Naturally Splendid Enterprises announces acquisition and $1.25M private placement

News Release

Naturally Splendid Enters into Letter of Intent to Acquire Innovative Natural Food Company and Announces Private Placement Financing

VANCOUVER, BRITISH COLUMBIA / TheNewswire / July 12, 2017 – Naturally Splendid Enterprises Ltd. (“Naturally Splendid” or the “Company”) (FRANKFURT:50N) (TSX VENTURE:NSP) (OTC:NSPDF) is pleased to announce it has entered into a letter of intent (“LOI”) to acquire an innovative, privately owned natural food company located in Vancouver, British Columbia that is focused on the development and production of nutritious products for the meal replacement market.

The proposed target has accumulated sales of approximately $8 million over the past four years and its products can be found in major retailers across Canada. As part of the acquisition, Naturally Splendid will take ownership of approximately $320,000 CDN of automated manufacturing equipment and related lease obligations, ownership of all retail lines and trademakes, ownership of intellectual property as well as all inventory and other working capital.

The target company’s line of products compliments Naturally Splendid’s current retail offering and the target’s expertise in creating innovative products for its clients is an excellent platform for the ingredient technologies supplied by Naturally Splendid. Upon completing the acquisition, it is expected that the target company’s product lines will be supplied by Naturally Splendid’s NATERA® Ingredients Division. Key executives and employees of the target company are expected to remain with the company upon completion of the acquisition.

Naturally Splendid CEO, Mr. Dave Eto states, “This proposed acquisition represents a significant advancement in our strategic plan. By acquiring the target company, we expect to add both to our product offerings and revenues while also accessing the target’s existing distribution channels to introduce the NATERA® retail lines both domestically and internationally. I am familiar with the history of the target company as well as its key executives, and I am confident the synergy between our organizations will benefit Naturally Splendid”.

Under the terms of the LOI, to acquire 100% of the outstanding shares of the target, Naturally Splendid will issue approximately 1,100,000 common shares of Naturally Splendid having a value of CDN $200,000 at the time of the signing of the LOI (the “Share Consideration”); and pay CDN $200,000 in cash on or before December 29, 2017 (the “Cash Consideration”). The Share Consideration will be placed in escrow or otherwise subjected to lock up agreements, with 50% to be released on January 1, 2018, and the remaining 50% to be released on January 1, 2019.

As part of the acquisition Naturally Splendid will assume or otherwise pay off the target company’s existing lines of credit which are currently anticipated to be approximately CDN $250,000. The vendors will also be entitled to performance based compensation equal to 25% of specified sales that exceed CDN $3,250,000 per year (adjusted annually), for the period 2018 to 2022. Total performance compensation will be capped at CDN $1,209,000. The Company has 30 days from the date of the LOI to execute definitive agreements in respect of the proposed acquisition.

Closing of the transaction is subject to acceptance by the TSX Venture Exchange and satisfactory due diligence by Naturally Splendid.

Private Placement

Naturally Splendid has also announced a proposed private placement financing of up to a maximum of 6,944,444 units at a price of CDN $0.18 per Unit for gross procceds of up to CDN $1,250,000 (the “Offering”). The proceeds will be used to satisfy the acquisition and integration of the target company, and for general operating capital. Directors and insiders of the company will be participating in the financing.

Each Unit offered will be comprised of one common share of Naturally Splendid and one-half of one common share purchase warrant (“Warrant”), with each whole Warrant entitling the holder to purchase one additional common share at $0.27 per share for a period of two years from the date of the issue. Naturally Splendid will have the right to accelerate the expiry date of the Warrants if, at any time, the average closing price of Naturally Splendid’s common shares is equal to or greater than $0.40 for 10 consecutive trading days. In the event of acceleration, the expiry date will be accelerated to a date that is 30 days after Naturally Splendid issues a news release announcing that it has elected to exercise this acceleration right. Management, directors and advisors of Naturally Splendid are expected to participate in the Offering through a combination of cash and loan conversions.

There is no minimum amount to the Offering. The Offering will be completed to “accredited investors” pursuant to National Instrument 45-106 – Prospectus and Registration Exemptions (“NI 45-106”), to existing security holders pursuant to BC Instrument 45-534 – Exemption from prospectus requirement from certain trades to existing security holders (“BCI 45-534”) and to certain subscribers pursuant to B.C. Instrument 45-536 – Exemptions from prospectus requirement for certain distributions through an investment dealer. The Offering of securities pursuant to 45-534 is being made to existing security holders who held shares of Naturally Splendid on July 11, 2017 (the “Record Date”). Naturally Splendid confirms that there is no material fact or material change regarding Naturally Splendid that has not been generally disclosed. In the event that Naturally Splendid receives subscriptions above the maximum, Naturally Splendid will adjust the subscriptions received on a pro-rata basis.

Naturally Splendid may pay finders a finder’s fee in cash and/or share purchase warrants.

Closing of the private placement is subject to acceptance of the TSX Venture Exchange.

This news release does not constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of any of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful, including any of the securities in the United States of America. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “1933 Act”) or any state securities laws and may not be offered or sold within the United States or to, or for account or benefit of, U.S. Persons (as defined in Regulation S under the 1933 Act) unless registered under the 1933 Act and applicable state securities laws, or an exemption from such registration requirements is available.

About Naturally Splendid Enterprises Ltd.

Naturally Splendid is a biotechnology and consumer products company that is developing, producing, commercializing, and licensing an entirely new generation of plant-derived, bioactive ingredients, nutrient dense foods, and related products. Naturally Splendid is building an expanding portfolio of patents (issued and pending) and proprietary intellectual property focused on the commercial uses of industrial hemp and non-psychoactive cannabinoid compounds in a broad spectrum of applications.

Naturally Splendid currently has six innovative divisions: (1) Natera® brand of retail hemp superfood products currently distributed throughout North America and Asia; (2) Chi Hemp Industries Incorporated (Chii) is selling natural and organic hemp products through e-commerce (3) PawsitiveFX® brand of pet care products; (4) Natera®Ingredients, division of plant-derived bulk ingredients including patent-pending HempOmega™; (5) POS-BPC Facility a 12,000-square-foot facility which is managed for Naturally Splendid by POS Bio-Sciences – is positioned to offer commercial-scale custom processing solutions for biological materials, such as functional foods and natural health ingredients to a wide range of clients;(6) Naturally Splendid USA offers Natera®CBD brand of retail hemp based cannabinoid nutraceutical and cosmeceutical products and Natera®Skincare brand of retail hemp based cosmeceutical products. Naturally Splendid`s advanced technologies, industry expertise, and strategic partners allow for the creation of customized solutions with a consistent focus on quality and sustainability.

For more information e-mail or call Investor Relations at 604-465-0548

On Behalf of the Board of Directors
Mr. Dave Eto
CEO, Director

Contact Information
Naturally Splendid Enterprises Ltd.
(NSP – TSX Venture; NSPDF – OTCQB; 50N Frankfurt)
#108-19100 Airport Way
Pitt Meadows, BC, V3Y 0E2
Office: (604) 465-0548
Fax: (604) 465-1128