For those people who have only held a week and seem somewhat unfamiliar with the reality of the Meluka situation, here is a not so brief outline:
May
50% interest in an established organic essential oils producer from Jenbrook Pty Ltd Jenbrook) whose long‐term owner is Bryan Easson, for total consideration of $1.49m.
This transaction was later amended in August to:
A revised Term Sheet with Meluka Health Pty Ltd in which Eve invesment of $740k less $100k deposit will equate to a 50% interest, of which $500k is retained as working capital by Meluka Health honey business.
IPO information
Eve will retain the rights to manage an intended IPO for Meluka Health within a 12-18 month timeline. Eve shareholders will receive a preferential entitlement to participate in the IPO. < May-Nov 2018
October
Eve investments has received firm commitments equating to $1.2m to fund the completion of the Meluka Health transaction, includes $500k from TRT investments and $110k of director participation.
As part of the agreement TRT (Chinese health company) will nominate a non-executive director to the board.
Meluka Health Pty Ltd holds 100% ownership of EcoBotanicals Pty Ltd and 66.66% of Medic Honey Pty Ltd
Agreement was scheduled for completion in October but as previously stated some outstanding factors are being finalized and closure of the deal is imminent.
November
Appointment of Dr. David Rudd to Meluka Honey board of directors to develop
Medicinal/Therapeutic Honey - ingestible
Topical Honey Balm - injuries
Bee Tonic - health product
Combined revenues of A$3m < doubled over last 18 months
Product range will consist of:
Base Meluka Honey
Medicinal Ingestible Meluka Honey
Medicinal Topical Honey
Hemp Seed Honey < you may have to go to the US as it's stated as designed for that market (initially at least)
Cannabis Honey < under development that will incorporate pain relief
Upcoming
Research and development of products
Bulk honey sales to the US market
Leverage contacts for sales to China
December
Base honey sales
Q1 2018
Medicinal Meluka Honey
SCU research validation
Production and sale of Hemp seed honey
Q2 2018
Production and sale of Bee Health tonic
Commence production of Cannabis for honey research < this allows a fair degree of time in which they can get the licenses required, I believe they will be pushing for the hemp license in the short term so they can grow their own to meet the Q1 production goals
IPO/RTO to support expansion
The summary I get from all of this is that while people keep saying it is a speculative company, if the sale is completed in the short term they have a clear path to expansion planned and if the market receives the products well it could lead to a significant increase in revenue during 2018-2019 for the company.
Considering Capilano has had a bad reputation for non-organic products and a lot of consumers are willing to pay for a higher quality more natural product, it will be interesting to see if they can disrupt the space.
It will be interesting to see if Eve push for further investment opportunities in late 2018 or early 2019. If Meluka and Omni begin to generate revenues that will enable Eve to expand that is certainly a strong possibility.
I will not go into all the details of Omni but for those unaware our first sales into China are also happening this month and they have targeted expansion into:
Canada
South Africa
Indonesia
Malaysia
and are in or completing negotiations with
Scandinavia
USA
India
Q1 2018 - will also launch VLCD range into Australia then international markets followed by a lot of expansion, research and development in Q2.
It is my impression that Omni will probably not be overly profitable until perhaps the 2019 eofy due to the expense of building the companies brand and product line. In terms of yoy revenues though, these should increase as distribution channels and sales broaden.
Omni also has a planned IPO but at this point I don't believe a definitive date has been determined.
(20min delay)