Press Release (ePRNews.com) - Laguna Beach, CA - May 19, 2017 - Code Green Apparel Corp (OTC: CGAC), a sustainable apparel company that develops, produces, markets and distributes a diversified portfolio of forward-thinking, eco-friendly corporate apparel, uniforms and accessories issued a letter to its shareholders from Chairman & CEO, George J Powell III today. The letter follows:
A Letter from the Chairman
May 19, 2017
We just filed our audited Annual Report on Form 10-K for Fiscal Year (FY) 2016. This filing is both a notable milestone from a regulatory standpoint and represents an opportunity to update shareholders on the future of Code Green Apparel Corporation. Due to a series of unanticipated events, we were delayed in filing our 10-K, and we apologize for our tardiness; however, this delay afforded us an unforeseen opportunity to negotiate with our debt holders. Going forward we strive to provide timely reporting as we continue on our quest of market leading Sustainable Textile company.
We successfully reached numerous milestones worth noting over this past year. The vast majority of our activities produced positive results, prove the tremendous progress as a company and demonstrate the bright future of Code Green. Like any young company, we learned valuable lessons from each and every event, positive and negative, and are very confident we will deliver measurable value for the company and our shareholders in the current Fiscal Year.
In FY 2016, we transitioned Code Green Apparel from the Conceptual Stage into the Operating Stage and then into Revenue Stage. We also initiated an S-1 Registration process with the Securities and Exchange Commission (SEC), and we were able to complete that S-1 process receiving Form Effect status from the SEC on April 28, 2016. Prior to FY 2016, our efforts were heavily organizational in nature and were predominantly focused on strategic planning and initial fundraising. Corporate activities included the process of updating corporate registrations, changing the corporate name, changing the trading symbol and creating our initial marketing materials.
Our most notable value driven milestones for FY 2016:
1. Activated Code Green Apparel in and to the marketplace,
2. Solidified market relationships,
3. Started product development and manufacturing for new accounts resulting in orders,
4. Shipped product,
5. Became a revenue generating company in Q3 of 2016, shipping $240,000 during that quarter,
6. Acquired 10Star Apparel, and
7. Partnership with Cicero Consulting and Recruiter.com to streamline our sales process.
On June 23, 2016, we completed the acquisition of 10Star Apparel, a Dallas, Texas-based marketer of logo apparel. On multiple levels, 10Star has great synergy with Code Green Apparel, and we feel this acquisition will continue to improve our pace of revenue growth. The 10Star transaction provided immediate impact by delivering additional revenue and opened numerous accounts to Code Green Apparel. We continue to streamline the overlapping processes with 10 Star and are confident this acquisition will continue to pay dividends for our company.
Recruiter.com / Cicero Partnership
The recently announced partnership with Cicero Consulting and Recruiter.com, Code Green provides direct access to the top executives, “C” level and executive buyers, in the largest and hottest companies seeking corporate apparel. The partnership combines the best eco-friendly products, innovative content, unprecedented access to top corporate buyers, extraordinary brand exposure and countless more advantages. Most companies require branded apparel, and most companies have adopted an eco-friendly philosophy, regardless of the industry. Code Green delivers both the want of eco-friendly and need of branded apparel to its corporate customers. This partnership exponentially increases our company’s exposure and top level sales leads.
FY 2016 Financials
While we have achieved many goals and reached many milestones, we still have much to accomplish. This is my list of highlights and opportunities for improvement based on our latest audited Annual Report on Form 10-K for the period ending 12/31/2016.
1. Code Green has approximately 450 million shares of common stock issued and authorized, and our float is under 100 million shares.
2. Code Green Apparel Corporation graduated from the Conceptual to Operating to Revenue Stage in one fiscal year. We became revenue generating in Q3 of 2016, shipping approximately $250,000 of product.
3. Our sourcing capabilities allow us to deliver eco-friendly product at or below market pricing resulting is favorable Gross Margins and Cost of Goods Sold comparatives. Our customers favor sustainable products but demand equivalent pricing: we deliver both.
4. Acquisition of 10Star Apparel helped to grow our customer base and streamline our raw materials sourcing. This acquisition paid dividends in 2016, but we believe will prove invaluable in 2017.
Opportunities for Improvement:
1. Derivative liabilities increased in 2016, as is normal with a young operating company. As sales and revenues grow, reliance on debenture type capital decreases. Management strives to reduce derivative liabilities through revenue growth, more favorable capital procurement and restructuring of existing debentures.
2. Operating Expenses are a focused area of improvement. The acquisition of 10Star and partnership with Cicero and Recruiter.com are the first steps in this area of focus. While we are fortunate to be able to leverage a low Cost of Goods Sold threshold in our early stages of corporate development, we will continue to leverage growth in order to properly resource the operations on a go forward basis.
3. Top-line revenue growth is out highest priority. While we posted revenues for first time in our history, we are not content and strive to deliver tremendous growth in 2017.
a. We anticipate continuing to roll out new customers as we target corporate accounts with published Sustainable Marketing positions. Our partnership with Cicero and Recruiter.com is a good first step in this area.
b. We are considering additional acquisitions, both strategic and tactical, that could make positive and near immediate impacts on our business in financial, revenues and margins, and in non-financial, operations and scaling, parts of our business.
c. Expand the Code Green brand into Golf Market (proven in February at PGA Phoenix Open). We are finding the Golf market to be receptive to our Sustainable Textile positioning.
d. Expand the Code Green source materials to include hemp-based raw materials.
4. While not reflected in Financials, we know we need to deliver more net revenues to the bottom line. One of steps in achieving this necessity is the acquisition of our new “workhorse” brand.
In closing, we see our typical startup growing pains as opportunities just waiting to be seized. We built the necessary broad and sturdy foundation in 2016. In 2017, we vertically launch Code Green with new customers, in-demand eco-friendly products, potential acquisitions, expanding partnerships and exponentially increased exposure. We are firmly committed to driving our Sustainability positioning and to becoming the market disruptor that we started out to become. We are proving that the solutions we offer our customers are financially sound and, at the same time, in sync with the more eco-sensitive demands of their customers. Our philosophy combined with our foundation and pending launch is designed to deliver tremendous, measurable value to our company and our growing team of Code Green shareholders.
We believe in what we profess…..Sustainability is both “Good for Business” and “Good for the Soul.”
As always, we appreciate your confidence and support.
Code Green Apparel Corporation (OTC:CGAC)
About Code Green Apparel Corporation:
Code Green Apparel Corp. is focused on bringing Sustainable Textile Solutions to the “Corporate Marketplace” through development and marketing of uniforms and corporate logo apparel formulated from Recycled and Regenerated textiles. Code Green is leading the charge into this very important and emerging market segment. The company is located in Laguna Beach California. For further questions or comments, please feel free to email our investor relations department ([email protected]).
Safe Harbor Statement: This document contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Act of 1934 that are based upon current expectations or beliefs, as well as a number of assumptions about future events. Although we believe that the expectations and assumptions upon which they are based are reasonable, we can give no assurance that such expectations and assumptions will prove to have been correct. Some of these uncertainties include, without limitation, the company’s ability to perform under existing contracts or to procure future contracts. The reader is cautioned not to put undue reliance on these forward-looking statements, as these statements are subject to numerous factors and uncertainties, including without limitation, successful implementation of our business strategy and competition, any of which may cause actual results to differ materially from those described in the statements. We undertake no obligation and do not intend to update, revise or otherwise publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of any unanticipated events. Although we believe that our expectations are based on reasonable assumptions, we can give no assurance that our expectations will materialize. Many factors could cause actual results to differ materially from our forward-looking statements.