TORONTO, Oct. 16, 2018 (GLOBE NEWSWIRE) — 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.