Naturally Splendid (TSXV:NSP) announced it has signed a definitive share purchase agreement with Chi Hemp Industries Inc. and the shareholders of CHII whereby Naturally Splendid has agreed to acquire all of the issued and outstanding shares of CHII.
As quoted in the press release:
As described in an earlier news release, CHII is an online hemp company, based in Victoria, British Columbia, Canada. Their existing warehousing operation in Victoria, BC that distributes hemp products including seeds, oil and protein, will be replaced by Naturally Splendid’s 7,000 square foot facility in Burnaby, BC.
Under the terms of the definitive agreement, the CHII Shareholders will sell the CHII Shares to Naturally Splendid and, in consideration of which, Naturally Splendid will issue CAD $75,000 of common shares of Naturally Splendid to the CHII Shareholders and pay CAD $75,000 (the “Cash Payment”) to the CHII Shareholders. The Cash Payment will be made in three separate tranches: $25,000 within three months of closing, $25,000 within six months of closing and $25,000 within nine months of closing.
CHII has sold over one million pounds of hemp products since 1998. In fiscal year 2014/2015, CHII generated approximately CAD $300,000 in sales as well as positive earnings. The additional infrastructure and support available from Naturally Splendid creates the opportunity to build upon this revenue base.
On closing of the transaction, the CHII Shareholders, being Marco Pimentel and Agnieszka Wojdyla, will enter into a one year consulting agreement with Naturally Splendid. Their responsibilities will include the development and growth of CHII and associated websites, as well as optimizing revenue on Naturally Splendid’s online business. Further, the CHII Shareholders will receive a 12% gross sales commission on any lines of business that are directly benefited from their services.
Naturally Splendid V.P, Bryan Carson, stated:
Since the announcement of CHII, we have identified multiple opportunities in the retail hemp food sector. We will continue to grow our existing retail lines and pursue other areas of expansion for our retail divisions. The CHII team will be instrumental in assisting Naturally Splendid achieve these goals and we are excited to have them play a major role in our growth strategy moving forward.