The company said the brand, which provides CBD products to consumers in the US and Europe, clocked up revenue of C$29,034,000 and produced net income of C$3,505,000 over the year, while associated expenses were C$25,530,000.
"Completion of the 2019 audit is a culmination of an extensive team effort, and represents a significant milestone in the validation of our eCommerce business,” Mota Ventures CEO Ryan Hoggan said in a statement.
Throughout the 2019 calendar year, Nature's Exclusive brand was operated as a separate business segment of Unified Funding LLC. Mota completed the acquisition of the brand and the associated business line on January 17.
“The 2019 figures, where we achieved over 12% net income, provides us with a benchmark from which to measure our success in the 2020 fiscal year as we continue to build on the strong results generated by Unified," he added.
The audit was completed on carve-out financial statements of Unified, which present the standalone financial results of the brand. Mota said the figures presented in its statement were translated from US dollars into Canadian dollars using the Bank of Canada average annual exchange rate of US$1 vs C$1.3269 for 2019.
Bonus thresholds amended
The Vancouver-based company also announced that it has reached an agreement with Unified to amend the thresholds necessary for Unified to earn a bonus based on the financial results generated by the Nature's Exclusive brand in the 2020 calendar year. Unified is entitled to earn a bonus payment based on the terms of the original transaction.
Under the terms of the amendment, Mota said Unified will continue to be entitled to a one-time bonus payment based on the revenue and profitability of Nature's Exclusive in the 2020 calendar year.
The bonus payment will be US$5 million should gross revenue exceeds US$40 million with a profit margin of at least 10%; US$10 million should gross revenue exceed US$45 million with a profit margin of at least 10%; or US$15 million in the event gross revenue exceeds US$50 million.
The bonus payment will be payable in common shares of Mota based on an exchange rate of US$1.00 to C$1.30 and the greater of C$0.80 and the volume-weighted average closing price of the common shares on the Canadian Securities Exchange in the 10 trading days prior to the last trading day of 2020.
Any bonus shares issued by Mota will be subject to the terms of a 36-month time-release pooling arrangement, with applicable release dates calculated from the date of issuance of the bonus shares.
"Revising the 2020 performance bonus will help to align our interests with Unified, and ensure they remain incentivized in the development of Nature's Exclusive in the context of the current market,” Hoggan said.
“The brand has demonstrated strong financial results through 2020 to date, in spite of economic volatility, and we look forward to continued success leading into the second half of 2020,” he aded.
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