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Emerald Valley Processors Selects Luna Technologies for Cannabis Extraction Expansion

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Eugene, Oregon-based Processor Uses Oberon Model to Increase Production and Quality Through Cost-Saving Automation

PORTLAND, Ore.–(BUSINESS WIRE)–Luna Technologies, a Portland-based manufacturer of extraction equipment for the cannabis industry, announced the installation of its Oberon large-scale hydrocarbon, butane hash-oil (BHO) automated extraction machine at Eugene, Oregon-based Emerald Valley Processors, a vertically integrated cannabis grower, processor, and purveyor for the Oregon market.


Emerald Valley Processors selected the hydrocarbon extractor primarily for Oberon’s large capacity and automated operation to help meet the growing demand for its recreational cannabis products. The Oberon enables large-scale operators such as Emerald Valley to process more than 40 pounds of fresh-frozen cannabis flower per hour (or 30 pounds of dried cannabis flower), and the ability to conduct back-to-back runs with just 60 seconds of downtime in between. With the Oberon, Emerald Valley Processors is able to process more than 1,000 lbs. of fresh-frozen cannabis in 24 hours.

The system also utilizes programmable and customizable extraction recipes through the Luna Technologies proprietary recipe book, available at one’s fingertips through the built-in touchscreen and companion mobile software applications for iOS and Android devices.

“The capabilities of the Oberon, especially its ease of use and consistent production, sets this machine apart from other closed-loop hydrocarbon extraction machines we’ve tried,” said Josh Lippold, owner and operator of Emerald Valley Processing. “The Oberon requires less training time to operate, freeing up our production team to focus on other higher-value activities that are fueling our growth. Furthermore, the array of data this machine produces helps us continually refine our processes, giving Emerald Valley Processors an edge in our highly competitive market.”

“As interest in cannabis extracts and concentrates grows, leading companies like Emerald Valley Processors need greater capacity to keep pace, but at the same time, they must control production costs without sacrificing consistency and quality,” said Jack Naito, president of Luna Technologies. “The Oberon empowers processors to create larger quantities and more consistent extraction products in less time while also reducing labor hours.”

Fight Inflation Through Automation

According to a recent survey from CBD Oracle, 54 percent of cannabis users will buy less if inflation causes prices to rise. In response, cannabis organizations must find ways to reduce costs to blunt the effects of inflation to maintain margins, including through automation. For processors, this includes reducing costs at each stage of production while still maintaining the consistency and quality customers expect.

Improving Capacity, Efficiency, and Flexibility

Luna Technologies engineers designed the Oberon from the ground up for larger producers to achieve greater efficiency, capacity, and flexibility. Similar to the Luna Technology IO extractor, Oberon utilizes hydrocarbon solvent to separate and purify cannabis oil, but with a larger extraction vessel. The higher capacity thresholds also enable producers to conduct more efficient reruns and to more easily extract minor cannabinoids and terpenes, as desired.

In addition to end-to-end cannabis extraction, including accessory products for color remediation and pre-processing biomass, the Oberon features a highly efficient dual-chiller system developed by Luna Technologies to maintain precise solvent temperatures at all times. Precise temperatures are critical for maintaining quality and consistency at each stage of processing. The end result is improved production speed, quality, and volume, 24 hours a day.

To see the Oberon and the entire line of Luna Technologies extraction equipment and capabilities in person, please visit booth #8127 at MJBizCon, November 15-18, 2022, within the south hall of the Las Vegas Convention Center.

About Luna Technologies:

Luna Technologies engineers state-of-the-art extraction equipment for cannabis processors. The meticulously designed, automated equipment empowers operators to process fresh-frozen or cured plant biomass with stress-tested hardware and built-in fail-safes to foster a superior level of workplace safety while also lowering labor costs. Luna’s Earth-conscious engineering approach helps decrease energy consumption while setting the industry standard for safety, quality, consistency, and customization in support of creating clean, consistent cannabis concentrates with medical and social benefits. Learn more at www.lunatechequipment.com.

Contacts

Luna Technologies contact:
Michael Goodman

Marketing Director

michael.goodman@lunatechequipment.com

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Business Wire

Organigram Reports Record Fourth Quarter and Full Year Fiscal 2022 Results

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Continues trend of record quarterly net revenue and positive Adjusted EBITDA while growing share of adult recreational market

Q4 FISCAL 2022 FINANCIAL HIGHLIGHTS

  • Continued record growth in net revenue, reaching $45.5 million, the highest in the history of the Company, up 83% from $24.9 million in the same prior-year period and 19% from $38.1 million in Q3 Fiscal 2022.
  • Adjusted EBITDA1 of $3.2 million, the third consecutive quarter of positive Adjusted EBITDA, compared to negative Adjusted EBITDA of $4.8 million in the same prior year period.
  • Adjusted Gross Margin1 of $10.4 million or 23%, compared to $3.0 million or 12% in the same prior year period, reflecting improvements from increased efficiencies and higher sales volume.

FISCAL 2022 FINANCIAL HIGHLIGHTS

  • Net revenue of $145.8 million, an increase of 84% over $79.2 million in Fiscal 2021.
  • Adjusted EBITDA1 of $3.5 million, compared to a loss of $27.6 million in Fiscal 2021.
  • Adjusted Gross Margin1 of $33.4 million or 23%, an increase of 837% over $3.6 million or 5% in Fiscal 2021.

SALES AND OPERATIONAL HIGHLIGHTS

  • In Q4 Fiscal 2022, held #3 position among Canadian licensed producers with 8.2% market share compared to 7%, in the same prior-year period. In October, Organigram achieved the #2 market position.2
  • According to OCS shipped sales data, Organigram achieved the #1 market position in Ontario since January, 2022 and maintained it throughout the balance of the fiscal year3.
  • Organigram achieved the #1 market position in the Maritimes, since January 2022, until the end of the fiscal year3.
  • Continues to hold #1 position in dried flower, the largest category of the Canadian cannabis market, the #3 market position nationally in gummies2 and the #1 position for hash in the Quebec market4.
  • Introduced 18 SKUs in Q4 Fiscal 2022 for a total of 85 in market.
  • Generated a 11% increase in yield per plant in Q4 Fiscal 2022, compared to the same prior year period, as a result of environment improvements which contributed to reduced cultivation costs of 23% in Fiscal 2022 versus Fiscal 2021 and provided additional flower to address growing consumer demand.
  • In Q4 Fiscal 2022, completed 4C expansion at Moncton growing facility, increasing annual capacity from 45,000 kilograms at the end of Fiscal 2021 to 85,000 kilograms of dry flower at the end of fiscal 2022, which will drive further cost reductions through operating leverage.
  • Shipped $6.0 million of high margin flower to Australia and Israel in Q4 Fiscal 2022. In Fiscal 2022, Organigram shipped $15.4 million of flower internationally, compared to $0.4 million in Fiscal 2021.

