Toronto, Ontario – February 1, 2021 – Nutritional High International Inc. (“Nutritional High” or the
“Company”) (CSE: EAT) is pleased to announce its financial results for the fiscal year ended July 31,
Business Highlights: Q4 and Subsequent Events
• As a result of the strategic review undertaken during the year, the Company implemented a number
of initiatives which reduced costs, eliminated unprofitable operations and restructured a number of
its obligations. The effect of such initiatives were realized during the fourth quarter of fiscal 2020
and subsequent to the Company’s July 31, 2020 year end.
• During the three months ended July 31, 2020 the effect of cost reductions were realized as operating
expenses reduced by 65% to $2.3 million.
• The most significant improvements to the balance sheet took place after the fiscal year end
including the following:
1. The elimination of over $8 million in debt through settlement of payables for common shares
and conversion of $7.6 million of convertible debentures;
2. The sale of Calyx Brands Inc. (“Calyx”) which eliminated $11.2 million in liabilities; and
3. Termination of the agreement to acquire Green Therapeutics (“GT”) and entering into an
agreement for the repayment of US$2.2 million in loans due to the Company upon closing of
the sale of GT to Australis Capital Inc. (“Australis”). If the sale of GT is completed, the
repayment of these loans will be in the form of Australis common shares at a valuation of
$0.20 per share. At the current market price for Australis shares, after recent note sales, the
value of the shares to be received upon repayment represents over $4 million.
• With the completion of the reorganization of the business and elimination of approximately $20
million in liabilities, management has focused on the growth of the business with the following
achievements which are expected to drive profitability and value creation for shareholders:
1. On August 14, 2020, the Company acquired all of the outstanding common shares of
Psychedelic Science Corp. (“PSC”) a company developing products and conducting research
in the emerging area of psychoactive therapy and wellness. The acquisition of PSC will allow
Nutritional High to broaden its focus to encompass other plant-based products in addition to
and in combination with cannabis.
2. On May 19, 2020, the Company announced that it has signed an agreement to purchase Palo
Verde LLC and on January 28, 2021 the Colorado Marijuana Enforcement Division (“MED”)
provided conditional approval for completion of this acquisition expected to close in March
3. On January 29, 2021 the Company announced that it has signed a binding letter agreement to
acquire California-based OutCo Labs Inc. (“OutCo”). OutCo specializes in manufacturing and
retailing premium quality cannabis flower and high margin extract products including award-
winning vape cartridges, tinctures, topicals, capsules and flower products which are sold under
in-house brands through wholly owned retail stores and third-party dispensary clients
throughout California. OutCo is an established operator in the California cannabis landscape
with annual run rate revenues of approximately USD $8.0 million.
Summary Income Statement
July 31, 2020
July 31, 2019
Total sales 12,338,061 23,608,410
Cost of goods sold (“COGS”) 9,550,928 18,127,382
Gross Profit 2,787,133 5,481,028
Operating Expenses 15,068,624 25,948,899
Other Items 8,972,883 6,203,200
Pre Tax Income (21,026,075) (26,552,125)
Net comprehensive Income (21,922,661) (27,358,172)
Loss per share (basic) (0.07) (0.09)
Loss per share (diluted) (0.07) (0.09)
Fiscal 2020 Financial Highlights
• Revenue during fiscal 2020 was $12.3 million compared with $23.6 million in 2019 reflecting the
reduction in distribution business at Calyx. As a result of the Company’s strategic review of the
business, Calyx was sold after the fiscal year end.
• Gross Profit during fiscal 2020 was $2.8 million or 22.5% of revenues which was in line with the
previous fiscal year at 23.2% which is reflective of the distribution business of Calyx.
• Operating costs declined by 42% from the prior year to $15 million as a result of reductions in
salaries and consulting fees, lower general and administrative expenses and lower inventory loss
• Expenses and charges included in Other Items were $9 million in 2020 compared with $6.2 million
the prior year. The higher level of Other Items was due to over $10 million in gains on sales or
settlements during fiscal 2019 which were not experienced in 2020. The Company recorded
impairments of intangibles and goodwill of $3.1 million during 2020 which represented a
significant reduction form $11.8 million in impairment charges during fiscal 2019.
• Total Assets as of July 31, 2020 was $6.7 million compared with $19.5 million at the corresponding
date of 2019. This reduction in total assets was due to lower receivables and inventory as a result
of the reduced level of business at Calyx. In addition, impairments of capital assets, intangibles
and goodwill contributed to the reduction of total assets.
• Total Liabilities increased to $28.6 million as at July 31, 2020, from $24.8 million during the same
period in 2019. The increase in liabilities was due to higher levels of payables and accrued
liabilities associated with Calyx as well as the addition of convertible debt incurred during the year.
Nutritional High is focused on identifying, acquiring and developing high-value products and brands for its
cannabis infused edibles and oil extracts product lines sold into the medical and adult recreational markets.
In early 2020 Nutritional High undertook a strategic review of its business with two distinct areas of focus.
As a first step, management undertook a thorough review of assets and investments including distribution
and manufacturing operations with a view to cost reductions and re-deployment of resources on the
segments of the business most likely to achieve profitability in the short term. Secondly, the Company
undertook an overall reassessment of its liabilities including an immediate reduction in costs, sale or closure
of unprofitable operations, settlement of payables, renegotiation of lease agreements as well as repricing,
extending and conversion of debt.
