TORONTO, March 1, 2021 /CNW/ - 48North Cannabis Corp.
("48North" or the "Company") (TSXV: NRTH), a vertically integrated
Licensed Producer focused on manufacturing high-quality cannabis
products, building progressive and thought-provoking brands, and
low-cost cultivation, has released its financial and operating
results for the second quarter ended December 31, 2020. The Company's financial
statements and related management discussion and analysis for the
period are available on the Company's SEDAR profile at
www.sedar.com and on the Company's website at
www.48nrth.com/investors.
Financial and Operating Highlights for Fiscal Q2 2021
- Quarterly revenue of $7.6
million, representing a 346 per cent year-over-year increase
over second quarter 2020 revenues of $1.7
million and a 11.7 per cent increase over first quarter 2021
revenues of $6.8 million.
- The Company improved its cash use in operating activities by 46
per cent from $5.7 million in Q1 2021
to $3.1 million in Q2 2021. Having
made early investments in a state-of-the-art manufacturing,
processing, and packaging facility, Good:House, 48North expects to
continue to improve its cash use. This reduced cash burn
well-positions the Company for sustainable growth and puts 48North
on a clear trajectory to near-term profitability.
- Adjusted EBITDA1 for the quarter was $(2.9) million compared to $(4.7) million in Q2 2020, an improvement of 38.3
per cent.
- At the end of Q2, 48North had $4.1
million in cash and cash equivalents.
- 48North closed its private placement offering with Cormark
Securities Inc. ("Cormark"), to offer for sale 22,767,000 units of
the Company at a price of $0.15 per
unit for aggregate gross proceeds of $3,415,050. Cormark exercised its over-allotment
option with respect to 2,767,000 Units for additional gross
proceeds of $415,050.
- In addition, the Company announced that it had entered into a
term loan with a senior secured lender for gross proceeds of
$3.25 million.
- 48North announced that Health Canada had granted the Company
the required license for its state-of-the-art drying facility at
Good:Farm and completed the Company's second annual harvest
successfully.
- The Company launched Latitude, a brand with products
ranging from sexual wellness, to beauty and beyond. Since
launching, the brand has launched a number of innovative products,
all in high-demand from both retailers and consumers.
- Looking ahead, 48North expects to redouble its commitment to
high-quality products that delight the consumer as strengthened
production and manufacturing capabilities continue to support
revenue increases.
1 Adjusted EBITDA is
a Non-IFRS financial measures. Refer to the Non-IFRS Measures
section in the MD&A for the definition.
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"48North's Q2 Fiscal 2021 results provide us with another strong
demonstration that our strategy is working. The Company was
successful in driving an increase in revenue while dramatically
decreasing its cash burn. Looking ahead, there are additional
efficiencies to leverage and significant organic growth
opportunities to be capitalized upon, including increasing the
reach of the Company's newest brands Trail Mix and Latitude,
introducing new product formats, and maximizing retail
penetration," said Charles Vennat,
CEO of 48North.
"As a brand-led, consumer obsessed cannabis producer, 48North
has never lost sight of the big picture. Our strategy of putting
consumers first, working hand in glove with wholesalers and
retailers to commercialize our products, and investing in a leading
supply chain that is flexible to evolving market conditions has
positioned us for continued success," continue Charles.
"The plan is simple: drive revenue for our products and
significantly lower fixed costs. We expect our focus on increased
margins, stronger cash flows, and shortening our cash conversion
cycle to generate lasting shareholder value. We continue to expand
our product pipeline with well-defined and trusted brands, and we
are staying on our path to profitability by doing what we do best:
bringing flower to the people," finished Charles.
Selected Financial Information
All amounts are expressed in thousands of Canadian dollars
unless where indicated
|
|
|
|
3-months ended
December 31, 2020
|
6-months ended
December 31, 2020
|
Revenue
|
7,607
|
14,420
|
Net (loss)
income
|
(7,149)
|
(11,017)
|
Basic and diluted
(loss) earnings per share –
cents
|
(0.037)
|
(0.060)
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Total
assets
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58,042
|
58,806
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Total
liabilities
|
15,098
|
15,862
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Cash and cash
equivalents
|
4,053
|
4,053
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First Quarter Financial Statements
The Company announces that concurrent with the filing of the
second quarter 2021 condensed interim financial statements,
the condensed interim financial statements for the three-months
ended September 30, 2020 have been
re-filed. The Company determined that the gross amount of certain
revenues were recognized rather than the net amount. As a result,
the Company has reduced net revenues by $690,017 and increased accounts payable and
accrued liabilities by the same amount. The Company believes that
these changes do not impact the Company's operations or financial
position.
Second Quarter 2021 Results Conference Call
March 2, 2021 at 8:30 AM (ET)
Dial-in number: 1-888-231-8191
The conference ID is 9567686 and you will be prompted to provide
your name and company.
About 48North
48North Cannabis Corp. (TSXV: NRTH) is a vertically integrated
cannabis company focused on manufacturing high-quality products,
building progressive and thought-provoking brands, and low-cost
cultivation. 48North is developing formulations and manufacturing
capabilities for its own proprietary products, as well as
positioning itself to contract manufacture similar products for
third parties. 48North operates Good:Farm, a 100-acre organic
cannabis farm which produces organically grown cannabis, securing a
significant first-mover advantage in the production of low-cost,
next-generation, extract-based cannabis products. In addition,
48North operates two indoor-licensed cannabis production sites in
Ontario. 48North cultivates unique
genetics at its wholly owned subsidiary, DelShen Therapeutics Corp.
("DelShen") and processes cannabis and manufactures next-generation
cannabis products at Good & Green Corp. ("Good & Green"),
both Licensed Producers under the Cannabis Act.
DISCLAIMER & READER ADVISORY
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release. Certain statements contained in this press release
constitute forward-looking information. These statements relate to
future events or future performance. The use of any of the words
"could," "intend," "expect," "believe," "will," "projected,"
"estimated" and similar expressions and statements relating to
matters that are not historical facts are intended to identify
forward-looking information and are based on the parties' current
beliefs or assumptions as to the outcome and timing of such future
events. Actual future results may differ materially. Please refer
to the Company's SEDAR filings for further details concerning the
risks associated with the Company's business. The forward-looking
information contained in this release is made as of the date hereof
and the parties are not obligated to update or revise any
forward-looking information, whether as a result of new
information, future events or otherwise, except as required by
applicable securities laws. Because of the risks, uncertainties and
assumptions contained herein, investors should not place undue
reliance on forward-looking information. The foregoing statements
expressly qualify any forward-looking information contained herein.
Public health crises, including the ongoing novel coronavirus
(COVID-19) pandemic, could have significant economic and
geopolitical impacts that may adversely affect the Company's
business, financial condition and/or results of operations.
SOURCE 48North Cannabis Corp.