iBrands Corp. Receives Conditional Offer for $10 Million Funding
ATLANTA, March 26, 2012 /PRNewswire/ -- iBrands Corp. (OTC: IBRC) is pleased to announce it has received a Conditional Commitment Letter from an undisclosed investment group intending to provide the company with $10 million USD. This funding is for the completion of the company's acquisitions, software enhances for iMenu24/7 and working capital. According to the company, all of the terms and fees of the financing have been agreed upon. The company expects to receive the first tranche of funding in the next 90-days.
"We have signed a non-disclosure agreement with the investment group, so we are yet unable to identify this group," states Paul Smith, CEO of iBrands. "We have been working with representatives of this group for several months and are excited that an investment group of this size and reputation have determined our company is worthy of their commitment." Mr. Smith further states, "It isn't easy raising capital in this tough economy and competition for limited available capital is fierce. The next step for the company is the completion of a due diligence procedure followed by the development of required closing documents."
Following the company's market test of iMenu24/7 (the company's online ordering platform for restaurants), consisting of over 1.5 million orders process, it was determined that software enhancements were required prior to a national and international roll-out. This funding will provide the necessary resources to complete these enhancements accompanied by a sizable marketing budget. One of the software enhancements considered in the funding is a mobile app for all platforms including the iPhone, Android, Windows 7 and BlackBerry. The company further intends to acquire some competitors thereby accelerating its market share.
"Statistically," states IBRC CEO, Paul Smith, "our market demand speaks for itself." The North American market consists of some 1.1 million restaurant locations generating approximately $617 Billion annually in sales serving more than 78 Billion meal occasions annually. The National Restaurant Associations quotes that 58% of all restaurant patrons order food for off-premises consumption (take-out). Further, according to the National Restaurant Association, since 1985, take-out orders have increased a staggering 75%. As well, orders placed online are, on average, 20-30% higher than takeout orders placed over the phone. Over 35% of consumers polled have or would place an order online if their favorite restaurant offered the service.
According to a new Cornell University research study on "The Current State of Online Food Ordering in the U.S. Restaurant Industry, 2011" gives new insight into the value of online food ordering for restaurants and their customers. The study of 372 U.S. restaurants of all sizes that accept takeout orders found that 26.9% offered online ordering. For pizza companies, the percentage was higher, at 48%.
In an interview with the study's author, professor Sheryl E. Kimes of Cornell's School of Hotel Administration (September 2011), Nation's Restaurant News managing editor Alan J. Liddle noted some surprising results. Contradicting claims frequently cited by online ordering service providers, the restaurateurs in the study noticed only slight increases in order size. Instead, they noted a considerable increase in order frequency: "most commonly for takeout orders (42.5%), but also for delivery (28.5%) and catering (14.2%)."
The increase in overall sales through online ordering seemed to come not from higher check averages, but from an overall increase in volume. According to this study, "restaurants using online ordering reported more frequent orders and increases in group and catering orders because of the ease of placing an order." Interestingly, in the restaurateurs' comments on the benefits of online ordering, higher check averages and marketing benefits ranked far below other factors such as labor savings and order accuracy.
For Kimes, the most surprising find was the belief of many of the restaurateurs who did not offer online ordering, that customers prefer to talk to someone at the restaurant. In fact, Kimes says, the consumers surveyed in this study, and in an earlier study in this series on online ordering, clearly preferred not to talk with staff at the restaurant. In fact, the primary reason consumers chose online ordering over a phone call was because the web interface gave them more control over the order process.
The Company has identified several potential acquisitions meeting specific requirements: (a) niche brand with an identifiable market sector; (b) underperforming due to lack of capital; (c) substantial upside; (d) e-commerce component; and (e) strong management vested for the long term. Our acquisition model is based on industry multiples with a combination of stock and cash.
The company previously traded on the OTCBB. On December 5, 2005, the Company filed a Form 15 to terminate its trading on the OTCBB. The Company is "piggy-back" qualified to return to the OTCBB/QB once it files its last 2 years audits. We are intending to elevate to the OTCQB as quickly as possible following the closing of our funding.
About iBrands Corporation
iBRANDS CORPORATION ("IBRC"), www.ibrandscorp.com, is a publicly traded holding company that acquires and operates niche market brands having unique market positioning with substantial upside. Our strategy is executed through the acquisition of proprietary brands having unique market niches with substantial upside growth and providing strong management. A common thread throughout our acquisitions is the application of Internet technology to enhance revenues and optimize margins.
SAFE HARBOR STATEMENT: Except for historical information contained herein, the statements in this release are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties, which may cause a company's actual results in the future to differ materially from forecasted results. These risks and uncertainties include, among other things, product price volatility, product demand, market competition and risk inherent in the operations of a company.
Paul Smith, 1-866-595-1081
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