On July 3, Nutritional High International Inc. (SPLIF) published a press release boasting Q3 revenues of $2,680,444 CAD, an increase of 408% over Q3 2017. That figure, however, differs from the Q3 financial statements Nutritional High filed with SEDAR. Nutritional High’s formal financial statements show lower 2018 Q3 earnings and the discrepancy remains unaccounted for. Nutritional High did not respond to a request for comment.
Nutritional High is a Toronto-based company that distributes edibles, concentrates, and oils. Nutritional High both develops its own products under its FLÏ flagship brand and acquires other brands for distribution and development. On July 18, Nutritional High announced a Letter of Intent to acquire a 51% interest in Bright Green Lights LLC (d/b/a J:MEDS), which produces cannabis-infused lozenges and mints.
In March, Nutritional High acquired Calyx Brands Inc., a California-based distributor, for $3,433,784 CAD. In Q3, Calyx Brands posted sales $1,674,269 CAD, accounting for the majority of Nutritional High’s Q3 2018 revenue. This number is not misstated in Nutritional High’s July 3 press release.
Nutritional High’s Q3 financial statements, though, do not show top-line revenue of $2,680,444 CAD. It’s unclear how the company arrived at this figure. In addition to the sales by Calyx Brands, Nutritional High reported earnings of $585,156 CAD from various asset holdings. Incorporating these earnings brings Nutritional High revenue total to $2,257,425 CAD, still short of their $2,680,444 figure.
Nutritional High reported 408% year-over-year growth by pointing to their Q3 2017 revenues of $527,227 CAD. This was income from asset holdings—specifically, interest on a loan to Palo Verde LLC and rent from real estate holdings. However, Nutritional High’s gross profits show more modest growth. In Q3 2017, Nutritional High’s revenue was entirely profit. But, in Q3 2018, income from their asset holdings was down and Calyx Brands contributed $1,346,722 CAD in COGS. Nutritional High’s gross profits were only $693,821 CAD.
Nutritional High “has been incurring operating losses and cash flow deficits since its inception,” according to their financial statements. In Q3 2018, they reported a net loss of $2,397,163 CAD—roughly the same as in Q3 2017. Nutritional High raised $8 million CAD in Q3 2018 and has $19,227,881 CAD in assets. With a solid amount of cash under its belt, it’s unclear why these numbers don’t add up and why the company didn’t respond for a request for clarity.