF)
(FWB:8OO) (“HempFusion” or the “Company”), a leading health and
wellness Company offering premium probiotic supplements and
products containing CBD, is pleased to announce that it has
completed the previously announced acquisition of Sagely
Enterprises Inc. (“Sagely Naturals”), a leader in premium CBD
products with mass distribution in more than 14,000 retailers
nationwide.
Acquisition Highlights:
- 2020 net revenue of over $4.19 million; and when combined with
the closing of the Company’s previously announced proposed
acquisition of APCNA Holdings LLC (“Apothecanna”), will more than
triple HempFusion’s 2020 revenue with significant expansion planned
for 2021 and beyond
- Immediate distribution to up to 14,000 additional stores,
materially increasing HempFusion’s distribution footprint
- Opportunity to introduce ingestible CBD products in up to
14,000+ stores in Sagely Naturals’ retail distribution
footprint
- Complementary but not directly competing product offerings
provide significant cross-platform opportunities through each of
the companies’ respective distribution channels
- Product efficiencies across the topicals line while delivering
a near-term opportunity for further expansion into ingestible
products supported by HempFusion’s proprietary formulations
- HempFusion’s substantial investment into regulatory compliance
will help solidify Sagely Naturals’ leadership position in the CBD
industry
- Sagely Naturals has been included on HempFusion’s Novel Foods
Application Dossier with the United Kingdom’s Regulatory Food
Safety Agency for future European expansion
- Sagely Naturals’ C-Suite brings operational excellence
including best-in-class marketing, proven innovation, and
advantaged customer/channel relationships to HempFusion’s family of
brands
“We are incredibly excited to complete the acquisition of Sagely
Naturals which provides HempFusion with a significant increase in
revenue and immediate distribution to up to an additional 14,000
retail points nationally,” commented Jason Mitchell, N.D., Chief
Executive Officer of HempFusion. “Integration has been well
underway over the past several weeks and we look forward to driving
shareholder value through continued growth in 2021 and 2022 both
domestically and internationally with our expanding family of
brands,” continued Dr. Mitchell.
The acquisition was completed pursuant to the terms of the
agreement and plan of merger dated May 24, 2021, as amended (the
“Merger Agreement”), among HempFusion, HF Merger Sub 2021, Inc., a
wholly-owned Delaware subsidiary of HempFusion, Sagely Naturals and
KBKN Equityholder Representative LLC, in its capacity as
representative of the holders of equity interests in Sagely
Naturals (the “Sellers”), that resulted in Sagely Naturals becoming
a wholly-owned subsidiary of HempFusion, for initial consideration
of US$25,000,000 (the “Initial Consideration”), of which
US$2,000,000 was paid in cash (subject to adjustment for Sagely
Naturals’ cash and working capital) and US$23,000,000 was satisfied
by the issuance of 22,531,348 common shares of the Company
(“HempFusion Shares”) at a deemed issuance price of US$1.0208 per
HempFusion Share, being the volume weighted average trading price
of HempFusion Shares on the Toronto Stock Exchange (the “TSX”) for
the 30 trading days immediately prior to the date of the Merger
Agreement. In addition, the Sellers may be entitled to receive an
earnout payment of up to US$5,000,000 (“Earnout Payment”) subject
to Sagely Naturals achieving certain revenue targets (with a
minimum revenue threshold of US$6,020,000) within twelve months of
closing (the “Closing”) of the acquisition, with 40% of any Earnout
Payment to be paid in HempFusion Shares and the balance paid in
cash, as more fully described in the Company’s press release of May
25, 2021, a copy of which is filed on SEDAR under the Company’s
profile.
Pursuant to the Merger Agreement, the Company also assumed
unvested outstanding stock options of Sagely Naturals which are
exercisable for up to an aggregate of 279,432 HempFusion Shares,
and outstanding restricted shares of Sagely Naturals which resulted
in the issuance of an additional 263,179 HempFusion Shares.
