VANCOUVER, BC, April 2,
2024 /CNW/ - Simply Better Brands Corp. (TSXV: SBBC)
(OTCQB: PKANF) ("SBBC" or the "Company") today announced that
operations of its 50.1% owned subsidiary, PureKana, LLC
("PureKana"), are being suspended. PureKana plans to commence
bankruptcy proceedings under Chapter 7 of the Bankruptcy Code of
the United States as soon as
practicable (the "Proceedings").
The decision to commence the Proceedings
follows a comprehensive review over the last seven months by a
special committee of the Company's Board of Directors and the
Company's Board of Directors of SBBC's investment in PureKana. The
strategic review included an evaluation of PureKana's performance,
customer acquisition strategy and long-term growth potential, as
well as a search for a buyer.
"The special committee and our Board of
Directors undertook a comprehensive review of PureKana's business
and concluded that the business model, given the significant costs
associated with acquiring and retaining customers, does not fit
with SBBC's strategy for profitable growth," said SBBC Interim CEO
J.R. Kingsley Ward. "The decision of
previous management to continue investing in high-cost affiliate
marketing programs in the CBD market did not meet our objectives
for growth and profitability. As a result, SBBC can no longer
support PureKana's operations and continued investment in PureKana
is not considered to be in the best interests of SBBC and our
shareholders."
In conjunction with today's announcement,
SBBC released preliminary full-year 2023 financial results,
reporting revenues in the range of $80-$85 million and
gross profit of approximately 60% in 2023. While PureKana accounted
for approximately half of SBBC's consolidated revenue in 2023, it
also represented the majority of the Company's operating losses
during such period. Additionally, SBBC's consolidated debt
position is expected to benefit from the elimination of
approximately $10M of debt owing by
PureKana from the Company's financials as a result of the
Proceedings.
"Looking ahead, we are excited about the
opportunity to sharpen our focus on investing in the growth and
continued momentum of our TRUBAR plant-based protein bar," said Mr.
Ward. "Based on the brand's strong performance in 2023, we expect
TRUBAR to generate revenues of $40-$45 million and
gross profit of approximately 45% in 2024 with the potential to
generate significantly greater revenues over the next 2 to 3 years.
The Company has adequate resources to execute the profitable growth
strategy going forward."
All figures above are in United
States Dollars.
SBBC was advised in the strategic review process by certain
strategic advisors and Canadian legal counsel, Norton Rose
Fulbright Canada LLP.
About Simply Better Brands
Corp.
Simply Better Brands Corp. leads an international omni-channel
platform with diversified assets in the emerging plant-based and
holistic wellness consumer product categories. The Company's
mission is focused on leading innovation for the informed
Millennial and Generation Z generations in the rapidly growing
plant-based wellness, natural, and clean ingredient space. The
Company continues to focus on expansion into high-growth consumer
product categories including plant-based food, clean ingredient
skincare and plant-based wellness. For more information on
Simply Better Brands Corp., please visit:
https://www.simplybetterbrands.com/investor-relations.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Forward-Looking
Statements:
Certain statements contained in this news release constitute
"forward-looking information" and "forward-looking statements"
(collectively, "forward-looking statements") as such terms are
defined under applicable Canadian securities laws and are based on
plans, expectations and estimates of management at the date of this
press release. Forward-looking statements include, without
limitation, statements with respect to the Proceedings and the
anticipated outcome thereof, future oriented financial information
and financial outlook, including with respect to anticipated
revenues from the TRUBAR plant-based protein bar (collectively,
"FOFI"), and statements with respect to the future business and
operations of the Company. The words "engaged in", "evaluating",
"continuing to", "is reviewing", "potential", "intend",
"anticipates", "believes", "aims", "plans", "expects" or variations
of such words and phrases or statements that certain future
conditions, actions, events or results "will", "may", "could",
"would", "should", "might" or "can", or negative versions thereof,
"occur", "continue" or "be achieved", and other similar
expressions, identify forward-looking statements. Forward-looking
statements are necessarily based upon management's perceptions of
historical trends, current conditions and expected future
developments, as well as a number of specific factors and
assumptions that, while considered reasonable by the Company as of
the date of such statements, are outside of the Company's control
and are inherently subject to significant business, economic and
competitive uncertainties and contingencies which could result in
the forward-looking statements ultimately being entirely or
partially incorrect or untrue. Forward-looking statements contained
in this press release are based on various assumptions, including,
but not limited to, the following: the commencement of the
Proceedings as anticipated; the ability of the Company to achieve
its growth and revenue strategies, including with respect to the
TRUBAR plant-based protein bar; the demand for the Company's
products, including the TRUBAR plant-based protein bar and
fluctuations in future revenues; that the Company's financial
condition and development plans do not change as a result of
unforeseen events, the regulatory climate in which the Company
operates, the Company's ability to execute on its business plans,
distribution plans, reliance on a consistent supply chain, and
claims relating to the efficacy and results of the Company's
products. By their nature, forward-looking statements are
subject to inherent risks and uncertainties that may be general or
specific and which give rise to the possibility that expectations,
forecasts, predictions, projections or conclusions will not prove
to be accurate, that assumptions may not be correct, and that
objectives, strategic goals and priorities will not be
achieved.
Known and unknown risk factors, many of which are beyond the
control of the Company, could cause the actual results of the
Company to differ materially from the results, performance,
achievements or developments expressed or implied by such
forward-looking statements. Such risk factors include but are not
limited to, uncertainty involved in the Proceedings; changes in or
enforcement of national and local government legislation, taxation,
controls or regulations and/or changes in the administration of
laws, policies and practices; legal or regulatory developments and
changes; the impact of foreign exchange rates; pricing pressures;
general adverse economic, market and business conditions and those
factors which are discussed in the Company's management discussion
and analysis for the year ended December 31,
2021, which is available under the Company's SEDAR+ profile
at www.sedarplus.com. The risk factors are not intended to
represent a complete list of the factors that could affect the
Company and the reader is cautioned to consider these and other
factors, uncertainties and potential events carefully and not to
put undue reliance on forward-looking statements. There can be no
assurance that forward-looking statements will prove to be
accurate, as actual results and future events could differ
materially from those anticipated in such statements.
Forward-looking statements are provided for the purpose of
providing information about management's expectations and plans
relating to the future. The Company disclaims any intention or
obligation to update or revise any forward-looking statements
whether as a result of new information, future events or otherwise,
or to explain any material difference between subsequent actual
events and such forward-looking statements, except to the extent
required by applicable law. All of the forward-looking statements
contained in this press release are qualified by these cautionary
statements.
The Company and its management believe that the FOFI has been
prepared on a reasonable basis, reflecting management's best
estimates and judgments. However, because this information is
subjective and subject to numerous risks, it should not be relied
on as necessarily indicative of future results. FOFI contained in
this press release constitute forward-looking information, was made
as of the date of this press release and was provided for the
purpose of providing further information about the Company's
anticipated future business operations. Readers are cautioned that
the FOFI contained in this press release should not be used for
purposes other than for which it is disclosed herein.
SOURCE Simply Better Brands Corp.