CALGARY, Alberta, July 27, 2023 (GLOBE NEWSWIRE) -- CE Brands Inc. (TSXV: CEBI) ("CE Brands", "we", "our", or the "Company"), a data-driven consumer-electronics company, today announced its financial results for the three-month period ended March 31, 2023 ("Q4 2023") and the year ended March 31, 2023 ("Fiscal 2023"). The audited consolidated financial statements for Fiscal 2023 and accompanying notes and Management's Discussion and Analysis for Fiscal 2023 ("MD&A") are available on SEDAR at and on CE Brands' website at .

Except as otherwise indicated, all amounts in the press release are expressed in Canadian dollars.

Q4 2023 and Fiscal 2023 Highlights

• Total revenue of approximately $1.50 million in Q4 2023 was lower by 55% compared with approximately $3.29 million in the three-month period ended March 31, 2022 ("Q4 2022"). The reason can be attributed to lower business-to-consumer sales of moto smartwatches on e-commerce platforms. The total revenue for Fiscal 2023 has been consistent with that of the prior year, being a decrease of 4%.
• Gross loss of approximately $2.4 million in Q4 2023, from a gross profit of approximately $0.66 million in Q4 2022, representing a decrease of approximately 472%. Gross loss of approximately $4.2 million in Fiscal 2023, from a gross profit of approximately $1.5 million in the year ended March 31, 2022 ("Fiscal 2022"), representing a decrease of approximately 381%. This decrease can be attributed to $0.5 million of write-offs of Kodak branded inventory and a $1.8 million liability related to non-cancellable inventory purchase commitments due to the Company's termination of its contract with Kodak. Additionally, the decision to withdraw from the Moto 150 and Moto 200 smartwatch launches led to the write-off of all materials associated with it in Fiscal 2023.
• Net loss of approximately $17.3 million in Q4 2023, up by 488% compared with $2.9 million in Q4 2022. Net loss of approximately $28.0 million in Fiscal 2023, up by 175% compared with $10.0 million in Fiscal 2022. The increase in net loss was due to impairment of assets of $9.96 million along with additional Cost of Products and Services leading to lower gross profit and increased spend across wages and contractors pay, royalty, technology related expense, legal, accounting, general and administrative and professional fees expenses.
  

"Fiscal 2023 was a challenging year for CE Brands. Global macro events continued to result in delays in manufacturing and contributed to higher material costs for our product lines, which despite stable performance sales volumes, put significant pressure on the bottom line," said Kalvie Legat, Interim Chief Executive Officer of CE Brands. "We have made several key management and organizational structure changes, which moving forward will enable us to both reduce our corporate costs and focus on growing our key business lines and move the Company to profitability."

"We continue to see strengthening in the global consumer markets and we are very excited about the [upcoming/recent] launch of our new Vitalist [smart watch/health monitoring] product line [in late 2023/by the end of 2023/in Q3] and our ongoing partnership with Motorola and anticipated expansion of Moto Watch line," continued Mr. Legat.

Post-Q4 2023 Updates

• On June 6, 2023, the Company announced it is expanding its ecosystem of watches and wearables with the launch of Vitalist, a connected health brand that aims to connect consumers' biometric data with blood and saliva biomarker data. See the previous news release dated June 6, 2023.
• On June 26, 2024, eBuyNow eCommerce Ltd. ("EBN"), a wholly-owned subsidiary of the Company, made a voluntary assignment into bankruptcy under the Bankruptcy and Insolvency Act (Canada). See the previous news release dated June 26, 2023.

Outlook

The Company continues to take steps to mitigate the impacts of the ongoing supply constraints on semiconductor chip manufacturing and global supply chain disruptions through supply-chain improvements and strategically prioritizing the Company's product portfolio to conserve cash and improve near-term profitability. In order to continue to meet customer demand and fulfill growing order backlog, the Company anticipates pursuing additional financing for working capital and general corporate purposes, principally to ensure the Company has sufficient financing on hand for the purchase of inventory.

Due to the working capital and liquidity constraints that the Company has faced and a slower than anticipated return to full operations in our partner factories, the Company withdraws all previously disclosed financial guidance due to the uncertainty in forecasting operating results.

