Highlands, the London listed natural resources and vertically integrated CBD company, announces that Robert Price is leaving the Company in order to pursue other interests and accordingly has resigned as chairman and chief executive of Highlands.
Nick Tulloch, who joined as Finance Director earlier this year, has been appointed Chief Executive Officer and a new chairman will be sought in the coming weeks. Nick Tulloch has waived any increase in salary in respect of his new role.
During 2019, Highlands successfully established Zoetic and progress has been significant in recent months with planting of hemp indoors and outdoors, commencing a seed genetics operation as well as launching two brands with three websites and online and offline sales. With further opportunities planned, it has become clear over the summer that this is now the core business driver for the Company and the interests of Highlands and its shareholders are best served by becoming a pure CBD company.
Accordingly, in the coming months, it is the Company’s intention to carry out an orderly sale or closure of its natural resources business, thereby freeing management time and financial resources to concentrate on Zoetic. Robert Price has offered to assist in this process and, as part of his severance arrangements, the Company is negotiating with him in regard to a possible sale of some or all of the natural resources assets to him. Any agreement in respect of that possible sale will be announced in due course.
As part of a financial review into the Company’s operations, it has become clear that the natural resources business has several liabilities that will need to be satisfied, particularly taxes on production at its East Denver project and potential plugging and abandonment costs at its Montana operations (if it is determined that the project is not viable). The cashflow and the potential capital value of the East Denver project exceeds these liabilities but it is likely that the net future capital contribution to the Company from its natural resources portfolio may be limited in the absence of any potential upside from the earlier stage projects.
In recent weeks the Company has received a number of invoices for work done in its natural resources business, primarily by external consultants and legal advisers. Following the implementation of its new strategy, these costs will not be repeated. The Company has also increased inventories at Zoetic ahead of several significant presentations to potential customers. Should these meetings be successful, it is imperative that Zoetic is in a position to fulfil orders quickly. Consequently, the Board resolved to draw down in full of the $500,000 bank facility. This satisfies these temporarily higher costs whilst preserving the funds raised in the placing on 19 August for future expansion and ongoing operations. It is expected that any sale of the natural resources assets will generate sufficient surplus funds (after taking into account the liabilities above) to repay the bank facility.
Robert Price said:
“It has been a privilege to have worked with Highlands over the past four and a half years. I am proud to have developed the portfolio of natural resources projects and also to have been involved with the Company as it re-shaped its business and established itself as a vertically integrated CBD business. I wish the Company well for the future.”
Nick Tulloch, new Chief Executive Officer of Highlands, added:
“I have known Robert for over four years and, during that time, he has become a good friend and a supportive colleague. As the founder and leader of the Company since IPO, he has been instrumental in bringing the Company to where it is today and he leaves the Company with the opportunity to become a leading player in the rapidly developing CBD industry. All of us at Highlands wish him well in the future.”
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