UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
Commission File Number:
(Exact Name of Registrant as Specified in Its Charter)
| (State or Other Jurisdiction of Incorporation) | (IRS Employer Identification No.) |
|
|
|
| (Address of Principal Executive Offices) | (Zip Code) |
| (Registrant’s Telephone Number, Including Area Code) | |
| (Former Name or Former Address, if Changed Since Last Report) | |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class | Trading Symbol(s) | Name of Each Exchange On Which Registered | ||
| Not applicable |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant
to Section 13(a) of the Exchange Act.
Item 2.02 Results of Operations and Financial Condition.
On November 15, 2021, Medicine Man Technologies, Inc. (the “Company”) issued a press release announcing results for its third quarter ended September 30, 2021 and projected outlook of certain items for the remainder of fiscal year 2021. A copy of the press release is attached as Exhibit 99.1, and the information contained therein is incorporated herein by reference.
The Company will host a conference call and webcast to discuss its results for its third quarter ended September 30, 2021 on November 15, 2021 at 4:30 pm Eastern Time.
This Current Report on Form 8-K and the press release attached hereto as Exhibit 99.1 are being furnished by the Company pursuant to Item 2.02. In accordance with General Instruction B.2 of Form 8-K, the information contained in this Current Report on Form 8-K, including Exhibit 99.1 shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section. In addition, this information shall not be deemed incorporated by reference into any of the Company’s filings with the Securities and Exchange Commission, except as shall be expressly set forth by specific reference in any such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| Exhibit No. | Description |
| 99.1 | Press Release dated November 15, 2021 |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
| 2 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| MEDICINE MAN TECHNOLOGIES, INC. | ||
| By: | /s/ Daniel R. Pabon | |
|
Date: November 15, 2021
|
Daniel R. Pabon General Counsel | |
| 3 |
Exhibit 99.1
| NEWS RELEASE | |
| For Immediate Release | OTCQX: SHWZ |
SCHWAZZE ANNOUNCES THIRD QUARTER RESULTS
Revenue Increases 328.4% to $31.8 Million Compared to $7.4 Million in Q3 2020
Adjusted EBITDA is $8.8 Million, 27.6% of Revenue
Executing an Aggressive Acquisition Plan
Revised Guidance
Annual Projected Revenue of Approximately $110 Million - $115 Million
Annual Projected Adjusted EBITDA $32 Million - $34 Million
Conference Call and Webcast Scheduled for Today – 4:30 pm ET
DENVER, CO – November 15, 2021 – Schwazze, (OTCQX:SHWZ) ("Schwazze" or the “Company"), announced financial results for its third quarter year ended September 30, 2021 (“Q3 2021”).
Financial Summary for Q3 2021:
| · | Revenues of $31.8 million grew 328.4% over Q3 2020 and 3.6% over Q2 2021 | |
| · | Gross Margin of $15.1 million was 441.3%, better than Q3 2020 and 103 bps over Q2 2021 | |
| · | Adjusted EBITDA of $8.8 million was 27.6% of revenue, compared to a loss of ($0.8) million in Q3 2020. | |
| · | Net Income was $1.0 million or $0.02 Diluted Earnings per share compared to a Net Loss in Q3 2020 of ($2.9) million or ($0.7) Diluted Net Loss per share. | |
| · | Cash Flow from operations for the nine-month period was $4.8 million | |
| · | Same store sales for the quarter of the seventeen Star Buds dispensaries when compared to last year were $20.7M up 1%. |
| o | Average basket size was $59.05 up 7.3% compared to the prior year, year-to-date basket size was $59.70 or up 8.6% | |
| o | Recorded customer visits totaled 353,370 down by 5.8%, year-to-date visits were 1,046,232 up 5.1% |
Note: Schwazze did not own all the assets in 2020 and are using unaudited numbers for this comparison.
Q3 2021 Highlights
Acquisition of Southern Colorado Growers
The Company announced on July 22, 2021, that it has closed the transaction to acquire the assets of Southern Colorado Growers (“SCG”) in Huerfano County, Colorado; previously announced June 1, 2021. The acquisition includes 34 acres of land with outdoor cultivation capacity, as well as indoor, greenhouse, and hoop house cultivation facilities and equipment. This purchase is the company’s first major move into cultivation, which is expected to provide high-end, premium cannabis directly to its Star Buds dispensaries and significant production of biomass for its PurpleBee’s extraction and manufacturing facility.
