HempFusion Wellness Inc. (TSX:CBD.U) (OTCQX:CBDHF) (FWB:8OO) (“HempFusion” or the “Company”), a leading health and wellness Company offering premium probiotic supplements and products containing CBD, is pleased to provide a corporate update and proforma revenue guidance including its two recently completed acquisitions, APCNA Holdings LLC (“Apothecanna”) and Sagely Enterprises Inc. (“Sagely Naturals”), (together the “Acquisitions”) for fiscal 2021 and 2022.
Based on a fiscal 2020 pro forma revenue basis, HempFusion (combined with the fiscal 2020 revenues of Apothecanna and Sagely Naturals) would have generated approximately USD$11.8 million in revenue. With the completion of the Acquisitions and inclusion of the pre-closing fiscal 2021 revenues of Apothecanna and Sagely Naturals, HempFusion expects to generate revenues of between USD$12.5 million and $13.5 million in fiscal 2021 and USD$20 million to $25 million in fiscal 2022 due in large part to the Company’s expansion plans over the next 18 months and beyond. The Company maintains a clean balance sheet with approximately USD$11.4 million cash as of the end of the Company’s second fiscal quarter.
HempFusion’s combined footprint includes the following:
With the recent closing of the Acquisitions, HempFusion now has significant distribution of market leading products into thousands of retailers globally, as well as the ability to roll out highly compliant, organic-certified ingestibles through multiple e-commerce and retail platforms. Upon the anticipated approval of ingestibles from major retailers, the Company expects to rapidly fill its newly expanded pipeline. Additionally, HempFusion plans to leverage the investment it has made in international distribution to bring a more robust offering to Europe and Asia, including expanding its already strong partnership with T-Mall.
“I am pleased to present revenue guidance for 2021 and 2022 to our investor community,” commented Dr. Jason Mitchell, the Company’s Chief Executive Officer. “With the Acquisitions closed, not only do we reach over 15,000 retail locations and sell products in eight countries, but we’re also targeting up to $30 million in revenue for 2022. Combining this with our regulatory preparedness for ingestible CBD, we believe that we are poised to be the outstanding leader in the CBD industry. With a current market capitalization under $40 million, we hope this provides investors with a strong sense of confidence in our Company and sets us apart from our competitors,” continued Mr. Mitchell.
HempFusion is a leading health and wellness CBD company utilizing the power of whole-food hemp nutrition. HempFusion distributes its family of brands, including HempFusion, Probulin Probiotics, Biome Research, and HF Labs, to approximately 4,000 retail locations across all 50 states of the United States and select international locations. Built on a foundation of regulatory compliance and human safety, HempFusion’s diverse product portfolio comprises 48 SKUs including tinctures, proprietary FDA Drug Listed Over-The-Counter (OTC) Topicals, Doctor/Practitioner Lines and more. With a strong focus on research and development, HempFusion has an additional 30 products under development. HempFusion is a board member of the US Hemp Roundtable, and HempFusion’s wholly-owned subsidiary, Probulin Probiotics, is one of the fastest-growing probiotics companies in the United States, according to SPINs reported data. HempFusion’s CBD products are based on a proprietary Whole Food Hemp Complex™ and are available in-store or by visiting HempFusion online at www.hempfusion.com or www.probulin.com.
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This news release contains forward-looking statements and forward-looking information within the meaning of Canadian securities legislation (collectively, “forward-looking statements“) that relate to HempFusion’s current expectations and views of future events. Any statements that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions or future events or performance (often, but not always, through the use of words or phrases such as “will likely result”, “are expected to”, “expects”, “will continue”, “is anticipated”, “anticipates”, “believes”, “estimated”, “intends”, “plans”, “forecast”, “projection”, “strategy”, “objective” and “outlook”) are not historical facts and may be forward-looking statements and may involve estimates, assumptions and uncertainties which could cause actual results or outcomes to differ materially from those expressed in such forward-looking statements. No assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this news release should not be unduly relied upon. These statements speak only as of the date of this news release. In particular and without limitation, this news release contains forward-looking statements relating to the Company’s anticipated distribution, product, geographic and sales expansion plans, DTC revenue growth, expansion of the Company’s global footprint, production relationships and related anticipated lack of service disruptions as operations scale, plans to provide a more robust offering to Europe and Asia, expansion of its relationship with T-Mall and the Company’s other plans, focus and objectives.
