Efftec International, Inc. Announces Financial Restructuring and Provides Corporate Status Update
Las Vegas, NV, July 20, 2017 (Newswire.com) - Efftec International, Inc. (OTC: EFFI or the "Company"), a holding company that focuses on sales of hardware, nutrients and professional consulting services into the hydroponics and indoor grow markets through various business segment activities, announced today that it is restructuring its businesses to better align with segment and managerial competencies. The Company's strategic direction has now been organized along the lines of the following three segments or verticals:
- Consumables: Red Light Bakers -- suppliers of specialty baking mixes;
- Hard Goods: Xe Lighting and private label lighting -- suppliers of lighting products and nutrients to the indoor grow markets and Budz Sunglasses -- manufacturer and distributor of specialty grow room safety sunglasses; and
- Professional Consulting Services: Consulting Partnership Group -- suppliers of turnkey solutions and consultation for indoor agriculture.
The Company has developed and intends to further implement a technology-based "incubator model" for each of these business segments or verticals, along with possible future related businesses or activities, with an intent at some future date to either spin-off or sell each segment or vertical, either in whole or in part. The Company believes that this "incubator model" approach will maximize the Company's value by providing shareholders with the ability to participate in the ownership of any separate segment or vertical spinoffs.
In terms of reporting upon the business and operational activities of the Company over the past year in light of this restructuring announcement, the Company provides the following status update.
The Company, after significant review by management and outside legal counsel, has decided to divest itself of its ownership position in Hemplife Industries and the Company is presently in discussions to sell its ownership interest to a potential buyer. The Company has also decided to sell the suite of five individual industry-specific patents which focus on technologies and methodologies that improve the efficiency of gas discharge lighting systems, commonly known as HID and CFL lighting systems, that was acquired in April, 2016 since further development of these patents are no longer relevant to the Company's planned future business activities. The Company is continuing with its strategic partnership with The Future Farms despite the fact that its planned acquisition of that company has been further delayed due to various reasons mostly attributable to the temporary absence of the Company's chief executive officer last year due to illness and various other issues attributable to unmet conditions specified in the acquisition agreement. The Company is pleased to report, however, that its chief executive officer has returned to that position on a full-time basis. In addition, The Future Farms has been able to utilize its established line of credit to purchase the Company's products on a regular, recurring basis.
Lastly, the Company is currently pursuing a leasing option with a medical marijuana grower in California which was initiated by the Consulting Partnership Group whereby the leasing arrangement will utilize the Company's proprietary container design and will be funded as part of the Company's restructuring.
As previously reported, the Company and Chapman Aerospace are continuing to review opportunities to deploy Chapman technology in the hydroponics and indoor grow markets. The Company's proprietary medium mix, developed and produced with its joint partner, Volcanic Solutions, has been tested with full expectations of excellent market acceptance. Although the Company has received an initial order of three hundred (300) bags per month, the fulfillment and logistics costs presently do not allow the Company to achieve its minimum profit margin expectations. The Company is, therefore, pursuing alternative ways in which the bagging can be performed in South Florida, close to the Company's customer base, which would allow the Company to meet these profit margin expectations.
The Company is in preliminary discussions with its largest debtholder along with an unaffiliated third-party investor, which could provide not only for certain financial flexibilities, but also could include an infusion of new capital which the Company intends to utilize among its business segments or verticals to further its revenue growth and earnings potential as well as to pursue additional opportunities.
Lastly, the Company has decided that it does not intend to either increase its authorized common shares or to enact any share splits or reverse share splits and, in consideration thereof, the Company has retained SEC legal counsel and an independent certified public accountant in order to commence the preparation of a Form S-1 registration statement in order for the Company to be a fully reporting issuer by the end of this year.
According to Brian Tucker, President of the Company, "the restructuring actions along with the revised focus on the three business activity segments or verticals will greatly increase the Company's ability to achieve further growth as historically evidenced by the increase of over 900% in net sales of $ 247,000 for the calendar year ended December 31, 2016 compared to $ 27,000 for the calendar year ended December 31, 2015."
Safe Harbor Provisions: This Press Release may contain, among other things, certain forward-looking statements, including, without limitation (i) statements with respect to the Company's plans, objectives, expectations and intentions, and (ii) other statements identified by words such as "may", "could", "would", "should", "believes", "expects", "anticipates", "estimates", "intends", "plans" or similar expressions. These statements are based upon the current beliefs and expectations of the Company's management.
For further information, please contact:
Mr. Jack Morris, Chief Executive Officer
Efftec International, Inc.
(888) 420-4213
Source: Efftec International, Inc.