Member Info for BlackHopper

Operating costs



Notwithstanding this expansion of activities in the UK, the Board continues to identify further cost savings such that the overall operating costs of Zoetic remain in line with the expectations set in the trading update announced on 4 October 2019. Further details will be provided at the time of the announcement of the Company's interim financial results for the period to 30 September 2019, next month.



Commenting, Nick Tulloch, Chief Executive of Zoetic, said:



"The development of six new products in the UK has taken considerable effort from the team in both the UK and US. The primary target was to ensure that the cosmetic and beauty range was available for sale ahead of the Christmas period and I am delighted that we are on track for that. Furthermore, the impending launch of our first Chill-branded product in the UK is an important milestone. In conjunction with these product launches, we are upgrading and improving our sales and marketing capabilities in the UK and Europe and investors should expect to see several changes here in the coming months.



"In our US division, the popularity of our chew pouches is surpassing expectations. This has meant that we may need to address manufacturing capacity earlier than we expected, but it is paramount that we are able to meet demand and the team in the US are already well advanced in examining options in this regard. In the meantime, as we look forward to commencing sales of feminised seeds next year, our outdoor farming operations have produced a successful outcome and we are now positioned to manufacture products with our own source of CBD."





**ENDS**

In addition, the Company is in discussions with a further major distributor in relation to the chew pouches. These discussions are currently at the contract negotiation stage and, assuming a satisfactory conclusion, will provide the Company with another valuable outlet for its lead product.



In light of this potential high demand, Zoetic has reviewed its manufacturing capability. If both of these distributors proceed as expected then demand may exceed the Company's existing manufacturing capacity. To ensure there is no disruption to supply, management has started exploring solutions and these may include either outsourcing some manufacturing or expanding its in-house capacity.



As previously announced, the Company will be trialling larger pack sizes of its CBD smokables and the management's expectation is that a pack size of 10 has more traction with end customers. That makes the product more comparable with tobacco product sizes and takes the smokables out of the novelty category and into mainstream, and potentially repeat, use. Alongside this trial, Zoetic is introducing two new blends to its range of smokables - "Mintz" and "Calm" - both of which will also be available for sale in December. Mintz is a mint-flavoured blend focused on the menthol smokers market and Calm is a blend of herbs designed to have a relaxing effect.



Outdoor crop

Harvesting completed in October and the plants have now been dried. The dry weight yielded is less than expected, but this is more than offset by quality of the crop, being at the top end of expectations, such that the overall value of the crop is very satisfactory. Although the Company has made a small number of sales of the biomass (which is the dried but untreated plant), Zoetic plans to use the vast majority of its outdoor crop in its own product manufacturing. Biomass prices are relatively low at present and, as the Company expands its operations and requires more raw material, it is far more economic to process the biomass for the Chill and Zoetic brands. Whilst this means the Company will forgo some short-term revenue from biomass sales, the longer-term impact on margins should be very positive and it supports Zoetic's "seed to sale" strategy.



Feminised seeds

In anticipation of commencing sales of feminised hemp seeds next year, Zoetic has started developing framework arrangements with seed distributors in the United States and is now well positioned in this regard ahead of the growing season. The process of developing and curing the feminised seeds is taking marginally longer than anticipated and Zoetic now expects its first high quality feminised seeds to be ready at the beginning of 2020, having previously expected the seeds by the end of 2019. Notwithstanding this additional time, the Company remains on target to make its first sales ahead of the 2020 growing season and to reach maximum capacity at its indoor facility in DeBeque in the coming months.

Trading update



Zoetic, the London listed vertically integrated CBD and natural resources company, is pleased to provide the following update on its operations and current trading.



Highlights



· Six new CBD products to be launched in the UK ahead of Christmas

· Two new flavours for chew pouches to be launched in the US

· Two new blends introduced alongside larger pack sizes of Chill smokables

· Introduction of the Chill brand to the UK

· Further distribution discussions in the US

· Successful harvest of outdoor crop



United Kingdom



The Company is working towards launching six new CBD products for sale before the end of 2019, all of which are expected to be available for sale ahead of Christmas.



Cosmetics

The Company has been developing a range of cosmetics and beauty products, and its initial launch comprising a hand cream, night cream, facial serum and lip balm is expected to be available for sale in the first week of December. Assuming the success of these products, Zoetic plans to further develop this range, with further product launches planned during 2020.



Softgels

Also expected to be available for sale in the first week of December are softgels. Similar to the Company's oral tinctures, these are oral capsules which will be available in two strengths of 10mg and 30mg with each being sold in packs of 30 softgels. The softgels are suitable for vegans.