Launched Star Buds Home Delivery
The Company announced the launch of its cannabis product home delivery service to residences in the city of Aurora on August 19, 2021. Aurora home delivery service commenced from its Star Buds Montview retail dispensary location at 10100 E. Montview Boulevard. The delivery service is available to any personal residences located within the city limits of Aurora, in which the Star Buds Montview location currently serves. The launch of the delivery service from Star Buds Montview is the first phase of a home delivery offering for the Star Buds dispensaries in Colorado. The second phase, expected later this year, will include deliveries from the Star Buds Arapahoe location at 14655 E. Arapahoe Road, also based in Aurora.
| 1 |
Acquisition of Brow 2, LLC
The Company announced on August 23, 2021, that is has entered into an agreement to acquire the assets of Brow 2, LLC, located in Denver, Colorado. The planned transaction includes a 37,000 square foot building (27,000 square feet of canopy) for indoor cultivation and equipment. This transaction is expected to significantly enhance Schwazze's aggressive expansion in Colorado and will significantly enhance the Company's cultivation resources, providing product directly to its seventeen Star Buds brand dispensaries.
Acquisition of Smoking Gun
The Company announced on November 15, 2021, that it has signed definitive documents to acquire the assets of Smoking Gun, LLC and Smoking Gun Land Company, LLC. The dispensary and assets are located on a prime corner on Colorado Boulevard in Glendale, Colorado in the center of the greater Denver area. This acquisition is part of the Company’s continuing expansion and growth plans in Colorado adding to its retail footprint, bringing the total number of dispensaries including announced acquisitions to 20.
“We continue to realize strong growth revenue quarter over quarter along with adjusted EBITDA results and to aggressively execute our growth strategy for Colorado,” stated Justin Dye, CEO of Schwazze. “In this quarter we announced the acquisitions of Southern Colorado Growers, Brow 2 and Smoking Gun, bringing our announced dispensaries to 20 and significantly increased our cultivation capabilities. Wholesale results, led by PurpleBee’s distillate also had another excellent sales quarter. Our retail results continue to outpace Colorado by 11.5%. I’m pleased to report that our average basket size for the quarter was up 7.3%, and although customer visits decreased by 5.8%, due to cycling through COVID impacts in the third quarter, year-to-date customer visits were up by 5.1%.”
Third Quarter 2021 Revenue
Total revenue was $31.8 million during the three months ended September 30, 2021, compared to $7.4 million during the same period in 2020 and represents an increase of approximately 328%. Retail sales were $20.7 million over the quarter from $1.1 million dollars the previous year and wholesale operations revenue increased to $11.0 million from $6.3 million compared to the same period last year. Other sales were $0.07 million from $0.02. The increase in retail and wholesale revenue is attributed to the increased sales in the wholesales segment, led by Purplebees and the completion of the acquisition of Star Buds in March 2021.
Total cost of goods and services were $16.8 million during the three months ended September 30, 2021, compared to $4.6 million during the same period in 2020. This increase was due to improved sales from our retail and wholesale operations.
Gross profit increased to $15.1 million during the three months ended September 30, 2021, compared to $2.8 million during the same period in 2020. Gross profit margin increased as a percentage of revenue from 37.4% to 47.3% continued to be driven by the strength of Star Buds acquisition, our consolidated purchasing approach, and implementation of our retail playbook.
Q3 average basket size was $59.05 up 7.3%, year-to-date basket size was $59.70 up 8.6%. Recorded customer visits during Q3 totaled 353,370 down by 5.8%, compared to the prior year period, due to cycling through COVID impacts, however year-to-date visits were 1,046,232 up 5.1% compared to the prior year period.
Total operating expenses were $11.2 million during the third quarter compared to $6.4 million during the same period in 2020. The higher expenses were due to increased selling, general and administrative expenses, and salaries from the addition of the dispensaries.
Q3 2021 net income was $1.0 million, or a gain of approximately $0.2 per share on a basic weighted average, as compared to net loss of $2.9 million, or a loss of approximately $0.07 per share on a basic weighted average during the three months ended September 30, 2020.
Q3 2021 adjusted EBITDA was $8.8 million representing 27.6% of revenue. This is derived from Operating Income and adjusting one-time expenses, merger and acquisition and capital raising costs, non-cash related compensation costs, and depreciation and amortization. See the financial table for Adjusted EBITDA below for details for Q3 2021 adjustments.
