Naturally Splendid Enterprises (TSXV: NSP) (FSE: 50N) (OTCQB: NSPDF), a biotechnology and consumer products company that is developing, producing, commercializing, and licensing an entirely new generation of plant-derived, bioactive ingredients, nutrient dense foods, and related products, through its wholly owned subsidiary, Prosnack Natural Foods, has signed an agreement with a leading national food company for a bar/snack manufacturing contract worth up to CDN$5 million over a 5-year period.
The company recently acquired a new state-of-the-art bar/snack manufacturing machine which has increased production capacity twofold, while improving on the quality of its bars and snacks. The equipment’s capabilities are very versatile, having the ability to produce a variety of different products for the food manufacturing industry, including various sized spheres and bars that can be coated with any number of flavours and ingredients. This greatly extends product formulation capabilities for house-brands, opening the door to obtain new clients. A second shift will also be added to accommodate increases in production needs.
Douglas Mason, CEO, stated: “Securing this new manufacturing contract will provide NSE with needed revenue and access to new markets. Increasing our production capacity and product innovation capabilities was an important objective, this now gives NSE the flexibility to approach new customers and significantly add to our service offerings. We see private labelling and co-manufacturing as enormous opportunities for added revenue, we are currently in advanced discussions with other companies seeking similar manufacturing requirements.”
Alan Maddox, Executive VP Sales & Marketing, added: “After successfully completing the transition of Prosnack to the NSE facility in April 2018, one of our focuses was to increase production capacity to be able to meet the demand for larger clients’ requirements. Acquiring this new machinery has supported us in this objective. The production interruption Prosnack experienced with the transition to the NSE facility near the end of Q4 2017 and in Q1 2018 is now behind us and we are actively seeking more commitments from previous and new clients.”
A report published by MarketResearch.biz on May 30th, 2018, stated: “The global snack bar market is expected to grow significantly in the coming years. The major factors contributing to the growth of the market include increasing demand of high-protein snack bars, consumers’ daily snacking habits and demands for protein and fibre ingredients that they look for in snack bars. In addition, there is a rising demand for vegan snack bars as consumers who lead a vegan lifestyle opt for healthy substitutes for meat, dairy and other conventional sources of protein.”
The company announced a private placement for gross proceeds of up to $1.26 million, planning to issue up to 7,000,000 units, priced at $0.18 per unit, with each unit consisting of 1 share and one-half a warrant, with each full warrant exercisable at $0.27 for 24 months, subject to an acceleration clause.
Proceeds will be used for expansion of Naturally Splendid’s existing facilities and for working capital purposes.
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Barry Morgan, CFO