– the Company is in breach of certain provisions (relating, inter alia, to the Company's rights to use certain BRK trademarks) of the distribution agreement entered into between Sprue and BRK Brands Europe Limited (“BRK”) dated 10 April 2010 which was extended by both parties for a further three years from 1 April 2015 (“Distribution Agreement”) and that this alleged breach severely damages BRK; and
– the breach is not curable and as such BRK is terminating the Distribution Agreement effective as of 22 March 2018 and that BRK shall not be purchasing any stocks of unsold products.
The Company will be carrying out an assessment of the value of the stocks of unsold products which BRK has stated, in the Termination for Breach Notice, it is not going to purchase. A further announcement will be made in due course.
The Company announced on 31 March 2017 that it had received 12 months' written notice to terminate the Distribution Agreement such that the Distribution Agreement would terminate on 31 March 2018. The Company also announced on 31 March 2017 that expiry of the 12 months' notice period on the Distribution Agreement would end Sprue's obligation to pay the fixed BRK annual distribution fee of £2.9m and its right to distribute BRK's products and brands in Europe, both with effect from 31 March 2018.
The Company is taking legal advice with regard to the Termination for Breach Notice and the allegations made by BRK and a further announcement will be made in due course.
On 30 January 2018, the Company announced that it expected to announce its audited final results for the year ended 31 December 2017 in late March 2018. In light of the Termination for Breach Notice, the audited final results for the year ended 31 December 2017 will not now be announced in late March 2018. A further announcement will be made in due course.