Naturally Splendid: Two Companies in One

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NATERA™ Hemp Based Superfoods for the Retail Markets and a Biotech Food Company Marketing Plant Based Omegas

In life, two things you shouldn’t have to worry about: the quality of your food and the quality of an investment.

Naturally Splendid “NSP” on the TSX Venture satisfies both of those concerns. With a national distribution deal now in place with Canada’s largest natural food distributor for its exceptional NATERA™ Hemp Superfood products and continued progress with strategic partner Boreal Technologies marketing plant based omega products, this Vancouver-based Company is poised to access the massive health conscious market south of the border. And make no mistake, the potential growth is staggering.

Canadian Hemp, including fiber, oil and seed exports to the US has grown from $5 million in 2008 to $34.2 million for 2013 to October of that year. From FY2012 to FY2013 growth of 100% can be extrapolated.

Globally, revenues from the functional food market - foods or dietary components that provide a health benefit beyond basic nutrition – are expected to rise from $24 billion in 2011 to $240 billion in 2014; outpacing the traditional processed food market.

The total global nutrition market is forecast to hit $400 billion by 2014.

Along with high production standards and ethics, NSP investors get two businesses for the price of one, both of which would undoubtedly do very nicely, thank-you very much, as standalones. The NATERA™ line is gaining traction in the retail market while the plant based omega products based on the revolutionary science being developed by Boreal Technologies are showing great promise.

Interesting to note that sales volume from NSP’s fourth quarter 2013 was the same as for the previous three quarters of test marketing: Obvious evidence of a retail line trending in a most positive direction.

Management is expecting a record sales year in 2014.

Investment Drivers

  •     Exclusive Agreement to market and distribute patent pending, plant-based omega products developed by Boreal Technologies at the University of British Columbia (HempOmega™, H2Omega™, ChiaOmega™, FlaxOmega™, CanolaOmega™)
  •     NDA signed with Caldic, a leading distributor of quality food ingredients
  •     NDA signed with Calico Food, a leading distributor of quality food ingredients
  •     Canadian distribution agreement with Purity Life Health Products, Canada’s largest    distributor of natural health products (supplier to over 7,000 stores) to market the 100% owned NATERA™ line across Canada
  •     NSP accepted into the Non-GMO Project Verification Program in 2012
  •     Accepted into Canada Brands Program, which identifies safe, high quality products
  •     Naturally Splendid listed on the Frankfurt Exchange (Symbol: 50N)
  •     Currently investigating listing on the OTC QX in the United States

Trading at approximately C$0.20, there are 28.7 million shares outstanding, for a market cap of just under $6 million. With a market float of roughly 6 million shares the 52-week trading range is C$0.16-C$0.30.

Comparable companies tend to trade at 8-12 times topline sales, further increasing the potential for NSP’s investors.

Two Multi-branched Revenue Streams
The NATERA™ line of flavored shelled hemp seeds and flavored protein powders are 100 percent owned and marketed by NSP. Seriously healthy, these nutrient dense products make an excellent addition to any diet, from traditional to vegan. Snack packs can be consumed for a perfect balance of omegas 3 and 6 as well as an abundance of vitamins, minerals, anti-oxidants and fiber. As well, the seeds and powders are quite versatile and can be included in everything from salads to ice cream and smoothies or simply eaten on their own for optimal nutrition.

The entire NATERA™ hemp Superfood line is GMO-free, with no preservatives, additives or trans fats. The line is sweetened with Stevia which is a natural sweetener derived from the sweet leaf plant. It’s 300 times as sweet as sugar, so it only takes a small amount to produce the same sweet taste as cane sugar. Stevia has been used as a sweetener in many cultures for centuries.

There are currently several sugar substitutes available on the market, so what makes Stevia unique? For one thing, it’s all-natural, so many health gurus prefer it over other artificially manufactured substitutes. It also offers several potential health benefits.

A no-carb, no-calorie substitute
For those watching their carbohydrate or caloric intake, Stevia is both carb- and calorie-free. This makes it possible for dieters to satisfy sweet cravings without wrecking their eating plans.

Lowers blood pressure
Stevia has been shown, in some studies, to lower blood pressure. This makes it an ideal sweetener for people with high blood pressure.

Lowers blood sugar
For people with high blood sugar levels, Stevia has the possible benefit of lowering sugar levels. This makes it a possibly acceptable substitute for anyone with blood sugar or insulin problems, including diabetics. However, diabetics should continue to monitor their blood sugar levels and insulin levels after using Stevia to make sure everything remains in check.

Naturally Splendid & Boreal
NSP’s agreement with Boreal Technologies is multi-faceted. These proprietary plant-based omega products can be milled into a flour-like substance or liquid state. This flexible delivery method allows the Omega nutrient additive to supplement a myriad of products, including foods, beverages or as capsule or powders.

NSP is planning to market the proprietary products developed by Boreal through four separate distribution channels. Direct to market sales, both proprietary and private label; as an ingredient to established products and brands; market the products and technology to multi-national ingredient providers who in turn will develop custom formulations to their clients; and to the food service industry both retail / fast food as well as institutional which includes hospitals and extended care facilities. These Omega formulations can be added to virtually any food or beverage line. Custom formulations can also be developed to address the needs of suppliers. Omega ingredients can be marketed to retail customers such as restaurant chains, beverage companies. Institutional penetration has large potential with direct sales to hospital, seniors’ care and alternative medical professionals including naturopaths.

Why Plant-based Omega?
Historically, Omega supplements and additives have come from marine life such as fish or krill. With concerns about rising toxicity in fish, both wild and farmed, marine life issues with situations such as Fukushima as well as sustainability concerns, plant-based Omegas makes perfect sense. Whether Hemp, Flax, Canola or Chia as the input, there is no concern as to the purity and sustainability. As noted, the plant-based products open up the growing restricted diet market such as vegan and gluten-free, as well as those consumers—52 percent in the US alone—who want to increase omega 3 in their diets.

80 percent of Canadians are influenced in their buying decisions by Omega 3 inclusion and 45 percent are or have used products containing the supplement.

Why Hemp?
Hemp could arguably be at the top of the Superfood chain. Along with the purity and quality of the NATERA™ line, Hemp has been credited with lowering cholesterol, moderating blood sugar, weight control and enhancing digestion. Inflammation, which is blamed for many ailments including arthritis, shows improvement as well as addressing dry skin and hair health.

The retail and institutional market is not waiting for these products; they are demanding them now as a way to promote health and avoid the all too common toxins, trans fats and GMO ingredients.

CEO Craig Goodwin brings 30 years of sales and marketing experience. Past positions include a Western regional Manager for a division of the Jim Pattison Group as well as consultant to a number of public companies; primarily in the area of marketing services and raising venture capital.

Bryan Carson, VP Operations has overseen the growth of Naturally Splendid to date and brings exceptional retail experience including long-term relationships with major food distributors.

Investors should be impressed with NSP’s overall business strategy. Balanced between growing retail sales and marketing partnerships with Boreal the Company offers several potential revenue paths.

The markets NSP targets are no longer niches. The healthy supplement/ingredient markets have and will continue to show exponential growth. Every GMO or toxin related media story simply adds to the public consciousness and desire for exactly the type of products Naturally Splendid has and will produce.

Strong partners, great metrics, good management and explosive markets are the constituents of this compelling investment story.

Where else can you find a stock that makes you feel good both as an investor and consumer? Let me know.

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Craig Goodwin
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