NetBrands Corp. (NBND)
NetBrands Corp. is an early‐stage, Delaware‐incorporated diversified holdings company focused on healthy snack foods under six trademarked brands (Biscottelli, Dolcibono, Bonbons de Paris, Fruttata, Coco Bliss, and Ezlyv) and on acquiring and scaling e-commerce assets (e.g., an online home-fitnes...
NetBrands Corp. (OTC Pink: NBND) 10-K Review: Healthy Snacks & E-Commerce Pivot—But Is It Too Little, Too Late?
Investment Score: 2.0 / 10
Warren.AI 💰 2.0 / 10
TL;DR: NetBrands Corp. has spent years building up six gourmet snack brands and dabbled in e-commerce acquisitions, but supply-chain failures, geopolitical shocks and liquidity constraints left it with $0 revenue in 2024, a $1.3 million loss, zero cash, and $2.4 million in liabilities at year-end. With its CEO holding effective voting control and the stock trading illiquid on the OTC Pink market, we see near-term survival hurdles outweighing any upside. Read on for our deep dive.
1. Business Overview (Item 1)
- Corporate structure: Delaware-incorporated in 2017; name changes and reverse merger culminated in NetBrands Corp. with one wholly owned subsidiary, Global Diversified Holdings, Inc.
- Operations: Two divisions—(1) Packaged Goods: Developing/marketing healthy snack foods under six trademarks (Biscottelli, Dolcibono, Bonbons de Paris, Fruttata, Coco Bliss, Ezlyv).
• Products are outsourced to co-packers under non-exclusive manufacturing agreements.
• Primary customers: Specialty and grocery retailers (club stores, chain supermarkets), food-service distributors, direct-store delivery, vending operators, micro-markets.
(2) E-Commerce Assets: Acquired the Shopify-based “The Hula Fit” online home-fitness store; plans further e-commerce acquisitions. - Distribution channels: Brick-and-mortar (90% historically) and e-commerce (10% target).
- Strategy: Leverage co-packer model to control costs; grow e-commerce revenue; acquire small/niche brands and digital assets to diversify.
2. Key Brand Assets & Intellectual Property
| Brand | Filing Date | Owner | Expires |
|---|---|---|---|
| Biscottelli | 2015-03-28 | Paul Adler | 03/27/25 |
| Dolcibono | 2019-10-02 | Global Diversified Holdings | 10/01/29 |
| Bonbons de Paris | 2017-01-11 | Paul Adler | 01/10/27 |
| Fruttata | 2019-07-19 | Global Diversified Holdings | 07/18/29 |
| Coco Bliss | 2016-12-05 | Paul Adler | 12/04/26 |
| Ezlyv | 2021-08-30 | Global Diversified Holdings | 08/29/31 |
Note: Loss of critical trademarks or manufacturing rights could cripple core snack-food business.
3. Financial Performance & Condition (Items 7, 8)
Revenue & Gross Margin
| Year | Revenue | Cost of Goods Sold | Gross (Loss)/Margin |
|---|---|---|---|
| 2023 | $644,535 | $479,845 | $164,690 (25.6%) |
| 2024 | $0 | $0 | $0 |
- 2024: Revenue dropped to zero after a key co-packer supply bottleneck and a separate Russian-made snack SKU line was halted due to Ukraine conflict sourcing issues.
- 2023: Modest revenue, 25.6% gross margin.
Operating Expenses & Non-Cash Charges
| Category | 2024 | 2023 | Notes |
|---|---|---|---|
| Payroll & taxes | $154,784 | $438,684 | CEO salary partly deferred |
| Legal & professional fees | $599,669 | $216,192 | Financing deals + audits |
| Rent & occupancy | $0 | $177,327 | Lease renegotiation |
| SG&A | $43,636 | $247,782 | Sales/marketing overhead |
| Total OpEx | $798,089 | $1,079,985 | Incl. $425k non-cash stock comp. (’24) |
- Excluding non-cash stock compensation, 2024 OpEx was $372,951—a $542,000 drop.
- Stock-based compensation: $425,138 (2024) vs. $164,500 (2023).
Interest & Other Expenses
- Interest expense: $487,217 in 2024 (vs. $406,046 in 2023) on convertible notes, related-party loans, and high-cost debt.