During the third quarter, the Company generated positive operating cash flow of $3.4 million and $4.8 million in operating cash flow for the first three quarters with $21.2 million in cash and cash equivalents at the end of Q3 2021
Nancy Huber, CFO for Schwazze commented, “We continue to generate operating cash flows from our acquired businesses, and we are using the cash flow to invest in new acquisitions and make improvements in our stores, manufacturing, and cultivation operations.
| 2 |
2021 Guidance
The Company has updated its 2021 guidance which excludes transactions that are announced but not closed. Annual revenue guidance is $110 million to $115 million and projected annual adjusted EBITDA from $32 million to $34 million.
Adjusted EBITDA represents income (loss) from operations, as reported, before tax, adjusted to exclude non-recurring items, other non-cash items, including stock-based compensation expense, depreciation, and amortization, and further adjusted to remove acquisition related costs, and other one-time expenses, such as severance. The Company uses adjusted EBITDA as it believes it better explains the results of its core business. The Company has not reconciled guidance for adjusted EBITDA to the corresponding GAAP financial measure because it cannot provide guidance for the various reconciling items. The Company is unable to provide guidance for these reconciling items because it cannot determine their probable significance, as certain items are outside of its control and cannot be reasonably predicted. Accordingly, a reconciliation to the corresponding GAAP financial measure is not available without unreasonable effort.
Q3 2021 Webcast – November 15, 2021 – 4:30 ET
Investors and stakeholders may participate in the conference call by dialing 416 764 8650 or by dialing North American toll free 888-664-6383 or listen to the webcast from the Company's website at https://ir.schwazze.com. The webcast will be available on the Company’s website and on replay until November 22, 2021 and may be accessed by dialing 888-390-0541 / 807433#.
Following their prepared remarks, Chief Executive Officer, Justin Dye and Chief Financial Officer, Nancy Huber will answer investor questions. Investors may submit questions in advance or during the conference call itself through the weblink: https://produceredition.webcasts.com/starthere.jsp?ei=1506871&tp_key=909a00d089 This weblink has been posted to the Company’s website and will be archived on the website. All Company SEC filings can also be accessed on the Company website at https://ir.schwazze.com/sec-filings
About Schwazze
Schwazze (OTCQX: SHWZ) is building the premier vertically integrated cannabis company in Colorado and plans to take its operating system to other states where it can develop a differentiated leadership position. Schwazze is the parent company of a portfolio of leading cannabis businesses and brands spanning seed to sale. The Company is committed to unlocking the full potential of the cannabis plant to improve the human condition. Schwazze is anchored by a high-performance culture that combines customer-centric thinking and data science to test, measure, and drive decisions and outcomes. The Company's leadership team has deep expertise in retailing, wholesaling, and building consumer brands at Fortune 500 companies as well as in the cannabis sector. Schwazze is passionate about making a difference in our communities, promoting diversity and inclusion, and doing our part to incorporate climate-conscious best practices. Medicine Man Technologies, Inc. was Schwazze’s former operating trade name. The corporate entity continues to be named Medicine Man Technologies, Inc.
Schwazze derives its name from the pruning technique of a cannabis plant to enhance plant structure and promote healthy growth.
| 3 |
MEDICINE MAN TECHNOLOGIES, INC.
