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RYU Apparel Inc. 26.03.2021

RYU Apparel Announces Proposed Acquisition of Vancouver Based Kosan Travel Apparel

 

Acquisition Targets Incubating Travel Wear Market, Provides Centralized Operational Costs, Augments Ecommerce and Capital Market Expertise

 

Vancouver, BC – March 26th, 2021 – RYU Apparel Inc. (TSXV: RYU) (OTCQB: RYPPF) (FWB: RYAA) (“RYU” or the “Company”), creator of urban athletic apparel, is pleased to announce that it has entered into a share exchange agreement dated March 24, 2021 (the “Agreement”) with Kosan Travel Company Ltd., a private arm’s length British Columbia corporation (“Kosan”), and the shareholders of Kosan (collectively, the “Vendors”), pursuant to which RYU has agreed to acquire all of the issued and outstanding shares of Kosan from the Vendors (the “Transaction”).

 

Cesare Fazari, CEO of RYU stated, “We are excited at the prospect of having Kosan join the RYU family. We expect a big resurgence of travel in 2022 and intend to capitalize on the increased demand as consumers emerge from the pandemic. Whether it is heading out across the country or back out across the world, we believe Kosan’s functional travel apparel will be a hit with RYU customers and new customers alike. We also believe Kosan’s alignment with our message of RESPECT and its predominantly millennial female audience will augment our brand in a key market that we are focusing on.”

 

About Kosan Travel Company Ltd.

 

Kosan was co-founded by Joel Primus, who is intended to remain as the CEO of Kosan in addition to assisting RYU’s leadership team and corporate objectives. Joel was the founder and creative visionary behind numerous products at Naked Underwear (NASDAQ:NAKD), establishing retail distribution at Holt Renfrew, Nordstrom, Hudson’s Bay, and Bloomingdales, as well as brokering celebrity partnerships and up-listing the company to the Nasdaq. He was an inaugural British Columbia Business top 30 under 30 Entrepreneur in 2014 and has appeared on CBC’s hit show Dragon’s Den.

 

Kosan is a web-based travel apparel provider with a core focus on stylish performance dresses, rain jackets and bags that make adventures safer, easier and more comfortable. The brand achieved success on the well-known crowdfunding platform Kickstarter. The brand achieved nearly $1M in sales over a 35-day period, making it one of the platforms most successful apparel campaigns in history.

 

Kosan has built a loyal community of travelers across the world by creating beautiful but functional travel wear made from high quality materials. Kosan sells its popular travel dresses in over 70 countries. The brand has been featured in well-known publications such as Forbes, Travel + Leisure, SELF and Fodor’s. Kosan’s premium clothing can be seen on travel influencers and digital nomads from around the globe on travel blogs, Instagram models, and Tik Tok influencers.

Kosan’s unaudited net sales for the year ended May 31, 2020 were CAD$944,147 with an achieved gross margin(1) of 39%.

Kosan was seeing impressive growth before the pandemic hit. With the travel market predicted to return bigger than ever, we hope that by joining up with RYU, we will get that traction back faster than we could on our own,” said Primus. We are confident that RYU’s product development platform, distribution network, and marketing channels will enable us to scale growth, reduce cost structures, and exceed our goals for 2022.”

 

Terms of the Transaction

 

The purchase price for the Transaction will be $4,000,000 worth of common shares (each, a “Share”) in the capital of RYU, with the number of Shares issuable based on the volume-weighted average closing price of the Shares on the TSX Venture Exchange (“TSXV”) over the thirty (30) trading-days prior to the closing of the Transaction (“Closing”), or such other price as determined by the TSXV in accordance with its policies.

 

Closing is subject to Kosan raising at least $175,000 in equity financing and a number of other conditions common to similar share exchange transactions, including the conditional approval of the TSXV. Closing is also subject to Kosan having no more than $90,000 in aggregate indebtedness on the closing date.

 

The Company anticipates that the Transaction will constitute an Expedited Transaction in accordance with the policies of the TSXV.

 

For regular updates on RYU Apparel visit: http://ryu.com

 

Note:

(1) Non-GAAP measure. Gross margin does not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. The Company defines gross margin as gross profit as a percentage of revenue. Gross margin should not be construed as an alternative for revenue or net loss determined in accordance with IFRS. The Company believes that gross margin is a meaningful metrics in assessing the Company’s financial performance and operational efficiency.

 

About RYU

 

RYU Apparel (TSXV: RYU, OTCQB: RYPPF), or Respect Your Universe, is an award winning urban athletic apparel and accessories brand engineered for the fitness, performance and lifestyle of the athletic man and woman. Designed without compromise for fit, comfort, and durability, RYU exists to facilitate optimal human performance. For more information, please visit the RYU website at: http://ryu.com 

 

About Kosan

 

Kosan creates beautiful, functional travel wear with the finest materials and best factories from around the world. Their customers live active lives, travel the world and explore their own backyards! Kosan’s community spans 74 countries and transcends geography, language, culture and actively champions respect for human rights, equality, and environmental awareness. Kosan’s core products are performance dresses, rain jackets and bags that make your adventures safer, easier and more comfortable. They also donate 1% of its profits to Amnesty International, an organization supporting and advocating for human rights causes around the world.

 

RYU APPAREL INC.

Cesare Fazari”

Cesare Fazari, CEO

Tel: (844) 535‐2880

 

Corporate Communications

Anna Brazier +1 (844) 535-2880 investors@ryu.com

 

U.S. Investor Relations RedChip Companies Inc. Dave Gentry

(407) 491-4498

Dave@redchip.com

 

Notice Regarding Forward-Looking Statements

 

Certain statements in this news release related to the Company are forward-looking statements and are prospective in nature. Forward-looking statements are not based on historical facts, but rather on current expectations and projections about future events, and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements. These statements generally can be identified by the use of forward-looking words such as “may”, “should”, “could”, “intend”, “estimate”, “plan”, “anticipate”, “expect”, “believe” or “continue”, or the negative thereof or similar variations. Forward-looking statements in this news release include the statements respecting the Transaction and the closing thereof, the Company’s expectation that there will be a resurgence of travel in 2021, the expected benefits of the Transaction for both RYU and Kosan and that Joel Primus is anticipated to remain as CEO of Kosan post-closing. There are numerous risks and uncertainties that could cause actual results and the Company’s plans and objectives to differ materially from those expressed in the forward-looking information, including: that the Company’s assumptions in making forward-looking statements may prove to be incorrect; adverse market conditions; the inability of RYU to complete the Transaction on the terms announced or at all; risks relating to the satisfaction of the conditions to closing the Transaction; that future results may vary from historical results; and that market conditions or competition may affect the outcome of the Transaction and the business plan and operations of the Company in the future. These and all subsequent written and oral forward-looking information are based on estimates and opinions of management on the dates they are made and are expressly qualified in their entirety by this notice. Except as required by law, the Company does not intend to update these forward-looking statements.

 

Neither the TSX Venture Exchange Inc. nor its Regulation Service Provider (as that term is defined in the policies of the TSX Venture Exchange Inc.) accepts responsibility for the adequacy or accuracy of this press release.

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