GABY Inc. Announces a Strategic Acquisition of Highly Regarded and Well Established CBD Brands: Hempfusion(TM), Sagely Naturalstm and Apothecanna(TM) - Seite 2

A copy of the Share Purchase Agreement will be filed on the Company's SEDAR profile at www.sedar.com.

Highlights of The Transaction

• HempFusion^TM is a topicals and ingestibles brand, sold in a variety of retail locations including, natural, Food Drug & Mass, and online. It is unique in market as its topical product is listed with the US Food and Drug Administration ("FDA") as an over-the-counter pain relief topical that includes hemp derived CBD and Omegas as part of the skin nourishing cosmetic blend and has been assigned a National Drug Code number by the FDA. It also has an unparalleled regulatory compliance portfolio including Self GRAS status on its exclusive hemp CBD extract, and validation by the UK Food Standards Agency for Novel Food.[1] HempFusion participated in, what is being referred to as, the largest Human Toxicology Study to date, which illustrated that CBD is safe for human consumption.[2] According to Brightfield Group wave 1 2022, HempFusion™ was ranked in the top five in brand awareness amongst CBD consumers.
• Sagely Naturals™ finished 2021 holding as the number one ranking topical brand in Multi-Outlet[3] retail locations in the US and US Drug with market share held as 14% and 24% respectively.[4] In 2022 its Relief and Recovery Active Roll-On™ was rated as "Best for Pain Relief" by Men's Health Magazine.
• apothecanna™ is primarily a Direct-to-Consumer brand although it is also sold in many retail locations. The products consist of topical creams and oils, capsules and tinctures. It has a strong following amongst the over 55 age demographic and after an aggregate of two million bottles sold still garners a 90% five-star rating by consumers.[5] apothecanna™ has an extremely loyal online following with nearly 70% repeat purchase activity.[6]
• The Brands Value: The Brands together generated net revenue of over US$5.4 million in 2022.
• The Brands Future: Because of their extensive regulatory portfolio, management of GABY believe that the Brands are uniquely poised for growth as soon as legislative clarity is given by applicable United States government officials on the regulatory and legal status of hemp derived CBD. Currently focused on topical products, legislative clarity could open the door for ingestible products that could unlock the potential for significant revenue growth for the Brands.
• The Brands Growth: The aggregate revenues from the Brands has remained consistent from 2020 to 2022, despite limited investment by HF and HempFusion. Management of GABY believes that, through strategic marketing efforts, the Brands could see substantial revenue growth in 2024 and beyond.
• GABY's CBD Brands: The Transaction gives GABY the infrastructure to grow its current CBD brands 2Rise^TM and Lulu's^TM, which brands currently produce approximately $400,000 of combined revenue annually. Management of GABY believes that by leveraging the newly acquired distribution infrastructure and sales channels GABY's existing CBD business could experience significant growth.

Closing of the Transaction is subject to certain third party approvals, the approval of HempFusion shareholders at a special meeting of shareholders to be called by HempFusion, and the satisfaction of customary closing conditions for a transaction of such nature. Subject to satisfaction or waiver of the conditions, the transaction is expected to close towards the end of Q2 of 2023.