Mr. Gary Latham reports
HIGH HAMPTON HOLDINGS CORP. REPORTS THE FOURTH QUARTER 2018 FINANCIAL RESULTS AND PROVIDES AN OPERATIONAL AND CORPORATE UPDATE
High Hampton Holdings Corp. has filed its consolidated audited financial statements for the year ended Aug. 31, 2018. The consolidated financial statements and management's discussion and analysis are available on SEDAR.
Quarter ended Aug. 31, 2018, highlights:
Liquidity remains strong with over $15-million in cash as at Aug. 31, 2018.
On June 7, 2018, the City of Coachella ratified the approval of a conditional use permit (CUP) for High Hampton Holdings' CoachellaGro operation to cultivate medicinal cannabis.
On June 21, 2018, the company acquired all the membership interests of 420 Realty. 420 Realty has multiple permits in Cudahy, Calif. (Greater Los Angeles Area), for a development agreement, including cannabis cultivation (processing only), distribution and a retail (non-store front) licence. High Hampton Holdings has applied for three additional licences to permit further cultivation, nursery and manufacturing.
On July 10, 2018, High Hampton Holdings successfully closed the acquisition of 8 Points Management LLC and Bravo Distro LLC.
- On July 16, 2018, High Hampton Holdings announced that it engaged leading global greenhouse design firm Aurora Larssen Projects Inc. for the design and support of its CoachellaGro cannabis cultivation facility. Aurora Larssen Projects is a wholly owned subsidiary of Aurora Cannabis Inc.
Subsequent to the quarter:
On Oct. 3, 2018, High Hampton Holdings announced that it secured seven megawatts of power for its CoachellaGro facility, pursuant to a will serve letter from the Imperial Irrigation District (IID), with a confirmation to accommodate the CoachellaGro cultivation facilities through an existing transmission line along Harrison Street, where the CoachellaGro operations are located.
- On Nov. 12, 2018, High Hampton Holdings completed the purchase of Mojave Jane with the issuance of 8,974,352 common shares of the company. Mojave Jane is a licensed manufacturer of premium cannabis extracts and concentrates for the California markets. Based in Coachella, Calif., and licensed for volatile and non-volatile manufacturing, Mojave Jane currently utilizes state-of-the-art carbon dioxide extraction technologies and proven distillation techniques to create products for both recreational and medical cannabis users.
In California, success in the cannabis business is built on the ability to produce quality products and brands that live within the state's complex regulatory environment as well as control distribution of those products throughout the state. High Hampton Holdings is proud of its progress made in the past year. In a very short period, High Hampton Holdings has grown to form a company with a licence to grow in Coachella to one with statewide distribution as well as unique and compelling brands.
Revenue will arrive in Q1 2019. Two of High Hampton Holdings' current brands, Cali-Gold and Mojave Jane, are well recognized for quality and have cleared the state's licensing hurdles and begun operations. Experienced teams are in place and all necessary equipment is already on hand or has been ordered. Both businesses will produce and ship products as well as deliver revenue in the first quarter of 2019 and show significant growth across the year.
Distribution is next for the company. Bravo, High Hampton Holdings' cornerstone distribution business, has made excellent progress toward operations as well. A 15,000-square-foot facility is under lease in western Sacramento. The appropriate applications have been submitted. The facility and the business expect to be licensed in early Q2 and operational in late Q2 2019. A proven team with a long history of success in the distribution is in place to navigate the complex distribution regulations, operate the business, and create and maintain market presence and demand. Bravo will, of course, distribute the full line of products from Mojave Jane and Cali-Gold.
Vertical integration across the portfolio has begun. High Hampton Holdings' facility in Cudahy, Calif., has met its milestones as the company closes the year. The conditional use permit has been received, along with the crucial development agreement, city permits, and state temporary licences to operate. Those licences allow High Hampton Holdings to build out the Cudahy facility and begin building out expanded manufacturing (Type 7), distribution, product production, and research-and-development-level cultivation to develop and refine specific cannabis strains.
The design and development of CoachellaGro continue. High Hampton Holdings' 11-acre property in Coachella, Calif., received its conditional use permit, allowing design to begin. Additionally, power has been committed to the property on a scale that matches the full buildout plan. Design and development of CoachellaGro are being carried out in a modular fashion to allow High Hampton Holdings to respond to the changing market dynamics for flower and biomass in California.
Fiscal 2019 will be an active and exciting year. In 2019, High Hampton Holdings will secure its complete supply chain from the plant to distillates and concentrates to edibles and flower-based products. Establishing High Hampton Holdings' brands and controlling the distribution of those brands to California's largest markets in the north and the south will provide touch from the plant to the consumer. This level of control and insight will allow High Hampton Holdings to thrive as the market evolves and keeps the company in good standing with respect to evolving regulations.
High Hampton Holdings' board and management are committed to operating a business with the highest standards of integrity, accountability and transparency. When complaints are made that contradict these standards, be assured that High Hampton Holdings takes them seriously and investigates them fully. With the public release of High Hampton Holdings' 2018 annual audited financial statements, the board of directors thought it was timely to address Paul Mann's press release dated Oct. 22, 2018. Mr. Mann's press release contains false statements; it is highly misleading and defamatory.
Upon receipt of the complainants materials, the board immediately instructed management to perform an internal review and report the findings. The review highlighted inaccuracies in the materials and failed to substantiate any of the opinions of the complainant. The internal review also showed a control environment in which governance and controls are functioning appropriately.
In the opinion of High Hampton Holdings' auditor, Manning Elliott LLP, the consolidated financial statements present fairly, in all material respects, the financial position of High Hampton Holdings as at Aug. 31, 2018, and Aug. 31, 2017, and its financial performance and cash flows for the years then ended, in accordance with international financial reporting standards, as issued by the International Accounting Standards Board.
Despite the affirming evidence that High Hampton Holdings do things right, the company's board understands, and is committed to, its fiduciary duties to act in the best interest of all shareholders. High Hampton Holdings believes this commitment is best expressed with the recruitment of seasoned independent directors. High Hampton Holdings' board has been active and aggressive on this initiative, with two new independent directors joining the board over the past six months. Board independence and recruitment will continue to be a top priority in 2019.
High Hampton Holdings' No. 1 priority continues to be executing on its operational excellence and compliancy knowledge to deliver strong results that drive long-term shareholder value. Creating a strong management team with an "earnings-matter" focus is a cornerstone to this value creation. With the recent addition of Gary Latham as chief executive officer and Tom Baird as chief operating officer to the management group, that focus has begun. The first quarter of 2019 will see High Hampton Holdings' initial revenues. Additional updates will be provided as High Hampton Holdings progresses through the year toward the desired outcomes of growth and financial sustainability in 2019.
About High Hampton Holdings Corp.
High Hampton Holdings is a cannabis sector investment company focused on opportunities in California. The company is striving to become the largest consolidator in the medicinal cannabis sector.
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