News Feed Item

Gilla Completes Acquisition of Leading Canadian Vape Company

TORONTO, ONTARIO -- (Marketwired) -- 08/03/17 -- Gilla Inc. ("Gilla" or the "Company") (OTCQB:GLLA), the fast-growing designer, marketer and manufacturer of E-liquid for vaporizers and developer of cannabis concentrate products, announced today that the Company's subsidiary, Gilla Enterprises Inc., has closed the acquisition of all of the outstanding shares of Vape Brands International Inc. ("VBI"), a Toronto, Canada-based manufacturer and distributor of E-liquid products, for a total purchase price of up to $2,645,082(1) as detailed below. The transaction was first announced by the Company on a press release dated May 5th, 2017.

Transaction Highlights

--  VBI generated E-liquid sales and co-pack manufacturing revenue of over
    CAD $1.4 million (USD $1.1 million(1)) for fiscal 2016 and currently has
    a revenue run-rate of approximately CAD $2.0 million (USD $1.6
    million(1)) per year. 
--  The acquisition provides Gilla with a state-of-the-art manufacturing
    facility located in Canada's Greater Toronto Area. The 13,000 sq. ft.
    facility features a fully automated E-liquid manufacturing line, a
    certified ISO 8 clean room and capacity to produce up to 1.2 million E-
    liquid bottles per month. The facility is also stage 2 ISO 9001
    certified and will be utilized to manufacture product for Gilla's global
    customer base. 
--  The Company has acquired 6 brands from VBI to add to Gilla's portfolio,
    including the award-winning Moshi and Ohana E-liquid lines and the
    recently launched Crisp E-liquid line. 
--  The Company has also acquired VBI's extensive international customer
    base, as well as its Canadian distribution network covering over 500
--  The Company has agreed to retain the employees of VBI as well as all
    management expertise, including its CEO and founder Beju Lakhani. Mr.
    Lakhani has joined the Company as Chief Customer Officer of Gilla
    Enterprises Inc. and will be responsible for all aspects of the customer
    experience including sales, marketing and product development. 

"We are extremely pleased to be adding VBI's Canadian-based manufacturing operations and extensive Canadian distribution network to Gilla's already robust international platform," stated Graham Simmonds, Chair and CEO of Gilla. He continued, "This will also allow us to add immediate incremental revenue as we introduce Gilla's portfolio of brands to the existing customer base of VBI. Our integration process has already begun and we expect to quickly benefit from both operational and cost-saving synergies. I would like to give a warm welcome to the employees of VBI and to Beju as he joins our senior management team with an immediate focus of enhancing our global sales and marketing platform."

"I am truly excited to see what VBI and Gilla can accomplish together," stated Beju Lakhani, CEO and founder of VBI. He continued, "With a wealth of expertise, a truly global client base and a portfolio of innovative brands, I feel that we are well positioned to be one of the fastest growing vapor companies as a result of bringing together these two industry leading manufacturers. On a personal note, I am very pleased to be joining the Gilla team to help lead our growth in the vapor products industry. The combined talent of both the VBI and Gilla teams is incredible and it is very exciting to think of what we are capable of achieving in the future, both in Canada and throughout the world."

Transaction Details

Pursuant to the share purchase agreement (the "SPA"), dated July 31st, 2017, the Company paid to the vendors of VBI the total purchase price of up to $2,645,082(1) as follows:

--  2,500,000 common shares of the Company (the "Common Shares"), valued at
    $0.14 per share on closing for a total value of $350,000; 
--  Warrants exercisable for the purchase of 2,000,000 common shares of the
    Company (the "Warrants"), having an estimated value of $252,631 on
    issuance. The Warrants are exercisable for a period of twenty-four
    months at an exercise price of $0.20 per share, such Warrants vesting in
    five equal tranches every four months from closing; 
--  A total of CAD $550,000 (USD $440,529(1)) in vendor take-back loans (the
    "VTB"). The VTB is non-interest bearing, unsecured and due over twenty-
    four months. The Company shall be required to pay monthly principal
    repayments beginning five months from closing until maturity.
    Furthermore, a total of CAD $314,923 of the VTB is convertible into
    common shares of the Company at a fixed conversion price of $0.10 per
    share prior to each monthly principal repayment date at the option of
    the holder; and 
--  An earn-out capped at: (i) the total cumulative amount of CAD $2,000,000
    (USD $1,601,922(1)); or (ii) five years from the closing date (the
    "Earn-Out"). The Earn-Out shall be calculated as: (a) 15% of the gross
    profit generated in Canada by VBI's co-pack and distribution business;
    (b) 10% of the revenue generated in Canada by Gilla's existing brands;
    and (c) 15% of the revenue generated globally on VBI's existing brands.
    Furthermore, the Earn-Out shall be calculated and paid to the vendors
    quarterly in arrears and only as 50% of the aforementioned amounts on
    incremental revenue between CAD $300,000 and CAD $600,000 per quarter
    and 100% of the aforementioned amounts on incremental revenue above CAD
    $600,000 per quarter. No Earn-Out shall be payable to the vendors if
    total revenue for the calculation period is less than the CAD $300,000

