Dear SNNC Shareholders,
I am pleased to provide the following update which summarizes the current status of the company and our plan of operations.
Current Plan of Operations
Sibannac is continuing to evolve in 2021 into a multi-faceted and vertically integrated next-generation wellness company, developing, manufacturing, marketing, and monetizing sales of products in the health, fitness, and sports channels with a focus on nutraceuticals and functional foods.
The company has developed an operational platform that will be announced to the public this month setting forth our organizational and infrastructural capabilities providing branding, product development, sourcing, manufacturing, sales, and distribution for the company’s internal brands as well as third parties. Through our marketing partner, Lifetime Branding, the company is also nutrition, wellness, and fitness brand that provides responsible, highly efficacious solutions, enabling exponential growth through strategic branding, market disruption, and innovation. In this effort, we are currently incubating and working with two independent companies offering Sibannac differentiated and complementary products to bring to market under their brands.
All administrative and manufacturing operations are being done out of the company’s offices and lab in Scottsdale. It is a Food-Grade FDA registered facility. The company is also conducting due diligence on the intended acquisition of Stellar Chemical Corp. in Linden, New Jersey (video link below), which will add “Gummy” manufacturing as well as significant other additional capabilities and provide a valuable solution for east-coast distribution and fulfillment.
Our immediate and short-term operational focus is to use our marketing resources with Lifetime Branding to penetrate the contract manufacturing and fee-for-service channels. The goal is to gain awareness in the marketplace as a manufacturing and logistics solution for industry brands willing to pay premiums for smaller runs. This is the fastest and easily the most cost-effective approach to generate immediate and ongoing revenues as we engage in the long-term brand build and activation.
The longer-term goals will be, of course, our branding play. With our growing manufacturing capabilities, our relationship with Lifetime Branding and Eric Stoll, positions us to compete at the highest level. The Lifetime team brings incalculable value to Sibannac’s operations, with a proven track record in ground-up brand building. We believe there is now an unbounded opportunity to create a sustainable brand in the alternative wellness space and that the events of 2020 have eliminated a large number of competitors and cleared the way for Sibannac – a vertically integrated design, manufacturing, and marketing machine. Along the way, we will incubate new brands and take equity as we have the manufacturing and marketing efficiencies to advance them in-house. The two companies we are currently engaged with have raised their own funds and are continuing to do so while Lifetime and Sibannac are moving toward service and manufacturing agreements with them in addition to equity.
As we started manufacturing operations in 2019, the focus was strictly on CBD. While CBD remains a core focus, we will be developing much more complex formulations moving forward, consisting of multiple active ingredients and flavor profiles. Differentiated, cutting-edge products combined with the marketing prowess we command is how Sibannac is reinventing the Gen 2 CBD marketplace. Our products are not conventional. Our goal is simple – to identify, develop and lead the way in bringing market the most efficacious cannabis and other healing plant-based products in natural wellness.
Sibannac is developing a line of Kratom products currently and evaluating new equipment to bring Kratom production in-house. Kratom is the common name for Mitragyna Speciosa Korthals, a tree indigenous to Southeast Asia. The main compound in Kratom, Mitragynine, has been used for hundreds of years in Asia as a natural, plant-based solution to combat many of the symptoms CBD is sought for, namely pain, anxiety and sleep. Kratom has been used by the many victims of opioid addiction in conjunction with prescription medication and to combat the symptoms of withdrawal. Association with the opioid epidemic has not helped Kratom’s image, though thousands of consumers rely on Kratom products to manage chronic pain and use it daily as a natural alternative. Today there is no leading brand in the Kratom market and products are relegated mostly to smoke shops. This is a pivotal opportunity for Sibannac to enter the Kratom market with our soon-to-be-announced brand and establish new distribution channels in more upscale retail and alternative health providers. The company will offer Kratom direct to consumer through its new payment solution to be announced in partnership with NOHO, Inc. (OTC Pink: DRNK)
Delta-8 is a hemp-derived THC cannabinoid that offers similar but less potent psychoactive effects to its Delta-9 cousin, the main psychoactive compound in Marijuana. However, as it is derived from industrial hemp under the 2018 Farm Bill, Delta-8 is in the same legal category as CBD. The DEA has, however, challenged that position, and the industry immediately responded with a lawsuit that is now pending. Our analysis of the DEA’s position is that it has no merit. The DEA has been active in attempting to regulate CBD over the last number of years and has lost several key lawsuits along the way. We anticipate a similar outcome in this litigation. This is yet another futile attempt to circumvent the Farm Bill – an act of Congress. However, 12 states prohibit the sale of Delta-8 products, however, in total they amount to a negligible impact on the total assessable market, mostly being small and low population states. The demand for Delta-8 is exploding across the U.S. Sibannac is currently manufacturing vape and gummy Delta-8 products for sale and distribution where legal.