CONDENSED BALANCE SHEETS
Expressed in U.S. Dollars
All accompanying notes to the financial statements can be found within the SEC Form 10-Q filed on November 15, 2021
| September 30, | December 31, | |||||||
| 2021 | 2020 | |||||||
| (Unaudited) | (Audited) | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 21,168,816 | $ | 1,231,235 | ||||
| Accounts receivable, net of allowance for doubtful accounts | 3,530,520 | 1,270,380 | ||||||
| Accounts receivable - related party | – | 80,494 | ||||||
| Inventory | 10,678,381 | 2,619,145 | ||||||
| Note receivable - current, net | – | – | ||||||
| Note receivable - related party | – | 181,911 | ||||||
| Prepaid expenses and other current assets | 2,579,035 | 614,200 | ||||||
| Total current assets | 37,956,752 | 5,997,365 | ||||||
| Non-current assets | ||||||||
| Fixed assets, net accumulated depreciation of $1,631,093 and $872,579, respectively | 8,805,348 | 2,584,798 | ||||||
| Goodwill | 42,090,944 | 53,046,729 | ||||||
| Intangible assets, net accumulated amortization of $7,162,110 and $200,456, respectively | 98,072,970 | 3,082,044 | ||||||
| Marketable securities, net of unrealized gain (loss) of $210,685 and $(129,992), respectively | 487,467 | 276,782 | ||||||
| Note receivable – noncurrent, net | 179,167 | – | ||||||
| Accounts receivable – litigation | 3,063,968 | 3,063,968 | ||||||
| Other noncurrent assets | 448,062 | 51,879 | ||||||
| Operating lease right of use assets | 3,626,617 | 2,579,036 | ||||||
| Total non-current assets | 156,774,543 | 64,685,236 | ||||||
| Total assets | $ | 194,731,295 | $ | 70,682,601 | ||||
| LIABILITIES AND STOCKHOLDERS' DEFICIT | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | 953,467 | $ | 3,508,478 | ||||
| Accounts payable - related party | 87,143 | 48,982 | ||||||
| Accrued expenses | 11,660,237 | 2,705,445 | ||||||
| Derivative liabilities | 79,730 | 1,047,481 | ||||||
| Deferred revenue | – | 50,000 | ||||||
| Notes payable - related party | 134,498 | 5,000,000 | ||||||
| Income taxes payable | 1,029,482 | – | ||||||
| Total current liabilities | 13,944,557 | 12,360,386 | ||||||
| Long term debt | 59,246,337 | 13,901,759 | ||||||
| Lease liabilities | 3,807,306 | 2,645,597 | ||||||
| Total long-term liabilities | 63,053,643 | 16,547,356 | ||||||
| Total liabilities | 76,998,200 | 28,907,742 | ||||||
| Stockholders' equity | ||||||||
| Common stock, $0.001 par value. 250,000,000 shares authorized; 45,139,297 shares issued and 44,622,253 shares outstanding at September 30, 2021 and 42,365,818 shares issued and 41,933,086 shares outstanding as of December 31, 2020, respectively | 45,140 | 42,602 | ||||||
| Preferred stock, $0.001 par value. 10,000,000 shares authorized; 82,838 shares issued and outstanding at September 30, 2021 and 10,000,000 shares authorized; 19,716 shares issued and outstanding at December 31, 2020 | 87 | 20 | ||||||
| Additional paid-in capital | 165,393,733 | 85,357,835 | ||||||
| Accumulated deficit | (46,188,829 | ) | (42,293,098 | ) | ||||
| Common stock held in treasury, at cost, 517,044 shares held as of September 30, 2021 and 432,732 shares held as of December 31, 2020 | (1,517,036 | ) | (1,332,500 | ) | ||||
| Total stockholders' equity | 117,733,095 | 41,774,859 | ||||||
| Total liabilities and stockholders' equity | $ | 194,731,295 | $ | 70,682,601 | ||||
See accompanying notes to the financial statements
| 4 |
MEDICINE MAN TECHNOLOGIES, INC.
CONDENSED STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED)
For the Three Months Ended September 30, 2021, and 2020
Expressed in U.S. Dollars
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||
| Operating revenues | ||||||||||||||||
| Retail | $ | 20,741,864 | $ | 1,135,822 | $ | 54,083,880 | $ | 1,868,279 | ||||||||
| Wholesale | 11,022,519 | 6,273,897 | 27,654,965 | 12,909,025 | ||||||||||||
| Other | 70,922 | 20,655 | 165,416 | 1,280,533 | ||||||||||||
| Total revenue | 31,835,305 | 7,430,374 | 81,904,261 | 16,057,837 | ||||||||||||
| Cost of goods and services | ||||||||||||||||
| Cost of goods and services | 16,779,313 | 4,648,910 | 44,692,765 | 9,904,131 | ||||||||||||
| Total cost of goods and services | 16,779,313 | 4,648,910 | 44,692,765 | 9,904,131 | ||||||||||||
| Gross profit | 15,055,992 | 2,781,464 | 37,211,496 | 6,153,706 | ||||||||||||
| Operating expenses | ||||||||||||||||
| Selling, general and administrative expenses | 5,593,336 | 1,298,693 | 13,580,469 | 3,054,091 | ||||||||||||
| Professional services | 752,572 | 1,769,455 | 4,466,696 | 5,390,186 | ||||||||||||
| Salaries | 3,644,320 | 1,878,156 | 8,505,733 | 5,973,482 | ||||||||||||
