Vancouver, British Columbia--(Newsfile Corp. - January 11, 2021) - The Very Good Food Company Inc. (CSE: VERY) (OTCQB: VRYYF) (FSE: 0SI) ("VERY" or the "Company") is pleased to announce that it has signed a non-binding letter of intent (the "LOI") for the acquisition (the "Acquisition") of all the shares of The Cultured Nut Inc., a popular plant-based cheese company located in Victoria, British Columbia ("The Cultured Nut"), with current distribution in several online and grocery retailers including SPUD.ca and select Whole Foods stores.
The Cultured Nut is a rapidly growing and highly successful artisan vegan cheese manufacturer on the West Coast of Canada with a well established line-up of innovative products consisting of block style cheeses, cream cheese and plant-based butter, which are tree nut based and both soy and gluten free. VERY has been selling The Cultured Nut's artisan vegan cheese products in its eCommerce and retail stores since September 2017 with overwhelmingly positive results and feedback.
The dairy alternatives market, including the plant-based and vegan sector, is expected to grow at a CAGR of 11.2% from 2020 to 2027 to reach US$44.9 billion by 2027. With the entire plant-based food industry growing at a rapid pace, the intended Acquisition is very timely and is an excellent complement to the Company's existing product line under The Very Good Butchers brand.
Mitchell Scott, CEO of The Very Good Food Company, stated: "The proposed acquisition of The Cultured Nut marks VERY's first move into the dairy alternatives space and is the next natural step towards achieving our near-term objective of being a leader in the plant-based food technology industry. With a shared ethos of using only high quality whole food ingredients, The Cultured Nut is a perfect addition to our existing and growing product portfolio. We have been selling their plant-based cheeses in our eCommerce and retail stores since September 2017, and have seen increased demand from consumers and highly positive reviews. We feel that by quickly integrating The Cultured Nut into our existing processes and distribution network, these synergies will allow us to scale their operations significantly and create a key, and entirely new revenue stream for our Company."
Under the terms of the LOI, completion of the Acquisition is subject to a number of conditions including, but not limited to, the completion of mutual due diligence, the negotiation and execution of a definitive agreement and the satisfaction of all closing conditions (including obtaining all regulatory approvals).
Pursuant to the LOI, the aggregate purchase price for Cultured Nut will be C$3,000,000 consisting of: (i) a $1,000,000 cash payment; (ii) such number of common shares of the Company equal to C$1,000,000 divided by the greater of the 30-day volume weighted average trading price of the Company shares ending two trading days prior to closing of the Acquisition or the the minimum price as may be permitted by the Exchange; (iii) a C$925,000 cash payment subject to meeting certain milestones related to integration of the Cultured Nut's business; and (iv) a C$75,000 cash payment subject to certain indemnification requirements. In addition, key Cultured Nut employees will enter into employment agreements with VERY. The parties have agreed to an exclusivity period until February 15, 2021 to complete due diligence and to negotiate and execute the definitive agreement. However, the Company can give no assurance that the Acquisition will be completed as proposed or at all.
The LOI is non-binding and neither the Company nor Cultured Nut is under any obligation with respect to the Acquisition or otherwise. Other than as specifically set out in the LOI, no definitive agreement will exist between the Company and Cultured Nut relating to the Acquisition unless and until a definitive agreement has been executed.
About the Company
The Very Good Food Company Inc. is an emerging plant-based food technology company. Our mission is to use progressive food technology to create plant-based meat and other food products that are delicious while maintaining a wholesome nutritional profile. To date we have developed a core product line under The Very Good Butchers brand.
For further information, please contact:
Chief Executive Officer and Director
Corporate Communications and Investor Relations
Phone: +1 855-472-9841
Neither the Canadian Securities Exchange nor its Market Regulator (as defined in the policies of the Canadian Securities Exchange) accept responsibility for the adequacy or accuracy of this release.
Cautionary Note Regarding Forward-Looking Information
This news release contains forward-looking information under applicable securities laws. Such forward-looking information is provided for the purpose of providing information about management's current expectations and plans relating to the future. Readers are cautioned that reliance on such information may not be appropriate for other purposes. Any such forward-looking information may be identified by words such as "proposed", "expects", "intends", "may", "will", and similar expressions. Forward-looking information contained or referred to in this news release includes, but is not limited to, the expected benefits to be derived from the Acquisition, the Company's ability to integrate The Cultured Nut's products into VERY's existing product portfolio, the Company's ability to scale The Cultured Nut's operations to create a sizable and new revenue stream for VERY, the expected growth rate of the dairy alternative market, the execution of a definitive agreement with respect to the Acquisition as proposed or at all and the ability of the parties to satisfy the conditions with respect to a definitive agreement. All statements other than statements of historical fact may be forward-looking information. Such statements reflect the Company's current views and intentions with respect to future events, and current information available to the Company, and are subject to certain risks, uncertainties and assumptions, including, without limitation the ability of the Company to negotiate and execute a satisfactory definitive agreement with respect to the Acquisition and to satisfy the conditions thereunder. Other factors that could cause actual results to differ materially from those described in such forward-looking information include, but are not limited to: negative cash flow and future financing requirements to sustain operations, dilution, limited history of operations and revenues and no history of earnings or dividends, competition, economic changes and the impact of and risks associated with the ongoing COVID-19 pandemic. The forward-looking information in this news release reflects the current expectations, assumptions and/or beliefs of the Company based on information currently available to the Company. Any forward-looking information speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking information, whether as a result of new information, future events or results or otherwise. The forward-looking statements or information contained in this news release are expressly qualified by this cautionary statement.
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