The parties to the agreement are: California-based AMC, Hong Kong-based Delta Group Investments (DGI) and Washington-based TNS.
AMC is a highly experienced direct mail marketing company. DGI is a private investment company which has made available a loan of $300,000 to be used as operating capital to test and launch the direct mail marketing campaign. TNS will be the supplier of the finished private label products to be sold through the direct mail marketing program and will also be the project manager.
According to the terms of the profit sharing agreement, the funds provided by DGI were deposited in a special account and all expenses will be paid from this account. TNS and AMC will be reimbursed for all expenses related to product costs, mailing expense, media and printing, fulfillment, shipping and order taking. On a quarterly basis, any profits generated by the three entities will be disbursed pursuant to a predetermined schedule.
The initial test mailing will consist of 250,000 pieces which will be sent out on or about April 30, 2010. In connection with the direct mail marketing campaign, AMC will receive stock purchase warrants based on performance criteria tied to total sales. DGI has an option to convert their loan or any portion thereof to common stock of TNS at $.25 per share.
Marvin Hausman, CEO of TNS, said: “This agreement allows our company to effectively formulate and launch proprietary dietary supplement products into the US market. TNS has become a global leader in the research and development of mushroom-based products and enrichment processes for potent antioxidants such as L-Ergothioneine and Vitamin D2.
“Our company intends to actively formulate and launch into the US and International dietary supplement markets breakthrough nutritional products enriched with these key nutrients that have the potential to improve human health and well-being.”