Vancouver, British Columbia – TheNewswire – December 13, 2019 – Naturally Splendid Enterprises Ltd. (“Naturally Splendid”, “NSE” or “the Company”) (FRANKFURT:50N) (TSXV:NSP) (OTC:NSPDF) a healthy food, hemp product developer and large scale producer for in-house brands as well as global contract manufacturer of nutritional plant-based products, is pleased to announce at the request of the Company, a Calculation Valuation Report (the “Report’) has recently been completed on the Prosnack Division (Prosnack), a nutritional bars and bites manufacturing facility which is 100% owned by Naturally Splendid. Prosnack was valued on a going concern basis.
RwE Growth Partners, Inc. (RwE) was engaged by Naturally Splendid to prepare the Reportregarding the fair market value of Prosnack Natural Foods Inc. – a 100% owned NSE division (i.e., “PSN”, “Prosnack” or the “Division”) as at September 30, 2019 (“the Valuation Date”) based on certain assumptions and information provided by the directors and management of NSE and the work conducted by RwE. The Report takes into account the Prosnack Division only.
The Report concludes that RwE believed it was appropriate to value Prosnack based on a weighting of different valuation approaches so as to find a reasonable range of fair market value for Prosnack. The range of fair market value of Prosnack as at the Valuation Date, and given all of the assumptions made, and the scope of the work conducted, was in the range of C$11.1 million.
NSE directors/management outlined to RwE that Prosnack is separate and distinctive from NSE. PSN, which the RwE Report focuses on, operates within the food manufacturing marketplace; more specifically, the snack, nutrition and bites marketplace, especially as to plant-based products. PSN appears to RwE to do a number of different activities that have material synergy among them. Those activities being: (1) a supply chain supplier/partner to food and consumer packaged goods (“CPG”) companies providing them flexible manufacturing solutions (i.e., small and short-run to extended run production) with a SQF2, certified, 20,000+ square foot production facility; (2) an external product testing/formulation provider creating products for firms; (3) an outsourced marketing / branding business creating attention to their packaging; and importantly (4) a separate Prosnack branded products area whereby the Division creates/markets/manages its own Prosnack bars, bites and related products. Prosnack is able to leverage the experience of its management team (which appears creative and dynamic) so as to seek opportunities with CPG and other food firms which are presently needing fast, organic and plant based products, to serve consumers more health conscious demands. Hence, Prosnack provides clients two broad areas of services and/or products, with small samples of such services/products shown below.
The Report notes that RwE was asked by NSE to prepare the Report for internal review by its Board of Directors as the Board examines possible transactions with and regarding Prosnack. The Report also notes that RwE does not assure NSE or its shareholders that any external parties, such as the it and other shareholders, outsiders, regulatory groups and others will necessarily agree with the conclusions of RwE. The Report does, nonetheless, represent RwE’s professional opinion given the work done and the assumptions made and follows the standards set out by the Canadian Institute of Chartered Business Valuators”. RwE was paid a fee of $5,000 CDN to complete this Report.
The valuations methods used in the Report were the Public Guideline – Public Company Method, the Public Guideline – Public Transactions Method and the Adjusted Book Value (Relief from Royalty) Method. The assumptions utizlized in the valuation have not been tested by RwE, and RwE has not been audited or reviewed the cash flow forecasts that form the basis of the the assumptions. RwE has also assumed that Prosnack will have sufficient capital to expand its operations to meet its cash flow forecasts.
A significant component of the valuation is based on the assumption of the Company being able to reach high growth rates and capture market share in a timely manner.
In the relatively short time since acquiring Prosnack, several milestones have been met including; relocating the operations from North Vancouver to our Pitt Meadows facility; obtaining certification as a Safe Quality Food Level 2 Food Manufacturing Facility; investment of approximately $2,000,000 CDN over the past twelve months increasing production capacity more than five-fold; successful product launches such as Natera Sport KEY-TO-LIFE keto friendly bars; and securing a roster of significant contract manufacturing clients. Capacity is now capable of producing up to 2,150,000 bars and bites per month on a single shift five days a week, or up to 5,000,000 bars and bites by extending shifts and number of days of operation. The Company is currently reviewing a packaging system that will increase capacity by 30% at a capital cost of approximately $150,000 CDN.
Naturally Splendid CEO, Mr. J. Craig Goodwin states, “We are pleased with this affirmation that our strategic plan has resulted in this valuation for Prosnack. Building out Prosnack has been a primary focus for the past year since acquiring the business in August of 2017. We have been successful launching our own company branded products, while at the same time building our roster of contract manufacturing clients, which includes well recognized brands including those that are identified on the Profit 100 Canada’s Fastes Growing Companies.
We anticipated there could be a pullback in the MJ space and have gone about building a ‘business inside of a business’, that is positioned to service the plant-ingredient based nutritional market, while remaining available to service the edible markets upon securing licensing.
As client demand dictates, we are prepared to invest further into this facility as currently it generates the majority of our revenue. Without expanding the footprint of the SQF2 facility, we are capable of inceasing manufacturing capacity to over 25,000,000 bars and bites per month. In essence, we have built the core structure of the SQF2 facility and are capable of increasing manufacturing capacity in phases as business demands”.
About Naturally Splendid Enterprises Ltd.
NSE has established numerous healthy, functional foods under recognized brands such as Natera Sport(TM), Natera Hemp Foods, CHII (TM), Elevate Me(TM) and Woods Wild Bar. The Company has a myriad of new products and line extensions under development that are approaching launch. NSE has also developed proprietary technologies for the extraction of high demand, healthy omega 3 and 6 oils from hemp. (NSE sales revenues for the first half 2019 exceeded FY2018).NSE is the current “go-to” manufacturer for healthy, functional food products and ingredients focusing on plant-based ingredients. The Company provides contract manufacturing services for many global healthy food companies, private labelling a wide variety of nutritional food products destined for global healthy food markets. NSE plans to utilize current and new technologies to meet the expected exponential demand developing in the cannabis market. Pending appropriate NSE licensing and regulations in permitting jurisdictions, NSE’s current production facilities will be one of very few facilities that is capable of meeting the demand for infused edibles and oils for both in-house and contract manufacturers’ brands.
For more information e-mail [email protected] or call Investor Relations at 604-673-9573
On Behalf of the Board of Directors
Mr. Craig Goodwin
CEO, President, Director
Naturally Splendid Enterprises Ltd.
(NSP – TSX Venture; NSPDF – OTCQB; 50N Frankfurt)
#108-19100 Airport Way
Pitt Meadows, BC, V3Y 0E2
Office: (604) 465-0548
Fax: (604) 465-1128
E-mail: [email protected]
Information set forth in this news release contains forward-looking statements that are based on assumptions as of the date of this news release. These statements reflect management’s current estimates, beliefs, intentions and expectations. They are not guarantees of future performance. Naturally Splendid cautions that all forward looking statements are inherently uncertain and that actual performance may be affected by a number of material factors, many of which are beyond Naturally Splendid’s control including, Naturally Splendid’s ability to compete with large food and beverage companies; sales of any potential products developed will be profitable; sales of shelled hemp seed will continue at existing rates or increase; the ability to complete the sales of all bulk hemp seed purchase orders; and the risk that any of the potential applications, including its application to become a Licensed Dealer, may not receive all required regulatory or legal approval. Accordingly, actual and future events, conditions and results may differ materially from the estimates, beliefs, intentions and expectations expressed or implied in the forward-looking information. Except as required under applicable securities legislation, Naturally Splendid undertakes no obligation to publicly update or revise forward-looking information.
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