Sibannac has a licensing agreement with Mitosynergy to provide the company with Copper 1 raw material for formulation into finished goods. The products will be formulated to address some of the most common consumer needs, chief among them improved immune response. Mitosynegy has been awarded multiple U.S. patents for molecular compounds for bioavailable coppers, namely Cuprous Nicotinic Acid. These patented compounds involve the only known bioavailable Copper 1 in the Copper 1 oxidative state. (For additional information, Patent Nos.: WO2016/037181 and 20150224112)
Mitosynergy has performed a human study on the Copper Niacin compound and submitted results to the Food and Drug Administration (“FDA”). In response, the FDA issued a No Objection Letter: #910, allowing the Copper compound to be marketed as an Initial New Dietary Ingredient (“IND”).
The Company has procured and installed nanotech processing equipment in its plant to be used to make its CBD, Copper 1, Kratom, and Delta-8 THC products. The nanotech processing equipment breaks down the size of the molecules in the active ingredients which can provide enhanced absorption and bioavailability. This will allow Sibananc to develop best-in-class, proprietary formulations to maximize efficacy. This will enable potential future licensing deals, manufacturing deals, supply agreements, partnerships, and proprietary products.
Stellar Chemical Corp.
Sibannac is currently conducting due diligence on the Stellar acquisition, aimed to be completed this month. Stellar’s current projected annual run rate of about $5MM in top-line revenue and access to various credit facilities will provide Sibannac with a solid foundation as we raise capital to fund our manufacturing and marketing plan. In this process, the company conducted a site inspection of Stellar’s operations and is providing the following video of Stellar’s 10,000 sq. ft. plant in New Jersey.
In anticipation of closing the transaction, Stellar has agreed to participate in the financing of the initial production run of NOHO’s Shot.
“We see an enormous opportunity to bring this exciting product to fruition on behalf of NoHo. Given our already proven manufacturing and digital marketing abilities, bringing the initial test run to market will both validate and solidify NoHo’s short-term product strategy,” said Michael DiPiero, Stellar’s President.
Sibannac, Inc. and Eric Stoll, founder of Lifetime Branding Collabrative LLC (“Lifetime”), a California limited liability company, have executed a binding term sheet giving Sibannac the option to acquire the agency and immediately appoint Mr. Stoll as Vice President of Marketing.
The acquisition will result in Sibannac assuming all of Lifetime’s revenues and have the unique opportunity of having a nationally renowned, full-fledged branding and marketing agency in-house. Sibannac will then enjoy the unprecedented economy of scale and cost savings while having some of the best branding talent under the corporate umbrella.
Eric has an impressive track record not only advancing already established brands for some of the Fortune 500, but also creating new brands from the ground up with a particular focus in the nutraceutical space. Mr. Stoll and his team of marketing professionals and formulators are set to launch Sibannac’s wellness brand into key market segments, including wholesale, retail, and direct-to-consumer. His previous experience includes building the Super Candy brand to 25,000 doors in three years and was carried in Walmart, Target, Costco, Whole Foods, and leading pharmacies.
The company is now current with its securities filings as of 2020. We are now preparing to move into the audit phase, and one again be fully reporting as we begin to raise capital and activate our brands. We are pursuing a Reg A secondary public offering and have an “Indication of Interest” for an initial $3M investment from a firm with whom the company is currently engaged in a debt-financing transaction that has removed significant debt from the company’s books. Audited companies pursuing a Tier II Reg A offering can raise up to $50MM.
In summary, the future is very exciting for Sibannac and the opportunities that lay ahead. I look forward to sharing the new brand and platform with you in the coming weeks.
Chairman and Chief Operating Officer
Cautionary Note Regarding Forward-Looking Statements
This press release contains statements that constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements appear in a number of places in this release and include all statements that are not statements of historical fact regarding the intent, belief or current expectations of the Noho, Inc. (the “Company”), its directors or its officers with respect to, among other things: (i) financing plans; (ii) trends affecting its financial condition or results of operations; (iii) growth strategy and operating strategy. The words “may,” “would,” “will,” “expect,” “estimate,” “can,” “believe,” “potential” and similar expressions and variations thereof are intended to identify forward-looking statements. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, many of which are beyond the Company’s ability to control, and actual results may differ materially from those projected in the forward looking statements as a result of various factors. You should not place undue reliance on forward-looking statements since they involve known and unknown risks, uncertainties and other factors, which are, in some cases, beyond the Company’s control and which could, and likely will, materially affect actual results, levels of activity, performance or achievements. The Company assumes no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future. Important factors that could cause actual results to differ materially from the company’s expectations include, but are not limited to, those factors that are disclosed under the heading “Risk Factors” and elsewhere in documents filed by the company from time to time with the United States Securities and Exchange Commission and other regulatory authorities.