TORONTO, Nov. 05, 2018 (GLOBE NEWSWIRE) -- PRESS RELEASE -- Golden Leaf Holdings Ltd., a cannabis company with cultivation, production and retail operations built around recognized brands, has announced financial results for the fiscal third quarter ended September 30, 2018.
UPDATE: Golden Leaf Holdings Ltd. Not Pursuing Terra Tech Corp. Transaction
Recent Business and Financial Highlights
- Record quarterly revenues of US$5.1 million for Q3 2018, compared to US$3.1 million for Q3 2017
- Acquired Canadian Sales License from Health Canada via Medical Marijuana Group, its Canadian Subsidiary
- Hired Jeff Yapp as Chief Marketing and Sales Officer
Subsequent Events
- Announced non-binding letter of intent to merge with Terra Tech Corp.
- Announced launch of Golden Fruit Chews into the Nevada market
- Acquired cultivation license for its Bald Peak, Oregon facility from the Oregon Liquor Control Commission
- Introduced new Green Apple Flavor CBD Infused Fruit Chews into the Oregon market
Mr. William Simpson, chief executive officer of Golden Leaf Holdings, commented, “Our third quarter revenue reached yet another record, achieving US$5.1 million, primarily driven by sale of flower in Canada after we received our Canadian Sales license from Health Canada, and seasonal improvements in our Oregon Retail revenue and the addition of two new Retail stores in Oregon when compared to the third quarter 2017. Adjusted EBITDA for the third quarter of 2018 was a loss of US$2.9 million primarily driven by production costs and operating expenses.
“Combined with the recent legalization of cannabis in Canada and our ever expanding North American footprint in cultivation, wholesale and retail, we have set the stage for a stronger 2019. We continue our efforts to build our wholesale and retail brands, enhancing trust with our customers, and expanding market share. We are also investing in people and processes as we recognize the importance of a strong, dedicated workforce to support the market growth in the jurisdictions in which we operate."
Fiscal Third Quarter Ended September 30, 2018 Financial Results
For the quarter ended Sept. 30, 2018, net revenue was US$5.1 million as compared to US$3.1 million for the same three-month period in 2017. The 63-percent year-over-year increase largely reflects the sale of flower from our Canadian operations, seasonal improvements in Oregon retail and the addition of two new Chalice Farms stores in Oregon, when compared to the same period in 2017.
Gross profit was US$0.4 million or 9 percent of net revenue for Q3 2018, compared with US$0.7 million or 23 percent of net revenue for Q3 2017. Q3 2018 gross margins decreased primarily due to non-cash valuation of biological assets. As of Sept. 30, 2018, biological assets were newly planted and on average 13-percent complete.
Operating expenses were US$4.7 million USD for Q3 2018, consistent with US$4.7 million in Q3 2017.
Adjusted EBITDA loss was US$2.9 million for Q3 2018, a slight improvement compared with a loss of US$3.0 million for Q3 2017, primarily as a result of an increase in product sales volume. Adjusted EBITDA is defined by the Company as earnings before taxes, depreciation and amortization, less certain non-cash equity compensation expenses, including impairments, one-time transaction fees and all other non-cash items. The company considers Adjusted EBITDA an important operational measure for the business.
Net loss for Q3 2018 was US$5.5 million or US$0.01 per share loss, compared with a net loss of US$3.2 million or US$0.01 per share loss, for Q3 2017. Net loss for Q3 2018 increased primarily attributed to the effect of the changes in fair value of non-cash assets and debt, specifically, biological assets and warrant liability.
As of Sept. 30, 2018, the company had approximately US$20.1 million in current assets, compared with US$11.6 million in current assets at Dec. 31, 2017. The increase is largely because of the bought deal financing which was completed on Jan. 31, 2018, in addition to proceeds from warrant exercises. Total assets increased to US$84.2 million at Sept. 30, 2018, compared to US$75.8 million at Dec. 31, 2017, also due primarily to the bought deal financing completed in January.