Gummies

During December, Zoetic plans to commence sales of CBD gummies. These edible sweets will also be available in two strengths of 10mg and 25mg and will be sold in four assorted flavours. Significantly, the gummies will be sold under the Company's "Chill" brand and this will be that brand's first introduction to the UK and Europe. The gummies are also suitable for vegans.



Massage oil

The Company's massage oil that has been on sale since October has been very popular and so the management team are exploring ways to broaden this range. New products are likely to be introduced in early 2020.



Marketing

In line with these new product launches, Zoetic is expanding and upgrading its marketing programme. This includes:

· Launch of an affiliate marketing programme (already live in the UK and with the US to follow)

· Upgrades to the UK customer website www.zoetic.uk.com (in progress)

· Attendance at UK/European trade shows during 2020



United States



Chill

Chew pouches have rapidly become the Company's best selling product by volume. At present, these are available in mint flavour, but Zoetic has been developing and testing other flavours with the expectation of adding two new flavours, vanilla and peach, to the range before the end of 2019.



Preparations for the trial with Mr. Checkout are complete and Chill products will shortly be available through certain of Mr. Checkout's distribution partners. Based on correspondence with

Guys !!!!

The 'foam frack' or water based frack was not in the Helium bearing formation. The water based frack was used in the Eagle formation of the Montana well to access natural gas.

The helium content is in the deeper, brine saturated, Muddy formation which must be in contact with some Uranium bearing rock to hold He. This idea is the opposite of our proposed method which was to rapidly pump OUT the brine, drop the pressure, allow bubbles to form and stimulate a gas phase at the top of the formation and hence access Methane/Helium that was.

Paul is now suggesting pumping gas IN (high pressure needed because the Muddy is deep and at high pressure) to for a gas pool...or 'bubble' into which the gas trapped under pressure in the Muddy brine can migrate and collect. Then you bleed that out in a controlled way.

Interesting news though. patent applied for etc. Here's why.

East Denver. Obviously valuable asset. $$$
Kansas. Valuable gas but have to get to market. Cheap to shut well off so no big liability. $
Montana. COST to shut off well and return land to former condition and clear up water pool. This was the project that would have costs associated with shutting it down. If it now has value and the well will be tested in another way then the whole deal changes.

Either we don't sell it.... or we get a lot more for it. Win Win scenario. Very good news as this was the 'liability' project in terms of cost.

Looking forward to sales and products news and first seed production news... anytime!

Quick note too. we have ANOTHER new poster as per last week's 'justincase'. Please report the hell out of these new trolls. The post stating all Robert Price's warrants will be excised is libellous. Nobody knows if they will or they won't. Just report these posts please. everyone.

Has the company made any false promises in September, October or November..?

Funny Chesh! So much for the past AI.... what about the future? Are you excited about seeds and sales? Do you like those new 10 smoke Chill packs and the sexy looking chews? Can you see Mr Checkout shifting a few of those, eh, via it's 150,000 shop owning customers... even a couple of thousand of them, even 1% of them stocking Chill and selling what... a hundred units a month... and introducing people to the brand, who then go onto the website and buy in bulk at discount but making a better profit to ZOE because it's a direct sale... are you excited??? Then they tell their friends... what's that you're smoking, can I try one....

Are you a 'Warrant-worrier' or a 'Sales-slayer'? Hmmm

C'mon, get excited because we know you are a big shareholder and have skin in the game. Get excited. Feel the turning of the tide. Smell the future on the breeze. 2020 is going to be GOOD.

Tight cash control. Great sales of product backed up by high-tech, high-end seed sales. New products in the UK and expanding web sales. Smiles. Cashflow, investment in new production equipment, more sales.... employees benefit from share option at 14 and 18p..... smell it, touch it, smoke it, chew it, swallow it ... after minute under the tounge and then rub it gently all over the missus... natch. No pinching. Smile.

Just had another look and the new products do look tremendous. I can see them going well on the till areas of many thousands of convenience stores via Mr Checkout. Nick did mention moving from a 4 pack to a 10 pack of smokes to get a way from the novelty aspect of the 4 pack and really offer a serious nicotine/tobacco free alternative smoke. Here they are.

Great looking packs too. Chews a handy way of getting the daily dose and well priced.

Lot of posts this morning. Lot of 'Warrant-worries' coming suspiciously from a new poster (funny that) who has just popped in and posted what...10 plus times... on the same issue... again and again. So yes, there are warrants. Their use will be a drag on the SP but they will not make Robert Price much cash unless the SP stays here or above after broker fees and taxes. And Zoe receives money on their excision.

What our new negative, not-a-shareholder (I assume!) friend fails to ever talk about in numeric terms are the cash earning potentials of all the business lines in development. And boy is there some POTENTIAL.

So if you bothered to read all this then as ever take your pick....are you a Warrant-worrier or a Revenue-rejoicer?

