Nutritional High Cuts Green Therapeutics Purchase Price in Half; Green Therapeutics to Divest Non-Core Assets
TORONTO, May 21, 2019 (GLOBE NEWSWIRE) -- Nutritional High International Inc. ("Nutritional High" or the "Company") (CSE: EAT, OTCQB: SPLIF, FRANKFURT: 2NU) is pleased to announce it has entered into an agreement (the “Amending Agreement”) amending certain terms in its membership interest purchase agreement (“MIPA”) between the Company and Nevada-based Green Therapeutics, LLC (“GT”) (as previously announced October 1, 2018).
The MIPA has been amended to exclude certain assets and accompanying intellectual property which were not core to Nutritional Highs’ manufacturing and distribution focused business model, reducing by 50% the purchase price for its interest in GT. At closing, GT will hold its currently operating grow and manufacturing licenses, as well as a dispensary and distribution license authorizations recently awarded. Closing is pending approval by Nevada State and municipal authorities, which approvals are expected in due course.
We are very pleased to have negotiated this spin-out of non-core assets, which primarily relate to flower cultivation
commented CEO Jim Frazier.
By facilitating a sale of these assets, we continue our focus on manufacturing and distribution, and limit exposure to growing of cannabis flower, a sector which we believe will continue to be commoditized. This development will allow us to focus our efforts on accelerating our planned rollout of Nutritional High’s edible and extract products in Nevada in the coming months, and launch of distribution operations in Nevada
Pursuant to the Amending Agreement, the purchase price to acquire a 75% membership interest in GT has been reduced from USD $18 million to USD $9 million, allowing GT to divest one of its two grow licenses and one of its two manufacturing licenses to Australis Capital Inc., along with certain non-core brands marketed by GT in Nevada. Also excluded is the planned purchase of a parcel of land in North Las Vegas which had been intended for cannabis cultivation. The USD $9 million purchase price will be paid as follows:
- USD $3 million invested in the GT business for expansion, advanced over 18 months;
- Issuance of a number of common shares of Nutritional High to the founding members of GT equal to USD $4 million. The common shares will be issued at a price equal to the lesser of (a) USD $0.27 per common share; or (b) the 20-day volume weighted average price (“VWAP”) of Nutritional High shares on the Canadian Securities Exchange, converted into USD on the day that is three business days prior to the closing date;
- Issuance of secured convertible promissory notes (the “Notes”) to the founding members of GT for an aggregate principal amount of USD $2mm. The first USD $1mm of the Notes shall have a maturity date of one year from the date of issuance, and the remaining USD $1mm shall mature two years from the date of issuance. The Notes will be convertible into common shares of Nutritional High at a price that is the lesser of: (a) USD$0.27 per Nutritional High share, or (b) the 20-day VWAP price of NHI on the Canadian Securities Exchange, converted into USD on the day that is three (3) business days prior to the closing date.
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. 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 and Instagram or visit www.nutritionalhigh.com.
For further information, please contact:
Co-Chairman of the Board
Nutritional High International Inc.
Director, Investor Relations
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.