RYU Apparel, the Vancouver-based athletic apparel brand, is seeking to raise $7 million in capital in order to enter a consulting arrangement and pursue a plan to bring RYU (restricted stock unit) to profitability over the two-year period.
RYU said it has entered into a letter of engagement for a proposed consulting agreement with an unnamed Canadian-based retail consultant that is arm’s length to RYU and who will guide the turnaround efforts.
Terms for the engagement have not been finalized, and the entering of the agreement is subject to certain conditions including the approval of the TSX Venture Exchange as well as raising $7 million in capital to most of the activities to be undertaken under the consulting arrangement. Upon entry into a definitive agreement, the consultant will be retained to create, implement and execute a strategic plan to lead a formative transition of RYU within two years.
“Our focus is on the brand and its uninterrupted growth. The strategic services to be provided by the Consultant are focused on constant innovation and improvement as it has always been since the day we opened our first store,” said Marcello Leone, CEO of RYU. “These partners have a successful track record in North America and, if the arrangement is consummated, RYU anticipates the arrangement will represent a significant opportunity for brand awareness while keeping innovation, customer experience and the quality of our products as the center of our Universe”.
The letter of engagement provides that the consultant will receive, in addition to a work fee, 50 million stock options with an exercise price of 5 cents per share for a five-year term and, within 12 months of entering into definitive agreements, 30 million restricted share units. The stock option grant and RSU issuance are subject to shareholder approval if the aggregate number of options and RSUs granted to the Consultant exceeds 5 percent of the issued shares of RYU at the time of grant.
Photo courtesy RYU Apparel
