As a reader of our “Opportunities” Newsletters you may recall in 2019 TBK Capital supported a Northland based business in raising the funds to install plant and machinery for tea tree oil extraction.
As a reader of our “Opportunities” Newsletters you may recall in 2019 TBK Capital supported a Northland based business in raising the funds to install plant and machinery for tea tree oil extraction.
This is now complete with two new purpose-built units installed. These have the capacity to meet the volumes required under a five-year supply agreement for 67,000 kgs of NZ M?nuka and K?nuka tea tree oil for New Zealand made natural health products to be exported to the U.S.
This agreement is between NZ Tea Tree Oil Agribiz Limited, and U.S. based Tribal Therapeutics Inc, provides for the export of therapeutic grade, “Tribal” branded New Zealand made Natural Health Products.
These have a NZS100 million ex-factory export sales value as retail shelf-ready Stock Keeping Units, (SKU’s) for U.S. distribution. Based on the Recommended Retail Price in the U.S. these SKU’s have a forecast sales value of US$183.3 million over a five-year agreement period. The five-year agreement has a first-year minimum supply drawdown of 2,000 kgs of NZ m?nuka and k?nuka tea tree oil.
This will be supplied from a 944 ha plantation in New Zealand’s “Far North”. And NZ Tea Tree Oil is paying out NZ$1.2 million in the first year to the supply partner / landowners it works with under the supply chain it has created to provide a “seed-to-ship” infrastructure.
Offer to New Zealand investors
NZ Natural Capital Investors Ltd is now looking to partner with New Zealand investors to launch this 5 year contract by offering a NZD600,000, Series A Round of ordinary voting shares at 10 cents each. This would give these investors a 50% ownership of that company.
The 2,000 kgs mentioned above will produce 100,000 value added SKU’s delivering NZ$2.768 million in export sales with a forecast EBITDA of NZ$1.23 million.
On the Company’s launch of a “POI” (Plant Oil Infused) health honey division, a further 32,000 SKU’s are planned to be exported. This would take the total number of SKU’s exported to 132,000 with an FOB value of NZ$3.184 million in year one and NZ$101.57 million over the five year contract period.
A successful follow-on gender-specific “POI” health honey launch in year one would support a forecast delivery of a further 544,000 SKU’s with an additional export value of NZ$42.4 million.
US Distribution Partner
The US distribution partner is Tribal Health Corp, the holding company of Tribal Therapeutics Inc which has its pilot showcase, sales and marketing centre in Ft Lauderdale, Florida.
Its operations are conducted through a retail store owned by its US shareholders through their private investment interests who lease the store to Tribal Health Corp at a peppercorn rate. The US business plan targets distribution through three primary channels. These include:
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D2C retail sales through the Showcase.
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B2B targeting the 37,640 retail stores owned by the 12 largest retail chains across the US.
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B2C sales through third party provided, cloud hosted sales apps operated by an ever-growing number of potential channel partners operating in this space.
With the “POI” health honey supplement imports, the forecast, first year sales value of these 132,000 SKU’s in the US is US$8.15 million delivering a forecast EBITDA of US$3.45 million. The SKU imports from New Zealand are supported by a US$2.475 million capital injection by the shareholders of Tribal Health Corp.
The sales value of the 3.35 million imported, gender specific SKU’s under the five year Supply Agreement, is based on forecast retail Recommended Retail Pricing and is forecast to total US$183.3 million with an EBITDA of US$84.4 million.
Not included in the Supply Agreement is plant oil infused (POI) health supplement honey. This is expected to become a “disruptive” first to market entrant in the US honey market; as a result of its greater therapeutic efficacy as a health product and having a launch price less than half of UMF20+ rated m?nuka honey.
The imports of this “first to market” product from New Zealand are currently forecast at 576,000 SKU’s with a New Zealand export value of NZ$42.4 million and a US retail sales value of US$107.8 million. That’s NZ$181 million at the current exchange rate.
