Herborium Group, Inc.
February 28, 2013
The following statements are of importance to current and potential investors regarding Herborium’s Annual Report for year ending November 30, 2012. In addition, the statement contains a plan of operations for the next year, providing insight into the future of the Company.
Plan of Operations:
The following guidelines will shape the activities of Herborium Group, Inc. during the next 12 months
? To continue increasing the Company’s market share and revenues from AcnEase, the company’ all botanical acne treatment through a number of e-Commerce initiatives and Traditional Distribution.
To support this objective, in the 4th quarter of 2012, the Company deployed a number of aggressive social media events and tactics including a video series on YouTube, regular Newsletters, increased twitter frequency and building alliances with numerous respected bloggers and social media personalities to endorse the product. In the 3rd quarter, the Company continued its digital media strategy, increased its Facebook following to 5000 likes and over 60,000 “reach”, that is an increase of more than 5000% than 2011. The new state of art AcnEase Website was deployed in the 4th quarter and started to have an immediate positive impact on the bottom line. The two flush pages for www.herboriumsh.com and wwww.lastingenergy.com have also been deployed to prepare the marketing campaign for the new Herborium products Lasting Pleasure® for women, Lasting Power® for men and Lasting Energy® . The aforementioned formulations have been released from quality control and quality assurance testing and are being packaged for an immediate launch.
? To complete manufacturing, packaging and deployment of the 3 new products: Lasting Power®, Lasting Pleasure® and Lasting Energy®. To establish branding and build the market share for those products so they start generating revenues
In the 4th quarter, the Company moved into formulation of manufacturing of all three products and building a foundation for a branding strategy and commercialization strategy including the initial distribution and partnerships opportunities
? To build a system to benefit from a deployment and growth of Kamasutra spirit that was launched in 4th Quarter and immediately won an approval of consumers and distributors.
By the end of 4Q of 2012, Kamasutra was sold in over 200 stores in NJ and preparing the entry into New York and Connecticut. e Herborium receives royalties based on gross revenues of the product, is paid for a delivery of a formula and each bottle and marketing materials for the vodka related to Herborium sexual health products providing high marketing support and tangible value for Herborium.
Herborium is involved in building the Social Media strategy for Kamasutra and Dr. Olszewski, Chairman of Herborium is a Senior Advisor to Kamasutra USA, LLC.
? To improve Herborium’s Capitalization Table, to amplify investor’s awareness and to increase investor’s value.
In the 4th quarter, the Company maintained regular IR initiatives including a frequent Press Release Program and Investors meetings.
? To strengthen the Company’s brand positioning in the Botanical Therapeutics® field and increase brand recognition in the marketplace for all Herborium products leading to distribution partnerships, co-marketing and strategic partnerships and ultimately to increased revenues.
Along with this goal, Herborium and SSPR, one of the top 20 US PR firms, have achieved several media placements including positioning Dr. Olszewski as an advisor and regular contributor for www.sheknows.com which is one of the most visited women’s websites in the USA and Canada, with more than 6 million hits per month. They have also secured a presentation of Lasting Energy in Vitamin Retailer, a top Industry Magazine, and Lasting Power® and Lasting Pleasure® in USA Today’s Sexual Health Edition. These initiatives will help build and execute a successful PR strategy for the Company.
? To expand vendors network including e-stores, wholesale distributors and international vendors.
The company is discussing distribution agreements in Asia and Europe and has commenced collaborative marketing efforts with The Hut Group of Great Britain (www.thehutgroup.com), the largest distributor of AcnEase in Europe.
Analysis of Operations and Financial Conditions:
For the fiscal year ending November 30, 2012, the Company’s sales were $280,000 with a gross profit of $160,000 and operating expenses of 254,300. For fiscal year ending November 30, 2011, the Company had sales of $234,400 with $124,000 in gross profit and operating expenses of $365,700. This constitutes almost 20% growth in sales, 28% growth in gross profit and another consecutive reduction in operating expenses by $31,300, approximately 10%, in comparison to 2011. The total reduction in operating expenses was more than 60% in comparison to 2010. For fiscal year ending November 30, 2010, the Company had sales of $262,000 and operating expenses of $719,500. The Company’s capital deficiency at the end of 2012 is $655,800 which represents close to 50% reduction in comparison to 2011.
Considering the steady growth of the AcnEase brand, an explosive growth of popularity of Kamasutra, and the launch of three new products that have already generated interest, the
Company is optimistic about growing its business, sales and product awareness. In addition, the Company’s efforts to decrease costs and retire debt are clearly visible in its decreasing deficit. This should increase the Company’s ability to raise outside funds and is an indication of the Company’s strength and the rising tide of interest in Botanical Therapeutics® among consumers and the financial community.
By taking advantage of the aforementioned trends, the Company was able to achieve the following results in 2012:
? Gross Profit of $160,900
? Net Income of $50,000, and therefore Herborium ended the year in black, a year ahead of its anticipated schedule, mainly due to growing sales and decreasing expenses as well as the retirement of outstanding debt.
? Yearly sales grew 20% in comparison to 2011
? Gross Margin increased from 60% to 68% for its leading product AcnEase
? 4th Quarter Net Income of $144,000
? Total Income for 2012 was $294,000
In summary the company achieved the previous years’ goals of improving sales, profitability, debt and deficiency in the current year.
/s/ Dr. Agnes P. Olszewski _________________________
Dr. Agnes Olszewski
President & CEO
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