TORONTO–(BUSINESS WIRE)–Organigram Holdings Inc. (NASDAQ: OGI) (TSX: OGI), (the “Company” or “Organigram”), a leading licensed producer of cannabis, announced its results for the fourth quarter and year ended August 31, 2022 (“Q4 Fiscal 2022” or “Fiscal 2022”).

“In Fiscal 2022, our innovative product launches, comprehensive retail distribution, sales execution, and operational excellence helped Organigram become a leading consumer products company in the cannabis sector,” said Beena Goldenberg, Chief Executive Officer. “During the year, we increased and optimized production to meet consumer demand, drove market share gains nationally and solidified our position as serious competitors in several new categories. In Fiscal 2023 we expect continued success as we build on the high recognition of our brands, our track record of innovation and our proven ability to execute.

Select Key Financial Metrics

(in $000s unless otherwise indicated)

 

Q4-2022 

 

Q4-2021

 

 % Change

 

Fiscal 2022 

 

Fiscal 2021

 

% Change 

Gross revenue

 

65,657

 

 

36,182

 

 

81

%

 

209,109

 

 

109,859

 

 

90

%

Excise taxes

 

(20,177

)

 

(11,317

)

 

78

%

 

(63,300

)

 

(30,696

)

 

106

%

Net revenue

 

45,480

 

 

24,865

 

 

83

%

 

145,809

 

 

79,163

 

 

84

%

Cost of sales

 

36,718

 

 

25,867

 

 

42

%

 

119,037

 

 

103,567

 

 

15

%

Gross margin before fair value changes to biological assets & inventories sold

 

8,762

 

 

(1,002

)

 

974

%

 

26,772

 

 

(24,404

)

 

210

%

Realized loss on fair value on inventories sold and other inventory charges

 

(10,191

)

 

(7,286

)

 

40

%

 

(35,204

)

 

(35,721

)

 

(1

)%

Unrealized gain (loss) on changes in fair value of biological assets

 

15,677

 

 

11,639

 

 

35

%

 

40,001

 

 

31,726

 

 

26

%

Gross margin

 

14,248

 

 

3,351

 

 

325

%

 

31,569

 

 

(28,399

)

 

211

%

Adjusted gross margin1

 

10,362

 

 

3,017

 

 

243

%

 

33,390

 

 

3,563

 

 

837

%

Adjusted gross margin %1

 

23

%

 

12

%

 

92

%

 

23

%

 

5

%

 

360

%

Selling (including marketing), general & administrative expenses2

 

15,657

 

 

12,415

 

 

26

%

 

59,768

 

 

45,727

 

 

31

%

Adjusted EBITDA1

 

3,232

 

 

(4,818

)

 

167

%

 

3,484

 

 

(27,643

)

 

113

%

Net loss

 

(6,144

)

 

(25,971

)

 

76

%

 

(14,283

)

 

(130,704

)

 

89

%

Net cash used in operating activities

 

(19,695

)

 

(7,699

)

 

156

%

 

36,211

 

 

28,589

 

 

27

%

1 Adjusted gross margin, adjusted gross margin % and Adjusted EBITDA are non-IFRS financial measures not defined by and do not have any standardized meaning under IFRS; please refer to “Non-IFRS Financial Measures” in this press release for more information.

2 Excluding non-cash share-based compensation.

3 During Fiscal 2022, certain reclassifications have been made to the prior periods comparative figures to enhance comparability with the current period amounts, none of the reclassifications resulted in a change to net loss or shareholders’ equity. See Note 29 of the Financial Statements.

 

Select Balance Sheet Metrics (in $000s)

 

AUGUST 31,

2022

 

AUGUST 31,

2021

 

% Change

Cash & short-term investments (excluding restricted cash)

 

98,607

 

183,555

 

(46

)%

Biological assets & inventories

 

68,282

 

48,818

 

40

%

Other current assets

 

54,734

 

28,242

 

94

%

Accounts payable & accrued liabilities

 

40,864

 

18,952

 

116

%

Current portion of long-term debt

 

80

 

80

 

%

Working capital

 

166,338

 

234,349

 

(29

)%

Property, plant & equipment

 

259,819

 

235,939

 

10

%

Long-term debt

 

155

 

230

 

(33

)%

Total assets

 

577,107

 

554,017

 

4

%

Total liabilities

 

69,049

 

74,212

 

(7

)%

Shareholders’ equity

 

508,058

 

479,805

 

6

%

“We are pleased with record net revenue and the third consecutive quarter of positive Adjusted EBITDA achieved in Q4 Fiscal 2022. This is a reflection of our disciplined approach, the execution by our team and our success at integrating acquisitions,” added Derrick West, Chief Financial Officer. “We enter Fiscal 2023 well-capitalized and with a proven strategy to continue to generate shareholder value.”