Forward-looking statements are based on a number of assumptions and are subject to a number of risks and uncertainties, many of which are beyond HempFusion’s control, which could cause actual results and events to differ materially from those that are disclosed in or implied by such forward-looking statements. Such risks and uncertainties include, but are not limited to, the impact and progression of the COVID-19 pandemic and other factors set forth under “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” in the annual information form of the Company dated March 31, 2021, and available under the Company’s profile on SEDAR at www.sedar.com. HempFusion undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by law. New factors emerge from time to time, and it is not possible for HempFusion to predict all of them or assess the impact of each such factor or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statement. Any forward-looking statements contained in this news release are expressly qualified in their entirety by this cautionary statement.
Future-Oriented Financial Information and Assumptions
This news release also contains future-oriented financial information and financial outlook information (collectively, “FOFI”) regarding the Company’s prospective revenue, which is subject to the same assumptions, risk factors, limitations and qualifications as set forth above. In addition, the Company’s management used numerous other assumptions to derive these financial projections. Certain key assumptions that underpin the Company’s revenue guidance are as follows; the Company will continue as a going concern and raise additional financing to fund its planned expansion plans; there will be no United States lockdowns or stay-at-home order issued due to a resurgence of COVID-19 pandemic for the remainder of 2021 and the entirety of 2022; none of the Company’s principal manufacturers will incur significant unplanned downtime; the Company will continue to expand its retail footprint to over 2,000 locations in fiscal 2021 on HempFusion and Probulin brands; the Company will successfully execute on its recently awarded and announced national grocery chain private label contract for 10 SKUs; the Company will, in fiscal 2021, successfully launch into the over-the-counter (OTC) analgesic category with at least 4 SKUs and launch ingestible for Sagely Naturals and Apothecanna (both of which have been topical products only historically); the Company will experience continued growth in direct-to-consumer (DTC) sales consistent with historic growth rates for its HempFusion and Probulin brands and expanded new growth on its Sagely and Apothecanna brands; e-commerce growth with Amazon and Tmall will continue consistent with current growth rates and factoring in the potential inclusion of CBD products; the Company will successfully expand its global footprint with further European Union expansions and new market expansion in Latin America, Saudi Arabia, Kuwait and Canada; there will be FDA regulatory clarity for expansion of ingestible into existing and new customers; the Company will successfully execute new innovation product launches, including annualized and structure function gummies, across all four brands; and the Company will continue its distribution expansion through all six sales channels, including its newly launched private label division. Other assumptions used by the Company’s management to derive these financial projections include, among other things: that the demand for the Company’s products will continue to significantly grow; that the past production capacity of the Company’s third party manufacturing facilities can be maintained or increased; that the Company will receive all necessary regulatory approvals for the production and sale of its news products; that there will be increased production capacity through implementation of new manufacturing facilities and new technology; that there will be an increase in number of products available for sale to retailers and consumers; that there will be an expansion in geographical areas by national retailers carrying the Company’s products; that there will be an expansion into new national and regional grocery retailers; that there will be an expansion into new e-commerce, home delivery, convenience, and healthy food channels; that there will not be interruptions on production of the Company’s products; that there will not be a recall of products due to unintended contamination or other adverse events relating to the Company’s products; that the Company will be able to obtain additional capital to meet the Company’s growing demand and satisfy the capital expenditure requirements needed to increase production and support sales activity; the Company will maintain its ability to successfully develop its products; the Company’s pricing targets will remain in place; the Company will maintain its ability to successfully deploy its products to retailers; the Company will be able to maintain performance and quality as projects advance and product volume increases; and the effect of the ongoing global COVID-19 public health emergency on the Company's operations, its employees and other stakeholders, including on customer demand, supply chain, and delivery schedule, will be mitigated for the remainder of fiscal 2021 and entirety of fiscal 2022.
FOFI was made as of the date of this news release and is provided for the purpose of describing anticipated sources, amounts and timing of revenue generation as it relates to this retailer, and is not an estimate of profitability or any other measure of financial performance. In particular, revenue estimates do not take into account the cost of such estimated revenue, including the cost of goods and the cost of sales. In addition, and for greater certainty, revenue estimates do not take into account the operating costs of the Company. The Company disclaims any intention or obligation to update or revise any FOFI contained in this news release, whether as a result of new information, future events or otherwise, unless required pursuant to applicable law. FOFI contained in this news release should not be used for purposes other than for which it is disclosed herein.
Neither the TSX nor its Regulation Services Provider (as that term is defined in the policies of the TSX) accepts responsibility for the adequacy or accuracy of this release.
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