Zoetic International plc (LSE: ZOE), the London-listed vertically integrated CBD and natural resources company, has today provided the following update on its operations.
● Executed distribution agreement with a US multi-state provider.
● The Chill brand’s total reach with fully executed distribution agreements now totals over 6,000 retail outlets.
● While COVID-19 has slowed the roll-out, the position is now looking more positive.
● Discussions with AATAC continue.
Multi-state distribution agreement
Chill, Zoetic’s tobacco alternative brand, has announced that it has signed a distribution agreement with a new partner BettermentRS to market Chill products to their network of outlets. The Agreement is the latest development from the Company’s strategic partnership with Ox Distributing LLC, who continues to be instrumental in advancing the Chill brand with successful direct store distributors. The Board strongly believes that DSD are critical for shelf placement and education of products to quickly capitalise on this multi-billion Dollar industry.
Trading & Covid-19 Update
The Agreement brings the Company’s total number of active distribution agreements in the USA to four, covering over 6,000 retail outlets. Zoetic is prepared to roll out the Chill brand at the rate of around 500 stores per month (as previously announced on 5 February 2020), however this roll out has been delayed by the COVID-19 pandemic, as many retail outlets have been closed or experienced greatly reduced foot traffic (as set out in the announcement of 20 March 2020).
However, it is now becoming clear that lockdown restrictions are being relaxed throughout the USA and the Board has been preparing diligently to ensure it is ready to capitalise on the opportunity. US states are gradually opening back up with plans that incorporate tiered phases. The Company anticipates having an early indication in the coming weeks of how the roll-out plan is progressing.
The Company remains engaged in negotiations with AATAC (as previously announced on 5 February 2020), which are proceeding positively. However, the current COVID-19 pandemic has slowed progress, with substantial numbers of their large membership of independent owner-managed stores being closed during lockdown.
Chill has positioned itself as a target brand for retailers and distributors globally. Strong brand recognition is generating inquiries from international distributors and the Board is targeting signing its first international distribution agreement during June 2020, with negotiations already well advanced. Such international sales are a key objective for the second half of the current financial year, and the Board is preparing to ensure the Company remains compliant with the ever-changing rules and regulations regarding CBD in its target countries.
Antonio Russo, Co-CEO of Zoetic International, commented, “We are thrilled to pick up another distributor with enormous reach and well recognised retail outlets. Chill will continue to choose the right distributors to partner with, and which match the goals and ambitions of the brand.”
Trevor Taylor, Co-CEO of Zoetic, commented, “Our vision is progressing well, and we are strategically prepared to manage our growth and roll out plan both in the US and internationally. There are still many challenges due to COVID-19, but with strong collaboration and trusted partners, Zoetic is confident in its ability to hit the ground running and be a leader in the market.“
Total Voting Rights
The Company’s issued share capital as at the date of this announcement comprises 185,820,034 ordinary shares of 1 pence each (“Ordinary Shares”), with one voting right each. The Company does not hold any Ordinary Shares in treasury. Therefore, the total number of Ordinary Shares and voting rights in the Company is 185,820,034.
The above figure may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the share capital of the Company under the FCA’s Disclosure Guidance and Transparency Rules.