Key Financial Results for the Fourth Quarter and Fiscal 2022

  • Net revenue:
    • Compared to the prior period, net revenue increased 83% to $45.5 million, from $24.9 million in Q4 Fiscal 2021. The increase was primarily due to an increase in adult-use recreational revenue, partly offset by lower average net selling price (“ASP”) due to product mix and a decrease in medical revenue.
    • For Fiscal 2022, net revenue increased 84% to $145.8 million from $79.2 million in the previous year primarily due to an increase in recreational and international revenue, partially offset by a decrease in medical sales.
  • Cost of sales:
    • Q4 Fiscal 2022 cost of sales increased to $36.7 million, from $25.9 million in Q4 Fiscal 2021, primarily as a result of the increase in sales volume in the adult-use recreational market.
    • For Fiscal 2022, cost of sales was $119.0 million, compared to $103.6 million in the previous year.
  • Gross margin before fair value changes to biological assets, inventories sold, and other charges:
    • Q4 Fiscal 2022 margin improved to $8.8 million from negative $1.0 million in Q4 Fiscal 2021.
    • In Fiscal 2022, margin improved to $26.8 million from negative $24.4 million in Fiscal 2021. Quarterly and annual improvement were both positively impacted by higher net revenue, lower cost of production and a reduction in inventory provisions and unabsorbed overhead costs.
  • Adjusted gross margin5:
    • Q4 Fiscal 2022 adjusted gross margin was $10.4 million, or 23% of net revenue, compared to $3.0 million, or 12%, in Q4 Fiscal 2021.
    • In Fiscal 2022, adjusted gross margin was $33.4 million, or 23% of net revenue, compared to $3.6 million, or 5% in Fiscal 2021.
    • The improvement in quarterly and annual results was largely due to higher overall sales volumes and improved efficiency, net of the impact of a lower average selling price.
  • Selling, general & administrative (SG&A) expenses:
    • Q4 Fiscal 2022 SG&A expenses increased to $15.7 million from $12.4 million in Q4 Fiscal 2021.
    • In Fiscal 2022, SG&A expenses increased to $59.8 million, compared to $45.7 million in Fiscal 2021.
    • Annual SG&A expenses as a percent of net revenue has decreased from 57.8% to 40.9%.
    • Both quarterly and annual increases were primarily due to acquisitions and the higher spend to support the growth in the business.
  • Adjusted EBITDA6:
    • Q4 Fiscal 2022 Adjusted EBITDA was $3.2 million compared to negative $4.8 million in Q4 Fiscal 2021.
    • Adjusted EBITDA was $3.5 million for Fiscal 2022, compared to negative $27.6 million in Fiscal 2021.
    • The improvement in quarterly and annual results is primarily attributable to the increase in adjusted gross margins due to the higher volume of products sold and lower production costs.
  • Net loss:
    • Q4 Fiscal 2022 net loss was $6.1 million, compared to a net loss of $26.0 million in Q4 Fiscal 2021.
    • In Fiscal 2022, net loss was $14.3 million, compared to $130.7 million in Fiscal 2021.
    • The quarterly and annual decrease in net loss is primarily due to the increased revenues, lower production costs and a decrease in inventory provisions and unabsorbed overheads.
  • Net cash used in operating activities:
    • Q4 Fiscal 2022 net cash used in operating activities was $19.7 million, compared to $7.7 million in Q4 Fiscal 2021.
    • In Fiscal 2022, net cash used in operating activities was $36.2 million, compared to $28.6 million in Fiscal 2021.
    • The year over year increase to cash used in operating activities is primarily due to the higher working capital needs resulting from the growth in revenues.

The following table reconciles the Company’s Adjusted EBITDA to net income (loss).

 

Adjusted EBITDA Reconciliation

(in $000s unless otherwise indicated)

 

Q4-2022

 

Q4-2021

 

Fiscal 2022

 

Fiscal 2021

Net loss as reported

 

$

(6,144

)

 

$

(25,971

)

 

$

(14,283

)

 

$

(130,704

)

Add/(Deduct):

 

 

 

 

 

 

 

 

Financing costs, net of investment income

 

 

(364

)

 

 

(286

)

 

 

(1,058

)

 

 

2,106

 

Income tax expense (recovery)

 

 

(299

)

 

 

 

 

 

(88

)

 

 

 

Depreciation, amortization, and (gain) loss on disposal of property, plant and equipment (per statement of cash flows)

 

 

7,570

 

 

 

17,349

 

 

 

31,487

 

 

 

33,459

 

Impairment of intangible assets

 

 

 

 

 

1,701

 

 

 

 

 

 

1,701

 

Impairment of property, plant and equipment

 

 

2,245

 

 

 

 

 

 

4,245

 

 

 

 

Share of loss and impairment loss from loan receivable and investments in associates

 

 

528

 

 

 

4,162

 

 

 

1,614

 

 

 

6,363

 

Unrealized loss (gain) on changes in fair value of contingent consideration

 

 

317

 

 

 

3,392

 

 

 

(2,621

)

 

 

3,558

 

Realized loss on fair value on inventories sold and other inventory charges

 

 

10,191

 

 

 

7,286

 

 

 

35,204

 

 

 

35,721

 

Unrealized (gain) loss on change in fair value of biological assets

 

 

(15,677

)

 

 

(11,639

)

 

 

(40,001

)

 

 

(31,726

)

Share-based compensation (per statement of cash flows)

 

 

2,809

 

 

 

1,150

 

 

 

5,127

 

 

 

3,896

 

COVID-19 related charges, net of government subsidies and insurance recoveries

 

 

 

 

 

(892

)

 

 

(335

)

 

 

(8,147

)

Legal provisions

 

 

 

 

 

1,050

 

 

 

(310

)

 

 

2,750

 

Share issuance costs allocated to derivative warrant liabilities and change in fair value of derivative liabilities

 

 

(3,415

)

 

 

(6,001

)

 

 

(32,650

)

 

 

29,828

 

Incremental fair value component of inventories sold from acquisitions

 

 

 

 

 

 

 

 

1,363

 

 

 

 

ERP implementation costs

 

 

1,793

 

 

 

 

 

 

3,203

 

 

 

 

Transaction costs

 

 

(188

)

 

 

 

 

 

2,384

 

 

 

 

Provisions and impairment of inventories and biological assets and provisions of inventory to net realizable value

 

 

1,600

 

 

 

2,619

 

 

 

4,546

 

 

 

19,904

 

Research and development expenditures, net of depreciation

 

 

2,266

 

 

 

1,262

 

 

 

5,657

 

 

 

3,648

 

Adjusted EBITDA

 

$

3,232

 

 

$

(4,818

)

 

$

3,484

 

 

$

(27,643

)

The following table reconciles the Company’s adjusted gross margin to gross margin before fair value changes to biological assets and inventories sold:

         

Adjusted Gross Margin Reconciliation

(in $000s unless otherwise indicated)

 

Q4-2022

 

Q4-2021

 

Fiscal 2022

 

Fiscal 2021

Net revenue

 

$

45,480

 

 

$

24,865

 

 

$

145,809

 

 

$

79,163

 

Cost of sales before adjustments

 

 

35,118

 

 

 

21,848

 

 

 

112,419

 

 

 

75,600

 

Adjusted Gross margin

 

 

10,362

 

 

 

3,017

 

 

 

33,390

 

 

 

3,563

 

Adjusted Gross margin %

 

 

23

%

 

 

12

%

 

 

23

%

 

 

5

%

Less:

 

 

 

 

 

 

 

 

Provisions (recoveries) and impairment of inventories and biological assets

 

