Minerco Resources, Inc. (OTC:MINE), the parent company of Level 5
Beverage Company, Inc. a specialty beverage company which develops,
produces, markets and distributes a diversified portfolio of
forward-thinking, good-for-you consumer brands issued a letter to
its shareholders from Chairman & CEO, V. Scott Vanis today. The
letter follows:
Dear Shareholders,
Another quarter of rapid growth, steady expansion and notable
accomplishment are on the books for our burgeoning company.
VitaminFIZZ, arguably the hottest new enhanced sparkling beverage
on the market, continued its exponential growth (and expansion)
into the Southern California (SoCal) and New York City (NYC)
markets. VitaminFIZZ also recently launched in the Las Vegas
market. In addition, we posted revenues of over $740,000 in the
quarter ending January 31, 2015. All outstanding accomplishments,
but we have our goals set much higher than this.
VitaminFIZZ Highlights
In our focus market alone, SoCal consumers have purchased more
than 315,000 bottles of VitaminFIZZ (most sales occurring in this
calendar year with many not being counted in the latest Form 10-Q).
The full scale and quantifiable build out of SoCal is the
foundation of our scalable "copy and paste" model. VitaminFIZZ is
available in over 1,200 locations in SoCal, NYC and Las Vegas with
a very large number of these locations being high volume, key
accounts. There are approximately 280 Walgreens, 45 Kmart, 160
Albertsons and 30 Gristedes locations and counting.
Note: Even our industry advisors and brand
partners are impressed by the success and speed of the market's
acceptance of and demand for VitaminFIZZ.
In preparation for the Spring / Summer seasons, we have ramped
up production to satisfy the unprecedented consumer demand for
VitaminFIZZ. In addition, we are lighting up the United Kingdom
(UK) market this Spring. In fact, we will be the first (in our
category) to market in the UK. We'll also be evaluating
a few new markets in a few different corners of the U. S. and the
world.
Our key account progress in SoCal has captured the attention of
several different groups of stakeholders (including institutional
investors, very large chains and would-be competitors). We landed
Albertson's – Safeway, received long-term placement in Walgreen's
and Kmart and have a few more major retailers in the works. All
this attention and demand is reaching critical mass, which is
exactly why we have been responsibly building our strong foundation
to support what we believe will be exponential and vertical
expansion.
Avanzar Highlights
Avanzar Sales & Distribution, LLC, a company recently
acquired by Minerco/Level 5, has continued to rapidly grow
and expand over the past 90 days. In addition to the
impressive performance of VitaminFIZZ in SoCal (discussed above),
Avanzar has also increased their customer base (in clients and
locations) by over 40% from 3,700 locations to 5,300 locations
serviced, highlighted by 119 Stater Bros locations in
SoCal. These additional clients and locations are not only
good for all of Level 5's products but also for Avanzar's entire
portfolio.
Additionally, Avanzar has launched a Merchandising and Sampling
Department which they expect to increase by 50% over the next 90
days due to increase in demand for these services from all their
clients and customers. The continued geographic, location,
services and brokerage expansion is essential to the execution of
our business model and further solidifies our full service
development and test market in SoCal.
Other Notable Highlights
Keep in mind our focus is squarely on VitaminFIZZ (especially
coming into the Summer Season), but our next brands in the
pipeline, Vitamin Creamer® and The Herbal Collection™, were
recently updated as well. Vitamin Creamer formulations and designs
(as you may have seen) are moving forward at a responsible pace,
and we expect to start market tests later in the year. The Herbal
Collection is also moving forward in packaging and formulation,
under the terms of licensing rights, and will be updated in a
similar fashion as Vitamin Creamer.
VitaminFIZZ was the premium Spring Break beverage sponsor for
Student City in Panama City Beach, Florida, a top Spring Break
destination. As of the date of this letter, VitaminFIZZ is
estimated to have reached the taste buds of approximately 35,000
college age, health conscious people (one of our target
demographics) with overwhelmingly positive response (both to taste
and functionality). Similarly, with our branding efforts at Spring
Break (with Student City, at events and on the Boardwalk), we
estimate well over 250,000 VitaminFIZZ impressions to date and
expect well over 350,000 for the duration of the sponsorship. The
targeted follow up will start in the coming days and weeks.
FY 2015, Q2
Highlights and comments on our Quarterly Report on Form 10-Q,
just filed with the Securities and Exchange Commission (SEC) are as
follows:
- Top line revenues for Q2 FY 2015 (ending 1/31/2015) were in
excess of $740,000. When compared with revenues for Q1 FY 2015 of
$502,000, this represents an increase of over 47%, quarter over
quarter.
Note: Due to
Predecessor / Successor and inter-company accounting requirements,
SoCal VitaminFIZZ sales and revenues are not reported at the
VitaminFIZZ level. VitaminFIZZ sales (collected as of 1/31/2015)
were approximately $80,000 for the Quarter (ending 1/31/2015).
- In the current Fiscal Year, Assets have increased by 270% from
$1,011,586 (as of 7/31/2014) to $2,727,038 (as of 1/31/2015). The
increase is mostly attributable to the acquisition of Avanzar.
- Quarter-over-quarter liabilities remained relatively constant
from $4,918,192 (as of 10/31/2014) to $4,946,036 (as of 1/31/2015).
The majority of these liabilities are attributable to our long-term
debt (draws from our Line of Credit) and acquisition of Avanzar
liabilities.
- Another important financial indicator is our Total
Stockholders' Equity (Deficit). As of January 31, 2015, we had a
deficit of approximately $2,219,000 compared with $2,300,000 for
the Quarter ending 10/31/2014. You will see why this is an
important number to track in the next section.
