Nutritional high (CSE:TO EATOTCQB: SPLIF, FWB: 2NU) is pleased to provide an update on Calyx Brands Inc. (“Calyx”), Nutritional High’s wholly-owned subsidiary that operates a distribution business in California.
Financial and operational measures1
For the three months ended January 31, 2018, Calyx had revenue of approximately $5.7 million, representing an annualized revenue rate of approximately $22.7 million. For the same period, the gross margin was 19.5% and the Company’s total operating expenses were approximately $4.25 million.
As reported in the April 1, 2019 press release, for the 12 months ended January 31, 2018, Calyx’s revenue was approximately $17.2 million. Sales in the second half of the period increased 96% to $11.4 million from $5.8 million in the first half of the period. During the same period, the cost of sales increased from $5.1 million to $8.9 million, representing an improvement in gross margin percentage of nearly 10%.
Calyx continues to expand its distribution capability in the State of California and currently maintains distribution relationships with over 450 licensed dispensaries statewide. It is estimated that there were approximately 650 outlets in California in Q4 2018, compared to 450 in Q3 2018 and the overall market remains underpenetrated2.
Calyx’s curated distribution portfolio is made up of 13 market-leading brands, including FLÏ, Nutritional High’s flagship product.. The product offering includes, but is not limited to, edibles such as drinks, natural fruit bites, gummies and mints, as well as concentrates, blooms and pre-rolls.
Executive Quotes and Comments
“Maintaining and expanding dispensary relationships is critical to Nutritional High’s business in terms of growing sales and building intelligence.” commented Dakota Sullivan, CEO of Calyx. “The data we are able to gather from our footprint ensures that we are constantly at the forefront of industry trends and responding to changing consumer preferences by researching promising new brands and bringing them to the fore. attention of retailers.”
“Own the distribution pipeline and own the storage space. That’s our strategy,” commented Jim Frazier, CEO of Nutritional High. “To elaborate, through our ownership of the distribution pipeline, we effectively aim to control what products appear on the shelves without actually owning dispensaries and exposing the company to the risk of operating a brick-and-mortar retail operation. This strategy was evidenced by our exit from retail when we sold our remaining 50% stake in The Clinic Effingham in Illinois in October 2018. Our diversified approach allows us to take established brands to the next level. , as well as nurturing the lasting success of young emerging talent.
“Our revenue last quarter is approximately 7.2 times Calyx’s pre-acquisition revenue base,” added Adam Szweras, co-chairman of Nutritional High’s board of directors. “Since acquiring Calyx in March 2018, we have been able to rapidly accelerate revenue growth through the capital injection and joint management expertise of Nutritional High and Calyx. Based on Calyx’s current market access to more than 450 dispensaries in California, management believes Nutritional High’s footprint represents a dominant market position in the California distribution landscape relative to other market players. .
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 particular focus on edibles and oil extracts for medical and recreational use for adults. 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 the extraction, production, sales and distribution sectors of the cannabis industry. Nutritional High brought its flagship FLÏ edibles and extracts from production to market through its wholly-owned subsidiaries in California and Oregon, as well as in Colorado where its FLÏ the products are manufactured by a licensed third-party producer. In California, the Company distributes its products and products manufactured by other major producers through its wholly-owned distributor Calyx Brands Inc. and will soon enter markets in Nevada, Washington State and Canada.
For updates on Company activities and highlights of Company press releases and other media coverage, please follow Nutritional High on Facebook, TwitterInstagram and Google+ or visit www.nutritionalhigh.com.
For more information, please contact:
Co-Chairman of the Board
Nutritional High International Inc.
Director, Investor Relations
Nutritional High International Inc.
NEITHER THE CANADIAN SECURITY EXCHANGE NOR OTC MARKETS GROUP INC. NOR THEIR REGULATION SERVICE PROVIDERS HAVE REVIEWED NOR ACCEPT RESPONSIBILITY FOR THE SUITABILITY OR ACCURACY OF THIS RELEASE.
This press release may contain forward-looking statements and information based on current expectations. These statements should not be construed 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 differ materially from those implied by such statements. The statements relate to potential market expansion and the use of the proceeds of the Offering. Risks that could impact the ability to realize these events include the completion of due diligence, the negotiation of definitive agreements and the receipt of applicable approvals. Although these statements are based on management’s reasonable assumptions, there can be no assurance that these 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 US Securities Act of 1933, as amended (the “US 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 “US Persons”, as that term is defined in Regulation S of the US Securities Act, in the absence of registration or an applicable exemption to these registration requirements. This press release does not constitute an offer to sell or the solicitation of an offer to buy and there will be no sale of the securities in the United States or in any jurisdiction in which such offer, solicitation or sale would be unlawful. .
In addition, there are known and unknown risk factors that could cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information contained in the present. All forward-looking information contained herein is qualified in its entirety by this cautionary statement, and the Company undertakes no obligation to revise or update such forward-looking information or to publicly announce the outcome of any revision of any 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 the forward-looking information expressed in this press release include, but are not limited to: obtaining and maintaining regulatory approvals, including including the acquisition and renewal of state, local or other licenses, the uncertainty of existing protection from federal or other lawsuits in the United States, regulatory or policy changes such as changes in laws and applicable regulations, including legalization of U.S. state laws, market conditions and general economic conditions of the cannabis industry or otherwise.
1 Figures are in Canadian dollars (CAD) unless otherwise indicated.
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