The TSX Venture Exchange has accepted for filing an acquisition agreement dated May 2, 2021, between the company and Josh Delaney, as the sole shareholder (the vendor) of Fab Nutrition LLC. Pursuant to the terms of the agreement, the company will purchase an 80-per-cent ownership interest in Fab Nutrition, including a three-year option to acquire, at any time, the remaining 20-per-cent ownership interest of Fab Nutrition from the vendor. In return, the company will provide the vendor a total consideration of approximately $20.64-million (U.S.), to be satisfied as follows:
$12,561,798 (U.S.) in cash payments;
- 15,154,109 common shares to be issued at a deemed price of 64.8 cents for an aggregate value of $8,078,202 (U.S.).
In addition, as per the terms of the agreement, the vendor will also be entitled to receive an earnout bonus payment of $612,000 (U.S.), to be satisfied in shares in compliance with exchange policy, in the event that the gross revenue of Fab Nutrition is equal to or exceeds $13.5-million (U.S.) in the year 2021. The company has also granted the vendor an option that will grant him the right to sell to the company the remaining ownership interest of Fab Nutrition not held by the company. The put option is exercisable for a period of two years following the one-year anniversary after the closing of this transaction.
The call option and put option will be further subject to exchange approval at the time of exercise.
Insider/pro group participation: none
Bayline Capital Partners Inc. has also been provided an advisory fee equivalent to 3 per cent of the total consideration in connection with this transaction, satisfied 50 per cent in cash payments and 50 per cent in common shares, being 462,711 common shares in the capital of the company.
For further information, please reference the company's news releases dated May 3, 2021, and May 10, 2021.
© 2021 Canjex Publishing Ltd. All rights reserved.