Kidpik (PIK) to Merge with Nina Footwear

Kidpik Corp. (NASDAQ: PIK) (“Kidpik”), a kids’ online clothing subscription-based e-commerce company, and Nina Footwear Corp., a private company operating a brand specializing in women’s and kids’ dress shoes and accessories for special occasions (“Nina Footwear”), today announced that they have entered into a definitive merger agreement.

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.

About the Proposed Transaction

According to the terms of the merger agreement, Kidpik will acquire Nina Footwear through a reverse subsidiary merger that is intended to be a tax-free reorganization. Upon closing of the merger, the combined company will be renamed “Nina Holding Corp.” and its symbol will change to “NINA”. There is not expected to be any change in Kidpik’s officers or directors as a result of the transaction.

There are also a number of related party transactions between Nina Footwear and Kidpik as disclosed in Kidpik’s filings with the Securities and Exchange Commission (SEC), which are expected to be extinguished as a result of the merger.

The closing of the transaction is subject to customary closing conditions, including the preparation and mailing of a proxy statement by Kidpik, and the receipt of required stockholder approvals from Kidpik and Nina Footwear stockholders, and is expected to close in the third quarter of 2024.

Additional information regarding the proposed merger and the merger agreement can be found in the Current Report on Form 8-K filed with the SEC today by Kidpik.

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