The Company anticipates that it will require additional financing to address the Company's working capital and other financing needs and support the Company's Motorola and Vitalist product launches and sales described below. See "Forward-Looking Information", "Going Concern" and "Other Risk Factors" in the MD&A.

Motorola Products

With a focus on continuous product development and expansion, the Company is actively engaged with its research and development partners to bring four new Motorola branded smartwatches to the market. These devices are at various stages of development. The Company is committed to making the Motorola branded smartwatches accessible to a wide range of consumers. The four new models will be competitively priced, ranging from US$49 to US$149. The Company anticipates delivering these new smartwatches to distributors during the year ended March 31, 2024.

Vitalist Products

On June 6, 2023, the Company announced the launch of Vitalist, an inhouse smartwatch health brand. With a focus on affordability and market availability, Vitalist will specialize in cost-effective smartwatches that integrate with a dedicated application experience. By combining user-friendly design, at-home biomarker testing, and wellness improvement planning, Vitalist aims to empower users to gain deeper insight into, and track how their daily activities and interventions impact, their long-term health.

In addition to providing comprehensive smartwatch features, Vitalist will offer bundled biomarker testing services. This means that users will be able to conveniently test their biomarkers, gaining valuable insights into their health. By leveraging the power of smartwatch data and biomarker analysis, the Company anticipates that Vitalist will create an ecosystem that enables users to make informed decisions about their well-being.

Beyond biomarker testing, Vitalist will take a holistic approach to health. The brand will offer personalized health supplement interventions that are tailored to the specific needs of users based on their biomarker and biometric data. By analyzing the collected information, Vitalist will be able to generate custom training and dietary supplement plans, enabling users to manage their biomarkers and achieve their health goals.

With Vitalist, the Company plans to foster an ecosystem that promotes proactive health management through the integration of smartwatches, biomarker testing services, and health supplement interventions that allow users to track their progress, identify areas for improvement, and make informed decisions to enhance their overall health and well-being.

Based on internal market research, the Company intends to bring multiple smartwatch and smart ring products to market in the upcoming fiscal year under the Vitalist brand, to reach market segments where Motorola branded products may not be appropriate (for example, to reach iPhone users with a keen interest in hormone levels) and also to be able to launch a portfolio of off-the-shelf hardware products already being manufactured under non-exclusive brand names in other countries, of which the research and development requires limited resources in order to introduce to the market, and of which the products are not aligned with Motorola brand licensing requirements.

The Company anticipates that it will require additional financing to address the Company's working capital and other financing needs and support the Company's product launches and sales. See the "Forward-Looking Information", "Going Concern" and "Other Risk Factors" sections of the MD&A.

Selected Financial Information¹

Any references in this press release to the "Company" refer to EBN and its direct or indirect subsidiaries for information provided in respect of any period prior to June 18, 2021, which is the date on which the Company's Qualifying Transaction (as defined in the policies of the TSXV) was completed pursuant to which the business of EBN became the business of CE Brands. Subsequent to June 18, 2021, the "Company" refers to the consolidated operations of CE Brands and its direct or indirect subsidiaries and the historical operations of EBN and its direct or indirect subsidiaries.

¹ MLTA Note: Consider adding comparative information, i.e., columns for Q4 2022 and Fiscal 2022.

For more information, please see CE Brands' corporate presentation, which is available on CE Brands' website at .

Shareholder Call Information

CE Brands will hold a virtual-only annual and special meeting of shareholders (the "Meeting") on Friday, July 28, 2023, at 9:00 a.m. Calgary time. The Meeting will be followed by a shareholder update call and will be facilitated by Kalvie Legat, Interim Chief Executive Officer, who will review the Company's Q4 2023 and Fiscal 2023 results and related financial performance.

The Company will answer pre-submitted questions at the conclusion of prepared remarks. Investors are invited to submit their questions in advance to ir@cebrands.ca.

You may attend the Meeting and the shareholder update call at . Please note that only registered shareholders and duly appointed proxyholders who have registered with AGM Connect prior to the voting cut-off date will be able to submit questions and vote at the Meeting. Any shareholder or appointed proxyholder who has not registered with AGM Connect prior to the voting cut-off date will be able to attend the Meeting as guests, but guests will not be able to vote or ask questions.