Neither the Common Shares nor the common shares issuable upon exercise of the Warrants or conversion of the VTB thereof will be registered under the Securities Act of 1933, as amended, or any state securities laws and they may not be offered or sold in the United States absent of registration or an applicable exemption from registration requirements. All references to dollar amounts in this press release are in United States Dollars unless stated otherwise.

About Vape Brands International Inc.

Vape Brands International Inc. was founded in 2013 and began manufacturing and distributing the Moshi E-liquid brand. VBI now has a portfolio of 6 E-liquid brands and has co-pack agreements to manufacture for an additional 20 E-liquid brands for distribution across Canada. The company currently operates out of a state-of-the-art 13,000 sq. ft. facility in Mississauga, Canada and is committed to providing the highest level of customer service within the industry.

About Gilla Inc.

Gilla Inc. manufactures, markets and distributes E-liquid for use in vaporizers and develops turn-key vapor and cannabis concentrate solutions for high terpene vape oils, pure crystalline, high performance vape pens and other targeted products. Gilla aims to be a global leader in delivering the most efficient and effective vaping solutions for nicotine and cannabis related products. The Company's multi-jurisdictional, broad portfolio approach services both the nicotine and cannabis markets with high quality products that deliver a consistent and reliable user experience. Gilla's proprietary product portfolio includes the following brands: Coil Glaze(TM), Siren, The Drip Factory, Craft Vapes(TM), Craft Clouds, Surf Sauce, Vinto Vape, VaporLiq, Vape Warriors, Vapor's Dozen, Miss Pennysworth's Elixirs, The Mad Alchemist(TM), Replicant, Enriched Vapor and Crown E-liquid(TM).

Forward-looking Statements

Note: This press release contains "forward looking statements" as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on currently available competitive, financial and economic data and management's views and assumptions regarding future events. Such forward-looking statements are inherently uncertain. Gilla Inc. cannot provide assurances that the matters described in this press release will be successfully completed or that the company will realize the anticipated benefits of any transaction. Actual results may differ materially from those projected as a result of certain risks and uncertainties, including but not limited to: global economic and market conditions; the war on terrorism and the potential for war or other hostilities in other parts of the world; the availability of financing and lines of credit; successful integration of acquired or merged businesses; changes in interest rates; management's ability to forecast revenues and control expenses, especially on a quarterly basis; unexpected decline in revenues without a corresponding and timely slowdown in expense growth; the company's ability to retain key management and employees; intense competition and the company's ability to meet demand at competitive prices and to continue to introduce new products and new versions of existing products that keep pace with technological developments, satisfy increasingly sophisticated customer requirements and achieve market acceptance; relationships with significant suppliers and customers; as well as other risks and uncertainties, including but not limited to those detailed from time to time in Gilla Inc. SEC filings. Gilla Inc. undertakes no obligation to update information contained in this release. For further information regarding risks and uncertainties associated with Gilla Inc.'s business, please refer to the risks and uncertainties detailed from time to time in Gilla Inc.'s SEC filings.

For more information, please visit gilla.com.

(1) On July 31st, 2017, the exchange rate for Canadian Dollars ("CAD") in terms of the United States Dollars ("USD") as quoted by the Bank of Canada was USD $1.00 = CAD $1.2485.

Gilla Inc.
Mr. Graham Simmonds
Chair and CEO
1 (416) 843-2881
[email protected]