Net Results
| Year | Net Loss | EPS |
|---|---|---|
| 2023 | $(1,321,341) | $(0.08) |
| 2024 | $(1,285,306) | $(0.06) |
Both years delivered seven-figure losses despite partial expense cuts in 2024.
Balance Sheet & Liquidity
| Balance Sheet Item | Dec 31, 2024 | Dec 31, 2023 |
|---|---|---|
| Cash & cash eq. | $0 | $1,013 |
| Current assets | $0 | $13,479 |
| Current liabilities | $1,876,508 | $1,382,874 |
| Total liabilities | $2,376,508 | $1,882,874 |
| Stockholders’ (deficit) | $(2,374,911) | $(1,867,795) |
- Zero cash and negative $1.9 million working capital.
- Government EIDL loans (COVID relief) outstanding: $500,000.
- Heavy reliance on convertible notes, related-party loans, and high-cost debt.
Cash Flows
- Operating cash flow: $(182,120) in 2024 vs. $(430,093) in 2023.
- Financing cash flow: $181,107 in 2024 vs. $376,921 in 2023.
- No investing outflows in either year.
Net cash is at zero—management must raise capital immediately or face default.
4. Capital Structure & Dilution (Item 6, 8)
- Common stock: 100 million shares authorized; 22.6 million issued & outstanding as of December 31, 2024.
- Convertible debt & warrants: $187,777 first-lien convertible note with 12% interest, monthly 4.99% penalty-share issuances, 5-year warrants for 814,285 shares at $0.07; Spencer Clarke fees included warrants for 310,715 shares at $0.001 exercise.
- Series A Super-Voting Preferred Stock: 1,000,000 authorized; 1,000 issued to CEO Paul Adler—each share votes equal to 100,000 common shares, giving Mr. Adler 77.6% voting power.
5. Risk Factors (Item 1A)—Key Takeaways
- Going concern: Recurring losses, zero cash, negative equity, no guarantee of financing.
- Key person risk: CEO Paul Adler (sole director/officer) is indispensable; his loss would jeopardize operations/relationships.
- Competition: Unmatched scale and brand loyalty of PepsiCo, Kellogg, and other big snack players.
- Supply chain & manufacturing: Dependence on co-packers; past disruptions wiped out revenue.
- Regulatory: FDA compliance, labeling, food safety, potential recalls or liability suits.
- IP: Patent/trademark infringement, litigation risk.
- Product liability: Contamination or spoilage risks; costly recalls; insurance may be insufficient.
- Cybersecurity: Growing online presence invites hacking and data breaches.
- Penny stock & OTC Pink: Low liquidity, wide bid/ask spreads, FINRA restrictions, trading volatility.
- Dilution: Future financings will dilute existing shareholders; debt conversions add more shares.
6. Management’s Discussion & Outlook (Item 7)
- The loss of 2024 revenue is attributed to (a) strategic supplier capacity cuts, and (b) the unavailability of a Russian-sourced SKU line due to the Ukraine conflict.
- Goals for 2025: Secure fresh financing, rebuild inventory, restart SKU lines, accelerate e-commerce acquisitions, and reignite brick-and-mortar distribution.
- No clear funding source—management plans additional equity or debt raises, but terms may be dilutive or prohibitively expensive.
7. Investment Analysis & Conclusion
Strengths
- Six registered snack brands with health/clean-label positioning.
- Low-capital co-packer model.
- Step into high-growth e-commerce vertical via acquisitions.
Weaknesses
- No revenue in 2024; reliance on one key co-packer.
- Zero cash runway; negative working capital.
- Seven-figure net losses, steep interest burden.
Opportunities
- Rebuild digital channels; further e-commerce brand roll-ups.
- Pivot to omnichannel D2C snack marketplace.
Threats
- Liquidity meltdown if funding not secured immediately.
- Potential dilution/stock collapse from convertible debt.
- OTC Pink trading risks and corporate-governance questions around super-voting preferred shares.
Bottom Line: NetBrands has creative snack brands and an asset-acquisition play, but 2024’s zero sales and $2.4 million balance-sheet hole paint a bleak near-term survival picture. No revenue and no cash in the bank are red flags no savvy investor can ignore. We rate NBND as a 2.0 / 10—only a very high risk-tolerant speculator should consider the stock.
For educational purposes only. Always conduct your own due diligence.