Cosmos Holdings CEO Provides Letter to Shareholders

CHICAGO, IL / ACCESSWIRE / March 23, 2022 / Cosmos Holdings, Inc. (“the Company”) (Nasdaq:COSM), an international pharmaceutical company with a proprietary line of nutraceuticals and distributor of branded and generic pharmaceuticals, nutraceuticals, OTC medications and medical devices, provides the following letter to its shareholders from CEO Greg Siokas:

“To our valued shareholder,

On February 28, 2022, we achieved historic milestones for our Company by uplisting to the Nasdaq Stock Market and concurrently raising $6 million.

This was a direct result of intensive analysis, planning and hard work by our Board of Directors and leadership team in 2021. With a stronger corporate foundation, I’m delighted to report our outlook for growth and profitability is now the brightest it’s ever been.

I would like to provide you with our Board’s vision and realigned business plan for 2022 and beyond. I will cover highlights of our 2021 achievements, economic landscape, competitive advantages, strategy for strong growth, addressable markets, and our goals for 2022.

2021 Achievements

There’s a familiar metaphor on Wall Street about corporate executives who “eat their own cooking,” (i.e., purchase their own company’s stock) and, while uncommon, it is considered an exceptionally strong positive investment indicator.

In 2021, I converted $6.0 million of the Company’s debt owed to me into our common stock at $6 per share – while at that time its price averaged between $4 and $5 – fortifying our balance sheet and cash flow. I believe that action speaks more clearly, more loudly, of my confidence in our Company’s future value than any words I could write in this letter.

In early 2021, we launched Bodyguard, Osteodome, Chios Mastic, and King Eros and Queen Venus, expanding our proprietary Sky Premium Life (“SPL“) line of luxury nutritional supplements. Each is designed as follows: Bodyguard to strengthen the immune system and reduce fatigue; Osteodome to support normal bone / cartilage function and joint flexibility; Chios Mastic for disorders of the gastrointestinal tract; as well as Eros and Venus as complete nutritional food supplements — Eros to improve sexual health and men’s libido, and Venus to increase women’s energy and libido.

These additions to our 85 SKUs in our branded SPL product line, up from 60 just one year ago, succinctly exemplify our product direction. While branded products require R&D investment, they are designed and curated to capitalize on the latest science and clinical research to meet projected, growing market demand. They carry higher profit margins than those we procure to white label.

In October, our UK-based distribution subsidiary, Decahedron, began launching SPL products on Amazon UK representing our initial foray into major European e-commerce.

In August, we signed a three-year agreement to launch and market our SPL Nutraceuticals through our flagship store on Alibaba’s Tmall Global (AKA Taobao Mall) — the premier platform to connect foreign brands to affluent Chinese consumers. This agreement was one of the most important 2021 long-term strategic initiatives.

In November, we installed an automated, robotic fulfillment system in our Athens-based logistic center. It handles complex orders with precision and speed and can process up to 40,000 products per hour of various package shapes and sizes; see its short video clip HERE.

Competitive Advantages

• IP, Unrivalled Innovation and Quality. Today, we have the critical mass to leverage our assets while remaining nimble in a dynamic global industry. Along with our strong procurement capability and outstanding in-house R&D, we have established relationships with top-tier independent formulators and academia contributing to product development and market research.
• Broad Distribution Network. In Europe, we have built an extensive and established distribution network. The ability to distribute products widely across Europe and secure shelf space in pharmacies, grocery stores and specialty nutrition shops is half the battle to winning in our industry. In this regard, we are an undisputed leader.
• Regulatory Expertise. Every food supplement, nutraceutical and prescription pharmaceutical sold in Europe must be registered in each country. We are experts at navigating the regulatory maze that erects steep barriers to entry.
• State-of-the-Art Fulfillment. Our Athens-based logistic center’s robotic fulfillment system increases our efficiency and capacity by several orders of magnitude.
• Outstanding Leadership Team. Our senior management team each have an average 20 or more years in our industry bringing expertise, insight and valuable business relationships.

Scalable Strategy for Strong Growth

Our extensive penetration of brick-and-mortar pharmacies and retail stores across Europe, combined with our recent Amazon UK and Alibaba Tmall (China) storefronts, are just the first steps in our scalable omni-channel market strategy. Our re-tooled business plan for 2022 and beyond is multi-faceted:

1. Invest in proprietary supplements and nutraceuticals with higher gross margins. As a centerpiece of our strategy, we are focusing capital and distribution on our newest, most profitable proprietary branded products. During 2021, we developed numerous new branded products, many of which have launched with more slated for launch throughout 2022. From R&D, testing, and regulatory registration to distribution onto actual or virtual store shelves takes approximately six to nine months.

2. Leverage unique product strengths and differentiators:

• We are well known amongst industry distributors and wholesalers for our attractive, effective packaging that’s now synonymous with the SPL brand.
• We are capitalizing, literally, on our ‘roots’ with a new Mediterranean line incorporating our native, nutrient rich plants by combining carefully selected raw materials based on strict pharmaceutical standards.

3. Expansion of Branded Pharmaceuticals and Generic Pharmaceuticals. We are constantly analyzing the EU prescription market for drugs coming off patent. Generic prescription drugs are a ‘commodity’ albeit a highly regulated one, whose profitability is determined by distribution. We are focusing on creating a new line of proprietary branded and generic pharmaceuticals as drugs come off patent.

