Lifeist Sells Australian Vape Subsidiary to Sharpen Focus on Nutraceuticals and B2B Cannabis
"We are pleased to announce the sale of Australian Vapes to Flora Growth Corp whose core business is well-suited for this subsidiary,"
Lifeist Wellness Inc. (TSXV: LFST), a Canadian health-tech company, has sold its wholly-owned Australian subsidiary Australian Vaporizers Pty Ltd to Flora Growth Corp. (NASDAQ: FLGC), a U.S. consumer packaged goods and pharmaceutical distributor.
The sale was completed through a share purchase agreement where Lifeist sold 100% of the shares of Australian Vaporizers to Flora. The total consideration paid by Flora was approximately C$900,000 in the form of 550,000 Flora common shares issued from treasury to Lifeist.
"We are pleased to announce the sale of Australian Vapes to Flora Growth Corp whose core business is well-suited for this subsidiary," said Meni Morim, CEO of Lifeist Wellness. "The sale allows Lifeist to exit the Australian vape devices market and focus on developing our core nutraceutical and B2B recreational cannabis assets in North America, while also strengthening our cash position."
Lifeist had previously announced an agreement to sell Australian Vapes to Flora in September 2023, but that original deal was terminated. The newly agreed upon terms represent an improvement for Lifeist, requiring only C$400,000 in inventory and C$50,000 cash versus C$1.1 million in inventory and C$450,000 cash under the previous terms - a C$1.1 million boost to Lifeist's working capital.
By taking an equity stake in Flora through this transaction, Lifeist shareholders gain exposure to positive developments in the U.S. market. Morim noted the "potential for further cooperation with Flora in the future as events unfold."
Kronos Capital Partners Inc. acted as financial advisor to Lifeist on the deal, which did not involve any non-arm's length parties per TSX Venture policies.
The divestiture allows Lifeist to concentrate on its remaining portfolio companies - Mikra, a biosciences and consumer nutraceutical business, and CannMart, its B2B wholesale recreational cannabis distribution business in Canada. Lifeist aims to build breakthrough wellness companies leveraging science and technology in the "post-pandemic wellness revolution."