All HempFusion Shares issued in connection with the Merger
Agreement in respect of the Initial Consideration are subject to
contractual resale restrictions to be released over a period of 12
months from Closing as follows: (i) 33% will be released on
November 6, 2021, (ii) 33% will be released on March 6, 2022 and
(iii) the remaining balance will be released on July 6, 2022.
ABOUT HEMPFUSION
HempFusion is a leading health and wellness CBD company
utilizing the power of whole-food hemp nutrition. HempFusion
distributes its family of brands, including HempFusion, Probulin
Probiotics, Biome Research, and HF Labs, to approximately 4,000
retail locations across all 50 states of the United States and
select international locations. Built on a foundation of regulatory
compliance and human safety, HempFusion’s diverse product portfolio
comprises 48 SKUs including tinctures, proprietary FDA Drug Listed
Over-The-Counter (OTC) Topicals, Doctor/Practitioner Lines and
more. With a strong focus on research and development, HempFusion
has an additional 30 products under development. HempFusion is a
board member of the US Hemp Roundtable, and HempFusion’s
wholly-owned subsidiary, Probulin Probiotics, is one of the
fastest-growing probiotics companies in the United States,
according to SPINs reported data. HempFusion’s CBD products are
based on a proprietary Whole Food Hemp Complex™ and are available
in-store or by visiting HempFusion online at www.hempfusion.com or
www.probulin.com.
Follow HempFusion on Twitter, Facebook and Instagram and
Probulin on Twitter, Facebook and Instagram.
Neither the TSX nor its Regulation Services Provider (as that
term is defined in the policies of the TSX) accepts responsibility
for the adequacy or accuracy of this release.
FORWARD-LOOKING STATEMENTS
This news release contains forward-looking statements and
forward-looking information within the meaning of Canadian
securities legislation (collectively, “forward-looking statements”)
that relate to HempFusion’s current expectations and views of
future events. Any statements that express, or involve discussions
as to, expectations, beliefs, plans, objectives, assumptions or
future events or performance (often, but not always, through the
use of words or phrases such as “will likely result”, “are expected
to”, “expects”, “will continue”, “is anticipated”, “anticipates”,
“believes”, “estimated”, “intends”, “plans”, “forecast”,
“projection”, “strategy”, “objective” and “outlook”) are not
historical facts and may be forward-looking statements and may
involve estimates, assumptions and uncertainties which could cause
actual results or outcomes to differ materially from those
expressed in such forward-looking statements. No assurance can be
given that these expectations will prove to be correct and such
forward-looking statements included in this news release should not
be unduly relied upon. These statements speak only as of the date
of this news release. In particular and without limitation, this
news release contains forward-looking statements relating to the
Sagely Naturals transaction and related distribution, revenue and
sales expansion opportunities, closing of the proposed acquisition
of Apothecanna announced on May 17, 2021 and the Company’s other
plans, focus and objectives.
Forward-looking statements are based on a number of assumptions
and are subject to a number of risks and uncertainties, many of
which are beyond HempFusion’s control, which could cause actual
results and events to differ materially from those that are
disclosed in or implied by such forward-looking statements. Such
risks and uncertainties include, but are not limited to, the impact
and progression of the COVID-19 pandemic and other factors set
forth under “Cautionary Note Regarding Forward-Looking Statements”
and “Risk Factors” in the annual information form of the Company
dated March 31, 2021 and available under the Company’s profile on
SEDAR at www.sedar.com. HempFusion undertakes no obligation to
update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise, except as
may be required by law. New factors emerge from time to time, and
it is not possible for HempFusion to predict all of them or assess
the impact of each such factor or the extent to which any factor,
or combination of factors, may cause results to differ materially
from those contained in any forward-looking statement. Any
forward-looking statements contained in this news release are
expressly qualified in their entirety by this cautionary
statement.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210707005327/en/
Jason Mitchell, N.D. Chief Executive Officer and Director Email:
ir@hempfusion.com Phone: 416-803-5638
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