News!!!!
Verus International Signs $600,000 Note – Provides Operational Update
Gaithersburg, MD, May 01, 2019 (GLOBE NEWSWIRE) -- Verus International, Inc. (“Verus” or the “Company”) (OTCPink:VRUS) is pleased to announce that it has strengthened its capital structure via a $600,0000 fixed-rate convertible note from GS Capital. The note carries a 5% per annum interest rate on the principal. The note is due November 12, 2019 and the holder can convert any amount of the principal into shares of the Company's common stock, at a price equal to $0.10 per share. Full details of the note are available in the 8-K that was filed in conjunction with this announcement.
Importantly, proceeds from the funding can be used for general corporate purposes and are not restricted to accounts receivable or other narrow applications. A portion of this funding will be used immediately to begin production of ice cream for our newly announced Big League Foods subsidiary. This is a turnkey operation, ready for sales with packaging already designed, production agreements in place, and signed distribution networks that will cover close to 2,500 retail locations. Initial shipment dates have not yet been set, but the main goal is to move quickly to have product on store shelves to coincide with both the baseball and summer seasons.
“I can’t stress enough how timely this financing is in terms of our new business initiatives,” said Verus CEO Anshu Bhatnagar. “We are fortunate to have both backlog and greenfield opportunities, so every dollar of financing we receive can be put to work immediately to generate revenue. The larger we grow, the better our funding will become, so this is one more step on our path toward higher quality commercial sources of capital and faster growth.”
Verus is in a unique position as one of the newer international consumer products and food companies in an industry that is dominated by multi-billion-dollar giants. This makes us an attractive and right-sized partner for many high quality, but smaller firms that are seeking an experienced operator with a global footprint. As a result, Verus is experiencing continuing interest from potential M&A candidates. Accordingly, the acquisition of Big League Foods did not reduce the number of M&A targets, which remains at eight with the addition of a new candidate in the beverage space. Potential M&A is fairly diverse, covering multiple categories of consumer products on multiple continents.
“We put a lot of work into our M&A process to structure each deal to be both shareholder friendly and viable from day one,” explained Bhatnagar. “Our model starts with some basic requirements: unfilled backlog and high growth potential, near-term or existing revenue, and modest up-front acquisition costs. Big League Foods offers a perfect template for our M&A goals. We structured the deal with no stock or dilution as part of the acquisition cost, which will be paid for out of a percentage of profits based on annual revenue targets, with year-one contractually set at around $14 million in sales. These are terrific terms that will allow us to apply the bulk of our available capital to immediately grow the business. The multiplier effect on these kinds of transactions can be tremendous.”
Verus is currently working on additional forms of fixed-rate financing in order to fulfill existing backlog and support new business through M&A. The Company’s goal is to pursue this mix of organic and M&A-sourced growth through the remainder of 2019.
Verus will provide additional M&A related updates in coming weeks and in conjunction with its upcoming quarterly report. Interested investors are also invited to monitor the Company’s official Twitter feed @Verus_Foods for future information concerning Verus product announcements.