 

1,600

 

 

 

1,997

 

 

 

4,048

 

 

 

15,039

 

Provisions to net realizable value

 

 

 

 

 

622

 

 

 

498

 

 

 

4,865

 

Incremental fair value component on inventories sold from acquisitions

 

 

 

 

 

 

 

 

1,363

 

 

 

Unabsorbed overhead

 

 

 

 

 

1,400

 

 

 

709

 

 

 

8,063

 

Gross margin before fair value adjustments

 

 

8,762

 

 

 

(1,002

)

 

 

26,772

 

 

 

(24,404

)

Gross margin % (before fair value adjustments)

 

 

19

%

 

 

(4

)%

 

 

18

%

 

 

(31

)%

Add/(Deduct):

 

 

 

 

 

 

 

 

Realized loss on fair value on inventories sold and other inventory charges

 

 

(10,191

)

 

 

(7,286

)

 

 

35,204

 

 

 

35,721

 

Unrealized gain on changes in fair value of biological assets

 

 

15,677

 

 

 

11,639

 

 

 

(40,001

)

 

 

(31,726

)

Gross margin

 

 

14,248

 

 

 

3,351

 

 

 

21,975

 

 

 

(20,409

)

Gross margin %

 

 

31

%

 

 

13

%

 

 

15

%

 

 

(26

)%

Canadian Recreational Market Introductions

SHRED Dankmeister XL Bong Blends

  • Launched in July 2022, SHRED Dankmeister is a new offering in the popular SHRED milled flower line up that provides a coarser grind to suit bong and pipe smokers.

Sour Blue Razzberry

  • An addition to the SHRED’ems gummy line in an electrifying sour raspberry flavour with a 2:1 ratio of CBD to THC. There are now eight SHRED’ems SKUs in market.

Holy Mountain

  • Launched subsequent to quarter-end, HOLY MOUNTAIN, the Company’s newest value brand, features an initial lineup of dried flower strains along with value pressed hash. With the introduction of HOLY MOUNTAIN, Organigram now offers value-priced flower in an expanded range of sizes, starting with 3.5 gram offerings at launch.

Research and Product Development

Product Development Collaboration (“PDC”) and Centre of Excellence (“CoE”)

  • The Organigram and BAT CoE has completed all key spaces including the R&D Laboratories, enhanced Analytics, Quality Assurance and Control laboratory, GPP production space, Sensory Testing Laboratory and state-of-the-art Biolab for advanced plant science research. The CoE has undertaken initial stage development and safety studies on first generation edibles and novel beverages as part of its work. As part of the development, the CoE has created and assessed numerous delivery systems and created over 60 unique formulations to develop differentiated products in the future.

Plant Science, Breeding and Genomics R&D in Moncton

  • Organigram’s cultivation program; a key strategic advantage for the Company has continued its expansion with the addition of a dedicated cultivation R&D space. The new space has accelerated rapid assessment and screening, delivering 20-30 unique cultivars every two months while freeing up rooms for commercial grow. The Plant Science team continues to move the garden towards unique, high terpene and high THC, in-house grown cultivars, while also leveraging the newly commissioned Biolab for ongoing plant science innovation focusing on quality, potency and disease-resistance marker discovery to enrich the future flower pipeline.

International

  • In Fiscal Q4 2022, the Company completed three international shipments totaling $6.0 million to Israel and Australia. In Fiscal 2022, seven international shipments were made for total shipped sales of $15.4 million.
  • Recent political changes and cannabis election ballot initiatives for medical and recreational use in the United States suggest that the potential movements to U.S. federal legalization of cannabis (THC) remain difficult to predict. The Company continues to monitor and develop a potential U.S. entry strategy that could include THC, CBD and other minor cannabinoids. The Company is also monitoring recreational legalization opportunities in European jurisdictions based on the size of the addressable market and recent regulatory changes with a particular focus on Germany.

Liquidity and Capital Resources

  • On August 31, 2022, the Company had unrestricted cash and short-term investments balance of $99 million compared to $184 million at August 31, 2021. The decrease in cash of $85 million was the result of the following: $49 million invested in capital expenditures across three facilities, $8 million in cash consideration towards the acquisition of Laurentian Organics Inc. (“Laurentian”), $3 million investment into Hyasynth Biologicals with the balance related to supporting the increase in the working capital assets.
  • For Fiscal 2022 the Company has budgeted $29 million in capital expenditures for the three facilities. This spend would relate to the completion of the expansion at the Laurentian operations and also include automation investments at the Winnipeg edibles and Moncton flower facilities.
  • Organigram believes its capital position is healthy and that there is sufficient liquidity available for the near to medium term.

Capital Structure

in $000s

 

AUGUST 31,

2022

 

AUGUST 31,

2021

Current and long-term debt

 

235

 

310

Shareholders’ equity

 

508,058

 

479,805

Total debt and shareholders’ equity

 

508,293

 

480,115

in 000s

 

 

 

 

Outstanding common shares

 

313,816

 

298,786

Options

 

11,051

 

7,797

Warrants

 

16,944

 

16,944

Top-up rights

 

7,590

 

6,559

Restricted share units

 

2,346

 

1,186

Performance share units

 

265

 

472

Total fully-diluted shares

 

352,012

 

331,744

Outstanding basic and fully diluted share count as at November 28, 2022 is as follows:

in 000s

 

NOVEMBER 28,

2022

Outstanding common shares

 

313,857

Options

 

11,998

Warrants

 

16,944

Top-up rights

 

8,393

Restricted share units

 

3,797

Performance share units

 

1,103

Total fully-diluted shares

 

356,092

Outlook7

Net revenue

  • Organigram currently expects Fiscal 2023 revenue to be higher than that of Fiscal 2022. This expectation is largely due to ongoing sales momentum, stronger forecasted market growth, the Company’s expanded product line in multiple segments, greater capacity to meet demand at the Moncton Campus, increased throughput at the Winnipeg facility and contributions from the Lac-Supérieur facility.
  • In addition, the anticipated continuation of shipments to Canndoc in Israel and Cannatrek and Medcan in Australia is expected to generate higher sequential revenue in Fiscal 2023 as compared to Fiscal 2022. The Company believes it is better equipped to fulfill demand in Fiscal 2023 with larger harvests expected compared to Fiscal 2022. In addition, on November 17, 2022, the Company entered into a new multi-year agreement with Canndoc that contemplates shipping up to 20,000 kilograms of dried flower.

