Gilla Closes Acquisition of E-Liquid Manufacturer - Seite 2

"I am delighted to complete this exciting deal and become part of the Gilla strategy to be the leading global manufacturer of e-liquids," said Yaron Elkayam, President of E Liquid Wholesale. He continued, "I share a similar vision to the Gilla management team and I look forward to working with Graham to execute on his plan and to deliver significant value to the Gilla shareholders."

"We are very excited about the completion of the E Liquid Wholesale Acquisition, which, in addition to adding free cash flow to our Company, provides a cornerstone asset for our e-liquid consolidation strategy," stated Graham Simmonds, Chairman and CEO of Gilla Inc. He added, "I would like to welcome Yaron and his team to our organization and I personally look forward to working with them to advance our revenue growth and expansion plans."

About E Liquid Wholesale, Inc.

E Liquid Wholesale, Inc. manufactures e-liquids, which is the nicotine based liquid used in an electronic cigarette or vaporizer that is then heated by the atomizer to deliver the sensation, taste and feel of smoking. E-liquids can vary in flavor, consistency, throat hit, and nicotine concentration (and may contain no nicotine at all). E Liquid Wholesale manufactures primarily as a white-label service provider and supports a number of well-known brands within the industry.

About Gilla Inc.

Gilla Inc. designs, markets and distributes electronic cigarettes, vaporizers, e-liquids and related accessories. Gilla has a two-pronged business model: white-label solutions, including branding, marketing and sales support; and e-commerce solutions like Charlie's Club, a members-only online e-cigarette monthly subscription service featuring free hardware and no contracts. E-cigarettes and vaporizers are replacements for traditional cigarettes allowing smokers to reproduce the smoking experience. E-cigarettes and vaporizers do not burn tobacco and are not smoking cessation devices.

Forward-looking Statements

Note: This press release contains "forward looking statements" as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on currently available competitive, financial and economic data and management's views and assumptions regarding future events. Such forward- looking statements are inherently uncertain. Gilla Inc. cannot provide assurances that the matters described in this press release will be successfully completed or that the company will realize the anticipated benefits of any transaction. Actual results may differ materially from those projected as a result of certain risks and uncertainties, including but not limited to: global economic and market conditions; the war on terrorism and the potential for war or other hostilities in other parts of the world; the availability of financing and lines of credit; successful integration of acquired or merged businesses; changes in interest rates; management's ability to forecast revenues and control expenses, especially on a quarterly basis; unexpected decline in revenues without a corresponding and timely slowdown in expense growth; the company's ability to retain key management and employees; intense competition and the company's ability to meet demand at competitive prices and to continue to introduce new products and new versions of existing products that keep pace with technological developments, satisfy increasingly sophisticated customer requirements and achieve market acceptance; relationships with significant