Quarterly Update On Amfil Technologies, Inc. (OTC: FUNN) From CEO Rogen K. Chhabra
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ONTARIO, CANADA, March 29, 2021 (GLOBE NEWSWIRE) -- via NewMediaWire – Amfil Technologies, Inc. (OTC: FUNN) provides the following shareholder update:
The past few months have seen an incredibly positive shift in the company due to several factors. First and foremost, the Covid vaccine rollout is making a big difference. This has allowed the re-opening of our US locations and we anticipate Canada will follow suit shortly. Revenue continues to quickly improve with the re-openings, and we have no shortage of customers. Executing to the plan previously laid out, we are focusing resources in the most critical areas; reducing overhead, running leaner and positioning FUNN for scale and success beyond all previous metrics.
Summary of Key Accomplishments since December CEO report:
- Continued resolving, restructuring and eliminating debts without incurring offsetting / new obligations.
- Eliminated a large amount of the accruing interest with convertible noteholders.
- Hired an accounting firm to be a liaison for the FY19 and FY20 Audits.
- Established FUNN Dispensaries, Inc. as a Canadian Federal corporation.
- Completed construction of Snakes & Lattes Tucson. The venue will be open shortly after inspections are complete.
- Completed Snakes & Lattes Tempe outdoor seating area expansion.
- Navigated Snakes & Lattes Tempe to all time record revenues with continued upward momentum.
- Re-opened Snakes & Lattes Chicago with revenue trending in the right direction.
- Maintained a near zero cash burn rate.
- Established weekly management conference calls for open and under construction venues.
- CEO interviewed by Wall Street Analyzer at their request. Increasing market visibility and at no cost to Amfil.
Communication remains consistent, concise, and candid. The strategy has been simple: reports have been issued publicly only when tasks are complete or information reliable. Calls and emails from shareholders have been responded to with a sense of duty and urgency and with respect to Regulation Fair Disclosure. All communications with vendors, partners, and even creditors have been timely to gain trust and better position the company in negotiations.
We have received positive feedback regarding the cadence and format of this Quarterly CEO update. Shareholders can expect this report to be issued approximately every 90 days as an anchor point for comprehensive information of the company's ongoings. Other pertinent news will be released as needed, required, or available. This report ensures shareholders maintain insight to the big picture.
Wipfli has been hired to audit FY19, FY20, and to review subsequent quarters for FY21 as necessary to apply for OTCQB uplist. Uplist can be processed by OTC Markets without an audit of FY21 so long as the FYE 2019 and FYE 2020 audits are completed and uplist applied for and approved before the end of September. The auditors have not yet provided a projected completion date. Our collective goal is to beat the FY21 deadline with the help of KSMB who is assisting as a liaison for submissions to Wipfli. Either way, FY21 will be immediately audited after FY19/20 along with all future years as required by OTCQB.
The solution to expedite the audit:
- Internally audit our books to ensure all outstanding items are reconciled and well supported by documentation - this is complete.
- Work with accounting firm KSMB to review our internal audit and prepare submission to auditors - this is well underway and should be complete within weeks.
- Obtain a projected completion date from auditors. This will be announced when we have reasonable certainty that the projection is reliable and aided by the work we put in on the front end.
Evaluations of all subsidiaries and initiatives:
Snakes & Lattes
Tempe - The venue is now operating at 100% capacity and consistently beating pre-covid revenues on a regular basis. Even with daily, weekly and monthly revenues at all time highs, the venue continues to increase earnings week over week. Seating capacity is being further increased as allowed by lowered covid restrictions.
This past week, the Governor of Arizona signed an Order lifting Covid restrictions and allowing restaurants and bars to get back to normal operations. We are still providing a safe and social distanced environment due in part to expanded outdoor space.
Government loan PPP1 has been forgiven, and that debt will come off the books in the next quarterly financial report. Loan PPP2 was applied for and granted, putting the venue and the company as a whole in a better leverage position to put employees back to work.
Tucson - Construction for the buildout is complete. All equipment is in. We are waiting on some additional smallwares and pending final building and health department inspections. Management and staff have been hired and trained. The City of Tucson has issued our business license for opening. The venue will open officially within days after all required inspections passed. A grand opening date will be announced after a soft opening. All shareholders will be invited to meet the CEO in person at the grand opening.
Chicago - The venue is open at 50% capacity per state and local regulations. All licenses with appropriate agencies have been transferred to our ownership, and the liquor licenses with the state and city have been extended.
