Vejii Announces Definitive Agreement to Acquire Vegan Essentials and a C$10M Brokered Private Placement led by Eight Capital

Vejii Announces Definitive Agreement to Acquire Vegan Essentials and a C$10M Brokered Private Placement led by Eight Capital

/NOT FOR DISTRIBUTION OR DISSEMINATION INTO THE UNITED STATES OR THROUGH U.S. NEWSWIRE SERVICES/

VANCOUVER, BC, April 15, 2021 /CNW/ – Vejii Holdings, Inc.  (“Vejii” or the “Company“), which operates ShopVejii.com, a leading North American online vegan marketplace, today announced that it has signed a definitive agreement (the “Agreement“) to acquire Veg Essentials LLC. (“Vegan Essentials“), which operates VeganEssentials.com, one of the largest and most established vegan marketplaces in the US (the “Proposed Transaction“).

Proposed Transaction

Vegan Essentials’ unaudited 2020 revenue was approximately C$3.57M, mainly driven through organic search traffic, with a gross profit of approximately C$785,000. Vejii’s management team intends to enhance operational efficiencies, margins and begin to launch paid advertising programs for Vegan Essentials to further scale the business. It also expects to see several synergies across both Vejii and Vegan Essentials by leveraging combined purchasing, resources, technology and warehouses leading to lower shipping and transportation costs.

The terms of the Agreement include a purchase price of US$1,400,000 comprised of:

  • US$200,000 refundable deposit payable upon signing of the Agreement;
  • US$1,000,000 payable in common shares of Vejii (each, a “Share“) at a deemed price of C$0.35 upon closing; and
  • US$200,000 payable in cash upon closing.

Closing of the Proposed Transaction is subject to customary closing conditions as well as Vejii receiving a receipt for a final prospectus and obtaining conditional approval for listing on the Canadian Securities Exchange.

The Proposed Transaction will provide Vejii with an established platform for continued expansion within the US plant-based market that is complementary to its current e-commerce marketplace. Vegan Essentials has one of the longest digital presences and established domain authority in the US for vegan search terms, which Vejii plans to leverage to support marketing campaigns for both brands leading to increased marketing awareness and rankings.

Kory Zelikson, Vejii CEO, stated, “We believe that Vejji’s acquisition of Vegan Essentials, announced today, provides an established asset to accelerate growth within the growing plant-based market and will solidify Vejii as the market leader for online plant-based sales within the US. Vegan Essentials joins the Vejii family with a loyal customer base, established supplier relationships, and distribution channels that will not only enhance Vejii’s ability to continue scaling in the US, but also help grow Vegan Essentials’ reach with Vejii’s enhanced tech stack, and marketing experience”

“Vejii will leverage over 20 years of consumer insight and data from VeganEssentials.com, as the online grocery market has the potential to exceed traditional retail shopping over the long-term and will help fuel our growth for years to come.”

Ryan Wilson and Mary Ernster, Co-Founders of Vegan Essentials, said “Vejii’s acquisition of Vegan Essentials is not only a significant milestone for the company, but for the plant-based market as a whole. With this acquisition, we believe Vejii is poised to leverage the rapid growth of the plant-based online retail market, driven by consumer demand, access to new products, and the largest selection of plant-based products in one place.”

Vejii’s management team brings extensive experience in the leading and scaling of online platforms. Following the successful completion of the Proposed Transaction, the Vegan Essentials management team will continue to support the transition, driving consolidated distribution and day-to-day operations.

Darren Gill, Vejii President, commented, “Today marks a milestone moment as Vejii will become the online vegan marketplace with the largest reach between our two brands. Our acquisition of Vegan Essentials will provide a strong platform for the future introduction of vendors and marketing on both ShopVejii.com and VeganEssentials.com, all while leveraging our team, distribution, marketing channels and brand ambassador partnerships, as well as vast consumer insights that have been built through Vegan Essentials leadership position in the US. Based on consumption habits we have seen in the US, we believe that over time US plant-based products sales could grow to in excess of a US$20 billion total addressable market opportunity.” 

C$10,000,000 Brokered Private Placement and Appointment of Eight Capital

Vejii is also pleased to announce that the Company has signed an engagement letter with Eight Capital, as lead agent, to undertake a syndicated brokered private placement (the “Financing“) of special warrants of the Company (“Special Warrants“) and subscription receipts of the Company (“Subscription Receipts” and, together with the Special Warrants, the “Offered Securities“), for aggregate gross proceeds of $10,000,000, as follows:

  • C$2,000,000 in Special Warrants; and
  • C$8,000,000 in Subscription Receipts.

