Dear Shareholder,
This is to update you on the recent events and status of our company.
As we previously advised, the 2 new Salt Lake City airport locations which opened in April continue to set new record high sales for our airport units. Both are operated by our franchisee, Hojeij, who currently operates over 100 airport concessions and is a highly respected restaurant operator in our industry. Our first military unit in the Aberdeen Proving Ground military base PX opened on August 16th and will be followed by the second Aberdeen unit, now under construction, in mid to late September. The third unit is scheduled to open by year end. The 3 units approved for Aberdeen will be operated under a joint venture agreement with MBUF LLC, and with whom we executed a 26 unit development agreement for further military base expansion of UFood and who have executed a lease for a UFood Grill at the Ft. Bliss military base in El Paso, Texas which is projected to open in late November.
As you are aware from our recent press releases, UFood has been approved by the federal government in the Transportation building (FAA). This location will be operated by Sodexo as a franchise unit with whom we have signed our first franchise agreement and is also scheduled to open in mid September. We will keep you posted as events unfold on further approvals. Our British Columbia franchisee seeking to open 10 units in that province has completed a market study of Vancouver, and has a first specific location under review with the assistance of our vice president of development.
It is important to note that we are also continuing to address our additional financial needs as we open new units and greater demand is being placed on our staff to support these openings. Continued growth and addition of new units are paramount to securing our future. It is imperative that we obtain additional funding which we are diligently pursuing from a variety of sources and is necessary to sustain the continued operation of our company. We have retained the services of a leading investment banking firm, for that purpose.
Finally, I want to update you on the situation which we previously disclosed in a Form 8-K filed on March 15, 2012. UFood and our new auditors, Grant Thornton, who acquired our prior accounting firm, determined that warrants granted in 2009 and 2010 had to be classified as liability rather than equity. Accordingly, we delayed the amended 2011 Form 10-K filing pending the restatement of the 2009 and 2010 financial reports previously filed. This delay exceeded the mandatory deadline as defined by the SEC. As a result of this delay, the securities of the common stock of the Company were not eligible for quotation on the OTC Bulletin Board (“OTCBB”) pending the resolution of the matter heretofore described. The reclassification of the warrants will affect both the balance sheet and statement of operations previously reported by UFood. However, this change will have no effect on the cash position of the company.
We intend to refile several of our periodic reports with the SEC. Upon so doing, we hope to once again be eligible for quotation on the OTC Bulletin Board “OTCBB”.
Sincerely,
George A. Naddaff
Chairman & CEO
