Jeffs’ Brands Enters Into a Definitive Agreement to Sell Key U.S. Assets to a Canadian Public Company for an Approximate Valuation of $11.8 Million

Rhea-AI Summary

Jeffs' Brands has entered a definitive agreement to sell its key U.S. assets to Canadian company Plantify Foods in a deal valued at approximately $11.8 million. The transaction includes the sale of Smart Repair Pro, which operates Jeffs' Brands' Amazon U.S. Marketplace stores, and its 49.1% stake in SciSparc Nutraceuticals.

In exchange, Jeffs' Brands will receive up to 90% equity interest in Plantify Foods, with an initial 75% stake upon closing. The deal values Smart Repair Pro and the SciSparc stake at CAD 17.125 million, while Plantify Foods is valued at CAD 4.85 million.

Current Jeffs' Brands chairman Oz Adler will serve as Plantify Foods' chairman, while CFO Ronen Zalayet will become CFO and corporate secretary. The transaction is expected to close by July 31, 2025, subject to regulatory approvals and closing conditions.

Positive

• Strategic sale of U.S. assets valued at $11.8M to Canadian public company
• Company to receive up to 90% equity stake in acquiring company
• Key management continuity with current chairman and CFO taking leadership roles in acquiring company
• Initial 75% ownership secured upon closing, with potential for additional 15% based on milestones

Negative

• Company divesting core U.S. marketplace operations through Smart Repair Pro sale
• Transaction completion uncertain with July 31, 2025 deadline
• Potential conflict of interest with directors serving on both companies' boards
• Deal contingent on acquirer maintaining minimum cash holdings of $207,000

Insights

Financial Analyst

Jeffs' Brands to receive up to 90% ownership in Plantify Foods in exchange for its core e-commerce business, maintaining effective control through corporate restructuring.

The transaction between Jeffs' Brands and Plantify Foods represents a significant corporate restructuring where Jeffs' is exchanging its core operational assets for majority ownership in Plantify. The deal values Jeffs' assets (Smart Repair Pro and 49.1% stake in SciSparc Nutraceuticals) at CAD 17.125 million (approximately $11.8 million), while Plantify Foods is valued at CAD 4.85 million.

This valuation disparity explains why Jeffs' will initially receive 75% equity in Plantify, potentially increasing to 90% upon achieving unspecified milestones. Effectively, this transaction transforms Jeffs' from a direct operator of e-commerce businesses to a holding company with a controlling interest in a Canadian public company.

The leadership continuity is notable - Jeffs' current chairman and CFO will assume equivalent roles at Plantify. This suggests Jeffs' will maintain significant influence over its original assets, just through a different corporate structure. The transaction required special approval procedures due to related party involvement, with some Jeffs' directors serving on Plantify's board or as directors of Plantify's controlling shareholder.

While the transaction changes Jeffs' Brands' corporate structure, it doesn't necessarily alter the economic exposure to its underlying businesses. The deal is expected to close by July 31, 2025, subject to customary conditions and regulatory approvals.

Corporate Strategy Expert

Jeffs' Brands' transaction with Plantify Foods represents a reverse takeover structure where the seller gains control of the buyer while maintaining its core assets.

This transaction employs an interesting reverse structure where Jeffs' Brands, while technically the seller, will emerge with controlling interest (up to 90%) in the acquiring company, Plantify Foods. The valuation metrics illuminate this dynamic - Jeffs' assets are valued at approximately 3.5 times that of Plantify (CAD 17.125 million vs. CAD 4.85 million).

The phased equity acquisition (initial 75% with potential increase to 90%) introduces performance accountability into the transaction structure. While the specific milestones aren't disclosed, this approach aligns incentives for successful integration and performance.

The governance arrangement, with Jeffs' executives transitioning to leadership roles at Plantify, reinforces the effective takeover nature of this deal. Mr. Oz Adler will become Plantify's chairman, while Mr. Ronen Zalayet will serve as CFO and corporate secretary.

The related-party aspects of this transaction are noteworthy. Some directors serve on both companies' boards, necessitating special approval procedures through the audit committee and board in compliance with Israeli corporate law. This restructuring maintains Jeffs' economic interest in its original assets while potentially providing access to the Canadian public markets through Plantify's TSX Venture listing.

The transaction includes the acquisition of Jeffs’ Brands’ wholly-owned subsidiary, Smart Repair Pro, and its approximately 49.1% ownership interest in SciSparc Nutraceutical Inc. by a Canadian public company in exchange for an up to 90% equity interest (on a fully diluted basis) in such company

Tel Aviv, Israel, April 30, 2025 (GLOBE NEWSWIRE) -- Jeffs’ Brands Ltd (“Jeffs’ Brands” or the “Company”) (Nasdaq: JFBR, JFBRW), a data-driven e-commerce company operating on the Amazon Marketplace, today announced that it has entered into a definitive agreement (“the Agreement”) with Plantify Foods, Inc. (TSXV: PTFY)  a Canadian public company (the “Acquiror”) to sell its wholly-owned subsidiary, Smart Repair Pro, which operates Jeffs’ Brands’ stores on the Amazon U.S. Marketplace and owns Pure NJ Logistics LLC, and its approximately 49.1% ownership interest in SciSparc Nutraceuticals Inc. (“SNI”), which is currently held by its wholly-owned subsidiary, Jeffs’ Brands Holdings Inc.