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
This session will provide an introduction to Cloud driven quality and transformation and highlight the key features that comprise it. A perspective on the cloud transformation lifecycle, transformation levers, and transformation framework will be shared. At Cognizant, we have developed a transformation strategy to enable the migration of business critical workloads to cloud environments. The strategy encompasses a set of transformation levers across the cloud transformation lifecycle to enhance ...
Your job is mostly boring. Many of the IT operations tasks you perform on a day-to-day basis are repetitive and dull. Utilizing automation can improve your work life, automating away the drudgery and embracing the passion for technology that got you started in the first place. In this presentation, I'll talk about what automation is, and how to approach implementing it in the context of IT Operations. Ned will discuss keys to success in the long term and include practical real-world examples. Ge...
The challenges of aggregating data from consumer-oriented devices, such as wearable technologies and smart thermostats, are fairly well-understood. However, there are a new set of challenges for IoT devices that generate megabytes or gigabytes of data per second. Certainly, the infrastructure will have to change, as those volumes of data will likely overwhelm the available bandwidth for aggregating the data into a central repository. Ochandarena discusses a whole new way to think about your next...
So the dumpster is on fire. Again. The site's down. Your boss's face is an ever-deepening purple. And you begin debating whether you should join the #incident channel or call an ambulance to deal with his impending stroke. Yes, we know this is a developer's fault. There's plenty of time for blame later. Postmortems have a macabre name because they were once intended to be Viking-like funerals for someone's job. But we're civilized now. Sort of. So we call them post-incident reviews. Fires are ne...
Whenever a new technology hits the high points of hype, everyone starts talking about it like it will solve all their business problems. Blockchain is one of those technologies. According to Gartner's latest report on the hype cycle of emerging technologies, blockchain has just passed the peak of their hype cycle curve. If you read the news articles about it, one would think it has taken over the technology world. No disruptive technology is without its challenges and potential impediments t...
Hackers took three days to identify and exploit a known vulnerability in Equifax’s web applications. I will share new data that reveals why three days (at most) is the new normal for DevSecOps teams to move new business /security requirements from design into production. This session aims to enlighten DevOps teams, security and development professionals by sharing results from the 4th annual State of the Software Supply Chain Report -- a blend of public and proprietary data with expert researc...
CloudEXPO New York 2018, colocated with DevOpsSUMMIT and DXWorldEXPO New York 2018 will be held November 12-13, 2018, in New York City and will bring together Cloud Computing, FinTech and Blockchain, Digital Transformation, Big Data, Internet of Things, DevOps, AI and Machine Learning to one location.
DXWorldEXPO LLC announced today that Nutanix has been named "Platinum Sponsor" of CloudEXPO | DevOpsSUMMIT | DXWorldEXPO New York, which will take place November 12-13, 2018 in New York City. Nutanix makes infrastructure invisible, elevating IT to focus on the applications and services that power their business. The Nutanix Enterprise Cloud Platform blends web-scale engineering and consumer-grade design to natively converge server, storage, virtualization and networking into a resilient, softwar...
CloudEXPO | DevOpsSUMMIT | DXWorldEXPO are the world's most influential, independent events where Cloud Computing was coined and where technology buyers and vendors meet to experience and discuss the big picture of Digital Transformation and all of the strategies, tactics, and tools they need to realize their goals. Sponsors of DXWorldEXPO | CloudEXPO benefit from unmatched branding, profile building and lead generation opportunities.
The digital transformation is real! To adapt, IT professionals need to transform their own skillset to become more multi-dimensional by gaining both depth and breadth of a wide variety of knowledge and competencies. Historically, while IT has been built on a foundation of specialty (or "I" shaped) silos, the DevOps principle of "shifting left" is opening up opportunities for developers, operational staff, security and others to grow their skills portfolio, advance their careers and become "T"-sh...
Lori MacVittie is a subject matter expert on emerging technology responsible for outbound evangelism across F5's entire product suite. MacVittie has extensive development and technical architecture experience in both high-tech and enterprise organizations, in addition to network and systems administration expertise. Prior to joining F5, MacVittie was an award-winning technology editor at Network Computing Magazine where she evaluated and tested application-focused technologies including app secu...
DXWorldEXPO LLC announced today that Big Data Federation to Exhibit at the 22nd International CloudEXPO, colocated with DevOpsSUMMIT and DXWorldEXPO, November 12-13, 2018 in New York City. Big Data Federation, Inc. develops and applies artificial intelligence to predict financial and economic events that matter. The company uncovers patterns and precise drivers of performance and outcomes with the aid of machine-learning algorithms, big data, and fundamental analysis. Their products are deployed...
ICC is a computer systems integrator and server manufacturing company focused on developing products and product appliances to meet a wide range of computational needs for many industries. Their solutions provide benefits across many environments, such as datacenter deployment, HPC, workstations, storage networks and standalone server installations. ICC has been in business for over 23 years and their phenomenal range of clients include multinational corporations, universities, and small busines...
This sixteen (16) hour course provides an introduction to DevOps, the cultural and professional movement that stresses communication, collaboration, integration and automation in order to improve the flow of work between software developers and IT operations professionals. Improved workflows will result in an improved ability to design, develop, deploy and operate software and services faster.
Headquartered in Plainsboro, NJ, Synametrics Technologies has provided IT professionals and computer systems developers since 1997. Based on the success of their initial product offerings (WinSQL and DeltaCopy), the company continues to create and hone innovative products that help its customers get more from their computer applications, databases and infrastructure. To date, over one million users around the world have chosen Synametrics solutions to help power their accelerated business or per...