A recording of the shareholder update call will be made available on the Company's website at .

About CE Brands

CE Brands Inc. develops products with leading manufacturers and iconic brand licensors by utilizing proprietary data that identifies key market opportunities. With sales today in over 70 countries, our innovative, highly repeatable process, which we call the "CE Method", has created an optimal growth path for CE Brands to be the premier global licensed brand manufacturer.

Neither the TSX Venture Exchange nor its regulation services provider (as defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.

Forward-Looking Information

In general, forward-looking information refers to disclosure about future conditions, courses of action, and events. The use of any of the words "anticipates", "believes", "expects", "intends", "plans", "will", "would", and similar expressions are intended to identify forward-looking information. More particularly and without limitation, this press release includes forward-looking information with respect to the Company's capital requirements and intention to pursue additional financing opportunities; its plans for the Motorola product segment, the status of the Motorola product segment relative to those plans, and the anticipated timing to advance the Motorola product segment; and its plans for the Vitalist product segment, the status of the Vitalist product segment relative to those plans, and the anticipated timing to advance the Vitalist product segment.

The forward-looking information is based on certain key expectations and assumptions, including the continuance of manufacturing operations at the Company's partner factories in Asia, the timing of product launches, shipments and deliveries, forecast sales price and sales volume of the Company's products and the ability of the Company to secure additional sources of financing in the 2023 and 2024 calendar years.

There can be no assurance that the Company will be able to secure additional financing in the future and/or access funding under its account receivables facilities and credit facilities on the terms contemplated, in a timely manner or at all. If the Company fails to secure additional financing and/or access funding under its account receivables facilities and credit facilities, then the Company may have insufficient liquidity and capital resources to operate its business resulting in material uncertainty regarding the Company's ability to meet its financial obligations as they become due and continue as a going concern.

Although CE Brands believes that the expectations and assumptions on which such forward-looking information is based are reasonable, undue reliance should not be placed on the forward-looking information because CE Brands cannot give any assurance that it will prove to be accurate. By its nature, forward-looking information is subject to various risks and uncertainties, which could cause the actual results and expectations to differ materially from the anticipated results or expectations expressed in this press release. Such risks and uncertainties include, without limitation: the risks described in the "Other Risk Factors" section of the MD&A the impact of the evolving Covid-19 pandemic and associated supply chain issues, on the Company's business, operations and sales; the impact of the EBN bankruptcy on the Company; the impact of the termination of the Company's contract with Kodak; reliance on third party manufacturers and suppliers; the Company's ability to stabilize its business and secure sufficient capital, including the funding under its account receivables facilities and credit facilities, which may not be available in a timely manner or at all; the Company's available liquidity being insufficient to operate its business and meet its financial commitments, which could result in the Company having to refinance or restructure its debt, sell assets or seek to raise additional capital, which may be on unfavorable terms, if available at all; the inability to implement the Company's objectives and priorities for 2023 and beyond, which could result in financial strain on the Company and continued pressure on the Company's business; the Company's expectations with respect to anticipated revenue growth in 2023 and beyond; anticipated product launches and commercial partnerships; risks associated with developing and launching new products; increased indebtedness and leverage; the fact that historical and projected financial information may not be representative of the Company's future results; the inability to position the Company for long-term growth; risks associated with issuing new equity including the possible dilution of the Company's outstanding common shares; the value of existing equity following the completion of any financing transaction; the Company defaulting on its obligations, which could result in the Company having to file for bankruptcy or undertake a restructuring proceeding; the Company being put into a bankruptcy or restructuring proceeding; and the risk factors included in CE Brand's other continuous disclosure documents available on SEDAR at . Readers are cautioned not to place undue reliance on this forward-looking information, which is given as of the date of this press release, and to not use such forward-looking information other than for its intended purpose. CE Brands undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events, or otherwise, except as required by applicable securities law.

Further Information

For further information about CE Brands, please contact:

Kalvie Legat
Interim Chief Executive Officer
778-771-0901
ir@cebrands.ca