Nutritional High International Inc. (the “Company” or “Nutritional High”) (CSE:EAT, OTCQB:SPLIF, FRANKFURT:2NU) is pleased to provide an update on its operations in California. The Company owns assets in multiple verticals in the California value chain including extraction through its subsidiary, Pasa Verde, LLC which operates its FLI NorCal production facility, and distribution through its subsidiary, Calyx Brands (“Calyx”).
The Company is pleased to announce that Calyx has grown rapidly under Nutritional High’s leadership. Calyx has generated over USD $7.4 million in top line revenue and incurred approximately USD $6.1 million cost of sales in the six and a half months (March 15th, 2018, through September 30th, 2018) since it was acquired by the Company (see press release dated March 16th, 2018). In addition, Calyx services over 450 dispensaries covering the entire State. Company management is investing heavily in expanding distribution infrastructure to maximize efficiencies and its reach across California in the near term.
“As compared to previously disclosed revenue metrics from some of our competitors, these sales metrics place Calyx among the largest distributors in the California cannabis market,” commented Dakota Sullivan, CEO of Calyx. “We are very encouraged by the sales growth Calyx has been able to drive since being acquired by Nutritional High and we look forward to building on this momentum. The California market presents a massive opportunity for us and we will continue to execute on our strategy of providing innovative value-added products and superior service across the state to drive further market share.”
The top line revenues for Calyx reported here are not an indication of profitability, or the sustainability of its revenues. The cost of sales disclosed above excludes the overhead, interest, depreciation and tax. Calyx financial results will be reported in a more fulsome manner as part of Nutritional High’s financial statement reporting, the next report due being for its year ended July 31, 2018.
Jim Frazier, CEO of Nutritional High, commented: “We are proud of the growth of Calyx over this short time. The Calyx team has done a tremendous job of increasing market share in a rapidly changing California market. While others are losing ground and struggling to gain traction, Calyx has grown exponentially.”
“As we now commence production in the FLI NorCal facility, we look forward to leveraging the strong distribution channels built by Calyx to roll out new products in underserviced market segments,” Mr. Frazier added. “Our recently announced addition of FLI Mini-Mints, FLI High Terpine Vape Cartridges and Oil Syringes and FLI Select (high THC) Vape Cartridges and Oil Syringes are all examples of products being positioned for underserved market niches identified by Calyx management.”
Calyx Acquisition Payment
Further to the terms of the acquisition of Calyx, the Company was required to make a residual payment, subject to a working capital adjustment. The Company and Calyx entered into an amending agreement whereby certain Calyx shareholders elected to convert a portion or all of their final payment to shares of the Company, or elected to take deferred payments, in exchange for the Nutritional High foregoing the working capital adjustment. In this regard, the Company has paid the following amounts to Calyx shareholders (all figures in USD):
- $550,657 in cash;
- 486,500 common shares in the Company.
In addition, the Company is obligated to pay an additional $172,499 in cash on September 15th, 2019.
About Nutritional High International Inc.
Nutritional High is focused on developing, manufacturing and distributing products under recognized brands in the cannabis products industry, with a specific focus on edibles and oil extracts for medical and adult recreational use. The Company works exclusively with licensed facilities in jurisdictions where such activity is permitted and regulated by state law.
The Company follows a vertically integrated model with a fully developed strategy for acquisitions in extraction, production, sales, and distribution sectors of the cannabis industry. Nutritional High has brought its flagship FLÏ™ edibles and extracts product line from production to market through its wholly owned subsidiaries in California and Oregon, as well as Colorado where its FLÏ™ products are manufactured by a third-party licensed producer. In California, the Company distributes its products and products manufactured by other leading producers through its wholly owned distributor Calyx Brands Inc. The Company also owns a 50% interest in The Clinic Effingham (an Illinois dispensary), and is entering the Nevada, Washington State and Canadian markets in the near future.
For updates on the Company’s activities and highlights of the Company’s press releases and other media coverage, please follow Nutritional High on Facebook, Twitter, Instagram and Google+ or visit www.nutritionalhigh.com.
For further information, please contact:
Co-Chairman of the Board
Nutritional High International Inc.
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This news release may contain forward-looking statements and information based on current expectations. These statements should not be read as guarantees of future performance or results. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from those implied by such statements. The statements relate to potential market expansion and the use of the proceeds of the Offering. Risks that may have an impact on the ability for these events to be achieved include completion of due diligence, negotiation of definitive agreements and receipt of applicable approvals. Although such statements are based on management’s reasonable assumptions, there can be no assurance that such assumptions will prove to be correct. We assume no responsibility to update or revise them to reflect new events or circumstances.
The Company’s securities have not been registered under the U.S. Securities Act of 1933, as amended (the “U.S. Securities Act”), or applicable state securities laws, and may not be offered or sold to, or for the account or benefit of, persons in the United States or “U.S. Persons”, as such term is defined in Regulation S under the U.S. Securities Act, absent registration or an applicable exemption from such registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in the United States or any jurisdiction in which such offer, solicitation or sale would be unlawful.
Additionally, there are known and unknown risk factors which could cause the Company’s actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information contained herein. All forward-looking information herein is qualified in its entirety by this cautionary statement, and the Company disclaims any obligation to revise or update any such forward-looking information or to publicly announce the result of any revisions to any of the forward-looking information contained herein to reflect future results, events or developments, except as required by law. Some of the risks and other factors that could cause actual results to differ materially from those expressed in forward-looking information expressed in this press release include, but are not limited to: obtaining and maintaining regulatory approvals including acquiring and renewing U.S. state, local or other licenses, the uncertainty of existing protection from U.S. federal or other prosecution, regulatory or political change such as changes in applicable laws and regulations, including U.S. state-law legalization, market and general economic conditions of the cannabis sector or otherwise.