| Dear LUFF Shareholders,
It is hard to believe that a year has passed since I took on the challenge of rebuilding our company. Amidst one of the most challenging and difficult periods our society has ever faced, the LUFF team has been working tirelessly to chart a new course.
I am pleased to provide you with an update on the progress we have made and expand on our plans for the future.
At the outset of my new tenure there were many outstanding issues to address. While we were finally exiting the expensive CCAA process, we had to start to rebuild alliances, develop a new plan to address our place in the market and solve problems left behind by the unfortunate events that led to our CCAA filing.
Resolving these problems required significant resources, patience and tireless effort by our small team. Thankfully it now appears that most of these lingering legacy issues have been addressed. With those distractions largely behind us we are now focused exclusively on the task at hand of building something we can all be proud of.
One of the major challenges faced by companies in this industry is a lack of focus and failed execution from taking on too many opportunities. This lack of focus resulted in wasted capital expenditures, poor gross margins and inconsistent financial performance for many of our peers, which is being reflected across the capital markets.
Our new product offerings have been designed with precision and thoughtfulness in order to capture the largest share of the hemp wellness market, while remaining focused on only a few key products. This focus allows us to produce high-quality products and to keep our cost structure lean. We are committed to establishing our distribution channels, attaining consistent and recurring revenue streams, and scaling our manufacturing capabilities.
At the beginning of this year we announced the start of our online sales platform, which reflected our decision to focus primarily on higher margin, scalable, direct to consumer sales (D-to-C) via ecommerce channels, rather than focus on traditional and competitive brick and mortar outlets. Early sales are quite positive and we are encouraged by the response we have received from customers. Concurrent to this we are also in discussions with partners for expansion into new and promising international markets like Mexico, Europe (with Germany the initial focus) and the U.K., with the aim of replicating the D-to-C model in these new markets.
In keeping with our focused strategy, we made the decision to divest our Nevada licenses and property and concentrate our resources on expanding and perfecting what we have already started, with a focus on automation, inventory, scale and obtaining key manufacturing certifications at our existing full-service manufacturing facility in Portland. We recently signed a definitive agreement for the sale of these assets, which we expect to close in the next 90 days which will infuse $6.05 million CAD into the business, and allow us to pay off our $2 million dollar loan.
On the corporate front we have allocated more resources towards Investor Relations to enhance our public markets profile. We also changed our OTC ticker symbol from PGTMF to LUFFF, which is one of many developments we are working on to increase our profile and trading volumes.
Our Annual General Meeting is expected to take place in September, and we will let you know the date in the coming weeks.
Lastly, many of you have warrants that are due to expire in a few weeks, on June 24, 2021. If you would like to exercise your warrants or have questions about doing so, please contact me and I would be glad to discuss this with you.
I hope this finds you and your loved ones in good health and happiness, and I appreciate your support as we chart this new course forward.
Good winds,
Philip Campbell |