Adjusted gross margins8

  • The Company expects to see an improvement in adjusted gross margins in Fiscal 2023 and has put measures in place that it expects will further improve margins over time.
  • The overall level of Fiscal 2023 adjusted gross margins versus Fiscal 2022 will also be dependent on other factors, including product category and brand sales mix.
  • Organigram has identified the following opportunities which it believes have the potential to further improve adjusted gross margins over time:
    • Economies of scale and efficiencies gained as a result of moving from an annual capacity of 45,000 to 85,000 kilograms of dry flower at the Moncton facility, in addition to enhanced growing and harvesting methodologies, and design and environmental improvements, which have resulted in higher-quality flower and improved yields;
    • Expansion of the Lac-Supérieur facility which is expected to increase capacity for annual hash production from 1 million to over 2 million units;
    • Continued investment in automation at all three sites, which will drive cost efficiencies and reduce dependence on manual labor;
    • Revitalization of the Edison brand, including product innovation, packaging and post harvest processing and increased investment in building brand equity within the premium segment, geared toward securing higher margins;
    • Additional innovative product launches to support other key brands: SHRED, Monjour, Holy Mountain and Tremblant to create new potential avenues for growth; and
    • Full-year margin contribution from the Laurentian acquisition.

Adjusted EBITDA

  • The Company expects significant growth in Adjusted EBITDA in Fiscal 2023 over Fiscal 2022.

Cash flow

  • The Company expects to have positive cash flows from operating activities during Fiscal 2023 and positive free cash flows (“FCF”) during calendar 2023.

Fourth Quarter and Full Year Fiscal 2022 Conference Call

The Company will host a conference call to discuss its results with details as follows:

Date: November 29, 2022

Time: 8:00 am Eastern Time

To register for the conference call, please use this link:

https://conferencingportals.com/event/RUyBPhzX

To ensure you are connected for the full call, we suggest registering a day in advance or at minimum 10 minutes before the start of the call. After registering, a confirmation will be sent through email, including dial in details and unique conference call codes for entry. Registration is open through the live call.

To access the webcast:

https://events.q4inc.com/attendee/926817268

A replay of the webcast will be available within 24 hours after the conclusion of the call at https://www.organigram.ca/investors and will be archived for a period of 90 days following the call.

Non-IFRS Financial Measures

This news release refers to certain financial performance measures (including adjusted gross margin and Adjusted EBITDA) that are not defined by and do not have a standardized meaning under International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board. Non-IFRS financial measures are used by management to assess the financial and operational performance of the Company. The Company believes that these non-IFRS financial measures, in addition to conventional measures prepared in accordance with IFRS, enable investors to evaluate the Company’s operating results, underlying performance and prospects in a similar manner to the Company’s management. As there are no standardized methods of calculating these non-IFRS measures, the Company’s approaches may differ from those used by others, and accordingly, the use of these measures may not be directly comparable. Accordingly, these non-IFRS measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. Adjusted EBITDA is a non-IFRS measure that the Company defines as net income (loss) before: financing costs, net of investment income; income tax expense (recovery); depreciation, amortization, reversal of/or impairment, (gain) loss on disposal of property, plant and equipment (per the statement of cash flows); share-based compensation (per the statement of cash flows); share of loss from investments in associates and impairment loss from loan receivable; change in fair value of contingent consideration; change in fair value of derivative liabilities; expenditures incurred in connection with research & development activities (net of depreciation); unrealized (gain) loss on changes in fair value of biological assets; realized loss on fair value on inventories sold and other inventory charges; provisions and impairment of inventories and biological assets; provisions to net realizable value of inventories; COVID-19 related charges; government subsidies; legal provisions; incremental fair value component of inventories sold from acquisitions; transaction costs; and share issuance costs.

Contacts

For Investor Relations enquiries, please contact:
investors@organigram.ca

For Media enquiries, please contact:
Paolo De Luca, Chief Strategy Officer

paolo.deluca@organigram.ca

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Flora Growth Reports Third Quarter 2022 Financial Results

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  • Revenue for the three-month period ended September 30, 2022 was $10.8 million, an increase of 414% year over year
  • Revenue for the nine-month period ended September 30, 2022 was $25.7 million, an increase of 510% year over year
  • Gross profit for the three-month period ended September 30, 2022 was $5.0 million, an increase of 703% year over year with gross margins improving from 29.6% to 46.2%.
  • Company reaffirms its 2022 revenue guidance to range between $35 million – $45 million
  • Flora management to host a webcast today at 4:30PM ET

FORT LAUDERDALE, Fla. & TORONTO–(BUSINESS WIRE)–Flora Growth Corp. (NASDAQ: FLGC) (“Flora” or the “Company”), a leading all-outdoor cultivator, manufacturer and distributor of global cannabis products and brands, reported today its financial and operating results for the third quarter and nine months ended September 30, 2022. All financial information is provided in U.S. dollars unless indicated otherwise.

“The third quarter of 2022 was another exciting quarter for Flora as we continued to lay the foundation of our business for the long-term,” said Luis Merchan, Chairman a CEO of Flora Growth. “During the quarter, we exported products to several new markets, including distribution of our Colombian grown high-CBD dried cannabis flower to Switzerland and the Czech Republic, as well as CBD isolate to the United States. Our global distribution network, coupled with our high-quality Colombian flower and derivatives, leave Flora well positioned to capitalize on the evolving global cannabis landscape.”

“Subsequent to the quarter, we signed a definitive agreement to acquire Franchise Global Health, a pharmaceutical and medical cannabis distributor with principal operations in Germany. This transformative deal would connect our Colombian commercial infrastructure and product portfolio to the German and EU cannabis markets, allowing Flora to significantly increase its international footprint.

“As we look ahead to the end of the year, we expect to finalize the transaction and solidify our presence in the European cannabis market. With our industry leading production costs and expanding global footprint, we believe our business is well positioned to accelerate growth into 2023 and beyond.”

