Lifeist to acquire ‘Zest’ brand to drive growth through expanded marketing and sales as a complimentary product line to its in-house concentrate brand, Roilty
TORONTO, June 01, 2023 (GLOBE NEWSWIRE) -- Lifeist Wellness Inc. (“Lifeist” or the “Company”) (TSXV: LFST) (FRANKFURT: M5B) (OTCMKTS: LFSWF), a health-tech company that leverages advancements in science and technology to build breakthrough companies that transform human wellness, is pleased to announce it has entered into a definitive share purchase agreement (the “Share Purchase Agreement”), pursuant to which the Company will acquire 100% of 1000501971 Ontario Inc. (“Zest”) for $3,411,707.90 (the “Acquisition”).
The Acquisition is an all-stock transaction, marking another significant milestone for Lifeist’s expansion strategy.
About the ‘Zest’ Brand
The ‘Zest’ brand launched in September 2022 and has experienced remarkable growth within a short period of time, establishing a presence in Alberta, Ontario, Saskatchewan, Manitoba, and the Territories. With nine SKUs currently available and a store penetration rate of 22% in Alberta, Lifeist’s subsidiary, CannMart is focused on rapidly expanding and growing Zest’s market share in the markets CannMart currently serves. The brand’s success is further bolstered by developing innovative products and its ability to tap into fast-growing sub-categories within the Canadian cannabis market.
“The acquisition of Zest is another crucial step in our journey to establish Lifeist as one of Canada’s leading health-tech companies, with a goal to revolutionize human wellness,” said Meni Morim, CEO of Lifeist. “With Zest we acquire an established brand with sales in multiple provinces and territories, along with the added benefit of their unique Liquid Diamond vape formulations. The sale of vapes will generate additional revenue streams for Lifeist through prospective royalty and licencing agreements. We look forward to the seamless integration of Zest and its product portfolio into the Lifeist group of companies.”
“We are very excited about this strategic acquisition, as Zest has demonstrated tremendous growth through its innovative and complementary SKU assortment,” said Daniel Stern, CEO of CannMart. “The acquisition allows us to stay true to our core categories and further solidifies our position in the market. With the addition of Zest’s products, we anticipate accelerated growth in both top-line revenue and, more importantly, gross profit for our Cannabis division. What’s even more exciting is that this growth can be achieved without the need for additional capital expenditure or operating expenses. Leveraging our existing marketing and sales teams, we are confident we can continue to drive growth and achieve results similar to those we’ve accomplished with our successful Roilty brand.”
Zest has demonstrated solid sales growth, with shipments growing an average of 28% MoM from September 2022 to April 2023 across all provinces and categories. The focus is to continue this expansion with plans to increase the number of products available in Ontario to 14 by the end of Q3 2023. Zest is also looking to expand its current presence in Manitoba, Saskatchewan, as well as the Northwest Territories, Yukon, and Nunavut. The expansion into new product categories in response to the growing demand for Zest’s offerings positions Lifeist for continued success and reinforces its commitment to delivering innovative and exceptional cannabis products to consumers nationwide.
This acquisition also represents a considerable opportunity for Lifeist to make material contributions to its topline and gross profit. By incorporating additional popular ‘Zest’ products into its portfolio, Lifeist expands its product offering and the number SKUs available. The addition of Zest’s high-quality infused pre-rolls and the ground-breaking Liquid Diamond vape formulations perfectly compliments CannMart’s distribution network and in-house brand, Roilty, renowned for its BHO extracts and distillate vapes.
Transaction Details
The Acquisition, which is an arm’s length transaction, is subject to, among other things, receipt of required TSX Venture Exchange (“TSXV”) approval, and other customary conditions of closing, and is expected to close in the coming weeks. Pursuant to the terms of the Share Purchase Agreement, Lifeist will purchase 100% of the issued and outstanding shares of Zest from 13735346 Canada Inc. and 1000496959 Ontario Ltd. (together, the “Sellers”). The consideration for the Acquisition is comprised of, and is payable upon the following terms: (i) $1,536,707.90 in common shares of the Company (“Common Shares”) on the basis of a deemed price of $0.05 per Common Share (the “Initial Consideration Shares”) and (ii) $1,875,000 in Common Shares on the basis of a deemed price of $0.05 per Common Share (the “Escrowed Shares” and together with the Initial Consideration Shares, the “Consideration Shares”). Pursuant to the terms of the Share Purchase Agreement, the Escrowed Shares shall be deposited into escrow and released over a period of nine months in accordance with certain milestones pursuant to the terms and conditions of the escrow agreement.
