HempFusion Wellness Inc (TSX:CBD.U, OTCQX:CBDHF) said it has sold the assets and operations of its probiotic business, principally supplements sold under the Probulin brand name, under an asset purchase agreement dated November 21, 2022, with Kadenwood Inc, a private Delaware corporation.
"Through this sale we have been able to reduce our debt and add operating cash, allowing the continued operation of our core CBD business,” the company said in a statement.
“We expect to use a portion of the proceeds to complete our financial audits and we are aiming to re-establish our listing qualifications in 2023," it added.
READ: HempFusion Wellness reports a rise in Q4 and fiscal 2021 revenue amid declining costs
Under the asset purchase agreement, the company received US$4 million in cash on closing from the purchaser and will receive another US$1 million in cash on 31 December 2022, subject to adjustment for any indemnification claims, plus a limited assumption of liabilities, subject to standard adjustments.
Cease trade order and AGM
Hempfusion Wellness also said it is continuing to make efforts to file its annual audited financial statements for the year ended December 31, 2021, its interim financial report for the periods ended March 31, 2022, and June 30, 2022, and the related management's discussion and analysis, and chief executive officer (CEO) and chief financial officer (CFO) certificates, together with its annual information form for the year, as soon as possible.
Subject to making the required filings, the company added, it now intends to hold its annual general meeting (AGM) of shareholders by March 15, 2023, at the latest.
However, it said there can be no assurances that the company will be able to file the required filings, remedy its filing default, hold its AGM and have the previously announced cease trade order lifted in a timely manner, or at all.
Hempfusion Wellness said it will continue to endeavour to issue regular news statements to keep the investing public apprised of the situation and the progress of its required filings.
One of a select few hemp-derived CBD companies that are today fully prepared to meet or exceed expected global guidance, Hempfusion Wellness is a health and wellness company whose family of premium consumer brands include Hempfusion, Sagely Naturals and Apothecanna.
Contact the author at jon.hopkins@proactiveinvestors.com