3Q2022 Financial Highlights

  • Total revenue for the quarter was $10.8 million, an increase of 414% year over year, driven by Flora’s House of Brands division, which includes the acquisitions of JustCBD and Vessel.
  • Gross profit increased to approximately $5.0 million, up approximately 703% year over year.
  • Gross margin in the quarter improved from 29.6% to 46.2% year over year, and demonstrated a gradual improvement from 43.9% during 1H2022.
  • Net loss was approximately $7.4 million compared to a net loss of $3.6 million in 3Q 2021. Net loss margins reduced year over year, year to date, and in comparison to 1H2022.
  • Adjusted EBITDA (a non-IFRS measure defined below) was $(3.9) million compared to $(3.1) million in 3Q 2021. Adjusted EBITDA margin improved significantly from -150.1 % in 3Q2021 to -36.5 % in 3Q2022. For a reconciliation of these non-IFRS financial measures to the most directly comparable IFRS financial measures, please see Table 4 under “Reconciliation of IFRS to non-IFRS financial results” included at the end of this release.
  • As of September 30, 2022, the Company had approximately $5.9 million in cash compared to $37.6 million as of December 31, 2021. The decrease was primarily due to cash paid for the acquisition of JustCBD, as well as higher operating expenses related to investments in headcount, sales and marketing and one-time expenses associated with Cosechemos operations and the Flora Lab expansion.

2022 Outlook

  • Flora Growth remains on track to meet its 2022 revenue guidance of $35-45 million.

Recent Operational Highlights

  • Announced the appointment of former JP Morgan executive Brandon Konigsberg to Flora’s Board of Directors and former Amazon executive Elshad Garayev as the Company’s Chief Financial Officer
  • Announced a joint venture with Colombia’s largest indigenous tribe to process and distribute cannabis products throughout the country
  • Acquired the No Cap Hemp Co. brand, bolstering new product offerings and revenue streams for the expanding House of Brands division
  • Awarded Best M&A Deal at the Benzinga Cannabis Capital Conference for the acquisition of JustCBD
  • Completed multiple commercial cannabis and CBD isolate exports to international markets in the United States, Switzerland and the Czech Republic
  • Signed a definitive agreement to acquire Franchise Global Health (FGH). While the completion of the transaction is subject to customary closing conditions for a transaction of such nature, including a formal vote by FGH shareholders, FGH shareholders holding in excess of 73% of FGH’s outstanding shares have agreed to vote in favor of the transaction.

Earnings Call: November 28, 2022, at 4:30PM ET

Live Webcast Details

Date: Monday, November 28, 2022

Time: 4:30 p.m. ET

Online Participant Link: https://us02web.zoom.us/webinar/register/WN_zaiec74LQyGi_I9YYxCOOQ

The recording will be available on the Company’s investor page until November 2023.

The live webcast will be available online through the above participant link and will be archived and available on the Company’s website within approximately 24 hours.

About Flora Growth Corp.

Flora is building a connected, design-led collective of plant-based wellness and lifestyle brands, designed to deliver the most compelling customer experiences in the world, one community at a time. As the operator of one of the largest outdoor cannabis cultivation facilities, Flora leverages natural, cost-effective cultivation practices to supply cannabis derivatives to its commercial, house of brands, and life sciences divisions. Visit www.floragrowth.com or follow @floragrowthcorp on social media for more information.

Cautionary Statement Concerning Forward-Looking Statements

This press release contains ‘‘forward-looking statements,’’ as defined by federal securities laws. Forward-looking statements reflect Flora’s current expectations and projections about future events at the time, and thus involve uncertainty and risk. The words “believe,” “expect,” “anticipate,” “will,” “could,” “would,” “should,” “may,” “plan,” “estimate,” “intend,” “predict,” “potential,” “continue,” and the negatives of these words and other similar expressions generally identify forward looking statements. Such forward-looking statements are subject to various risks and uncertainties, including those described under the section entitled “Risk Factors” in Flora’s Annual Report on Form 20-F filed with the SEC on May 9, 2022, as amended, as such factors may be updated from time to time in Flora’s periodic filings with the SEC, which are accessible on the SEC’s website at www.sec.gov. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this release and in Flora’s filings with the SEC. While forward-looking statements reflect Flora’s good faith beliefs, they are not guarantees of future performance. Flora disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, new information, data or methods, future events or other changes after the date of this press release, except as required by applicable law. You should not place undue reliance on any forward-looking statements, which are based only on information currently available to Flora (or to third parties making the forward-looking statements).

About non-IFRS financial measures

To supplement our condensed consolidated financial statements, which are prepared and presented in accordance with International Financial Reporting Standards (“IFRS”), we use the following non-IFRS financial measures: Adjusted EBITDA and Adjusted EBITDA margin.

  • Adjusted EBITDA is a non-IFRS financial measure that does not have any standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other companies. The Company calculates adjusted EBITDA as total net loss, plus (minus) income taxes (recovery), plus (minus) interest expense (income), plus depreciation and amortization, plus (minus) non-operating expense (income), plus share based compensation, plus impairment charges, plus (minus) unrealized loss (income) from changes in fair value, plus charges related to the flow-through of inventory step-up on business combinations, plus other acquisition and transaction costs, plus (minus) non-cash fair value adjustments on the sale of inventory and biological assets.
  • Adjusted EBITDA margin % is a non-IFRS financial measure that does not have any standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other companies. The Company calculates adjusted EBITDA margin % as adjusted EBITDA, as described above, divided by revenue for the period.

Table 1. Consolidated Statements of Financial Position

Flora Growth Corp.

 

 

 

 

Interim Condensed Consolidated Statements of Financial Position

(Unaudited – Prepared by Management)

(in thousands of United States dollars)

 

 

 

 

 

 

September

 

 

December

 

30,

31,

As at:

2022

2021

ASSETS

 

 

 

 

 

 

Current

 

 

 

 

 

 

Cash

 

$

5,900

 

 

$

37,614

 

Restricted cash

 

 

1

 

 

 

2

 

Trade and amounts receivable

 

 

4,392

 

 

 

5,324

 

Loans receivable and advances

 

 

255

 

 

 

273

 

Prepaid expenses

 

 

1,990

 

 

 

1,700

 

Biological assets

 

 

91

 

 

 

37

 

Inventory

 

 

10,280

 

 

 

2,993

 

Total current assets

 

 

22,909

 

 

 

47,943

 

Non-current

 

 

 

 

 

 

 

 

Property, plant and equipment

 

 

4,349

 

 

 

3,750

 

Right of use assets

 

 

3,258

 

 

 

1,229

 

Intangible assets

 

 

12,652

 

 

 

9,736

 

Goodwill

 

 

28,856

 

 

 

20,054

 

Investments

 

 

839

 

 

 

2,670

 

Other Assets

 

 

271

 

 

 

97

 

Total assets

 

$

73,134

 

 

$

85,479

 

