VANCOUVER, BC and MESA, AZ, July 16,
2014 /PRNewswire/ - Avidus Management Group Inc. (TSX-V:
AVD; "Avidus" or the "Company") today announced it
has entered into an Asset Purchase Agreement with Truestar Health
Inc. ("Truestar"), a Toronto based
network-marketing company, pursuant to which Avidus will acquire
substantially all of the assets of Truestar (the "Acquisition").
The Acquisition is anticipated to have an immediate and substantial
impact on monthly revenue and is expected to increase annualized
consolidated revenue of Avidus to over $10
million CDN, based on the historical revenues and revenue
trends of Avidus and Truestar.
Post-Acquisition Avidus anticipates:
- Over $10 million CDN in
annualized consolidated revenue;
- Operationally cash flow positive by the end of 2014;
- Sustainable profitability in 2015;
- Two-fold increase in distributor base; and
- A strong foundation for organic growth of both operating
companies, Asantae and Truestar.
Under the terms of the Asset Purchase Agreement, Avidus will
purchase substantially all of the assets of Truestar for an
aggregate purchase price (not including value of inventory) of
CAD$6 million that will be paid as
follows: CAD$500,000 upon close and
the remaining $5.5 million based upon
a 5% royalty override on Truestar's revenue. Avidus will pay
for existing Truestar inventory as products are sold. The 5%
royalty override does not begin until after existing Truestar
current inventory is sold.
As part of the transaction, Avidus is acquiring Truestar's
proprietary software system that allows distributors and customers
to create customized nutritional, diet and exercise plans around
Truestar's 30 plus products.
Doug Ridley, Avidus CEO said,
"Truestar has invested millions to create an exceptional line of
nutritional supplements and a web based profiling system to
recommend product on a personal basis to both distributors and
customers. The result is a monthly average order size that is
significantly higher than the industry average and has attracted
network marketing talent with industry experience and great
potential."
"The acquisition of Truestar following the February purchase of
Akea demonstrates the viability of Avidus' stated business model
and "it validates our ability to attract up and coming companies"
who recognize the addition of Avidus' management and field
leadership is what they need to reach their potential" continued
Mr. Ridley. "Our distribution base has doubled with each
acquisition and we will continue to aggressively pursue other such
opportunities while deploying our growth strategies within Asantae
and now Truestar. The foundation is now in place for considerable
growth and we look forward to continuing to build upon the
significant momentum we have established since the beginning of
this year."
Michael Boulton, President of
Truestar said "With Avidus Management Group's acquisition of
Truestar we are very pleased to be adding years of experience and
leadership to our existing team and anticipate that this will
translate into renewed vigor and enthusiasm at Truestar. We expect
to see continued success and growth after this acquisition and we
are very excited about Truestar's future."
Doug Ridley said, "We are very
pleased to announce that Truestar's President Michael Boulton will continue to lead the
Truestar corporate team. His experience with Canadian public
companies together with mergers and acquisitions makes Michael a
great asset for Avidus as well."
Mr. Boulton has been an integral part of Truestar since its
inception, leading the development team and designing the software
architecture for the company. He has a degree from
Carleton University and a Post Graduate
Certificate from ITI in Applied Information Technology.
In addition, Avidus announces, in connection with the
Acquisition, a non-brokered private placement (the "Private
Placement") of up to 15,000,000 units of the Company (each a
"Unit") at a subscription price of $0.10 per Unit, for gross proceeds of up to
$1,500,000 CDN, subject to the
approval of the TSX Venture Exchange (the "Exchange"). Avidus also
will reserve up to 5,000,000 units as an overallotment. Each
Unit will be comprised of one common share in the capital of the
Company and one transferable common share purchase warrant (each a
"Warrant"). Each Warrant will entitle the holder thereof to
purchase an additional common share of the Company at an exercise
price of $0.20 per common share for a
period of 3 years from the date of issue.
Finder's fees may be payable in connection with the completion
of the Private Placement in accordance with Exchange policies. The
net proceeds of the Private Placement are expected to be utilized
by the Company to fund the Acquisition and for general corporate
and working capital purposes.
In connection with the Private Placement, Avidus advises that it
intends to settle outstanding indebtedness of up to $600,000 CDN through the issuance of Common
Shares at a deemed price of $0.20 per
Share, subject to the approval of the Exchange. In addition,
certain executives and consultants have forgiven $202,329.39 USD of accrued salary and fees.
