Smoky Market Foods Inks Development Agreement with Iowa Processor, Includes Venture Financing
WEBSTER CITY, IA / ACCESSWIRE / July 16, 2014 / Smoky Market Foods, Inc. (OTC PINK: SMKY) announced today the execution of a strategic development agreement with its long-time, Iowa meat processing affiliate, MaryAnn's Specialty Foods, Inc. (MaryAnn's). "We've got a lot of years together and know each other very well; the owners of MaryAnn's know the industry and that it's a perfect time for our product niche. They are also a large shareholder who wishes to join forces with SMKY to support our success," said Eddie Feintech, Chairman, President & CEO of the Company. "MaryAnn's brings over 40 years of successful meat processing experience and a large customer base of value-added food buyers. This development agreement is a demonstration of their commitment to SMKY with a minimum $650,000 of inventory and receivable financing, which will enable a rapid growth of our revenue," he continued.
The two companies will coordinate their marketing efforts that will include introductions to MaryAnn's extensive commercial customer base and broker network for sales of SMKY product. The partnering affiliation with MaryAnn's also gives the Company's sales team greatly enhanced operating credibility for development of large-scale distributor and co-brand marketing agreements. Said Feintech, "Our existing production capacity gives us a wholesale revenue range up to $1.5 million per month and MaryAnn's is providing the venture financing to enable that level of sales to be achieved as soon as possible." He continued, "We now have in place the production capacity and the financing to make exciting co-brand marketing deals with regional restaurant chains and certain prepared food retailers and health-oriented grocery chains, and we believe that level of sales will get us into profitability."
The Company's operations under the development agreement get underway in mid-August, with MaryAnn's producing an initial amount of inventory to include SMKY's unique Smoke-Baked fish items and chicken to begin filling distribution channels. MaryAnn's will finance the required growth of inventory to accommodate increasing sales as well as the investment required for growth of receivables, which at full capacity of SMKY's existing oven will require capital in excess of $650,000. "We've forged a solid win-win financial marketing arrangement with MaryAnn's that gets SMKY quickly and efficiently into scalable sales, and rewards MaryAnn's with a reasonable compensation of 4% of product sales and a grant of five million shares of restricted SMKY common stock for the venture financing risk commitment," said Feintech. The development agreement has a one-year term, which is automatically renewable each successive year by mutual consent without additional compensation.
As further up-date on its progress toward bringing its filings current, the Company is now working to first complete both its 2012 and 2013 audits together so that its filings may be consolidated, thereby expediting the process and reducing the cost. Said Feintech, "With both audits getting done and production commencing in August, September is looking to be an exciting month for becoming current on all filings and growing sales revenue."
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