The Board of Directors of both companies have approved the all-stock transaction. The combined company will operate as Nina Holdings Corp. In connection with the merger, Nina Footwear stockholders will be issued shares of common stock of Kidpik such that upon closing thereof, Nina Footwear’s stockholders will own 80% of Kidpik’s outstanding common stock.

Kidpik is controlled by Mr. Ezra Dabah, the Chief Executive Officer, Chairman, and majority stockholder (67% beneficial owner) of Kidpik, who is also the Chief Executive Officer of Nina Footwear. Mr. Dabah and his children own approximately 79.3% of Nina Footwear, and Mr. Dabah and his extended family own 100% of Nina Footwear. Mr. Dabah, his children and wife are expected to continue to control approximately 76.8% of the combined company’s voting shares following the closing of the merger.

Kidpik’s entry into the merger agreement was approved by the Kidpik Board of Directors (with Mr. Dabah abstaining from the vote), acting on the unanimous recommendation of a special committee consisting of independent and disinterested directors of Kidpik that was formed to negotiate and evaluate a potential strategic transaction involving Kidpik.

“Our transaction is expected to increase Kidpik’s revenue, cashflow and prospects, while also strengthening Kidpik’s balance sheet and significantly increasing stockholder value. I am extremely happy to fulfill the wish of my late father in-law, Mr. Stanley Silverstein, to make Nina a public company on the heels of the 70th anniversary of our family business,” said Mr. Dabah. He continued, “As a team we will refocus our attention on growing Nina through brand and category extensions, international expansion, the resurrection of the Delman shoe brand, and mining our extensive Nina Footwear archive for additional growth, which we believe presents great value. I believe the retention of the net operating loss carryforwards is of tremendous value to our shareholders in entering into the merger,” concluded Mr. Dabah.

An important factor in the special committee of the Board of Directors recommending the approval of the merger was that due to Mr. Dabah’s control of both companies, it is expected that Kidpik will retain its ability to use its significant net operating loss (NOL) carryforwards following the merger (currently estimated at approximately $38 million), and that the transaction is not anticipated to be deemed a change of control under Nasdaq rules.

Note: The content of this press release has not been edited by Fibre2Fashion staff.

Fibre2Fashion News Desk (RM)