VANCOUVER, BC, Canada – PlantX Life Inc. announces that PlantX has acquired majority equity interests in each of Eh Coffee Corp. (“Eh Coffee”) and Portfolio Coffee Inc. (“Portfolio Coffee”, and together with Eh Coffee, the “Companies”, and each is a “Company”) from their respective shareholders (the “Selling Shareholders”) for a purchase price comprised of common shares of PlantX (“PlantX Shares”, and each is a “PlantX Share”) and cash (the “Transaction”). For further details about the Transaction, please see “About the Transaction.”
With this acquisition, PlantX plans to sell the Companies’ products on its online platform and its physical locations. PlantX will also exclusively use these curated beans to make the coffee beverages in its state-of-the-art cafe’s located in XMarket Squamish, XMarket Venice Beach, XMarket Hillcrest, XMarket Tel Aviv, and the two upcoming XMarkets located in Hudson’s Bay stores (Yorkdale & Rideau). By featuring the Portfolio brand at the XMarket Cafés, PlantX can offer same day delivery throughout Vancouver, Los Angeles, San Diego, Tel Aviv, Toronto and Ottawa.
PlantX will also leverage its e-commerce knowledge and distribution experience to bring Portfolio Coffee’s e-commerce subscription to new heights, similar to PlantX’s ramping of both the Bloombox Club and Little West businesses through the integration of a subscription-based model.
About the Companies
Eh Coffee and Portfolio Coffee source, roast, and distribute specialty coffees for a memorable farm to cup experience. Headquartered in Toronto, Ontario, Eh Coffee sources specialty coffee beans from renowned family farms worldwide and custom roasts these harvests in Canada. Branded “Portfolio” – Portfolio Coffee distributes these wide ranges of specialty coffees, featuring different roasts, flavour profiles and regions. Portfolio Coffee prides itself on its direct trade approach that empowers local farmers, and its direct-to-consumer green, sustainable packaging. All portions of the Eh Coffee to Portfolio Coffee supply chain remain transparent – ensuring origin, quality and consistency. Typically, this calibre of coffee is only available for coffee shops, but through Portfolio Coffee, is made accessible to everyday consumers. All Portfolio Coffee ranks 80 and above on the Specialty Coffee Association scale, delivering the most delicious coffee to your home. Eh Coffee has similarly built a successful distribution model, supplying many leading specialty coffee shops in Canada, including Dineen Coffee Company.
The visionaries behind Eh Coffee and Portfolio Coffee are founders Jacob Fortier, Victor Nucci and Andre Dalben, who will remain the Companies’ operators. They bring decades of experience to PlantX in this new chapter of growth. “We are very excited to join the PlantX team and bring the joys of coffee drinking and connoisseurship to XMarket stores and PlantX consumers,” collectively stated the founders. “We believe that curated farm-to-cup specialty coffee from renowned crop growing regions is the sustainable path of the future for specialty coffee.”
PlantX plans on distributing globally through the continuation of the local Canadian EH Coffee roasting business, driving growth of Portfolio Coffee’s subscription model for tailored coffee delivery, distribution of a wide range of Portfolio Coffee at PlantX’s online platform, as well as launching cafés serving Portfolio Coffee in the brick-and-mortar XMarket locations.
“We are delighted to welcome the Eh Coffee and Portfolio Coffee teams to the fold of the PlantX family,” stated the CEO of PlantX, Lorne Rapkin. “Coffee is perhaps the most widely accepted plant-based product – and a universal drink to start our days. We are beyond thrilled to join together our teams to launch the Portfolio Coffee offerings roasted right here in Canada for a farm to cup experience of premium specialty coffees on the PlantX website, XMarket stores and future cafés.”
According to Business Wire, last year (2020) the global coffee market was valued at USD $102.02 Billion, and between 2021-2025, is projected to grow at a CAGR of 4.28%.
About the Transaction
Pursuant to the terms and conditions of a share purchase agreement dated November 10, 2021 among PlantX, the Companies and the Selling Shareholders (the “Purchase Agreement”), PlantX acquired from the Selling Shareholders 53.5% and 51% of the outstanding shares in the capital of each of Eh Coffee and Portfolio Coffee (respectively) for a purchase price comprised of an aggregate of 913,320 PlantX Shares (the “Share Consideration”) and an aggregate of $434,058.14 in cash (the “Cash Consideration”), each payable in accordance with the terms and conditions of the Purchase Agreement and subject to adjustment. Further, nominees of PlantX now hold three out of the five board seats of each Company, but the Companies’ existing management teams will remain involved in the day-to-day operations of the Companies’ businesses going forward.
Upon the closing the Transaction, the Cash Consideration was paid to the Selling Shareholders and 182,664 of the PlantX Shares comprising the Share Consideration were issued at a deemed issuance price of $0.4096 per PlantX Share, representing the 10-day volume-weighted average price of the PlantX Shares on the Canadian Securities Exchange (the “CSE”) as of November 8, 2021. The other 730,656 of the PlantX Shares comprising the Share Consideration are to be issued in four equal tranches of 182,664 PlantX Shares on the 3-month, 6-month, 9-month and 12-month anniversaries of the closing date of the Transaction, respectively, subject to the terms and conditions of the Purchase Agreement and applicable securities laws.
The Purchase Agreement provides that, over the course of the three calendar years immediately following the closing of the Transaction, PlantX will have the option to purchase up to all of the remaining shares in the capital of the Companies held by the Selling Shareholders for a purchase price comprised of PlantX Shares, on and subject to the terms and conditions of the Purchase Agreement and applicable securities laws. Additionally, the Purchase Agreement provides that certain of the Selling Shareholders can require that PlantX exercise its option in respect of the remaining shares of either Company upon the achievement of certain financial performance milestones during the three calendar years immediately following the closing of the Transaction.
All PlantX Shares issued and to be issued in connection with the Transaction are, and are expected to be upon issuance, subject to a restrictive hold period of four months and one day. Additionally, the Purchase Agreement provides that the Selling Shareholders who received PlantX Shares will not, on any given day, sell such number of PlantX Shares that exceeds 10% of the average trading volume of the PlantX Shares on the CSE during the immediately preceding trading days, subject to certain exceptions.
In addition, in connection with the Transaction, PlantX has agreed to pay an aggregate of $60,611.55 in fees to a professional advisor, which amount will be paid post-closing in the form of cash and PlantX Shares, subject to applicable securities laws.
