TAAT™ Enters into Agreement to Acquire Ohio-Based

LAS VEGAS and VANCOUVER, British Columbia, Feb. 25, 2022 (GLOBE NEWSWIRE) — TAAT™ GLOBAL ALTERNATIVES INC. (CSE: TAAT) (OTCQX: TOBAF) (FRANKFURT: 2TP) (the “Company” or “TAAT™”) is pleased to announce that it has entered into an agreement dated Friday, February 25, 2022 to acquire HLND Holdings, Inc. (“HLND”), the parent entity of a convenience and tobacco wholesaler based in Ohio. HLND presently maintains a network of more than 5,000 convenience stores through its direct and indirect relationships with independent and corporate retailers as well as a network of regional sub-distributors. From 2019 to 2021 HLND realized at least 10% growth of its net revenues each year, with net revenues for calendar 2021 amounting to CAD $87,181,400.32 (approximate conversion from USD as at February 23, 2022), and continues to be profitable. The Company anticipates that by acquiring HLND it could fortify its existing revenue sources as well as its portfolio of assets as TAAT™ continues to expand both in the United States and internationally.

With its agreement to acquire HLND, the Company is embarking on a journey in which it plans to convert certain aspects of its supply chain into wholly-owned internal business units, which aligns with the practices of current leaders in the global tobacco industry. With HLND’s seasoned executive team and personnel in sales, logistics, and product development, the Company can leverage these invaluable skill sets as part of commercializing TAAT™ products on a larger scale.

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The Company has entered into an agreement to acquire HLND, which will provide TAAT™ with its own wholesale presence in the Great Lakes region of the United States. HLND operates a long-established convenience distribution network in categories to include tobacco, snacks, candy, and various other convenience products.

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HLND has aggressively expanded its footprint in the Great Lakes region of the United States, which can add to the Company’s overall presence with its first owned facility and distribution network in the northeastern region of the country. Besides TAAT™ and leading brands of tobacco cigarettes (e.g., Marlboro, Newport, Camel), HLND also carries a selection of consumer packaged goods (“CPG”) oriented towards the convenience segment such as candy, snacks, beverages, and paper products. Additionally, HLND already stocks a diverse range of alternatives to tobacco cigarettes such as e-cigarettes and vaping cartridges, which the Company intends to complement with its heat-not-burn offering as detailed in its February 18, 2022 press release. Since 2019, HLND’s net revenues have seen “double-digit” growth (i.e., growth of 10% or more) year-over-year (“YoY”) as shown in the table below.

TAAT™ Chief Executive Officer Setti Coscarella commented, “In competitive industries such as tobacco, long-term success largely depends on how self-sustaining and independent your operations are at a macro level. TAAT™ has proven quite popular in the Midwest, and I believe that by owning a regional fulfillment centre we will be able to distribute our products more efficiently and more profitably as we continue to build market share. Additionally, with direct access to Ohio stores through HLND we can test new offerings and initiatives, and overall gain an improved understanding of a product’s journey to market from a distributor perspective. HLND has proven to be a very reliable, insightful, and beneficial business partner of ours since they began carrying TAAT™. As such, we are excited about making them part of the TAAT™ family, where we anticipate they will be invaluable to us for growing our distribution, developing new products, and formulating strategies for commercializing TAAT™ on an even larger scale.”

HLND Director Barry Adelman stated, “Ever since we started carrying TAAT™ over a year ago, it has proven to be an impressive product among our existing tobacco offerings. Over the past several decades we have seen numerous alternatives to tobacco cigarettes hitting the market, though for a combustible product to be nicotine-free and tobacco-free is rather unique, and that alone does a great job at capturing the attention of our retail accounts, leading to repeat orders when consumers are ultimately compelled to make the switch. Having worked side-by-side with TAAT™ all this time, we have identified countless opportunities for them to potentially generate unparalleled value as our parent company. The combustible Original, Smooth, and Menthol offerings are just the beginning; between the recently announced heat-not-burn offering and the ability to develop and test new variations, our facilities, team, and network are capable of bringing many great things to fruition for TAAT™, which we are very excited to begin exploring.”

The purchase price to acquire HLND will be equal to CAD $6,604,000 or the equivalent of approximately USD $5,200,000 (the “Purchase Price”), representing a valuation of CAD $8,890,000 or the equivalent of approximately USD $7,000,000 (the “Valuation”) less CAD $2,286,000 or the equivalent of US $1,800,000 debt outstanding on the HLND line of credit. The final Purchase Price on closing shall be adjusted accordingly as the sum of the Valuation less the Debt Amount on the Closing Date. The Purchase Price shall consist of up to CAD $1,254,760 or 19% of the Purchase Price in cash (“Cash”) and the remaining CAD $5,349,240 or 81% of the Purchase Price in Common Shares of TAAT™ (the “Consideration Shares”).

All Consideration Shares will be issued upon closing, and will be subject to a lock-up schedule whereby one-third (1/3) of the Consideration Shares will be released from lock-up on the 4^th, 8^th and 12^th month from closing.

The transaction as contemplated in the agreement between the Company and HLND is expected to close on or about March 15, 2022.

In connection with the closing of this transaction, TAAT™ will pay a finder’s fee of 5% of its value (paid as 50% in cash and 50% in shares) to an arm’s length party.

On behalf of the Board of Directors of the Company,

TAAT™ GLOBAL ALTERNATIVES INC.

“Setti Coscarella”

Setti Coscarella, CEO and Director

For further information, please contact:

TAAT™ Investor Relations
1-833-TAAT-USA (1-833-822-8872)
[email protected]

THE CANADIAN SECURITIES EXCHANGE (“CSE”) HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ACCURACY OR ADEQUACY OF THIS RELEASE, NOR HAS OR DOES THE CSE’S REGULATION SERVICES PROVIDER.

About TAAT™ Global Alternatives Inc.

The Company has developed TAAT™, which is a tobacco-free and nicotine-free alternative to traditional cigarettes offered in “Original”, “Smooth”, and “Menthol” varieties. TAAT™’s base material is Beyond Tobacco™, a proprietary blend which undergoes a patent-pending refinement technique causing its scent and taste to resemble tobacco. Under executive leadership with “Big Tobacco” pedigree, TAAT™ was launched first in the United States in Q4 2020 as the Company seeks to position itself in the $814 billion¹ global tobacco industry.

For more information, please visit http://taatglobal.com.

References

¹ British American Tobacco – The Global Market

Forward-Looking Statements

This news release contains “forward-looking information” within the meaning of applicable Canadian securities legislation. Often, but not always, forward-looking information and information can be identified by the use of words such as “plans”, “expects” or “does not expect”, “is expected”, “estimates”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur, or be achieved. Forward-looking information in this news release includes statements regarding the anticipated performance of TAAT™ in the tobacco industry, in addition to the following: Completion of the Company’s planned acquisition of HLND under the terms of a February 25, 2022 agreement; the ability of management to integrate HLND’s business into its current operations; and the ability to execute on its plan to expand both in the United…