TIDMZOE
RNS Number : 0266P
Zoetic International PLC
15 February 2021
For immediate release 15 February 2021
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF REGULATION 11 OF THE MARKET ABUSE (AMENDMENT) (EU EXIT)
REGULATIONS 2019/310
Zoetic International plc
('Zoetic', the 'Company' or the 'Group')
Progress Update
Zoetic, the international CBD group, is pleased to provide an
update on its operations, its activities, and sets out its current
strategic roadmap.
Overview
-- Pivotal distribution agreements in place
o AATAC rollout has commenced with initial 10,000 stores
committed during next phase
o Executed previously announced agreement with prominent UK
distributor
o Ox Distribution beta-store programme complete
-- Legal and regulatory work underway for new market entry
o UK FSA Novel Foods dossier submitted
o EU compliance work underway
-- Executive management team appointment and corporate governance progress
-- Financial commitment from the Schrader Family has now been fully executed
Distribution Agreements
The Group is pleased to provide an update on its distribution
contracts and refined marketing strategy. After consultation with
its leading distribution partners, the Group has committed to
ramping-up its market entrance through a calibrated and phased
entry into stores. This careful approach has been engineered to
maximise sell-through rates and revenues with demographically
targeted products, following from the Group's long-term commitment
to ensuring that all processes are properly implemented to yield
the best possible results.
The Group will now enter what has been dubbed its 'Prepare for
Lift Off' plan, as it works in close partnership with distributors
to orchestrate a successful rollout and to implement best practices
across appropriate marketing, trade spend, advertising, in-store
display, education, and speed to market. The Group and its
distributors anticipate this ramp-up cycle to be completed over the
course of 12 to 15 months, and the information gathered during this
phase will allow Zoetic to guide its strategy as the Group
accelerates towards total network penetration.
United States
Asian American Trading Associations Council ('AATAC')
The rollout of Zoetic's Chill brand of tobacco alternative
products has now commenced across the AATAC's national convenience
store distribution network. Leveraging dedicated shelf space, our
products will take prime position within an initial 10,000 stores
committed during the 'Prepare for Lift Off' phase. In conjunction
with the sage advice of the AATAC's distribution experts, the
Group's focus during this time will be on determining favourable
geographic targets whilst gathering the data needed to optimise
continued rollout operations. Initial product shipments are
anticipated in the coming weeks, with the programme's early
requirements set to be satisfied with existing inventory and
available funds. With initial test markets set to span from New
York to California, these key strategic geographies will inform our
wider strategy, enhance brand recognition, and allow us to execute
a mass market rollout that is repeatable and scalable.
Ox Distributing LLC (Ox) / The Schrader Family
The Group's beta-store programme with Ox Distributing is now
complete, having enabled the Group to establish a market fit and
genuine appetite for its products. As previously announced, this
pilot saw the Group's products enter the market via convenience
stores that were owned by the Schrader Family. Despite negligible
marketing and no in store promotional spend, the results of the
beta-store programme were extremely encouraging as Chill became the
chain's number one selling CBD line and continued to see sales
increase despite decreased footfall caused by the Covid-19
pandemic.
The Schrader Family has subsequently divested their interest in
the convenience store chain and have fully executed their previous
financial commitment. The Group is very thankful for their
continual support and guidance, and now looks to a promising future
as the Chill brand continues to penetrate the wider American market
with the benefit of valuable guidance from the Ox Distributing
team.
Europe
UK distribution and regulatory application
Further to the Group's interim results issued on 28 January
2021, the Group is pleased to announce that it has now executed an
agreement with a prominent retail partner in the UK. This milestone
agreement has the potential to facilitate a large-scale rollout
across some of the UK's most recognised high street brands,
granting the Group further exposure to this rapidly growing market.
This contract is conditional on Zoetic achieving Food Standards
Agency ('FSA') Novel Foods authorisation for its CBD product range.
The Group is pleased to announce that progress has been made on
this front, and the application for authorisation has now been
submitted in accordance with FSA guidance. Zoetic looks forward to
updating the market in due course on this matter.
EU Distribution
As previously announced, the Group has signed a number of
distribution agreements with the potential to facilitate the
distribution of the Group's Chill products across 17 distinct
European markets. The Group is committed to ensuring proper
compliance across each of these jurisdictions, and is working
closely with its legal advisers to drive a compliant and driven
rollout into the wider European market. The Group will provide a
further update as these matters progress.
Executive Appointment and Governance
The Group is pleased to announce that Mr. Paul Ferguson has been
promoted to Chief Financial Officer and is expected to join the
Board shortly. Mr. Ferguson joined Zoetic in November 2020 as Vice
President - Corporate Finance, and has been focused on financial
budgeting, forecasting, and identifying capital requirements. Mr.
Ferguson brings a combined five years' experience in previous CFO
positions, including a private cannabis equipment manufacturer as
well as TSX-listed Surge Energy. Additionally, Mr. Ferguson spent
approximately 15 years in the asset management industry as
portfolio manager and research analyst with firms such as Fidelity
Investments and Citadel. In addition to an undergraduate
engineering degree, Mr. Ferguson obtained an MBA in finance from
the Cox School of Business at Southern Methodist University.
An executive search programme has also commenced, as the Group
targets talented independent board directors. Interviews for Zoetic
board positions have begun, and the Group looks forward to
providing an update on this front in the coming months.
The CBD space is one of the most dynamic current business
sectors, both in terms of activities and regulations. As evidenced
by our FSA Novel Foods application, Zoetic seeks to be at the
forefront of current best-practice. This requires frequent input
from our legal advisers and regular changes to our website and
marketing material.
Antonio Russo, Co-CEO of Zoetic, said: "This an exciting time
for the Group, and we are confident that our careful approach to
distribution will ultimately yield better sell-through rates and
higher revenues, all whilst significantly boosting brand awareness.
Rather than making a consolidated market entrance as an outlier,
our incremental phased approach is designed to ensure that our
products are the market favourite across every geography in which
we operate. We are enthusiastic about the growing popularity of our
lines and look forward to seeing this trajectory continue in the
coming months."
Eric Schrader, formerly of Shrader Oil, commented: "With four
generations of experience in the convenience store sector, we have
seldom had a brand that, with no in store promotional spend,
outsells famous brands with million-dollar marketing budgets. This
kind of performance is why so many retail groups are keen to carry
the Chill brand, and it's easy to come to the conclusion that we
have something special here."
- Ends -
Publication on website
A copy of this announcement is also available on the Group's
website at www.zoeticinternational.com
Media enquiries:
Zoetic International plc c/o Buchanan
Trevor Taylor, Co-CEO
Antonio Russo, C0-CEO
Allenby Capital Limited (Financial Adviser
and Broker) +44 (0) 20 3328 5656
Nick Harriss / Nick Naylor (Corporate
Finance)
Guy McDougall (Equity Sales)
Buchanan
Henry Harrison-Topham / Jamie Hooper Tel: +44 (0) 20 7466 5000
/ Ariadna Peretz
zoetic@buchanan.uk.com www.buchanan.uk.com
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