- We Continued toExpand the DehydraTECH Licensee Eco-System, As Leading Multi-StateOperator MariMed Inc. Launched New DehydraTECH-Powered Products inQ2
- DehydraTECHLicensee 1906 Launched an Exciting New Direct-To-Consumer ProductLine, Produced Using DehydraTECH, Across A Majority of US StatesDuring Q2, Adding to Their Existing Product Lines Already Sold inLicensed Dispensaries
- We Continued toDrive Marketplace Growth on Vin(Zero) Alcohol-Free Wine, IncreasingShipments to Retailers by 11% in Q2 vs. Year Ago and Adding theLargest Grocery Retailer in Western Canada – Save-On-Foods – to OurBase of Vin(Zero) Customers
FINANCIAL HIGHLIGHTS FOR Q2 FY 2024AND THE SIX MONTHS ENDED DECEMBER 31, 2023
- We Delivered theSecond-Highest Quarterly Gross Profit in Company History in Q2,Topping $500K For the Second Time
- We Narrowed theNet Loss for the Six-Month Period by 23% vs. Same Period YearAgo
Toronto, ON. – TheNewswire – March 1, 2024 — Hill Incorporated,formerly Hill Street Beverage Company Inc. ( TSXV:HILL ) ( OTC:HSEEF )(” Hill ” or the ” Company “), is pleased to announce that ithas released its financial results for the three- and six-monthperiods ended December 31, 2023 (“ Q2 ”), which can befound at www.sedarplus.com . Theprogressive bioscience implementation company is dedicated to buildingpathways to better and healthier living by leveraging deep CPGexpertise to commercialize leading-edge technologies, craftingsuperior cannabis solutions and non-alcoholic beverage productsglobally. The financial information summarized in this press releaseis based on data from Q2 FY2024.
We Continued to Expand theDehydraTECH Licensee Eco-System, As Leading Multi-State OperatorMariMed Inc. Launched New DehydraTECH-Powered Products in Q2
Intensive R&D, product and commercial manufacturingdevelopment led to our November 16, 2023 announcement that leadingmulti-state operator MariMed will use the patented DehydraTECHbiodelivery technology to power the next generation of cannabisedibles sold under several of its award-winning brands.
MariMed has now rolled out improved DehydraTECH-poweredproducts in Massachusetts, Maryland, andDelaware, with Illinois planned to launch in early 2024 aswell. MariMed brands now powered byDehydraTECH include ‘ Vibations™ ’ all-natural,full-spectrum cannabis drink mix, which recently won first place inthe beverages category of the High Times CannabisCup in Massachusetts, ‘ K Fusion™ ’ chewable tablets, and ‘ InHouse TM ’ gummies. More information on MariMedbrands can be found at MariMedBrands .
We anticipate that this major new multi-state,multi-brand licensee will deliver strong incremental licensingrevenues in 2024 as their launches reach full scale and expand acrosstheir state footprint.
The addition of MariMed to our DehydraTECH licenseeecosystem represents continued expansion by Hill on the key factorsdriving the growth agenda of our DehydraTECH licensing business:
1) new licensees –increasing our base of active licensees and brands;
2) new states – newstate launches expanding the geographic coverage for active licenseesor brands;
3) new product form factors – innovation to expand the number of DehydraTECH-poweredconsumer product forms and types in market tofill consumer needs and occasions; and
4) deeper penetration of products acrossoperations – driving deeper penetration of thebreadth of product forms and brands across current and newstates.
The following chart shows the significant advances wehave made in the DehydraTECH licensing business, beginning from theDecember 2020 rights acquisition through December 2023 at the close ofQ2 FY 2024.
DehydraTECH Licensee 1906 Launched anExciting New Direct-To-Consumer Product Line, Produced UsingDehydraTECH, Across A Majority of US States During Q2, Adding to TheirExisting Product Lines Already Sold in Licensed Dispensaries
1906 also launched an exciting new direct-to-consumer(DTC) product line across a majority of US states, offeringhemp-derived Delta-9 THC micro-dose versions of their popular‘Drops’ products, which are also produced using DehydraTECH. This DTC launch expanded access of 1906 Drops varieties to a muchbroader footprint of consumers, adding DTC distribution acrossapproximately 36 states. This new initiative adds to the dispensaryavailability in several legal adult-use states of the higher dose,marijuana-derived delta-9 THC 1906 Drops. 1906 has announced thatthey will be streamlining the dispensary availability of the higherdose, marijuana-derived delta-9 THC 1906 Drops to Illinois,Massachusetts, Missouri, New Jersey, New York and Pennsylvania. Moreinformation on 1906’s products can be found at https://1906.shop/.
We Continued to Drive MarketplaceGrowth on Vin(Zero) Alcohol-Free Wine, Increasing Shipments toRetailers by 11% in Q2 vs. Year Ago and Adding the Largest GroceryRetailer in Western Canada – Save-On-Foods – to Our Base of Vin(Zero)Customers
As communicated, the new streamlined commercial modelon our alcohol-free business creates a new and different cadence tothe business, where dramatic quarter-to-quarter swings on therecognized revenues are planned based on inventory efficiencies. Therefore, the business must be looked at across longer time framesand through different operational lenses. As we adapt to the newcadence of supply shipments and recognized revenues, a key measure ofthe underlying business in this new model is our case depletions,which represents the shipment figures from our distributor toretailers. Our shipments from warehouses to retail customersincreased by a strong 11% during the quarter vs. year ago, showingstrength of support for the 2023 holiday period.
