Leading Brands, Inc (USA) (NASDAQ:LBIX) announced results for its second quarter of fiscal 2017, which ended August 31, 2017. All financial amounts are denominated in Canadian dollars, with all financial figures rounded to the nearest $000.
The Company’s net loss from continuing operations for Q2 was $710,000 (or $0.25 per share) versus a net loss of $949,000 (or $0.33 per share) in Q2 of the prior year. Gross revenue for continuing operations for Q2 2017 was $510,000, versus $568,000 in the comparable period of last year.
Discounts, rebates and slotting fees were $156,000 in Q2 2017, a decrease of $27,000 compared to the same period of the prior year. Selling, General and Administrative Expenses (“SG&A”) were $713,000 in Q2 of fiscal 2017, versus $818,000 in Q2 of the previous year.
Gross profit margin for the quarter was 0.7%, up from (9.1%) in the same quarter last year.
On September 18, 2017 the Company announced that it had entered into a Definitive Arrangement Agreement with Liquid Media Group, Inc. (“Liquid”) of Vancouver, Canada whereby LBIX will acquire 100% of Liquid pursuant to a plan of arrangement. Existing LBIX shareholders are anticipated to hold 22.637% and Liquid Shareholders are anticipated to hold 77.363% of the post-transaction entity. For these purposes, existing LBIX shares were valued at $1.50 US.
Liquid is aggregating mature production service studios and creating a vertically integrated studio system for producing film, television and gaming content from inspiration to distribution. Liquid is headquartered in Vancouver, Canada where it is establishing its studio footprint and production hub. Liquid also has satellite offices in both New York and Los Angeles.
The Company anticipates that the transaction will close within 90 days of September 18, subject to all necessary approvals, including shareholder approval. At that time, the existing LBIX board, with the exception of Tom Gaglardi, will resign and be replaced by Messrs. Jackson, Brezer and Cruz and Ms. Katsoolis. Those individuals will continue their current roles as officers of LBIX.
Company Chairman & CEO Ralph McRae said: “We are pleased to have reached an agreement with Liquid and its management. In addition to their impressive content, experience and connections the principals have proven a vision to aggregate the key components necessary to produce World-class entertainment product. We look forward to working with them to see this transaction through to a successful conclusion as soon as practicable.”
Liquid Chairman Joshua Jackson said: “Vancouver has long been an industry hub, with world class talent and production services at every level. We are excited to be able to harness all of that ability to produce world class content.”
Liquid CEO Krysanne Katsoolis added: “The demand for content is unprecedented and the opportunity to change the landscape in the media business is exciting. We sincerely wish to thank Ralph McRae and the Board of Leading Brands for their confidence in Liquid.”
Shares of Leading Brands opened today at $3.2, down $-0.20 or 6.67%. LBIX has a 1-year high of $3.75 and a 1-year low of $0.74. The stock’s 50-day moving average is $1.02 and its 200-day moving average is $1.54.
Leading Brands engages in packaging, distribution, bottling, marketing, sales, merchandising and brand management of juices, water, soft drinks and new age beverages. Its brands include TrueBlue, PureBlue and HappyWater.