I heart that!!! Monday RNS anyone ...... lol

As mentioned in the mire below, courtesy of 'justincase', it has been 7 weeks since the turnaround RNS of October 4th stating we have a big new deal with Mr Checkout and a secure enough cash position for now.

Since then we have had a positive update in respect of an employee share scheme to reward success and we are listed on the OTC market in the US to make it easier for US investors to trade. They have not done so in any volume though....... yet!

We are 7 weeks closer to seeds sales but also during that time new products have been launched in the UK and more are about to be, websites in the UK and US have finally got to grips with online payment woes related to stupid CBD rules/nervousness. I'd expect we could be getting a first sniff of how the new sales strategy is coming along for actual Chill and Zoetic product sales..... I'd say it's a risky time for a trade.... and getting more risky by the day....

More like a time to buy... I'd say.

Are you going to be that lazy justincase? Are you a new version of an existing poster? Are we going to play copy and paste ping pong? Do you have a life??

· Revenue of £1.15 million in H1 2019 (H1 2018: £0.52 million)

· 67 stores in the US now stocking Zoetic and Chill products

· Distribution agreement signed with Mr. Checkout with an initial supply to 15 distributors across the US (Mr. Checkout manages 13 industry associations with over 150,000 independent retail members)

· Expansion of Zoetic UK product lines into cosmetics before the end of the year

· First feminised hemp seed production likely to before the end of 2019 with initial sales in the first quarter of 2020

· Outdoor harvest underway

· Cash balance of £1.0 million as at 30 September 2019

· Process to obtain refund of US$360,000 performance bonds underway - US$60,000 received to date and not less than US$140,000 expected by the end of 2019

· Discussions with several parties on sale of oil & gas assets

· Buy-back of 950,000 of the Company's ordinary shares from Diversion along with payment of $65,000 in cash by Diversion in part satisfaction of debt owed to the Company



Nick Tulloch, Chief Executive of Zoetic International, said:



"The first half of this financial year saw a number of significant developments for the Company. From a standing start, we have established a vertically integrated CBD business with sales on both sides of the Atlantic and growing relationships with significant distribution partners. Our focus in these past few months has been to establish these relationships. For the remainder of the year we can look forward to advancing sales with our partners.



"Moving into 2020, we also anticipate first sales of our feminised seeds. This has been a complex process, but early signs are that the team's efforts are bearing success. As we expand the techniques we have been developing, we have every reason to believe that we have the capability to become a trusted supplier of significant volumes of feminised seeds on a monthly basis.



"Following our decision to exit natural resources, we have worked diligently to identify how best to realise the value in this side of our business. We will not rush into any quick or ill-advised sale, but we will develop in the coming months a series of opportunities to realise cash from these assets and reinvest in enhancing our CBD business.



"In the meantime, we have reduced our overheads such that our current cash balance, refunded performance bonds and projected revenues from East Denver and our CBD operations are capable of supporting the Company.



"Zoetic International is a very different company to the one that started the year, culturally and operationally. The team have embraced the changes we have implemented, morale is high and we are all focused on delivering results for our shareholders. I look forward to providing further

(i) 50 per cent of the Options will vest at any time after the second anniversary of grant if the 30 day volume-weighted price of the Company's ordinary shares ("VWAP") is 14 pence or more per share;



(ii) a further 50 per cent of the Options will vest at any time after the second anniversary of grant if the 30 day VWAP is 18 pence or more per share, this part of the award will vest in full; and



(iii) if condition (ii) is not satisfied but, by the third anniversary of grant, the VWAP is between 14 pence and 18 pence per share, the remaining Options will vest on a pro-rated straight-line basis (or will otherwise lapse).



Once vested, the Options expire on the tenth anniversary of the date of grant if not exercised.

Shot yourself in the foot! Quotes:

'So far, Paterno has lost money on seeds that didn’t sprout and flower as promised. Some of the seeds were males even though he thought he was purchasing only the females that produce the cannabidiol, known as CBD, that he wants.'

So you need the right seeds, not any old rubbish, and you need the right plant strain, with the right CBD/THC ratio and good growth characteristics! Exactly what our Trevor and Antonio are all about. So maybe now you understand why we pulled back on the outdoor crop expansion too and are sticking with 16 acres for 40,000 of our own plants to make our own organic CBD that we know has low impurity levels.

Thus concentrating on high quality seeds and high margin product sales IS the way to go. Nick Tulloch is not stupid, or rash. He is choosing the right path and progressing carefully and responsibly to some exciting looking profit numbers.

Hence those 14p and 18p option for starters.