In addition, we secured a major new account during theperiod that added to the strong shipments to retail, addingSave-On-Foods to our customer base. Save-On-Foods is WesternCanada’s largest grocery retailer 1 , with a dynamic history dating back to 1915. TheirWholesale Division also services ChoiceMarkets , Quality Foods , Georgia Main , AG Foods , Buy-LowFoods & CalgaryCo-Op . In total, this placement provides newconsumer access to Vin(Zero) through approximately 165 Save-On-Foodsstores across British Columbia , Alberta , Saskatchewan , Manitoba and the YukonTerritory . We are excited about this newadditional business and its impact in 2024, on top of our strongexisting base of customers.
We Delivered the Second-HighestQuarterly Gross Profit in Company History, Topping $500K for theSecond Time Consolidated net revenue for Q2 was a very strong$982,773 – the third highest ever – and our Q2 gross profit of$537,218 was the second highest in history, trailing only the recordQ2 year ago. The year ago quarter had extraordinarily high revenuesfor the Company due to significant inventory building on thealcohol-free wine business for the first winter of the new businessmodel. Our subsequently improved forecasting and inventoryefficiency planning, as we’ve executed themodel, resulted in a less significant inventorybuild-up for this winter season; however, alcohol-free wine netrevenue in Q2 was still a very strong $671,201.
We Narrowed the Net Loss for theSix-Month Period by 23% vs. Same Period Year Ago
As reported, gross profit of $537,218 was the secondhighest level reached in company history, trailing only the recordyear ago Q2. Yet, on a consolidated basis, gross profit declined 30%for the six-month period vs. year ago that included the record Q2. As discussed, the variance is due to the changes in alcohol-freewine inventory buildup and resulting recognized revenue between thetwo years. Despite this decline in consolidated revenue and grossprofit for the six-month period, the significant cost reductionmeasures we have taken have resulted in the net loss for the periodimproving a full 23% vs. year ago, decreasing from $856,925 to$650,614.
For the Company’s full financial statements and acomprehensive Company update by way of its Management Discussion andAnalysis, please visit the Company’s profile at www.sedarplus.com .
Company Returns to OTC PinkMarkets
On or around March 1, 2024, the Company’s stock willreturn to the OTC Pink Market from the OTCQB Venture Market(“OTCQB”) where its shares are currently traded. In the pastyear since we listed on the OTCQB, we have observed that there isminimal trading volume on that marketplace of the Company’s commonshares. As a result, we believe that the value in maintaining itsOTCQB listing does not substantiate the cost. The ticker symbol willbe unchanged and investors will still be able to purchase Hill commonshares via its OTC Pink listing in the United States (under the symbol“HSEEF”) or under its TSX-V listing in Canada (under the symbol“HILL”).
About Hill Incorporated (TSXV: HILL)/ (OTCQB: HSEEF)
Hill Incorporated is a progressive bioscienceimplementation company that is dedicated to building pathways tobetter and healthier living by leveraging our deep CPG expertise tocommercialize leading-edge technologies to craft superior cannabissolutions and non-alcoholic beverage products globally. Our HillAvenue Cannabis business unit is pioneering the space where craftconsumer products meet bioscience by combining our deep CPGcommercialization expertise with our rights to use LexariaBioscience Corp’s ground-breaking DehydraTECH patentportfolio for product development, licensing and B2B and B2C salesof cannabis ingredients or products on a global scale. Our Hill StreetBeverages business unit represents theCompany’s legacy alcohol-free consumer beverage marketing anddistribution business.
For more information on our business activities visit www.hillincorporated.com , tolearn more about our DehydraTECH cannabis biodelivery technology, goto www.dehydratech-thc.com , orto check out Hill Street Beverage’s award-winning alcohol-free wineline-up and order product to be delivered straight to your home, go to www.hillstreetbeverages.com .
If you wish to sign up for the Hill Incorporatedmailing list, click HERE .
For more information, contact:
Craig Binkley, Chief Executive Officer
Email: craig@hillincorporated.com
Phone: 604-609-6154
FORWARD-LOOKING STATEMENTS
Statements in this press release may containforward-looking information. Any statements in this press release thatare not statements of historical fact may be deemed to beforward-looking statements. Forward-looking statements are oftenidentified by terms such as “may”, “should”, “would”,“anticipate”, “expects”, and similar expressions. The readeris cautioned that assumptions used in the preparation of anyforward-looking information may prove to be incorrect. Events orcircumstances, such as future availability of capital on favourableterms, may cause actual results to differ materially from thosepredicted, as a result of numerous known and unknown risks,uncertainties, and other factors, many of which are beyond the controlof the Company. The reader is cautioned not to place undue reliance onany forward-looking information. Such information, although consideredreasonable by management at the time of preparation, may prove to beincorrect and actual results may differ materially from thoseanticipated. Forward-looking statements contained in this pressrelease are expressly qualified by this cautionary statement. Theforward-looking statements contained in this press release are made asof the date of this press release. The Company does not undertake anyobligation to update publicly or to revise any of the includedforward-looking statements, whether as a result of new information,future events or otherwise, except as required by securitieslaw.
Neither TSXVenture Exchange nor its Regulation Services Provider (as that term isdefined in policies of the TSX Venture Exchange) acceptsresponsibility for the adequacy or accuracy of this release.
1 Source:Save-On-Foods