The net effect of the shares for debt and salary and fees
forgiveness is a reduction of overall Avidus debt in excess of
$800,000 CDN.
Finally, Avidus announces that it has granted an aggregate of
1,126,000 incentive stock options pursuant to its option plan to
certain employees and consultants. The options vest immediately and
are exercisable at a price of CAD $0.10 per share until July
16, 2019.
The information set out above with respect to the anticipated
revenues and profitability of the Company is "financial outlook"
within the meaning of applicable securities laws. The purpose of
this financial outlook is to provide readers with disclosure
regarding the Company's reasonable expectations as to the
anticipated results of its proposed business activities. Readers
are cautioned that this financial outlook may not be appropriate
for other purposes and are directed to refer to the assumptions and
risks associated with the Company's financial outlook described
below under the heading "Forward Looking Statements".
About Avidus
Avidus Management Group Inc. (TSXV: AVD, OTC: ASNHF), based in
Mesa, Arizona, develops, acquires
and operates growth direct sales and network marketing companies in
the consumer health and wellness market. Avidus brands include
Asantae (www.asantae.com) and Akea (www.akealife.com).
The Avidus leadership team has a combined experience of 100
years in network marketing and direct selling. For more
information, visit www.avidusmanagementgroup.com.
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 release.
Forward Looking Statements
Certain information in this news release is forward-looking and
constitutes financial outlook within the meaning of certain
securities laws, and is subject to important risks, uncertainties
and assumptions. This forward-looking information includes, among
other things, information with respect to the Company's beliefs,
plans, expectations, anticipations, estimates and intentions,
including with respect to the Company's anticipated revenues,
profitability and the completion of the Acquisition and the private
placement of Units. The words "may", "could", "should",
"would", "suspect", "outlook", "believe", "anticipate", "estimate",
"expect", "intend", "plan", "target" and similar words and
expressions are used to identify forward-looking information. The
forward-looking information in this news release describes the
Company's expectations as of the date of this news release.
The results or events anticipated or predicted in such
forward-looking information may differ materially from actual
results or events. Material factors which could cause actual
results or events to differ materially from such forward- looking
information include, among others, the Company's ability to develop
new products which will receive market acceptance, to receive
market acceptance in new markets outside the United States, to engage and retain
qualified key personnel, employees and affiliates, to obtain
capital and credit and to protect its intellectual property
rights. The financial outlook contained in this news release
with respect to the Company's anticipated revenues and
profitability is also based on a number of assumptions, including
that: the Acquisition will result in efficiencies and reduce
consolidated operating costs for Avidus and Truestar as a result
of, among other things, consolidating the companies' computer
operating systems; that current trends in Avidus' and Truestar's
revenues will continue, and in particular that Avidus will continue
to see an increase in revenue over the next 12 month's based on the
Company's current business plan; and during the next 12 months,
Truestar may experience slightly downward revenue trend.
The Company cautions that the foregoing list of material factors
is not exhaustive. When relying on the Company's forward-looking
information to make decisions, investors and others should
carefully consider the foregoing factors and other uncertainties
and potential events. The Company has assumed a certain
progression, which may not be realized. It has also assumed that
the material factors referred to in the previous paragraph will not
cause such forward-looking information to differ materially from
actual results or events. However, the list of these factors is not
exhaustive and is subject to change and there can be no assurance
that such assumptions will reflect the actual outcome of such items
or factors.
THE FORWARD-LOOKING INFORMATION CONTAINED IN THIS NEWS RELEASE
REPRESENTS THE EXPECTATIONS OF THE COMPANY AS OF THE DATE OF THIS
NEWS RELEASE AND, ACCORDINGLY, IS SUBJECT TO CHANGE AFTER SUCH
DATE. READERS SHOULD NOT PLACE UNDUE IMPORTANCE ON FORWARD-LOOKING
INFORMATION AND SHOULD NOT RELY UPON THIS INFORMATION AS OF ANY
OTHER DATE. WHILE THE COMPANY MAY ELECT TO, IT DOES NOT UNDERTAKE
TO UPDATE THIS INFORMATION AT ANY PARTICULAR TIME EXCEPT AS
REQUIRED BY APPLICABLE LAWS.
SOURCE Avidus Management Group Inc.