Once Snakes & Lattes Tucson is open, the project manager will head to Chicago to oversee transition to 100% capacity and assist in maximizing revenue for the venue. When the transition is complete a grand opening date will be announced, and shareholders will have another opportunity to meet the CEO in person.
The purchase of the venue in September of 2020 was primarily for stock in Amfil. Snakes & Lattes Chicago provides a prime opportunity for the Snakes & Lattes brand to grow while allowing Amfil to maintain a strategic advantage with cash flow.
The outlook for Snakes & Lattes Chicago is getting stronger every day. Many groups have booked reservations for our private dining rooms in the coming weeks. We are still partnered with Community Kitchen and High Roads Kitchen to serve 475 meals per week. Our main dining room continues to gain traction as customer demand quickly fills allowed capacity. We are excited for the continued growth for Chicago moving forward.
Guelph - Construction is 75% complete. The venue will be open when Canadian lockdowns are lifted and final licensing and permitting is in place. A date will be given as soon as we have one with confidence.
Midtown, Annex, and College - Toronto is working towards re-opening. In-room dining is still not allowed, but we are optimistic that we will have successful re-openings of these locations as soon as permitted by the government authorities. Customer engagement, connection, and retention remains a priority for management in these venues to stay active within the community. As the other locations have shown, pent up demand is strong and we are confident the locations will thrive again once re-opened.
Cannabis Dispensaries - We have made significant progress towards opening FUNN’s first cannabis dispensary at 10 Dunlop Drive, St. Catharines, in the greater Toronto area.
Since the last report FUNN has:
- Applied for the dispensary operator license transfer from Tokin
- Applied for a new dispensary operator license directly for FUNN Dispensaries, Inc.
- Transferred and signed a lease for the first fully funded location
- Began construction
An opening date will be made public pending transfer/acquisition of the dispensary operator license.
Space for a second location has already been secured and will move forward pending completion of the first location. Negotiations have begun for additional locations, but are in the preliminary stage and too early to report meaningful progress.
Interloc-Kings continues to operate in the hardscaping and snow-plow business. It continues to generate consistent moderate revenue. It is self sustaining, and requires little effort from the corporate side. Initiatives for opportunities and growth will not be prioritized until after the planned spin-off is complete.
Snakes & Lattes USA expansion
While we are on the look-out for opportunities to pick up space and establish more corporate owned venues, the number one priority is to open all current cafes to 100% capacity. Once revenue is stable and in excess of 8 figures again, we will immediately switch focus to scale.
That said, we have had discussions with existing board game cafes as possible future expansion targets. If the right opportunity presents itself without sacrificing resources needed for existing venues, we will follow through and report publicly at that time.
While franchising may be a strategic initiative in the future, we are going to maintain our focus on building brand strength with corporate owned locations. Even when the audits and uplist to the OTCQB are complete, the focus will remain on corporate locations unless franchising is deemed strategically beneficial for the next phase of growth for Snakes & Lattes.
Per the previous report: It was stated Amfil plans to spin off the Cannabis and Hardscaping sectors while Board Game Cafes and the board game manufacturing and distribution sectors stay together. Current strategy has altered this plan. The Snakes & Lattes brand has major synergistic opportunities with the new FUNN Dispensaries brand.
Interloc-Kings would be spun-off with all other subsidiaries and joint ventures. We have completed a review of a spin-off with legal counsel. At this time, the costs significantly outweigh the benefits. Once up-listed to the OTCQB and resources are available to allocate, the plan to execute will be revisited. Completion of a spin-off will absolutely remain on the roadmap to scale, it is simply a matter of priority at this time.
Initiatives that will remain on hold:
Morning - Operations for this division are cash intensive and currently not the best use of our critical resources. Amfil will avoid further financial obligations that are not likely to return a profit with respect to this subsidiary. Per our last report, there may still be a viable future to propel Morning forward, but this will not be considered until all current cafes are open with stable revenue.
Board Game Sales - ‘Kill the Unicorns’ and ‘Red Panda’ are listed on the Loblaws and Wal-Mart websites. We will sell our remaining inventory of those games. Moving forward, the economic pros are outweighed by the resource cons of listing new titles or fulfilling any new purchase orders. SAS Publishing and the logistics efforts are not time or money well spent as compared to the booming cafe and dispensary potential.
