THC BioMed Releases Second Quarter Profitable Results

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Apr 08, 2020, 08:00 ET

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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.

SOURCE THC BioMed