Market Overview

THC BioMed Releases Second Quarter Profitable Results

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VANCOUVER, April 8, 2020 /PRNewswire/ - THC BioMed Intl Ltd. (CSE:THC) ("THC BioMed" or the "Company") is pleased to report its financial results for the six months ended January 31, 2020.

SUMMARY OF QUARTERLY RESULTS









Net

Income (Loss)


Quarter Ended

Revenue

Income (Loss)

Per Share

Q2/2020

January 31, 2020

$

1,246,625

$

88,191

$

-

Q1/2020

October 31, 2019

$

1,044,510

$

688,925

$

0.01

Q4/2019

July 31, 2019

$

382,096

$

(4,177,572)

$

(0.04)

Q3/2019

April 30, 2019

$

354,326

$

(4,905,797)

$

(0.03)

Q2/2019

January 31, 2019

$

474,041

$

(4,722,819)

$

(0.04)

Q1/2019

October 31, 2018

$

279,140

$

1,106,841

$

0.01

Q4/2018

July 31, 2018

$

163,883

$

(3,208,291)

$

(0.02)

Q3/2018

April 30, 2018

$

179,771

$

(89,245)

$

-

 

For the quarter ended January 31, 2020, we produced 470.50 kilograms of dried marijuana and sold 265.07 kilograms at an average price of $4.70 per gram.

KEY HIGHLIGHTS

  • Achieved revenues of over $1,000,000(1) in each of the first two quarters of the fiscal year with an average selling price of $4.20 per gram to medical patients and recreational buyers such as the Ontario Cannabis Store and BCcannabisonline; much less than the average price reported for other Licensed Producers overall
  • Revenue for the quarter increased 163% compared to the same quarter last year
  • Achieved a gross profit before fair value adjustments of $759,959
  • Achieved Adjusted EBITDA of $131,549
  • Had our license amended to include the production and sale of cannabis edibles, topicals, and extracts
  • Acquired an additional strata lot at the production facility to continue to increase grow capacity
  • Issued two convertible debentures for a total of $904,536
  • Announced a normal course issuer bid to purchase up to an aggregate of 7,977,152 common shares of the Company representing 5% of the issued and outstanding common shares as at that date of which 1,080,000 shares have been purchased to date
  • Announced the completion of a non-brokered private placement for total proceeds of $201,348 plus the repayment of bona fide debt of $800,000
  • Announced an offer to existing shareholders to complete a non-brokered private placement for a further 3,333,333 Units at a price of $0.15 per Unit for gross proceeds up to $500,000. Each Warrant entitles the holder to purchase one Common Share of the Company for a period of 24 months from closing at a price of $0.18 per share for the first six months, at $0.25 during the following six months, at $0.50 for the six months following that, and at $0.80 during the final fifteen months

(1) Includes excise taxes

 

KEY HIGHLIGHTS SUBSEQUENT TO THE SIX MONTHS ENDED JANUARY 31, 2020

  • Production began of our Pure Cannabis Sticks—pre-rolls that are filtered, paper cylinders filled with our own pure cannabis to be manufactured using our automated production machine
  • Production began of our THC Kiss—a brand new cannabis beverage product
  • A new three-year lease began for a property adjacent to our production facility intended for administration, storage, and other activities not related to cannabis production in order to free up space at the production facility by constructing four new grow rooms with the space once it is renovated and approval received from Health Canada

MANAGEMENT COMMENTARY

"We are proud to have achieved our second consecutive profitable quarter. We have surpassed the $1,000,000 revenue mark for each of the first two quarters of this fiscal year. Our financial statements for Q2 2020 reflect the improvements we have realized in all key indicators of economic progress. Over the last year, we have completed and started using new grow rooms to increase our output. Our focus on high quality, indoor-grown cannabis at reasonable prices has made our cannabis a best seller," said THC BioMed President & CEO, John Miller. "These results demonstrate the vision and abilities of our management team and we expect to continue this high level of performance going forward."

All financial information in this press release is reported in Canadian dollars, unless otherwise indicated. This press release is intended to be read in conjunction with the Company's Condensed Interim Consolidated Financial Statements and Management's Discussion & Analysis for the six months ended January 31, 2020, which has been filed on SEDAR (www.sedar.com).