The Gro3 joint venture with Advanced Ozone Integration, Inc and Amfil is not strategically suited for the new direction and growth of our company. No money has been spent on this project since the last CEO report as resources can be better allocated for far more likely profit generators.
Overall Company considerations:
Revenue and Debt
Amfil was generating more than $10 Million in annual revenue prior to COVID restrictions. While we expect to meet and exceed those numbers as the restrictions are lifted, it is difficult to realistically evaluate and make a plan going forward until all current and planned venues are open and running at 100% capacity. One good sign is that our cash burn rate is now close to zero. We have spent no new funds and issued no new shares for initiatives that have not proven to be capable of meaningful profit potential. In the meantime, steps have been taken to negotiate debt to work for the company in a healthy manner as we transition towards an exciting fiscal 2022 and beyond. The FY21 Q3 report due by May 15 will reflect revenue improvement and debt control efforts.
The debt reduction plan is:
- Avoid incurring additional debt that is unlikely to produce a profit - this has already been a priority the last 90 days
- Work with long convertible noteholders to convert so we can avoid further interest - we have already made significant progress on this
- Negotiate as many of the smaller debts by compromise with cash on hand - many of these have already been completed
- Lower current interest rates by refinancing where possible
- Tackle larger and longer term debts as profit continues to grow
CEO Moving forward past FY21
My initial agreement to be CEO was through the end of FY21. Now that I have had an opportunity to examine the company in all aspects, I am even more invigorated about the potential for success; especially in the entertainment/restaurant and cannabis sectors. Accordingly, I have begun having productive discussions with the board of directors to extend my contract beyond FY21 in a manner that will benefit the company and shareholders the most. My intent is to ask for no cash and no new allocation of shares beyond the incentives for benchmarks that are already being accomplished.
Shareholder Conference calls
Thus far, information has been reported as accurately and fully through public releases as available. Shareholder conference calls are still planned, but after all venues have opened. Until then, conference calls would not be meaningfully helpful to the company or its shareholders as we could not reliably address revenue and profit targets. As CEO, this is something that I personally very much want to do on a regular basis. Once the time is right, I believe it will be significantly beneficial for shareholders to get additional answers about all things FUNN.
Significant Questions that have been posed to me by shareholders:
Do we intend to expand our Cannabis sector in the US market? Yes. Opportunities have already been presented to us on the grow side. We are currently assessing each one. Dispensing in the US is also on our radar. We have to be realistic about how disjointed each state and the Federal government are in this industry. Banking is also a major issue, but we are hopeful Congress is on the precipice of passing meaningful legislation to put us in a position to be competitive in this market.
How can people get involved in opening new locations? This is doable, and we welcome discussions. If you have identified a location in a high traffic well populated area that meets our criteria, preferably an existing board game cafe or restaurant that already has the equipment, grease trap, bar and seating to minimize the cost of expansion, please reach out to me at email@example.com or 601-326-0805 so we can discuss. While our primary focus is on existing locations, we do not want to miss any expansion opportunities at this time.
How is my working relationship with Roger Mortimer, Ben Castanie, and Larry Leverton? It is excellent. Roger has significant institutional knowledge about the company and OTCMarkets dating back to the 80’s when this company started. Ben was the initial founder of the vision for Snakes & Lattes. He has been handling the accounting and books since merging with Amfil. Larry is intimately familiar with our stock transfer agent and many other aspects of being publicly traded. All three of them have been more than helpful in passing along the benefit of their knowledge and experience to put me in the best possible position to move this company forward. Most importantly, they have given me free reign and discretion to make the final decisions on anything involving Amfil and its subsidiaries. Their full support has been much appreciated.
How are we doing on updating and streamlining bookkeeping and accounting procedures? We have come a long way in the last three months with the help of KSMB and with regular conference calls to improve our logistics and operations. There is more work to be done. This has been one of our weakest areas in the past, and that weakness was directly attributable to how long the FY17 and FY18 audits took. Strengthening these processes is ongoing and is likely to lead to a much smoother audit process for FY19, FY20 and beyond.
How is the cash flow situation going? Obviously, the pandemic dealt a blow to all businesses operating in the entertainment and restaurant industries. Fortunately, we are on a significant revenue uptrend since FY21 Q1. We are doing all we can to maximize stimulus while not incurring, and in fact, reducing our debt. The last quarter before the pandemic began showed a profit, and we can see post pandemic profitability being even greater. We can do this while we provide a superior experience to our customers which is a key aspect for repeat business and brand loyalty.
