DENVER, CO -- May 25, 2021 -- InvestorsHub NewsWire --
HempFusion Wellness Inc. (TSX:CBD.U)
(US: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 it has entered
into a definitive agreement to acquire 100% interest in Sagely
Enterprises, Inc. ("Sagely Naturals"), a leader in premium CBD
products with mass distribution in more than 14,000 retailers
nationwide.
Founded in 2015 by Kerrigan Behrens and Kaley Nichol, Sagely
Naturals is the largest female-founded CBD
wellness brand. Since its inception, the brand has been on a
mission to naturally modernize the medicine cabinet with
high-quality, accessible products that help women feel their
best. Sagely Naturals maintains a
strong presence in the top Drug retailers nationwide and is sold in
key retailers such as CVS, Rite Aid, Albertsons, Sprouts,
Nordstrom, and many other independent regional grocers and natural
food stores in addition to sagelynaturals.com. The company's
products are available in over 14,000 retail locations.
Sagely Naturals has consistently maintained the number one
position in CBD topicals, with 23% market share in the Drug channel
and 13.8% market share in the Multiple Outlet channel ("MULO")
(according to IRI data). Including ingestibles, Sagely Naturals is
the #3 CBD brand and one of the only brands showing consistent
growth in the all-time periods within the latest 52 weeks
(according to IRI and MULO data). Out of the top 20 selling CBD
SKUs in MULO, Sagely Naturals have five SKUs, with the Extra
Strength Relief & Recovery Cream being the #1 selling SKU in
Chain Drug.
Consumer insights have informed every aspect of Sagely Naturals'
product development, enabling them to meet consumer needs in an
approachable and familiar way and build a large and devoted
community around their brand. Sagely Naturals has also caught the
attention of A-list celebrities, including Cameron Diaz, Zoe
Saldana, and Molly Sims, as both consumers and investors.
Strategic Rationale
- 2020 net revenue of over $4.19 million; and when combined with
the closing of the APCNA Holdings LLC ("Apothecanna") transaction,
will more than triple HempFusion's 2020 revenue with significant
expansion planned for 2021 and beyond
- Immediate distribution to an additional 14,000+ stores,
materially increasing HempFusion's distribution footprint
- Opportunity to introduce ingestible CBD products into Sagely
Naturals' 14,000+ stores
- 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
"Upon closing, the acquisition of Sagely Naturals immediately
adds significant value to shareholders. By more than tripling our
2020 revenue (when combined with the closing of Apothecanna),
expanding to over 15,000 stores, expanding our distribution
strategy to six channels, combining some of the top executive
talent in the industry, and bringing together over 75 incredible
and best-selling SKUs, HempFusion is in its strongest position to
date," commented Jason Mitchell, N.D., HempFusion's Co-Founder and
CEO. "We expect the combined proforma entity to achieve substantial
growth over our historical financials and cement our leadership
position in the CBD industry while setting the stage for tremendous
growth in 2021 and 2022," continued Dr. Mitchell.
"Allowing people to do more of what they love has always been at
the heart of our mission at Sagely Naturals. HempFusion approaches
the industry the right way and possesses the resources required to
help us significantly scale our business, increase our market
share, and expand beyond our stronghold in the United States to
international jurisdictions," said Kerrigan Behrens, Co-Founder and
Co-CEO of Sagely Naturals. "Quality and consumer safety are of the
utmost importance to our brand, and Dr. Jason Mitchell and his team
have been market leaders in the CBD category in this regard. We are
incredibly excited to be joining the HempFusion team," added Kaley
Nichol, Co-Founder and Co-CEO of Sagely Naturals.
Terms of the Agreement
Pursuant to an agreement and plan of merger dated May 24, 2021
(the "Merger Agreement") among HempFusion, HempFusion Merger Sub 2,
Inc., a wholly-owned Delaware subsidiary of HempFusion ("HF Merge
Co"), Sagely Naturals and KBKN Equityholder Representative LLC, in
its capacity as representative of the holders of equity interests
in Sagely Naturals (the "Sellers"), HF Merge Co will merge into
Sagely Naturals with Sagely Naturals surviving as a wholly-owned
subsidiary of HempFusion, for initial consideration of
US$25,000,000 (the "Initial Consideration") consisting of
US$2,000,000 in cash (subject to adjustment for Sagely Naturals'
cash and working capital) and $23,000,000 in common shares of the
Company ("HempFusion Shares") to be issued at a deemed price per
HempFusion Share of approximately US$1.021, being the volume
weighted average trading price ("VWAP") of HempFusion Shares on the
Toronto Stock Exchange (the "TSX") for the 30 trading days
immediately prior to May 24, 2021 (the "Transaction"). 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 Transaction (the "Earnout Period"), with 40% of any Earnout
payment to be paid in HempFusion Shares (the "Earnout HempFusion
Shares") and the balance paid in cash.
The number of Earnout HempFusion Shares to be issued under the
Earnout Payment, if any, will be calculated based on a deemed price
which is the greater of (i) the VWAP of HempFusion Shares on the
TSX for the 30 trading days immediately prior to the 12-month
anniversary of Closing, or (ii) $1.25 per HempFusion Share (the
"Floor Price"), provided that if, at any time during the period
commencing on the date of the Merger Agreement and ending 30 days
following the end of the Earnout Period, HempFusion issues any
HempFusion Shares (other than under certain arrangements specified
in the Merger Agreement) at a price per HempFusion Share (the
"Issuance Price") that is less than the Floor Price, the Floor
Price will be automatically adjusted downward to such Issuance
Price and the number of Earnout HempFusion Shares will be adjusted
accordingly.
All HempFusion Shares issued in connection with the Merger
Agreement will be subject to contractual resale restrictions to be
released over a period of 12 months from Closing as follows: (i)
33% will be released on the four-month anniversary of the Closing,
(ii) 33% will be released on the eight-month anniversary of the
Closing and (iii) the remaining balance will be released on the
12-month anniversary of the Closing.
Completion of the Transaction is subject to a number of terms
and conditions as set forth in the Merger Agreement, including
(among other things) holders of no more than 5% of the outstanding
shares of Sagely Naturals exercising appraisal rights, the receipt
of approval of the TSX and certain other closing conditions
customary in transactions of this nature.
Upon completion of the Transaction, Sagely Naturals will be a
wholly-owned subsidiary of HempFusion, with Kerrigan Behrens and
Kaley Nichol remaining as Co-CEOs of Sagely Naturals.
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.
Follow Sagely Naturals on Facebook and Instagram.
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 closing of
the 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.
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.
Contacts
Jason Mitchell, N.D.
Chief Executive Officer and Director
Email: ir@hempfusion.com
Phone: 416-803-5638
HempFusion Wellness (CE) (USOTC:CBDHF)
Gráfico Histórico do Ativo
De Out 2024 até Nov 2024
HempFusion Wellness (CE) (USOTC:CBDHF)
Gráfico Histórico do Ativo
De Nov 2023 até Nov 2024
