KALISPELL, MT/ ACCESSWIRE / July 19, 2016 / With yesterday's announcement Gilla Inc. (OTCQB: GLLA) has expanded into yet another European stronghold for e-cig vaping, the United Kingdom. The Company has agreed with a major vape store chain with over 50 physical locations, and a remarkably large online presence, to carry their award winning Coil Glaze product line. As well, the Company has decided to employ a local manufacturer, with their own distribution network of over 600 vape shops, to handle the bottling and boxing of the product. This is significant in that it will noticeably reduce lead times for orders, and with the already established distribution network, Gilla instantly gains access to a market that should significantly boost sales of the Coil Glaze brand.
The U.K. announcement comes on the heels of a May 2nd, 2016 press release where Gilla had signed an exclusive distribution agreement for China with an industry-leading manufacturer of E-cigarettes and other vaping hardware. The agreement includes exclusivity for the Company's entire line of E-liquid brands with the distributor, and includes a minimum purchase amount of $5.5 million worth of product over the next three years to maintain its exclusivity within China. It should be noted that the Chinese company who the deal was signed with has been manufacturing E-cigarettes for over 10 years, and does approximately $275 million in sales annually. Through this agreement, Gilla's E-liquid brands will be broadly marketed to Chinese domestic vape shops and distributed through some of the most popular Chinese online E-cigarette websites. Gilla has also agreed to jointly develop E-Liquid flavors that will be designed to satisfy the Chinese palate, which plays directly into Gilla's own strengths as they already have employed a team of mixologists working out of the Company's global offices. Gilla's team of mixologists have already created more than 500 recipes of different flavors for both its own brands and its private label customers.
Gilla has a number of very attractive items on their plate to go along with the recent U.K. and Chinese deals; their Q1 2016 revenue numbers were record setting at $1.36 million, they trade at a mere 5.96x market cap to asset ratio, and their premium brands are award winning. To put that in perspective, mCig Inc. trades at a 27.3x market cap to asset ratio, and Electronic Cigarettes International Group Ltd. while recording a very impressive $11.7 million in revenue last quarter, also had a net loss of $20.4 million during that same time frame, which is 1.5x what their current market cap is.
Looking ahead, Gilla appears to be well positioned to maintain their revenue growth while working towards becoming a positive cash flow company in 2016. As J. Graham Simmonds, Chairman and CEO of Gilla said in their May 17th, 2016 press release, "Given our strong revenue growth, we continue to make progress on our goal of achieving positive cash flow during the second half of 2016." A statement that if it holds true, should help separate Gilla from the other publicly traded companies in the space.
Disclaimer:
Except for the historical information presented herein, matters discussed in this release contain forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements. Tamarack Advisors is not registered with any financial or securities regulatory authority, and does not provide nor claims to provide investment advice or recommendations to readers of this release. For making specific investment decisions, readers should seek their own advice.
SOURCE: Tamarack Advisors
ReleaseID: 442557
