Pacific Vector Holdings Inc.

TSX VENTURE : PVH


Pacific Vector Holdings Inc.

January 28, 2014 08:00 ET

Pacific Vector Holdings Inc. Announces Equity Raise, Debt Conversion & Corporate Updates

CARLSBAD, CALIFORNIA--(Marketwired - Jan. 28, 2014) - Pacific Vector Holdings Inc. (TSX VENTURE:PVH), a premier action sports retailer and consumer brands company, announced today measures being taken to significantly deleverage the balance sheet, improve working capital and cash flow, strengthen its core brands, and improve its shareholder communications.

EQUITY RAISE ANNOUNCEMENT:

The company is raising $1,500,000 to $5,000,000 in new equity through a non-brokered private placement at a price to be determined.

DEBT CONVERSION ANNOUNCEMENT:

To deleverage the balance sheet, management has approached certain investors that hold a total of $4,000,000 in debt, who have agreed to convert their debt at the same price as the equity raised in the private placement. Management will be approaching additional investors holding another $1,200,000 in debt with the same offer. The debt conversion is subject to the approval of the TSX Venture Exchange.

FOCUS ON COMPANY OWNED BRANDS:

To allow the company to focus solely on its existing portfolio of brands and retail operations, management and Street League, Inc. have mutually agreed to rescind the license agreements previously announced on July 22, 2013. The company will no longer have an obligation to open Street League brick-and-mortar stores and can focus on rebranding its existing retail locations under the Prime Ride Shop name. The company has agreed to pay the minimum guaranteed licensing fees that were required under the agreements up to the day of rescission ($165,000). In addition, Street League will continue to hold the 100,000 stock options that have already vested and allow them to purchase 100,000 common shares at $0.10 per share. The remaining 700,000 stock options originally contemplated in the agreements will be cancelled.

INVESTOR RELATIONS:

To improve corporate communications efforts with existing and new shareholders, the company is pleased to announce it has engaged the services of Venture North Capital Inc. ("Venture North") to focus on marketing and investor relations. Under the terms of the engagement, which is for an initial three-month period, Venture North will be paid $4,000 per month. The contract is subject to regulatory approval.

CEO ROBERT REYNOLDS' COMMENTS:

"Since we acquired Ryderz Compound and its 34 retail locations nine months ago and the Alien Workshop, Habitat Footwear and Reflex skateboard brands three months ago, the company's annualized revenue has increased from $1,500,000 to $30,000,000. We need to put more attention on our existing brand infrastructure and capture all possible efficiencies to ensure we capitalize on economies of scale . In December, we developed a comprehensive plan to generate revenue growth in efforts to maximize brand value and profitability within our 'core' brand base prior to adding non-owned brands to our portfolio. As a result, we felt it was best to withdraw from our Street League initiatives, as Street League is not one of our owned brands," said Robert Reynolds, CEO.

"Additionally, the current debt levels on our balance sheet could hinder future growth opportunities, improvement of cash flow, and maximization of value for shareholders. In early January, the Board of Directors approved an equity financing and allowed us to approach debt holders about converting existing debt to equity. These actions will provide sufficient working capital to exploit growth opportunities, reduce debt levels, and focus on our brand repositioning efforts at our retail stores. We are pleased with the support of our debt holders, who have already agreed to convert $4,000,000 of debt at the price of the equity financing. This is a significant step in deleveraging the balance sheet."

"Ultimately, these steps will strenghthen the brands we own and drive positive results to our retail operations that will improve shareholder value."

About Pacific Vector

Pacific Vector is a premier action sports retail and consumer brands company.

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The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

Certain information in this press release may contain forward-looking statements. This information is based on current expectations that are subject to significant risks and uncertainties that are difficult to predict. Actual results might differ materially from results suggested in any forward-looking statements. Pacific Vector assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those reflected in the forward looking-statements unless and until required by securities laws applicable to Pacific Vector.

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