Good News...They had enough money to pay their salaries... Toronto, Ontario--(Newsfile Corp. - December 15, 2021) - High Fusion Inc. (CSE: FUZN) ("High Fusion" or the "Company") is pleased to announce its financial results for the fiscal year ended July 31, 2021.
Fiscal 2021 Financial Highlights
- For the year ended, July 31, 2021, revenues from Calyx Brands Inc. ("Calyx") have been categorized as discontinued operations and therefore the reported revenues for 2021 are negligible and only represent the business of Palo Verde LLC ("Palo Verde") which was acquired in March 2021. After closing of the acquisition of Palo Verde there was a change in management of this business and the equipment was recommissioned which caused reduced revenues during the date of acquisition to July 31, 2021.
- With the sale of Calyx, conversion of debentures and settlement of debt undertaken during the year ended July 31, 2021, total liabilities have been more than cut in half from the prior year end to $13.4 million.
- With the closing of the acquisition of the business of OutCo Labs Inc. ("OutCo") on August 31, 2021, the Company will begin to consolidate the financial results from this business starting in the first quarter ended October 31, 2021. Based on an audit of the business of OutCo included in the Company's business acquisition report filed on December 1, 2021, the business of OutCo had 2020 annual revenues of approximately US$8.2 million (US$8.6 million in 2019) and gross profit of US$2.5 million (US$2.3 million in 2019).
Business Highlights: Q4 and Subsequent Events
- On June 18, 2021, the Company announced that it entered into a definitive agreement to acquire the business of OutCo. On August 31, 2021, the Company acquired the business of OutCo through the purchase of substantially all the assets associated with the business including: control and management of all licensed entities; intellectual property; equipment and land. Based in San Diego California, the acquired business specializes in manufacturing and retailing premium quality cannabis flower and extract products under the OutCo name.
- Effective September 3, 2021, the Company, in accordance with the previously approved shareholder resolution, completed a consolidation of its common shares on a twenty (20) for one (1) basis. All references to share amounts and share prices herein are on a post-consolidation basis.
- On September 29, 2021, the Company obtained approval from its shareholders to establish a class of multiple voting shares, re-designate its common shares as subordinate voting shares and to change the name of the Company to "High Fusion Inc." The Company name change took effect November 15, 2021, and on November 16, 2021, the subordinate voting shares under the High Fusion name commenced trading on the Canadian Securities Exchange.
- On November 24, 2021, the Company announced that it received recreational licenses for both of its retail facilities located in Southern California.
Corporate Strategy
High Fusion 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.
The Company plans to adopt a focused approach to the production of branded product in the California market, which is expected to include acquisitions of, or partnerships with existing well-run businesses in the State. With the closing of the acquisition of the business of OutCo, the Company now controls a vertically integrated cannabis business through three licensed affiliates specializing in manufacturing and retailing premium quality cannabis flower and high margin extract products. These products include 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.
High Fusion's high-value product and brand manufacturing strategy has been successful in Colorado where the Company worked with Palo Verde, to grow the FL™ branded products. With the closing of the acquisition of Palo Verde, the Company expects to increase its investment in Colorado and expand the Palo Verde operations in the Colorado market.
Further, High Fusion plans to leverage its investment in Oregon through the relaunch of its manufacturing operations in the state and seek strategic partnerships and/or acquisitions to grow this business.
The Company has taken steps to broaden its focus to encompass research and development of non-cannabis, plant-based products through the acquisition of Neural Therapeutics in August 2020. Further to the press release November 19, 2021, the Company intends to spin-out Neural Therapeutics and raise capital for the business going forward.
"It has been a very exciting year for the Company as we took further steps in our restructuring and successfully closed a key acquisition of the business of OutCo. Within three months of closing the acquisition both licenced dispensaries gained approval for recreational sales," stated John Durfy, CEO of High Fusion. "As we move towards completing the clean-up and recapitalization of our balance sheet we are very excited about the growth opportunities in California, Colorado and Oregon."
Update on Management Cease Trade Order
As a result of a delay in the completion of the audit of the financial statements for the year ended July 31, 2021, on December 3, 2021, the Ontario Securities Commission (the "OSC") issued a Failure-to-File Cease Trade Order against the Company (the "FFCTO"). Under National Policy 11207 the filings of the financial statements, associated management's discussion and analysis and applicable certifications will automatically initiate a review process by the OSC, without any application by the Company. Following such review, the Company expects the FFCTO would be revoked by the OSC shortly thereafter. The Company confirms there has been no material change to the information relating to the Company's delay in filing the Audited Financial Statements since its news release on December 6, 2021, that has not been disclosed.
About High Fusion Inc.
High Fusion Inc. (formerly Nutritional High International Inc.) is focused on developing and manufacturing branded products in the cannabis industry with a specific focus on flower, pro-rolls, vapes, edibles and oil extracts for medical and adult recreational use. The Company operates and controls licenses in California, Colorado and Oregon.
High Fusion has manufacturing, retail and grow operations in California through its acquisition of the business of OutCo and owns and operates oil extraction and edible manufacturing facilities in Colorado and Oregon. The Company's brand portfolio includes its award winning FL™ edibles and vape product, along with a number of new brands including Red Octopus and Dubbi Brothers in addition to the OutCo and Thrive brands recently acquired.
Neural Therapeutics Inc. is a wholly-owned subsidiary of High Fusion focused on ethnobotanical drug-discovery and development company. Neural Therapeutics is focused on developing products and conducting research on the psychoactive cacti plants with the primary objective to find where the historical use in traditional medicine has proven to be effective and capitalize on the opportunities that can be applied in modern medical and natural health product markets.
For updates on the Company's activities and highlights of the Company's press releases and other media coverage, please visit www.high-fusion.com.
For further information, please contact:
High Fusion Inc.
Robert Wilson, Chief Financial Officer
416-666-4005
Email: rwilson@nutritionalhigh.com