LIABILITIES

 

 

 

 

 

 

 

 

Current

 

 

 

 

 

 

 

 

Trade payables and accrued liabilities

 

$

7,559

 

 

$

5,628

 

Current portion of long term debt

 

 

5

 

 

 

18

 

Current portion of lease liability

 

 

1,102

 

 

 

412

 

Other accrued liabilities

 

 

18

 

 

 

61

 

Total current liabilities

 

 

8,684

 

 

 

6,119

 

Non-current

 

 

 

 

 

 

 

 

Non-current debt

 

 

79

 

 

 

 

Non-current lease liability

 

 

2,137

 

 

 

908

 

Deferred tax

 

 

1,531

 

 

 

1,511

 

Other long term liabilities

 

 

6,537

 

 

 

 

Total liabilities

 

 

18,968

 

 

 

8,538

 

SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

Share capital

 

 

120,160

 

 

 

102,428

 

Options

 

 

6,242

 

 

 

3,712

 

Warrants

 

 

9,276

 

 

 

10,670

 

Accumulated other comprehensive loss

 

 

(2,723

)

 

 

(1,108

)

Deficit

 

 

(78,457

)

 

 

(38,536

)

Non-controlling interest

 

 

(332

)

 

 

(225

)

Total shareholders’ equity

 

 

54,166

 

 

 

76,941

 

Total liabilities and shareholders’ equity

 

$

73,134

 

 

$

85,479

 

 Table 2. Consolidated Statements of Loss

Flora Growth Corp.

 

Interim Condensed Consolidated Statements of Loss and Comprehensive Loss

 

(Unaudited – Prepared by Management)

 

(in thousands of United States dollars, except per share amounts which are in thousands of shares)

 

 

 

For the

 

 

For the

 

 

 

 

 

 

three

three

For the nine

For the nine

months

months

months

months

ended

ended

ended

ended

September

September

September,

September

30,

30,

30,

30,

2022

2021

2022

2021

Revenue

 

$

10,765

 

 

$

2,093

 

 

$

25,682

 

 

$

4,211

 

Cost of sales

 

 

5,936

 

 

 

1,474

 

 

 

14,351

 

 

 

2,580

 

Gross profit before fair value adjustments

 

 

4,829

 

 

 

619

 

 

 

11,331

 

 

 

1,631

 

Unrealized gain on changes in fair value of biological assets

 

 

152

 

 

 

 

 

 

198

 

 

 

 

Realized fair value amounts included in inventory sold

 

 

(10

)

 

 

 

 

 

(12

)

 

 

 

Gross Profit

 

 

4,971

 

 

 

619

 

 

 

11,517

 

 

 

1,631

 

Operating Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consulting and management fees

 

 

3,237

 

 

 

1,905

 

 

 

8,480

 

 

 

4,167

 

Professional fees

 

 

802

 

 

 

904

 

 

 

2,898

 

 

 

1,670

 

General and administrative

 

 

1,186

 

 

 

610

 

 

 

3,615

 

 

 

2,091

 

Promotion and communication

 

 

2,195

 

 

 

34

 

 

 

6,914

 

 

 

1,214

 

Travel expenses

 

 

288

 

 

 

140

 

 

 

889

 

 

 

283

 

Share based compensation

 

 

139

 

 

 

393

 

 

 

2,994

 

 

 

488

 

Research and development

 

 

170

 

 

 

(20

)

 

 

592

 

 

 

65

 

Depreciation and amortization

 

 

985

 

 

 

67

 

 

 

2,697

 

 

 

186

 

Bad debt expense

 

 

631

 

 

 

 

 

 

1,036

 

 

 

100

 

Goodwill impairment

 

 

 

 

 

 

 

 

16,000

 

 

 

 

Other expenses (income), net

 

 

346

 

 

 

198

 

 

 

1,524

 

 

 

131

 

Total operating expenses

 

 

9,979

 

 

 

4,231

 

 

 

47,639

 

 

 

10,395

 

Operating Loss

 

 

(5,008

)

 

 

(3,612

)

 

 

(36,122

)

 

 

(8,764

)

Interest expense

 

 

75

 

 

 

57

 

 

 

144

 

 

 

121

 

Foreign exchange loss (gain)

 

 

128

 

 

 

(38

)

 

 

328

 

 

 

(116

)

Unrealized loss from changes in fair value

 

 

2,177

 

 

 

 

 

 

3,510

 

 

 

 

Net loss before income taxes

 

 

(7,388

)

 

 

(3,631

)

 

 

(40,104

)

 

 

(8,769

)

Income tax benefit

 

 

 

 

 

 

 

 

 

 

 

 

Net loss for the period

 

$

(7,388

)

 

$

(3,631

)

 

$

(40,104

)

 

$

(8,769

)

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exchange differences on foreign operations

 

1,048

 

 

463

 

 

1,615

 

 

663

 

Total comprehensive loss for the period

 

$

(8,436

)

 

$

(4,094

)

 

$

(41,719

)

 

$

(9,432

)

Net loss attributable to:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Flora Growth Corp.

 

$

(7,358

)

 

$

(3,608

)

 

$

(39,969

)

 

$

(8,705

)

Non-controlling interests

 

 

(30

)

 

 

(23

)

 

 

(135

)

 

 

(64

)

Comprehensive loss attributable to:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Flora Growth Corp.

 

$

(8,406

)

 

$

(4,071

)

 

$

(41,584

)

 

$

(9,368

)

Non-controlling interests

 

 

(30

)

 

 

(23

)

 

 

(135

)

 

 

(64

)

Basic and diluted loss per share attributable to Flora Growth Corp.

 

$

(0.10

)

 

$

(0.08

)

 

$

(0.54

)

 

$

(0.21

)

Weighted average number of common shares outstanding – basic and diluted

 

 

76,611

 

 

 

44,199

 

 

 

74,335

 

 

 

41,152

 

Table 3. Statement of Cash Flows

Flora Growth Corp.