Each Subscription Receipt will offered at a price of $0.35 and will be automatically exercisable for one unit of the Company (each, a “Unit“), comprised of one Share and one-half of one common share purchase warrant (each whole warrant, a “Warrant“) following the satisfaction of the Escrow Release Conditions (as defined below). Each Warrant will entitle the holder thereof to purchase one Share for a period of 24 months following the satisfaction of the Escrow Release Conditions at C$0.50 subject to an accelerated expiry provision in the event the Shares trade at or above C$1.25 for ten consecutive trading days.

Each Special Warrant will be offered at a price of $0.35 and will be automatically exercisable into one Unit comprised of one Share and one-half Warrant upon the earlier of (a) satisfaction of the Escrow Release Conditions; and (b) the Termination Time (as defined below). In the event the Escrow Release Conditions are not satisfied on or before the date that is 90 days after closing of the Financing, the Special Warrant will entitle the holder to receive, upon exercise and without additional consideration, 1.10 Units rather than one Unit.

The gross proceeds from sale of the Subscription Receipts Financing will be held in escrow and released upon satisfaction of the following conditions (the “Escrow Release Conditions“):

  1. the Company obtaining a receipt from the provincial securities regulatory authorities in the jurisdictions where the Offered Securities were sold for a (final) non-offering prospectus qualifying distribution of the Units underlying the Offered Securities;
  2. the Company obtaining conditional approval from the Canadian Securities Exchange (the “CSE“) to list the Shares; and
  3. the Company and Eight Capital (on their own behalf and on behalf of the syndicate) having delivered a notice to the escrow agent confirming that the conditions set forth in (I) and (II) above have been met or waived.

In the event the Escrow Release Conditions are not satisfied within 120 days of closing of the Financing (the “Termination Time“), the escrowed funds will be returned to the holders of Subscription Receipts together with any interest accrued thereon.

In consideration for services provided in connection with the Financing, the Company will pay to Eight Capital the following:

  • 7% cash commission (3.5% for President’s List), 50% payable on the closing of the Financing and 50% payable upon the satisfaction of the Escrow Release Conditions); and
  • compensation warrants (each, a “Compensation Warrant“) equal to 7% of the number of Offered Securities sold pursuant to the Financing (3.5% for President’s List), 100% issuable on the closing date, each Compensation Warrant exercisable into one Share at a price of C$0.35 for a period of 24 months following the closing date.

Non-Offering Prospectus

Vejii intends to file with the provincial securities commissions a preliminary prospectus over the coming weeks, and a final prospectus on or shortly after the closing of the Financing. It is intended that the prospectus will qualify the distribution of the Units to be issued upon exercise of the Subscription Receipts and Special Warrants.

About Vejii Holdings Inc.
Headquartered in Kelowna B.C. and operating its online marketplace ShopVejii.com in the US, through its wholly-owned subsidiary Vejii Inc., Vejii Holdings Ltd. is focused on providing its customers with easy access to thousands of vegan and plant-based products in one place. Vejii leverages technology integrations like smart lists, reorders features, subscription programs, AI, and is always looking for new and innovative ways to enhance the customer experience.

Information on the Company and its many products can be accessed through the links below. VejiiHoldings.com

About Vegan Essentials

Vegan Essentials has been owned and operated since 1997 and is the longest-operating cruelty-free retailer in the US. Vegan Essentials offers unparalleled customer service and the highest quality animal-free and cruelty-free products, all in one location. Vegan Essentials has established long-term relationships with the industries most innovative brands, and continues to expand its offering of high-quality vegan products across the US.

CAUTION REGARDING FORWARD-LOOKING STATEMENTS

This press release contains certain forward-looking statements within the meaning of applicable securities laws with respect to the Company including statements relating to completion of the Proposed Transaction, completion of the Financing, the filing of a non-offering prospectus, a listing on the CSE and the Company’s future performance.  These forward-looking statements generally are identified by words such as “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” and similar expressions. Forward-looking statements are predictions, projections, and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Many factors could cause actual future events to differ materially from the forward-looking statements in this press release including, without limiting the foregoing, the risk  that the closing conditions to the Proposed Transaction will not be satisfied, the risk that the Company will not be able to locate suitable investors for the Financing and the risk that the Company will not be successful in obtaining a receipt for a final prospectus or obtaining conditional approval of the CSE to its proposed stock exchange listing. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and, except as required by law, the Company assumes no obligation and does not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise.

SOURCE Vejii Holdings Ltd.

For further information: Investor Relations: IR@shopvejii.com

Related Links

https://www.vejiiholdings.com/
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