The Bachelor NZ star Art Green may be forced to sell his company Riot Foods unless $1 million is raised in just two weeks, a letter to shareholders has revealed.
Ryan Kamis, co-owner and chief executive of Riot Foods, said the company has faced “significant challenges” with its Ascot Rd production factory in Auckland.
The facility was allegedly destroyed by an unnamed “fumigation/sterilisation company” a week before commencing production, and Riot Foods missed its production date which has affected cash flow.
“The inability to produce at this site, and the significant management focus on the recovery has impacted on our sales and related profitability,” said Mr Kamis in the letter to shareholders.
The company was forced to delay the re-launch of its Biltong product, a form of dried meat, alongside other products into the Australian and Asian markets.
Food Riot’s customers include Australian supermarket giant Coles. It also supplies products to 250 supermarkets across New Zealand.
Mr Kamis informed shareholders that despite working with some of them during this “challenging time”, the company now finds itself in a “tough position to turn things around with the Christmas / New Year period approaching.”
Food Riots needs enough funding to support it through till around February/March next year.
“Moving to profitability is simply not possible for us to do unless we are able to raise +$900k over the next couple of months,” the letter says, adding that half of the money would be spent on machinery to reduce labour expenditure.
In December last year, Riot Foods crowdfunded $1 million to have machinery fitted out at its second Auckland-based factory.
Mr Kamis said shareholders have come forward with “several hundred thousand dollars” in the last 24 hours to help save the company from financial collapse, but keeping it afloat will require much more than that.
But unless the company confirms “solid commitments” that will ensure the $900k or a “similar amount” is secured within one to two weeks, Mr Kamis said the company’s directors will “have to consider less positive options”.
“Matters outside our control have led us to this position, and whilst disappointed we continue to focus on getting the best outcome for all of our stakeholders,” the letter says.
The company was founded in 2014 by Mr Kamis and Mr Green, a year after the flagship food brand Clean Paleo was set up. Other food brands, such as Poppy and Olive, were later acquired by the company in 2017.
The company’s financial struggles come after Mr Green and his fiancée Matilda Rice – whom he met on The Bachelor NZ in 2015 – said they cannot afford to purchase a house in New Zealand.
The couple would like to own their own home in Auckland City, but Rice told Next magazine last month their joint incomes aren’t enough to buy an Auckland property.