| Stock based compensation | 1,228,764 | 1,453,986 | 3,865,588 | 5,815,808 | ||||||||||||
| Total operating expenses | 11,218,992 | 6,400,290 | 30,418,486 | 20,233,567 | ||||||||||||
| Income (loss) from operations | 3,837,000 | (3,618,826 | ) | 6,793,010 | (14,079,861 | ) | ||||||||||
| Other income (expense) | ||||||||||||||||
| Interest income (expense), net | (1,851,694 | ) | 10,131 | (4,526,746 | ) | 46,726 | ||||||||||
| Gain on forfeiture of contingent consideration | – | – | – | 1,462,636 | ||||||||||||
| Unrealized gain (loss) on derivative liabilities | 356,824 | 684,422 | 967,751 | 1,527,850 | ||||||||||||
| Other income (expense) | – | – | – | 32,621 | ||||||||||||
| Gain (loss) on sale of assets | (49,985 | ) | – | 242,494 | – | |||||||||||
| Unrealized gain (loss) on investments | (10,572 | ) | 10,062 | 210,685 | 120,800 | |||||||||||
| Total other income (expense) | (1,555,427 | ) | 704,615 | (3,105,816 | ) | 3,190,633 | ||||||||||
| Provision for income taxes (benefit) | 1,312,817 | – | 1,997,905 | – | ||||||||||||
| Net income (loss) | $ | 968,756 | $ | (2,914,211 | ) | $ | 1,689,289 | $ | (10,889,228 | ) | ||||||
| Earnings (loss) per share attributable to common shareholders | ||||||||||||||||
| Basic earnings (loss) per share | $ | 0.02 | $ | (0.07 | ) | $ | 0.04 | $ | (0.26 | ) | ||||||
| Diluted earnings (loss) per share | $ | 0.02 | $ | (0.07 | ) | $ | 0.03 | $ | (0.26 | ) | ||||||
| Weighted average number of shares outstanding - basic | 44,145,709 | 41,568,147 | 42,903,008 | 41,242,041 | ||||||||||||
| Weighted average number of shares outstanding - diluted | 56,139,416 | 41,568,147 | 56,688,640 | 41,242,041 | ||||||||||||
| Comprehensive income (loss) | $ | 968,756 | $ | (2,914,211 | ) | $ | 1,689,289 | $ | (10,889,228 | ) | ||||||
See accompanying notes to the financial statements
| 5 |
MEDICINE MAN TECHNOLOGIES, INC.
STATEMENT OF CASH FLOWS (UNAUDITED)
For the Three Months Ended September 2021 and 2020
Expressed in U.S. Dollars
| For the Nine Months Ended | ||||||||
| September 30, | ||||||||
| 2021 | 2020 | |||||||
| Cash flows from operating activities | ||||||||
| Net income (loss) for the period | $ | 1,689,289 | $ | (10,889,228 | ) | |||
| Adjustments to reconcile net income to cash used in operating activities | ||||||||
| Depreciation and amortization | 7,779,828 | 322,292 | ||||||
| Deferred taxes | – | – | ||||||
| Gain on change in derivative liabilities | (967,751 | ) | (2,990,486 | ) | ||||
| Gain on investment, net | (210,685 | ) | (120,800 | ) | ||||
| Gain on sale of assets | (292,479 | ) | – | |||||
| Stock based compensation | 3,865,588 | 5,815,808 | ||||||
| Changes in operating assets and liabilities | ||||||||
| Accounts receivable | (2,179,646 | ) | 1,292,509 | |||||
| Inventory | (3,034,246 | ) | 271,305 | |||||
| Prepaid expenses and other current assets | (1,964,835 | ) | 274,814 | |||||
| Other assets | (396,183 | ) | (127,999 | ) | ||||
| Operating leases right of use assets and liabilities | 114,129 | 27,028 | ||||||
| Accrued interest on notes receivable | – | – | ||||||
| Accounts payable and other liabilities | (568,387 | ) | (177,295 | ) | ||||
| Deferred revenue | (50,000 | ) | – | |||||
| Income taxes payable | 1,029,482 | (1,940 | ) | |||||
| Net cash provided by (used in) operating activities | 4,814,104 | (6,303,992 | ) | |||||
| Cash flows from investing activities: | ||||||||
| Collection (issuance) of notes receivable | 181,911 | 478,285 | ||||||
| Cash consideration for acquisition of business | (71,927,071 | ) | (2,609,500 | ) | ||||
| Purchase of fixed assets - net | (3,869,658 | ) | (976,685 | ) | ||||
| Purchase of intangible assets | (29,580 | ) | – | |||||
| Net cash provided by (used in) investing activities | (75,644,398 | ) | (3,107,900 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Proceeds from issuance of debt, net | 45,344,578 | – | ||||||
| Repayment of notes payable | (4,865,502 | ) | – | |||||
| Proceeds from issuance of common stock, net of issuance costs | 50,282,797 | 42,000 | ||||||
| Net cash provided by (used in) financing activities | 90,761,874 | 42,000 | ||||||
| Net increase (decrease) in cash and cash equivalents | 19,931,580 | (9,369,892 | ) | |||||
| Cash and cash equivalents at beginning of period | 1,237,236 | 12,351,580 | ||||||
| Cash and cash equivalents at end of period | $ | 21,168,816 | $ | 2,981,688 | ||||
| Supplemental disclosure of cash flow information: | ||||||||
| Cash paid for interest | $ | 3,862,970 | $ | – | ||||
See accompanying notes to the financial statements
| 6 |
MEDICINE MAN TECHNOLOGIES, INC.