Important New Focus
In this update letter, I would like to substitute the normal FAQ
section with information about an important new focus of our
company.
For the past few months, we have been speaking with
representatives of major listed exchanges and numerous eager
underwriters as we plan for and evaluate a move to a listed
exchange, either NASDAQ Capital Market or NYSE Market. With our
proven and measurable successes, our insistence on operating /
communicating like a Listed Company, and our bright and prosperous
future; we have been recognized by numerous groups.
Moving to a listed exchange will benefit our company in every
way. A listed exchange provides our company more exposure (to
institutional banks, funds and investors) and provides better terms
on capital and financing. The move to a listed exchange also helps
to protect long-term investors' value by mitigating volatility
(many times caused by manipulation) that can occur in our current
market.
Our discussions and evaluation are ongoing; however, I would
like to update you on the status. While there are numerous
standards for eligibility, we are concentrating on two standards
from each exchange. The requirements for listing on either of the
listed exchanges are as follows:
|
NASDAQ |
NYSE |
Requirements |
Standard
1 |
Standard
2 |
Standard
2 |
Standard
3 |
Pre-Tax Income Last
Year |
N/A |
N/A |
N/A |
N/A |
Net Tangible Assets |
N/A |
N/A |
N/A |
N/A |
Market Value Publicly Held
Stock(1) |
$15,000,000 |
$15,000,000 |
$15,000,000 |
$15,000,000 |
Market Capitalization |
N/A |
$50,000,000 |
N/A |
$50,000,000 |
# of Shares Publicly
Held |
1,000,000 |
1,000,000 |
1,000,000 |
1,000,000 |
# Public Shareholders |
300 |
300 |
400 |
400 |
Trading Price of Listed
Securities(3) |
$4.00 |
$4.00 |
$3.00 |
$2.00 |
Shareholders' Equity |
$5,000,000 |
$4,000,000 |
$4,000,000 |
$4,000,000 |
Market Makers |
3 |
3 |
N/A |
N/A |
Operating History |
2 years |
N/A |
2 years |
N/A |
As shown in the table above, we meet 7-8 out of the 10
requirements. Of the remaining 2-3 requirements for eligibility,
the Shareholders' Equity requirement is the most demanding for our
company. The simplest and most obvious ways to achieve the minimum
stockholder's equity requirement are 1) Exchange existing long term
debt to equity positions on our balance sheet; and 2) Produce
and/or acquire positive assets. Please keep in mind, this does not
happen overnight. It is a process.
A substantial equity capital raise (held as cash on balance
sheet) could provide us with the required Shareholders' Equity.
Additionally, we believe more value will be delivered to our
shareholders by identifying, evaluating and acquiring cash flowing
assets. These assets will fit into our scope and/or be strategic in
nature. Over the coming months, we plan to aggressively negotiate
with our lending partners in order for them to become long-term
equity partners and evaluate (then acquire) strategic and / or
vertical assets that fit within our reach and scope.
Together, we have made a strategic investment and the beverage
world has taken notice of our products, our success and our bright
future. We have accomplished a remarkable amount in a very short
period of time. But looking back (for more than a second)
will only slow us down. As we continue to execute our plan going
into the Summer Season, the pace will only get more frantic. As
more people sample, love and demand VitaminFIZZ in their favorite
stores, our beloved flagship product will, we believe, continue to
expand and evolve into a dominant, global brand.
Note: We are only talking about VitaminFIZZ (so
far). If you remember, we have a few more major category contenders
in the pipeline!
As always, I speak for Minerco, Level 5, Avanzar and our
strategic partners in thanking and recognizing our visionary,
resolute and enthusiastic shareholders. We will strive to earn your
respect, reward your loyalty and share your enthusiasm as we embark
on the next leg of our collective journey. We further commit to
delivering value to every share and pride to every shareholder.
I personally thank you for your confidence and support!
Sincerely,
V. Scott Vanis, Minerco
Chairman & CEO
Minerco Resources,
Inc. (OTC:MINE)
http://minercoresources.com/
Minerco Company Background: Minerco Resources,
Inc. (OTC:MINE) is the parent company of Level 5 Beverage Company,
Inc. (Level 5), a specialty beverage company which develops,
produces, markets and distributes a diversified portfolio of
forward-thinking, good-for-you consumer brands. The Minerco / Level
5 brand umbrella includes: VitaminFIZZ®, Vitamin Creamer®, Coffee
Boost™, The Herbal Collection™, Island Style™ and LEVEL 5®.
https://twitter.com/hashtag/vitaminfizz
https://www.facebook.com/drinkvitaminfizz
Safe Harbor Statement: This document contains
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Act of
1934 that are based upon current expectations or beliefs, as well
as a number of assumptions about future events. Although we believe
that the expectations and assumptions upon which they are based are
reasonable, we can give no assurance that such expectations and
assumptions will prove to have been correct. Some of these
uncertainties include, without limitation, the company's ability to
perform under existing contracts or to procure future contracts.
The reader is cautioned not to put undue reliance on these
forward-looking statements, as these statements are subject to
numerous factors and uncertainties, including without limitation,
successful implementation of our business strategy and competition,
any of which may cause actual results to differ materially from
those described in the statements. We undertake no obligation and
do not intend to update, revise or otherwise publicly release any
revisions to these forward-looking statements to reflect events or
circumstances after the date hereof or to reflect the occurrence of
any unanticipated events. Although we believe that our expectations
are based on reasonable assumptions, we can give no assurance that
our expectations will materialize. Many factors could cause actual
results to differ materially from our forward-looking
statements.
CONTACT: Media Contact:
Jason Grimley
Spelling Communications
323-309-8714
jasongrimley@spellcom.com