Last updated on September 13th, 2022 at 02:35 pm
Verus International and its wholly owned subsidiary, Big League Foods, have entered into a letter agreement with ACG Global Solutions and Game on Foods. For certain consideration, BLF has agreed to sell, transfer and assign all of its rights, title and interest in and to all of BLF’s assets to Game on Foods. Under this agreement, Game on Foods will manufacture, package and ship candy products under existing BLF licenses, while Verus will operate its own sales organization in support of this arrangement.
Game on Foods is in the process of building a custom fulfillment operation that is capable of producing smaller and more variable lot sizes compared to traditional candy suppliers. This facility is expected to solve some of the supply chain issues inherent under licenses that have large numbers of teams and widely varying market dynamics. The agreement is designed to significantly reduce current and future capital costs for Verus. The agreement also will remove certain salary and other obligations, and reduce existing liabilities, as ACG has agreed to modify the terms of its promissory note to $150,000 and extend the terms until Dec. 31, 2021.
“Licensed products require greater scale and significant capital investment, so today’s announcement solves a major problem for us,” explained Verus CEO Anshu Bhatnagar. “We consider this Agreement an amazingly positive development, because it will allow us to participate in the growth of the business, without facing the significant risks and ongoing capital requirements estimated at more than $1.0 million annually, which is required to develop this into a profitable operation. This agreement reduces our ongoing expense by eliminating significant guaranteed annual license minimums, salaries and inventory costs, so the benefit will be immediate. These changes will enable us to follow more closely to our international model, where we primarily operate as a sales organization. We will continue to distribute and sell the BLF products and have also freed up additional capital for our other divisions. Overall, today’s announcement puts us in a much better position to move forward with our strategic plan in 2021.”
The Gaithersburg, Maryland-based company previously announced reverse stock split is proceeding as expected as final regulatory approval is in process. Upon completion of the reverse stock split, the company expects to immediately proceed with previously discussed strategic initiatives.