As a condition of the Acquisition, each Seller will enter into a support and voting agreement (the “Voting Agreement”) with respect to the Consideration Shares received by the Sellers in connection with the Acquisition. Pursuant to the Voting Agreement, the Company will provide written notice to each Seller on how the Considerations Shares must be voted. The Voting Agreement will automatically terminate two years after the date of the closing of the Acquisition.
Corporate Update
The Company also announced today the grant of restricted share units (“RSUs”) to members of the senior management team as part of a salary deferral program implemented in 2022. The board of directors have approved a grant of 281,843 RSUs to senior management of the Company. The RSUs will vest one year from the grant date and have a two-year term. The grants of RSUs are subject to TSXV approval.
Data sources: 3rd Party Data: Headset, Trellis, Ontario Cannabis Store (OCS), and internal data.
About Lifeist Wellness Inc.
Sitting at the forefront of the post-pandemic wellness revolution, Lifeist leverages advancements in science and technology to build breakthrough companies that transform human wellness. Portfolio business units include: CannMart, which operates a B2B wholesale distribution business facilitating recreational cannabis sales to Canadian provincial government control boards including for CannMart Labs, a BHO extraction facility producing high margin cannabis 2.0 products; Australian Vapes, one of Australia’s largest online retailers of vaporizers and accessories; and Mikra, a biosciences and consumer wellness company developing and selling innovative therapies for cellular health.
Information on Lifeist and its businesses can be accessed through the links below:
www.lifeist.com
https://cannmart.com
https://www.roilty.co
https://wearemikra.com/
www.australianvaporizers.com.au
Contacts
Meni Morim, Lifeist Wellness Inc., CEO
Ph: 647-362-0390
Email: ir@lifeist.com
Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release or has in any way approved or disapproved of the contents of this press release.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This press release contains “forward-looking information” within the meaning of applicable Canadian securities legislation. These statements relate to future events or future performance. The use of any of the words “could”, “intend”, “expect”, “believe”, “will”, “projected”, “estimated” and similar expressions and statements relating to matters that are not historical facts are intended to identify forward-looking information and are based on the Company’s current belief or assumptions as to the outcome and timing of such future events.
The forward-looking information and forward-looking statements contained herein include, but are not limited to, statements regarding: the Company’s goal to leverage advancements in science and technology to build breakthrough companies that transform and revolutionize human wellness; the proposed benefits, terms, and timeline with respect to Acquisition, including, the Acquisition marking a significant milestone for the Company’s expansion strategy, serving as anothercrucial step in establishing the Company as a leading health-tech company, aligning the Company’s core categories and further solidifies its position in the market, and representing a considerable opportunity for the Company to make material contributions to its topline and gross profit; CannMart’s anticipated focus on rapidly expanding and growing Zest’s market share in the markets CannMart currently serves; the anticipated sale of vapes to generate additional revenue streams for the Company through prospective royalty and licencing agreements; the anticipated benefits of the Zest brand and products to the Company, including, the seamless integration the brand and products with the Company and its affiliates, the accelerated growth in both top-line revenue and gross profit for the Company’s Cannabis division, and that growth can be achieved without the need for additional capital expenditure or operating expenses; the Company’s expectations that the Acquisition can continue to drive growth and achieve similar results to its Roilty brand; the Company’s focus on continuing its expansion with plans to increase the number of products available in Ontario to 14 by the end of Q3 2023; the Company’s plans to expand the geographical availability of Zest and new product lines for Zest as part of the Company’s commitment to delivering innovative and exceptional cannabis products to consumers nationwide; the Company’s current and future product offerings and number of SKUs available; the receipt of the TSXV’s approval, satisfaction of customary conditions of closing, and the completion of the Acquisition under the timeline stated, including the deposit and release of the Escrowed Shares pursuant to the terms of the escrow agreement.