Statement of Comprehensive Income (Loss) Summary





For the three months ended 

For the six months ended


(Unaudited)
January 31

(Unaudited)
January 31

(Unaudited)
January 31

(Unaudited)
January 31


2020

2019

2020

2019

 

Revenue

 

$

1,246,625

 

$

474,041

 

$

2,291,135

 

$

753,181

Inventory expensed to cost of sales


(791,146)


(302,103)


(1,540,176)


(604,606)

Gross profit before fair value adjustments


455,479


171,938


750,959


148,575

Net change in fair value of biological assets


504,683


230,933


1,869,087


2,742,246

Gross margin


960,162


402,871


2,620,046


2,890,821

Total expenses


871,971


5,125,690


1,842,930


6,506,799

Net and comprehensive income (loss) for the period

 

$

88,191

 

$

(4,722,819)

 

$

777,116

 

$

(3,615,978)



 

Balance Sheet Summary






(Unaudited)

(Audited)



January 31

July 31

As at


2020

2019

Current assets


$7,337,222

$5,217,996

Total assets


$21,091,527

$18,058,337

Current liabilities


$3,602,192

$3,290,724

Total liabilities


$5,281,394

$4,603,731

Working capital


$3,735,030

$1,927,272

Accumulated deficit


$27,290,483

$28,400,635

 

Cash Flow Statement Summary





For the three months ended

For the six  months ended


(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)


January 31

January 31

January 31

January 31


2020

2019

2020

2019






Net and comprehensive income (loss) for the period

$

88,191

$

(4,722,819)

$

777,116

$

(3,615,978)

Cash, end of the period

$

385,295

$

849,668

$

385,295

$

849,668

 

Non-IFRS Earnings Measure





For the three months ended

For the six months ended


(Unaudited)
January 31

(Unaudited)
January 31

(Unaudited)
January 31

(Unaudited)
January 31

2020

2019

2020

2019

Net and comprehensive income (loss) for the period

$

88,191

 

$

(4,722,819)

$

 

777,116

$

 

(3,615,978)

Add back









Interest


92,239


16,982


134,016


29,726

Depreciation and amortization


244,853


148,031


483,519


251,321

EBITDA(1) from continuing operations


 

425,283


 

(4,557,806)


 

1,394,651


 

(3,334,931)

Foreign exchange income (loss)


1,741


(479)


3,922


2,815

Realized fair value changes in biological assets included in inventory sold


1,319,362


36,605


1,445,040


105,262

Realized loss on sale of asset


-


-


-


1,154

Share-based compensation


228,854


1,078,794


602,063


2,004,802

Unrealized gain on changes in fair value of biological assets


(1,824,045)


(267,538)


(3,314,127)


(2,847,508)

Adjusted EBITDA(1)

$

 

151,195

$

 

(3,710,424)

$

131,549

$

 

(4,068,406)

(1) These non-IFRS measures are defined in the Company's MD&A for the six months ended January 31, 2020 ("Q2 2020")

 

About THC

THC BioMed is a Cannabis Act Licensed Producer of medical and recreational cannabis. It is licensed to cultivate and sell dried, extract, edible and topical cannabis. THC BioMed is Canada's largest supplier of legal cannabis genetics. The Company is on the leading edge of scientific research and the development of products and services related to the medical cannabis industry. Management believes THC BioMed is well- positioned to be in the forefront of this rapidly growing industry.

Please visit our website for a more detailed description of our business and services available. www.thcbiomed.com

Forward-Looking Information:

This press release may include forward-looking information within the meaning of Canadian securities legislation, concerning the business of THC BioMed Intl Ltd. ("THC"). Forward-looking information is based on certain key expectations and assumptions made by the management of THC. In some cases, you can identify forward-looking statements by the use of words such as "will," "may," "would," "expect," "intend," "plan," "seek," "anticipate," "believe," "estimate," "predict," "potential," "continue," "likely," "could" and variations of these terms and similar expressions, or the negative of these terms or similar expressions. Forward-looking statements in this press release include that THC will (a) continue this high level of performance  going  forward,  and  (b)  be  in  the  forefront  of  this  rapidly  growing  industry.  Although  THC believes that the expectations and assumptions on which such forward-looking information is based are reasonable, undue reliance should not be placed on the forward-looking information because THC can give no assurance that they will prove to be correct. Forward-looking statements contained in this press release are made as of the date of this press release. THC disclaims any intent or obligation to update publicly any forward-looking information, whether as a result of new information, future events or results or otherwise, other than as required by applicable securities laws.

The Canadian Securities Exchange (CSE) has not reviewed and does not accept responsibility for the adequacy or the accuracy of the contents of this release.

Cision View original content:http://www.prnewswire.com/news-releases/thc-biomed-releases-second-quarter-profitable-results-301037219.html

SOURCE THC BioMed

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