A few years ago, New Leaf Brands (OTCPK:NLEF) was a pretty promising upstart drink maker. Granted, it was an upstart in the truest sense with funding a constant struggle, but it had a very good product and looked to be expanding. Founder Eric Skae, who has decades of experience in the beverage industry, including senior level roles at giants like Arizona and Hansen, was growing the company quite rapidly with more than 100 distributors pushing out New Leaf Brand teas and lemonades.
In 2012, Skae stepped down from the top executive and chairman positions and started a consulting business and New Leaf’s wheels, already wobbly owing to inability to find financing, started to come off.
David Fuselier was elected as the new CEO and chairman with the goal of implementing a turnaround strategy to get the company on track again, which included buying a beverage distributor, arranging financing and more. The plan didn’t exactly pan out and the company ceased quarterly reporting with the Securities and Exchange Commission in 2013 and put the New Leaf beverages into hibernation. The turnaround efforts continued in 2014, only to have New Leaf be dealt a knockdown blow from a lender reneging on a credit facility, sparking layoffs and lawsuits.
"We sought to build shareholder value by re-invigorating our flagship New Leaf beverage brand and expanding into the beverage distribution market. For a variety of reasons, both have failed, and we are now assessing our corporate mission," said Fuselier in a statement earlier this month.
On Wednesday, New Leaf announced that it has elected to move away from operations focused exclusively on beverages. After discussions with several small to medium businesses with established brands, the company says it is expanding its strategic mission to include the broader category of brands and branding.
"Our mission is to acquire regional or segment brands in an array of areas as broad as food and beverage and as deep as blue collar personnel services that have distinctive brands that customers respect and employees champion," said Mr. Fuselier in Wednesday’s press release. He added that New Leaf intends to focus on value acquisitions that are traditional yet innovative.
Shares of NLEF hit a high of 2.7 cents in 2014 and have slipped to sub-penny in 2015, including the super-sub-penny closing at $0.0009 on Tuesday. Traders seem to be somewhat optimistic about the expanded business plan. As the day nears the closing bell, shares are up 33 percent at $0.0012 on one of the best volume days of the year for the stock. Many will likely watch and see if these efforts can reap rewards from these deeply depressed share price levels. Unfortunately for lovers of the company’s teas, it doesn’t sound like anyone will be watching with a chilled New Leaf tea in their hand anytime soon.
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