Forward-looking information in this press release are based on certain assumptions and expected future events, which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, and those assumptions and expected future events include, but are not limited to: the Company’s ability to leverage advancements in science and technology to build breakthrough companies that transform and revolutionize human wellness; the Company’s ability to realize upon the proposed benefits, terms, and timeline with respect to Acquisition, including, the Acquisition marking a significant milestone for the Company’s expansion strategy, serving as anothercrucial step in establishing the Company as a leading health-tech company, aligning the Company’s core categories and further solidifies its position in the market, and representing a considerable opportunity for the Company to make material contributions to its topline and gross profit; CannMart will continue to focus on rapidly expanding and growing Zest’s market share in the markets CannMart currently serves; the Company’s ability to capitalize upon the anticipated sale of vapes and generate additional revenue streams for the Company through prospective royalty and licencing agreements; the Company’s ability to realize upon the anticipated benefits of the Zest brand and products to the Company, including, the seamless integration the brand and products with the Company and its affiliates, the accelerated growth in both top-line revenue and gross profit for the Company’s Cannabis division, and that growth can be achieved without the need for additional capital expenditure or operating expenses; the Company’s ability to realize upon its expectations that the Acquisition will continue to drive growth and achieve similar results to its Roilty brand; the Company’s ability to focus on continuing its expansion and carry out its plans to increase the number of products available in Ontario to 14 by the end of Q3 2023; the Company’s ability to carry out its plans to expand the geographical availability of Zest and new product lines for Zest as part of the Company’s commitment to delivering innovative and exceptional cannabis products to consumers nationwide; the Company’s ability to maintain, develop, and expand its current and future product offerings and number of SKUs available; the Company’s ability to obtain receipt of the TSXV’s approval, satisfy of customary conditions of closing, and the complete of the Acquisition under the timeline stated, including the deposit and release of the Escrowed Shares pursuant to the terms of the escrow agreement.
These statements involve known and unknown risks, uncertainties and other factors, which may cause actual results, performance or achievements to differ materially from those expressed or implied by such statements, including but not limited to: the Company’s inability to leverage advancements in science and technology to build breakthrough companies that transform and revolutionize human wellness; the Company’s inability to realize upon the proposed benefits, terms, and timeline with respect to Acquisition, including, the Acquisition marking a significant milestone for the Company’s expansion strategy, serving as anothercrucial step in establishing the Company as a leading health-tech company, aligning the Company’s core categories and further solidifies its position in the market, and representing a considerable opportunity for the Company to make material contributions to its topline and gross profit; CannMart’s inability to continue to focus on rapidly expanding and growing Zest’s market share in the markets CannMart currently serves; the Company’s inability to capitalize upon the anticipated sale of vapes and generate additional revenue streams for the Company through prospective royalty and licencing agreements; the Company’s inability to realize upon the anticipated benefits of the Zest brand and products to the Company, including, the seamless integration the brand and products with the Company and its affiliates, the accelerated growth in both top-line revenue and gross profit for the Company’s Cannabis division, and that growth can be achieved without the need for additional capital expenditure or operating expenses; the Company’s inability to realize upon its expectations that the Acquisition will continue to drive growth and its inability to achieve similar results to its Roilty brand; the Company’s inability to focus on continuing its expansion and carry out its plans to increase the number of products available in Ontario to 14 by the end of Q3 2023; the Company’s inability to carry out its plans to expand the geographical availability of Zest and new product lines for Zest as part of the Company’s commitment to delivering innovative and exceptional cannabis products to consumers nationwide; the Company’s inability to maintain, develop, and expand its current and future product offerings and number of SKUs available; the Company’s inability to obtain receipt of the TSXV’s approval, satisfy of customary conditions of closing, and the complete of the Acquisition under the timeline stated, including the deposit and release of the Escrowed Shares pursuant to the terms of the escrow agreement.
Source: Lifeist Wellness Inc.
