SALINAS, Calif., Feb. 02, 2018 (GLOBE NEWSWIRE) -- Via OTC PR Wire -- SUNSET ISLAND GROUP, INC. (OTCQB:SIGO) is pleased to provide the following update.
Licensing: Company has received its temporary licenses from the State of California for Distribution, Cultivation and Manufacturing. These licenses are for Adult Use (Recreational) and Medicinal. These licenses allow the company to sell and transport its own product to dispensaries throughout California. The manufacturing license allows the company to begin manufacturing products such as vape cartridges, edibles and extracts. The Company is currently in the process of converting one of its cold storage rooms into a clean room to begin manufacturing these products. The Company has been using a smaller room to test manufacture vape cartridges and extracts.
Fiscal Year 2017: For the Fiscal Year 2017, the Company generated approximately $300,000 in sales through October. The first sale occurred in August 2017. The revenue number are non-GAAP numbers and our accounting team may make adjustments during the audit due to the cash nature of the business. For the months of November and December, the company decided to slow its planting cycle due to the uncertainty related to the licensing process for the state of California. This was done so that the Company would not harvest any plants in January. There was no guidance from the State until the middle of November regarding the licensing process and what was going to be allowed during the timeframe of applying and receiving one's license. As such, the Company took the safe stance of not having plants harvested in January.
Planting/Harvest: The Company has split its greenhouse into 6 bays numbered 1 through 6. Bay 6 is currently being used as a transition bay for the mother plants and grow bay for clones prior to be planted in a flower bay (bays 1-5). However, the company is currently working on moving the mothers and grow bay thereby allowing the company to use Bay 6 as a grow bay.
Starting with Bay 3 (which was planted)1/26/2018, the Company is planting under its Cultivation Licenses. Below is the expected planting and harvesting schedule for each bay (which may change)
|Bay 1||Bay 2||Bay 3|
|Bay 4||Bay 5|
Subsidiaries: The Company currently has two subsidiaries. Battle Mountain Genetics and VBF Brands. VBF Brands is the license holder and operating entity. Battle Mountain Genetics is the service provider and staffing company for VBF Brands. VBF Brands was a nonprofit company. On December 20, 2017, the Company filed to Restate the Registration of VBF Brands to convert it to a for profit entity. The filing was processed by the state of California on January 4, 2018. Prior to December 20, 2017, VBF Brands was a California nonprofit mutual benefit corporation. The Company amended the registration to convert VBF Brands to a "For-Profit" Company. Prior to January 4, 2018, VBF Brands was a non-profit which technically cannot be owned by anyone. Valerie Baugher has been the sole voting member in March 2016 and was the sole voting member of VBF Brands prior to the conversion from a nonprofit to For- Profit. After January 4, 2018, VBF Brands became a wholly owned subsidiary (as Valerie transferred it to the company) once it became a For Profit entity and could formally become a wholly owned subsidiary. To clear up some confusion, VBF Brands, Inc. is not the same as Von Baron Farms, Inc. which was a separate California corporation that has been dissolved.
The reason VBF Brands was a non-profit is because that's how the cannabis business operated prior to 2018. Prior to the passage of Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA) which was replaced by SB-94, medical cannabis activities were typically run through a California nonprofit mutual benefit corporation. However, after MAUCRSA passed and subsequently codified under SB-94, For-Profit companies are allowed to own and operate cannabis related businesses. As such, the company had previous acquired a nonprofit mutual benefit corporation (VBF Brands) to maintain compliance with the laws of California while the transition to new regulations was being done on the state level. At the time there was a lot of confusion and uncertainty how the business would be regulated in California. On November 16, 2017, California's three state cannabis licensing authorities publicly proposed emergency regulations for commercial medicinal and adult-use cannabis. Once those were released the Company and its attorney began working on the temporary licenses that we filed on December 23, 2017. Prior to filing for its licenses the Company converted VBF Brands to a For-Profit entity. VBF Brands, now a For-Profit company, is a wholly owned subsidiary of the Company.
Fiscal Year 2017 10-K: On February 2, 2018, the Company decided to retain a new auditing firm (Malone Bailey) to act as it auditor. Malone Bailey is a larger firm and has the resources that we expect would be required for 2018. The Company was previously going to report under Regulation A+ as a Tier 2 filer but has now decided to maintain its current filing status and not change to Regulation A+. The switch to a new auditor may delay the 10-K but we will have it completed as quickly as possible.
Investment: The Company is currently continuing its discussions with the investment groups. The terms currently being discussed are $2-3 million investment for shares of our Preferred Stock and not common stock.
Notice Regarding Forward-Looking Statements in this press release which are not purely historical are forward-looking statements and include any statements regarding beliefs, plans, expectations or intentions regarding the future. Actual results could differ from those projected in any forward-looking statements due to numerous factors. These forward-looking statements are made as of the date of this news release, and we assume no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those projected in the forward-looking statements. Although we believe that any beliefs, plans, expectations and intentions contained in this press release are reasonable, there can be no assurance that any such beliefs, plans, expectations or intentions will prove to be accurate.
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