Read it all and factor in all the AMATEUR growers who will not plant Hemp again next year having had a bad experience and leave this valuable space for the dedicated, professional growers and outfits such as Zoetic.

article here:

https://hempindustrydaily.com/chart-cbd-retail-landscape-is-rapidly-evolving/

imagine how many convenience stores Mr Checkout can get Chill smokes and chews into..... don't be surprised when you see Zoetic named in a future Hemp Industry editorial.... this is why it could be such a big deal...

this was in 2019... just after the US Farm Bill kicked off the CBD industry big time.

Now with demand for CBD expected to outstrip supply and high quality feminized high CBD low THC seeds in short supply in 2019, do you think out carefully bred, tested, feminised hemp seed is going to struglle to find a buyer??

If so, try reading this again: https://hempindustrydaily.com/shortage-of-cbd-seeds-clones-will-leave-some-farmers-out-of-hemp-game-this-year/

You need a lot more than a shed and some soil .... BH

Just while you are all having fun down below, as our first set of 1.25 million seeds come to fruition it is worth bearing in mind a couple of things.

Having paid a significant amount to buy feminised, organic, High CBD Low THC hemp seeds, a grower that buys from us could in theory try to use some of their own seeds the following year. However, we Zoetic would own the Plant Variety Rights to the plants if they are our own cross breed. See
https://en.wikipedia.org/wiki/Plant_Variety_Protection_Act_of_1970

But worse than that, those seeds would not be 'feminized' if grown in the open air. They would be contaminated with male pollen from other crops and the seeds could contain a significant number of valueless male plants. Why take the risk if you are going to the expense of growing your crop all year. Our indoor facility excludes male pollen allowing us to prepare feminized seeds.

Also, if you have had a bumper crop using premium ZOE seeds, are you going to go elsewhere the following year? Really??

Should be news very soon on Seeds, Sales and sexy new products. ATB BH

a new thread... the other one was getting long. I just read it an it was enjoyable and it involved AI87 questioning someone's integrity! Oh my.

If a shareholders emails or chooses to converse with our CEO and receives generalised positive statements about progress along the lines of "I am happy with progress.." or "things are going well..." or "we should have news soon.." then that is NOT inside information.

Just to make that very clear. AI, I'm sure if you bother to email Nick you questions in a polite form he will answer them for you as best he can when he can.

I do so hope our top end product will soon be gracing the shelves of some top-end outlets. This will make it harder to employ sarcasm.

I wonder when the next products / seeds / Mr Checkout etc RNS will land? Good luck guessing...

Those prices are very impressive Joy, no wonder we are going for seeds and branded product. High margin sectors at either end of the CBD value chain!

It is now well over a month since Zoetic posted images of their first bay of indoor plants in an advanced stage of growth.

https://www.linkedin.com/company/highlands-natural-resources-plc/

These plants are to be grown to seed and looking at the flowering stage they were in back then, I'd like to suggest they have done just that. The indoor facility has capacity to grow 10,000 plants but is being split into 4 'bays' with 2,500 plants per bay. A plant can produce 500 seeds each, so each bay could produce 1.25 million seeds and Zoetic aim to harvest 1 bay per month.

When it comes to hemp seed, the value lies in providing growers with feminized seeds that will grow female hemp plants ( Hemp has separate male and female plants ) because it is the bulky flowers of the female plant that contain the most cannabidiol or CBD. The plants at the indoor facility have been carefully cloned and prepared by Antonio Russo and Trevor Taylor who both have long experience growing the cannabis family of plants and who have cross-bred their plants to be high in CBD but low in THC, the psychoactive component in marijuana. After careful plant strain preparation, the team at the indoor facility use the closed environment there to exclude any male pollen in the air around the facility with the aim to make sure the female plants produce only female seeds. This is never 100% the case, but one of the key updates you should be looking for in the coming days and weeks is confirmation of the first successful harvest of feminised seed from the De Beque indoor facility.

Bear in mind that high quality, organic, feminised hemp seed can retail for $1-1.40 per seed. Zoetic will most likely use a seed broker to sell the significant quantities of seed it is in the process of producing so the company will probably receive less than this but 60-80c per seed is a reasonable expectation.

If we harvest a million seeds by the end of November and do the same end of Dec, Jan, Feb, Mar and April, then that is 6 or perhaps 7 million seeds! The revenue from these seeds will start coming in in Q1 2020 and overlap into the companies new financial year commencing 01 April 2020. Clearly product sale revenue from Chill and Zoetic sales, via stores, websites and Mr Checkout will be adding to the company bank balance during this time.....

I am looking forward to the next updates from the company. I am aware new products are in the pipeline but a good update from Mr Checkout would be exciting and a seed harvest RNS could land anytime judging by those LinkedIn photos. Exciting! BH

Indeed Joy, but a better example would be olive oil. Is is it all the same and is it all the same price and quality?? Hmmm

Well I just thought I would give him the chance to say something... but it appears he has nothing to say at all. Just a tired old windbag. I shall ignore him from now on.