Are we going to hire a PR company? Not right now. I want the company to be in a stronger post pandemic cash flow and financial position before we allocate additional resources for PR. But when the time is right, I will certainly reconsider this position. This is the same for marketing. Re-opening Tempe and Chicago locations has shown strong customer demand, so capacity is more of an issue than reach. Once we have a larger location base and ready to move to the next level in scale, certainly such resources will move up in priority. Additionally, hiring a PR firm will be more strategically optimal if it coincides with the audit and uplist when we can achieve broader visibility in the market.
I continue to remain positive about the trajectory of FUNN. I am most grateful for the dedication of our management and staff who have worked tirelessly in the midst of a pandemic. They ensure our returning loyal customers and new ones receive the best possible service for a quality experience. Their hard work has quickly returned Snakes and Lattes Tempe to a profitable status. If Snakes & Lattes Tempe is any indicator of what other venues can achieve; the next year is going to be very bright for that sector of our business.
I am also excited about the opportunity to enter the Cannabis market in a meaningful way where good margins are expected and growth can be executed.
Financials, bookkeeping, and accounting have all seen significant improvements in the last quarter, and we are in a continuous improvement mode. These efforts lead to timely reporting and remaining current with OTCMarkets. Going forward, I do not expect to have the same issues that we previously encountered.
I remain accessible by email or phone, and continue to hold myself accountable for decisions I make; especially as my optimism increases.
About Snakes & Lattes Inc.
For further updates from the Snakes & Lattes and its parent company, Amfil Technologies, Inc. please follow us on Twitter @AmfilTech
For more information regarding the company, and its related subsidiaries please visit the following websites:
Amfil Technologies, Inc. www.amfiltech.com
Snakes & Lattes Inc. www.snakesandlattes.com
Interloc-Kings Inc. http://www.interloc-kings.com
Amfil Technologies, Inc. is the parent company to three wholly owned subsidiaries.
1). Snakes & Lagers Inc. holds the trade name and is the owner of Snakes & Lattes Inc. which currently operates 3 tabletop gaming bars and cafes located in Toronto, Ontario and 1 in Tempe, Arizona and 1 in Chicago, Illinois. The company is in the process of expanding throughout North America. Snakes & Lattes Inc. was the first board game bar and cafe in North America, is believed to be the largest in the world and has the largest circulating public library of board games in North America for customers to choose from. For more information on Snakes & Lattes Inc. feel free to visit the website at www.snakesandlattes.com.
2). FUNN DIspensaries, Inc. was incorporated as a Canadian Federal Corporation in January 2021. FUNN dispensaries is entering the Canadian cannabis dispensary market with its first dispensary expected to open by summer of 2021 and a goal of significant expansion throughout Canada.
3). Interloc-Kings Inc. is a hardscape construction company servicing the Greater Toronto Area. This subsidiary is an authorized Unilock installer. Unilock is North America's premier manufacturer of concrete interlocking paving stones and segmental wall products. Interloc-Kings Inc. has an A+ Rating with the Better Business Bureau (BBB) and a 10/10 rating on homestars.com. Specializing in stone and wood installations between $5,000 and $150,000 per project, Interloc-Kings Inc. has become a top, high quality installation company of outdoor living areas in the GTA. More information on this subsidiary can be found at the website www.interloc-kings.com
Safe Harbor Statement
This news release contains statements that involve expectations, plans or intentions (such as those relating to future business or financial results, new features or services, or management strategies) and other factors discussed from time to time in the Company's OTC Market or Securities and Exchange Commission filings. These statements are forward-looking and are subject to risks and uncertainties, so actual results may vary materially. You can identify these forward-looking statements by words such as "may," "should,", "will", "expect," "anticipate," "believe," "estimate," "confident," "intend," "plan" and other similar expressions. Our actual results, such as the Company's ability to finance, complete and consolidate acquisition of IP, assets and operating companies, could differ materially from those anticipated in these forward-looking statements as a result of certain factors not within the control of the company such as a result of various factors, including future economic, competitive, regulatory, and market conditions. The company cautions readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. The company disclaims any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.
Rogen Chhabra, CEO
Amfil Technologies, Inc.
Corporate Telephone: 601-904-FUNN
Direct telephone: (601) 326 0805
Snakes & Lattes Inc.
Telephone: (416) 500 2911
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