As part of the strategic review process, it was determined that due to the significant amount of working
capital required to sustain the Company’s distribution business, Calyx Brands would be divested. Further,
consistent with the brand focused manufacturing strategy, Nutritional High will be focusing on the
production of branded products, returning the Company to its roots. To this end, the Company announced
that it will complete its acquisition of Palo Verde and it has signed a binding agreement to acquire 100% of
Nutritional High’s redefined presence in it’s three primary states of California, Colorado and Oregon will
act as a foundation for potentially multiple bolt-on synergistic acquisitions in these markets over the
coming months. The Company’s strategy of maintaining financial discipline will be paramount as any
transaction will have to: 1. aide in operational efficiencies in manufacturing facilities through either
increasing under-utilized capacity or increasing capacity where needed 2. Provide additional branded
products where gaps have been identified. To ensure optimized execution, the Company plans to develop
centres of excellence for manufacturing, marketing, innovation and sales. Longer-term, Nutritional High
will selectively pursue acquisitions in states that have positive market and regulatory dynamics.
“It has been a difficult year for the Company as we undertook the reorganization of the business. These
steps, however were necessary to position the Company to be successful in its branded manufacturing
strategy” stated John Durfy, CEO of Nutritional High. “With a cleaner balance sheet, we are now able to
capitalize on our manufacturing strengths and focus on strategic opportunities such as OutCo to profitably
grow our business.”
Update on Management Cease Trade Order
As a result of a strategic review of Nutritional High undertaken over the past year, there was a change of
management and a corporate reorganization which resulted in a delay in the completion of the audit of the
financial statements for the year ended July 31, 2020. The late reporting of the annual statements has also
caused a delay in completion of the first quarter statement for the period ending October 31, 2020.
In anticipation of this delay, the Company applied for and was granted a Management Cease Trade Order
by the Ontario Securities Commission (“MCTO”). With the filing of the financial statements today, the
Company has met the deadline under the MCTO for the filing of its annual financial statement. The MCTO
also provided the Company until February 22, 2021 to file its first quarter statements which it expects to
About Nutritional High International Inc.
Nutritional High is focused on developing and manufacturing branded products in the cannabis industry,
with a specific focus on edibles and oil extracts for medical and adult recreational use. The Company works
exclusively in jurisdictions where such activity is permitted and regulated by state law. Nutritional High
has brought its flagship FLÏTM edibles and vape product lines from production to market in various markets
including Colorado where its award winning FLÏTM products are manufactured by Palo Verde, LLC. The
Company signed a purchase agreement for Palo Verde and on January 28, 2021, received conditional
regulatory approval to close the acquisition.
The Company also owns Psychedelic Science which is working with Rangsit University in Thailand to
consider the medical benefits of various psychedelic cacti.
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 and Instagram or visit
For further information, please contact:
Chief Financial Officer
Nutritional High International Inc.
Caution Regarding Forward-Looking Information:
NEITHER THE CANADIAN SECURITIES EXCHANGE NOR OTC MARKETS GROUP INC., NOR THEIR
REGULATIONS SERVICES PROVIDERS HAVE REVIEWED OR ACCEPT RESPONSIBILITY FOR THE
ADEQUACY OR ACCURACY OF THIS RELEASE.
This news release may contain forward-looking statements and information based on current expectations. These
statements include statements regarding: the acquisition of PSC enabling the Company to broaden its focus; the
completion of the acquisition of Palo Verde LLC; the completion of the acquisition of OutCo; and the potential for
additional synergistic acquisitions. 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. This forward-
looking information reflects the Company’s current beliefs and is based on information currently available to the
Company and on assumptions the Company believes are reasonable. These assumptions include, but are not limited
to: the ability of the Company to successfully satisfy the conditions to closing the acquisitions of Palo Verde and
OutCo,, the ability of the Company to successfully execute its business plans; legal changes relating to the cannabis
industry proceeding as anticipated; and the Company’s continued response and ability to navigate the COVID-19
pandemic being consistent with, or better than, its ability and response to date.
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. Such risks and other factors may include, but are not limited
to: general business, economic, competitive, political and social uncertainties; general capital market conditions and
market prices for securities; the actual results of the Company’s future operations; competition; changes in legislation
affecting the Company; 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; the timing and availability of external financing
on acceptable terms; lack of qualified, skilled labour or loss of key individuals; risks related to the COVID-19
pandemic including various recommendations, orders and measures of governmental authorities to try to limit the
pandemic, including travel restrictions, border closures, non-essential business closures, service disruptions,
quarantines, self-isolations, shelters-in-place and social distancing, disruptions to markets, economic activity,
financing, supply chains and sales channels, and a deterioration of general economic conditions including a possible
national or global recession; and a deterioration of financial markets that could limit the Company’s ability to obtain
A description of additional risk factors that may cause actual results to differ materially from forward-looking
information can be found in the Company’s disclosure documents on the SEDAR website at www.sedar.com. Although
the Company has attempted to identify important factors that could cause actual results to differ materially from those
contained in forward-looking information, there may be other factors that cause results not to be as anticipated,
estimated or intended. Accordingly, readers should not place undue reliance on forward-looking information. Readers
are cautioned that the foregoing list of factors is not exhaustive. Readers are further cautioned not to place undue
reliance on forward-looking information as there can be no assurance that the plans, intentions or expectations upon
which they are placed will occur. Such information, although considered reasonable by management at the time of
preparation, may prove to be incorrect and actual results may differ materially from those anticipated.
Forward-looking information contained in this press release is expressly qualified by this cautionary statement. The
forward-looking information contained in this press release represents the expectations of the Company as of the date
of this press release and, accordingly, are subject to change after such date. However, the Company expressly
disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new
information, future events or otherwise, except as expressly required by applicable securities law.