4. Increase Omni-Channel Marketing. In 2022, we will increase our digital marketing and e-commerce investment to gain market share, lower cost of entry, and speed time to market in new geographic territories, including the growing number of online-only e-pharmacies.

5. M&A and Strategic Alliances. A main priority for 2022 is acquiring accretive companies that are in line with our business. We are actively evaluating opportunities for mergers and acquisitions that will scale our business through vertical integration. This may also include strategic alliances or JVs with distributors, manufacturers, or formulation R&D firms in any corner of the world.

6. Expand geographically. We are increasing penetration across the EU both in and beyond our core UK, German and Mediterranean markets. We are actively working to expand into Eastern and Northern Europe, North America, and Asian markets with solid discretionary income. Our Alibaba Tmall initiative exemplifies this strategy, establishing a beachhead in what experts project will be the world’s largest nutraceutical market by 2030.

Nutraceutical $658 Billion Total Addressable Market

Globally, Fortune Business Insight analysts report, “COVID-19 has severely negatively affected various industries, but some, including nutraceuticals, have presented a tremendous growth opportunity,” as consumer preferences shift toward health-boosting products. The report predicts his market will grow from $352.9 billion in 2021 to $658.1 billion in 2028.

In Europe, analysts estimate the nutraceuticals market at US$59.3 billion in 2018 and it is expected to grow to US$108 billion by 2027.

In the US and China, analysts estimate the U.S. market at $104.5 billion in 2021, while projecting the China market to reach $52.5 billion by 2026, and state, “Nutraceuticals are the vital link between health and food.”

Cosmos 2022 Outlook: Goals for Growth and Expansion

• Higher Gross Margins, Grow Revenue. Initially, we aim to grow 2022 revenue 15-20% to over $65 million as we focus on branded products – while improving gross margins to 18%.
• Expand our High-Margin SPL Nutraceutical Product Roster. We plan to add 40 to 50 new, advanced nutraceutical products, including our new SPL Mediterranean Line in Q2 2022.
• Expand E-Commerce Footprint. Upon regulatory approvals, we expect to launch Amazon Stores in Germany, Italy, Spain, and France starting in mid-2022. Additionally, we expect to launch Amazon Stores in Singapore, Brazil and the US in the second half of 2022. When our test marketing is complete, we will launch our SPL store on China’s Tmall Global this spring, initially with 12 curated SKUs.
• Increase Penetration of Existing End Markets. Our omni-channel marketing strategy spans Amazon Stores to online and brick & mortar pharmacies, specialty nutrition and grocery stores.
• Reinforce Leadership. To drive our business aggressively forward in 2022, we will be adding additional management team members to support our rapid growth plan. We will also add additional board members to our Board of Directors, establish an Advisory Board bringing specialty expertise and industry relationships, and hire professionals in R&D, product management, sales and marketing.
• M&A or JVs. We plan to opportunistically pursue strategic transactions to expeditiously increase market penetration, geographic footprint, operational efficiency, and capture market share.

Execution of our transformative business plan is already well underway and will accelerate in 2022. With a stronger balance sheet, Nasdaq listing, expert leadership, valuable IP, expansion of our branded-product portfolio and rapidly growing consumer awareness and demand — I am confident that we have all the ingredients for success in 2022 and beyond. As an unconventional and innovative thinker, I am always contemplating outside the box ideas that have an element of disrupting the industry, while ultimately improving patients’ lives. This is the foundation that Cosmos has been built on and gives it a competitive advantage in the growing global nutraceutical and pharmaceutical markets. I believe the future for Cosmos is brighter than ever, and we look forward to achieving a number of very important milestones in 2022.”

About Cosmos Holdings, Inc.

Cosmos Holdings Inc. (Nasdaq:COSM) is an international pharmaceutical company, with a proprietary line of nutraceuticals and distributor of branded and generic pharmaceuticals, nutraceuticals, OTC medications and medical devices through an extensive, established EU distribution network. The Company identifies, acquires, develops and commercializes products that improve patients’ lives and outcomes and has developed a global distribution platform and is currently expanding throughout Europe, Asia and North America. Cosmos Holdings has offices and distribution centers in Thessaloniki, Greece, Athens, Greece and Harlow, UK. More information is available at www.cosmosholdingsinc.com and www.skypremiumlife.com.

Forward-Looking Statements

With the exception of the historical information contained in this news release, the matters described herein, may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Statements preceded by, followed by, or that otherwise, include the words “believes,” “expects,” “anticipates,” “intends,” “projects,” “estimates,” “plans” and similar expressions or future or conditional verbs such as “will,” “should,” “would,” “may” and “could”, are generally forward-looking in nature and not historical facts, although not all forward-looking statements include the foregoing. These statements, involve unknown risks and uncertainties that may individually or materially impact the matters discussed, herein for a variety of reasons that are outside the control of the Company, including, but not limited to, the Company’s ability to raise sufficient financing to implement its business plan, the impact of the COVID-19 pandemic on the Company’s business, operations and the economy in general, and the Company’s ability to successfully develop and commercialize its proprietary products and technologies. Readers are cautioned not to place undue reliance on these forward- looking statements, as actual results could differ materially from those described in the forward-looking statements contained herein. Readers are urged to read the risk factors set forth in the Company’s filings with the SEC, which are available at the SEC’s website (www.sec.gov). The Company disclaims any intention or obligation to update, or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Investor Relations Contact:
Crescendo Communications, LLC
Tel: 212-671-1020
Email: COSM@crescendo-ir.com

SOURCE: Cosmos Holdings, Inc.

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