Ann: TBB Update, page-27

All pessimism aside.

The structure of a TBB deal will now, I think, be significantly different. Assuming any TBB deal at all.

Administrators are typically interested in cash, possibly keeping things as a going concern. They also want speed of transaction. I can't imagine they would settle for equity in WFL, albeit it's not clear who the creditors of TBB are, and equity could be dumped on the market and therefore converted to cash.

An earnout no longer makes any sense.

There was talk of a bridge loan, and given this discussion and assumed negotiations (not involving Welfully) around liabilities with creditors, I suspect a decision was made to let TBB go into administration versus current shareholders (Capital D) bailing it out. This shafts said creditors, albeit they may end up with something if the administrators can do a deal. (Note: I'm not familiar with specifics around VA in Europe).

The TBB business (administrators) would retain, I assume, some inventory and any IP around the products themselves and any existing distribution and similar agreements. The Administrators will evaluate and determine if any of this can be converted to cash. The obvious way would be with a trade buyer (such as Wellfully). But, as we know, Wellfully has next to no cash, so what can it offer? Maybe Capital D loans cash to WFL so it can make the lowest possible (but still acceptable) offer for relevant TBB assets... and on they go.

In theory (keeping all the strange negativity aside) I can see how Welffuly could leverage these brands with their own and possibly move to positive operating cash. It's a stretch, and hard with next to no cash... and I'm concerned it's all a big distraction from the main game of Reduit and Swisswell. But maybe one or both of these brands have not kept their momentum and need to be exited. Or maybe they are continuing the slow build and sharing the cost base (economies of scope) makes sense. Who knows.

If nothing else, the Wellfully train continues to entertain.

Merry Christmas all.