Adjusted EBITDA Reconciliation
Non-GAAP measurement
(UNAUDITED)
For the Three Months Ended September 30, 2021
Expressed in U.S. Dollars
Three Months Ended September 30, 2021 | ||||||||
| 2021 | 2020 | |||||||
| Operating Income | $ | 3,837,000 | $ | (3,618,826 | ) | |||
| Addbacks: | ||||||||
| Non-Cash Stock Compensation | 1,228,764 | 1,453,986 | ||||||
| Deal Related Expenses | 404,687 | 607,863 | ||||||
| Capital Raise Related Expenses | 74,155 | 524,094 | ||||||
| Depreciation and Amortization | 2,972,681 | 225,095 | ||||||
| Severance | 19,412 | 17,286 | ||||||
| Retention Program Expenses | 29,687 | – | ||||||
| Employee Relocation Expenses | – | 8,333 | ||||||
| Other non-recurring items | 231,255 | – | ||||||
| Total Addbacks | 4,797,641 | 2,836,657 | ||||||
| Adjusted EBITDA | $ | 8,797,641 | $ | (782,169 | ) | |||
Forward-Looking Statements
This press release contains “forward-looking statements.” Such statements may be preceded by the words “may,” “estimates”, “predicts,” or similar words. Forward-looking statements are not guarantees of future performance, are based on certain assumptions, and are subject to various known and unknown risks and uncertainties, many of which are beyond the Company’s control and cannot be predicted or quantified. Consequently, actual results may differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include, without limitation, risks and uncertainties associated with (i) our inability to manufacture our products and product candidates on a commercial scale on our own or in collaboration with third parties; (ii) difficulties in obtaining financing on commercially reasonable terms; (iii) changes in the size and nature of our competition; (iv) loss of one or more key executives or scientists; (v) difficulties in securing regulatory approval to market our products and product candidates; (vi) our ability to successfully execute our growth strategy in Colorado and outside the state, (vii) our ability to identify and consummate future acquisitions that meet our criteria, (viii) our ability to successfully integrate acquired businesses and realize synergies therefrom, (ix) the actual revenues derived from the Company’s Star Buds assets, (x) the Company’s actual revenue and adjusted EBITDA for 2021, (xi) the Company’s ability to generate positive cash flow for the rest of 2021 (xii) the ongoing COVID-19 pandemic, (xiii) the timing and extent of governmental stimulus programs, and (xiv) the uncertainty in the application of federal, state and local laws to our business, and any changes in such laws. More detailed information about the Company and the risk factors that may affect the realization of forward-looking statements is set forth in the Company’s filings with the Securities and Exchange Commission (SEC), including the Company’s Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q. Investors and security holders are urged to read these documents free of charge on the SEC’s website at http://www.sec.gov. The Company assumes no obligation to publicly update or revise its forward-looking statements as a result of new information, future events or otherwise except as required by law.
|
Investors Joanne Jobin Investor Relations Joanne.jobin@schwazze.com 647 964 0292
|
Media Julie Suntrup, Schwazze Vice President | Marketing & Merchandising julie.suntrup@schwazze.com 303 371 0387
|
| 7 |