In US dollars, the total five year forecast US sales value of these 3.926 million New Zealand produced and exported NHP’s totals US$260.8 million, targeting entry into three US health market sectors. The biggest of these is the US$201 billon PA Infection Control Market followed by the US$48 billion per annum Antiseptic/Disinfectant market. Entry into the US$164 billion per annum Dietary Supplements sector will be with the plant oil infused (POI)” health honey supplement.
US Capital Support
In order to enable New Zealand investors in the Company to financially benefit from the US operations at no additional cost, the Company’s $NZ600,000 Series A Round includes an investor bonus of one free carry share in Tribal Health Corp for every three shares subscribed under the Series A Round.
On a $NZ6,000 minimum investment, this would deliver 20,000 free carry, bonus shares in Tribal Health Corp which will conduct two US based capital rounds when this New Zealand Offer closes.
This provides a unique opportunity for New Zealand investors to enjoy a capital gain on their free carry Tribal Health Corp shares, through the two US campaigns, of potentially US$2.00 + per share.
The first of these two Rounds is Tribal Health Corp’s Series A which has been structured as an offer of 1,000,000 shares as a result of its application to present to a members only, nationwide US Angel funding organization being accepted. The offer is for 1,000,000 shares priced at US$1.00 per share and is planned to act as a “lead-in” to a follow-on US crowdfunding campaign.
The second of these is the follow-on, USD5M SEC compliant, Regulation Crowdfunding (REG-CF) campaign. Tribal Health Corp has signed a “Listing Agreement” with a CA based, SEC licensed crowdfunding Intermediary which provides for building early market awareness with a “Test-the-Waters” introduction before going live with an offer of 5,000 “Tribal Ambassador Packs” for sale at USD1,000 per pack to US retail investors on Main St.
The packs will comprise 500 shares in Tribal Health Corp priced at US$2.00 per share and include US$407 in branded New Zealand made Natural Health Products bundled free of charge as a thank-you sample gift. It is expected that many of these US retail investors will reach out to their family, friends and associates telling them of the unique, gender-specific, Natural Healthcare Products that they got from New Zealand, that is for “Him”, for “Her” and their “Pet” in their investment package.
If the REG-CF campaign successfully closes, then a SEC Form S-1 filing by Tribal Health Corp with the SEC is planned to follow as the first step towards an IPO in the US.
US Share Trading
All shares issued by Tribal Health Corp are subject to SEC Rule 144 which imposes a 180 day lockup period on trading in the shares.
The US crowdfunding intermediary will facilitate the listing of the US shares on a recognized secondary market where share price discovery and trading can be conducted, giving investors an early exit opportunity.
The Offer
The Company was incorporated in New Zealand on December 22nd 2022 to assume a 100% controlling interest in the NZ production and export supply infrastructure from Tribal Health Corp, issuing 6,000,000 shares in settlement. This Series A Round offer by the Company of 6,000,000 shares at NZD0.10c per share raises NZ$600,000 and increases the issued shares to 12,000,000.
This delivering to investors, a 50% holding in the Company plus a 15% free carry shareholding in Tribal Health Corp, opening entry to US operational profit sharing and share trading in the US capital market.
For a copy of the IM describing this Offer reply to this email.
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The above investment is not an offer of financial products that requires disclosure under the Financial Markets Conduct Act 2013 (Act) and is available only to wholesale investors as defined by that Act. It is intended for distribution only to selected people to whom, under the relevant laws, it can be lawfully distributed. It cannot be distributed in any other jurisdiction, or to any other people. It is not an offer or solicitations in any jurisdiction in which such offers or solicitations are not authorised, or in which the person making such offers or solicitations are not qualified to do so, or to any person to whom it is unlawful to make such offers or solicitations. Any representation to the contrary would be unlawful. No action has been taken by any person that would permit a public offering in any jurisdiction where action for that purpose would be required.
Cheers
John Paine B.Sc., Dip BIA
TBK Capital Limited
Level 10,120 Albert Street
Auckland 1010, New Zealand
Phone +64 9 307 3257
Mobile +64 21 902 901
Email john.paine@tbkcapital.co.nz