In exchange, Jeffs’ Brands is expected to receive up to a 90% equity interest in the Acquiror (on a fully diluted basis), calculated as of immediately following the closing and based on a valuation of CAD 17.125 million (approximately $11.8 million) for Smart Repair Pro and the minority interest in SNI, and a valuation of CAD 4.85 million (taking into account the full potential consideration and contingent on the Acquiror having cash holdings of at least CAD 300,000 (approximately USD $207,000) for the Acquiror (together, the “Transaction”).

Following the completion of the Transaction, the Company’s ownership interests in Smart Repair Pro will be held by the Acquiror and the Company will only have a direct ownership interest in the Acquiror. It is expected that following the completion of the Transaction, Mr. Oz Adler, the Company’s current chairman of the board of directors, will serve as the chairman of the Acquiror, and Mr. Ronen Zalayet, the Company’s current chief financial officer, will serve as the chief financial officer and corporate secretary of the Acquiror.

Prior to the completion of the Transaction, the Company will enter into a share transfer agreement with Smart Repair Pro to transfer to Smart Repair Pro all of its shares of Jeffs’ Brands Holdings Inc., which holds the minority interest in SNI, in exchange for shares of common stock of Smart Repair Pro, such that Jeff’ Brands Holdings will be a direct wholly owned subsidiary of Smart Repair Pro. Under the terms of the Agreement, Jeffs’ Brands will then transfer all of the issued and outstanding shares of Smart Repair Pro to the Acquiror in exchange for initially 75% of the Acquiror’s issued and outstanding shares, as an initial payment upon closing of the Transaction. Upon the achievement of certain milestones, Jeffs’ Brands will receive an aggregate additional number of shares for up to a 90% equity interest in the Acquiror, on a fully diluted basis, each calculated as of immediately following the closing of the Transaction.

The Transaction is expected to close by July 31, 2025, subject to customary closing conditions, and compliance with any regulatory approvals. There is no guarantee when or if the Smart Repair Transaction will be completed.

Certain of Jeffs’ Brands directors serve as directors of the Acquiror and/or of the Acquiror’s controlling shareholder. As such, the Agreement was approved by the Company’s audit committee and the board of directors, in accordance with the Israeli Companies Law-1999.

About Jeffs’ Brands Ltd

Jeffs’ Brands aims to transform the world of e-commerce by creating and acquiring products sold on Amazon Marketplace and turning them into market leaders, tapping into vast, unrealized growth potential. Through the Company’s management team’s insight into the Fulfillment by Amazon business model, it aims to use both human capability and advanced technology to take products to the next level. For more information on Jeffs’ Brands Ltd visit https://jeffsbrands.com.

Forward-Looking Statement Disclaimer

This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that are intended to be covered by the “safe harbor” created by those sections. Forward-looking statements, which are based on certain assumptions and describe the Company’s future plans, strategies and expectations, can generally be identified by the use of forward-looking terms such as “believe,” “expect,” “may,” “should,” “could,” “seek,” “intend,” “plan,” “goal,” “estimate,” “anticipate” or other comparable terms. For example, the Company is using forward-looking statements when discussing the expected closing of the Transaction, including the timing thereof. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on the Company’s current beliefs, expectations and assumptions regarding the future of the Company’s business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of the Company’s control. The Company’s actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause the Company’s actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: the Company’s ability to adapt to significant future alterations in Amazon’s policies; the Company’s ability to sell its existing products and grow its brands and product offerings, including by acquiring new brands; the Company’s ability to meet its expectations regarding the revenue growth and the demand for e-commerce; the overall global economic environment; the impact of competition and new e-commerce technologies; general market, political and economic conditions in the countries in which the Company operates; projected capital expenditures and liquidity; the impact of possible changes in Amazon’s policies and terms of use; the impact of the conditions in Israel, including the recent attacks by Hamas, Hezbollah Iran, and other terrorist organizations; and the other risks and uncertainties described in the Company’s Annual Report on Form 20-F for the year ended December 31, 2024, filed with the U.S. Securities and Exchange Commission (“SEC”), on March 31, 2025 and the Company’s other filings with the SEC. The Company undertakes no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.

Investor Relations Contact:

Michal Efraty
Adi and Michal PR- IR
Investor Relations, Israel
michal@efraty.com

FAQ

What is the value of Jeffs' Brands (JFBR) asset sale to Plantify Foods?

Jeffs' Brands is selling its assets to Plantify Foods for approximately $11.8 million (CAD 17.125 million), which includes Smart Repair Pro and a 49.1% stake in SciSparc Nutraceuticals.

How much ownership will JFBR receive in Plantify Foods after the 2025 transaction?

JFBR will receive up to 90% equity interest in Plantify Foods, starting with 75% initial ownership upon closing, with additional shares based on achieving certain milestones.

When will the JFBR-Plantify Foods transaction close?

The transaction is expected to close by July 31, 2025, subject to customary closing conditions and regulatory approvals.

What assets is JFBR selling to Plantify Foods in the 2025 deal?

JFBR is selling Smart Repair Pro, which operates its Amazon U.S. Marketplace stores and owns Pure NJ Logistics, plus its 49.1% ownership stake in SciSparc Nutraceuticals.

What management changes will occur after JFBR's asset sale to Plantify Foods?

Oz Adler, JFBR's current board chairman, will become Plantify Foods' chairman, and Ronen Zalayet, JFBR's CFO, will serve as CFO and corporate secretary of Plantify Foods.