Consolidated Statement of Cash Flows

(Unaudited – Prepared by Management)

(in thousands of United States dollars)

 

 

For the

 

 

For the

 

nine months

nine months

ended

ended

September

September

30,

30,

2022

2021

Cash flows from operating activities:

 

 

 

 

 

 

Net loss

 

$

(40,104

)

 

$

(8,769

)

Adjustments to net loss:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

2,697

 

 

 

186

 

Stock-based compensation

 

 

3,184

 

 

 

488

 

Impairments

 

 

16,000

 

 

 

 

Changes in fair value of investments, biological assets and liabilities

 

 

3,312

 

 

 

 

Bad debt expense

 

 

1,036

 

 

 

100

 

Interest expense

 

 

123

 

 

 

18

 

Income tax benefit

 

 

 

 

 

 

Income tax (paid) received

 

 

 

 

 

 

 

 

 

(13,752

)

 

 

(7,977

)

Net change in non-cash working capital:

 

 

 

 

 

 

 

 

Trade and other receivables

 

 

909

 

 

 

(9,692

)

Inventory

 

 

(884

)

 

 

(1,025

)

Prepaid expenses and other assets

 

 

353

 

 

 

(1,596

)

Trade payables and accrued liabilities

 

 

(458

)

 

 

1,005

 

Net cash used in operating activities

 

 

(13,832

)

 

 

(19,285

)

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Common shares issued

 

 

 

 

 

18,067

 

Equity issue costs

 

 

(88

)

 

 

(2,431

)

Exercise of warrants and options

 

 

179

 

 

 

10,357

 

Repayments of lease liability

 

 

(707

)

 

 

(97

)

Common shares repurchased

 

 

(255

)

 

 

 

Interest paid

 

 

(126

)

 

 

 

Loan borrowing (repayments)

 

 

66

 

 

 

(247

)

Net cash (used) provided by financing activities

 

 

(931

)

 

 

25,649

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Loans provided

 

 

 

 

 

(268

)

Loan repayments received

 

 

 

 

 

224

 

Purchases of property, plant and equipment and other assets

 

 

(948

)

 

 

(1,472

)

Purchase of investments

 

 

 

 

 

(3,653

)

Business and asset acquisitions, net of cash acquired

 

 

(15,388

)

 

 

(1,284

)

Net cash used in investing activities

 

 

(16,336

)

 

 

(6,453

)

 

 

 

 

 

 

 

 

 

Effect of exchange rate on changes on cash

 

 

(615

)

 

 

(613

)

 

 

 

 

 

 

 

 

 

Change in cash during the period

 

 

(31,714

)

 

 

(702

)

Cash and cash equivalents at beginning of period

 

 

37,614

 

 

 

15,523

 

Cash and cash equivalents at end of period

 

$

5,900

 

 

$

14,821

 

Supplemental disclosure of non-cash activities

 

 

 

 

 

 

 

 

Right of use assets and lease liabilities acquired

 

$

2,042

 

 

$

 

Common shares issued for business combinations

 

 

14,917

 

 

 

 

Table 4. Reconciliation of IFRS to non-IFRS financial results

Adjusted EBITDA (non-IFRS measure) reconciliation to net loss and Adjusted EBITDA margin to net income (loss) margin. The reconciliation of the Company’s adjusted EBITDA, a non-IFRS financial measure, to net loss, the most directly comparable IFRS financial measure, for the three and nine months ended September 30, 2022, and September 30, 2021 is presented in the table below:

(In thousands of United States dollars)

 

For the

three

months

ended

September

30, 2022

 

 

For the

three

months

ended

September

30, 2021

 

 

For the

nine

months

ended

September

30, 2022

 

 

For the

nine

months

ended

September

30, 2021

 

Net loss for the period

 

$

(7,388

)

 

$

(3,631

)

 

$

(40,104

)

 

$

(8,769

)

Income tax expense (benefit)

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

75

 

 

 

57

 

 

 

144

 

 

 

121

 

Depreciation and amortization

 

 

985

 

 

 

67

 

 

 

2,697

 

 

 

186

 

Non-operating expense (1)

 

 

128

 

 

 

(38

)

 

 

328

 

 

 

(116

)

Share based compensation

 

 

140

 

 

 

393

 

 

 

3,184

 

 

 

488

 

Impairments (2)

 

 

 

 

 

 

 

 

16,000

 

 

 

 

Unrealized loss from changes in fair value (3)

 

 

2,177

 

 

 

 

 

 

3,510

 

 

 

 

Charges related to the flow-through of inventory step-up on business combinations

 

 

 

 

 

 

 

 

1,631

 

 

 

 

Other acquisition and transaction costs

 

 

94

 

 

 

10

 

 

 

653

 

 

 

10

 

Non-cash fair value adjustments on the sale of inventory and biological assets

 

 

(142

)

 

 

 

 

 

(186

)

 

 

 

Adjusted EBITDA

 

$

(3,931

)

 

$

(3,142

)

 

$

(12,143

)

 

$

(8,080

)

Adjusted EBITDA Margin %

 

 

-36.5

%

 

 

-150.1

%

 

 

-47.3

%

 

 

-191.9

%

(1)

Non-operating expense includes foreign exchange gain (loss).

 

 

(2)

Impairments include goodwill impairment.

 

 

(3)

Unrealized loss from changes in fair value includes changes in the value of the Company’s long-term investment in an early-stage European cannabis company and the value of the Company’s contingent consideration associated with its acquisition of JustCBD.

 

Contacts

Investor Relations:
Sean Mansouri, CFA

ir@floragrowth.com

Public Relations:
Cassandra Dowell

+1 (858) 221-8001

flora@cmwmedia.com

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Business Wire

POSaBIT Continues Eastward Expansion, Goes Live with Point of Sale System in Vermont

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TORONTO & SEATTLE–(BUSINESS WIRE)–POSaBIT Systems Corporation (CSE: PBIT, OTC: POSAF), the premier cannabis point of sale and payments platform, has gone live with their point of sale system in the Vermont market. While POSaBIT is able to take payments in any state, the unique regulatory requirements of each state mean that the point of sale system is extensively customized for each market. Vermont marks the 21st state that is active with POSaBIT’s dispensary solutions. This is a continuation of the company’s focus on eastward expansion into emerging markets; Vermont’s first recreational cannabis store only opened October 1st of this year.

“Every new state we enter is cause for celebration, and Vermont is no exception,” said Ryan Hamlin, Co-Founder and CEO of POSaBIT. “Our team is laser-focused on learning the ins and outs of each new market, optimizing our products to be the best fit as new states come online, and executing in a way that provides any dispensary with an incredible in-store experience. With Vermont, our team has done exactly that.”

POSaBIT plans to continue expanding into new markets and has contracted dispensaries with three additional states where the company plans to go live by the end of the year.

About POSaBIT

POSaBIT (CSE: PBIT) POSaBIT is a FinTech, working exclusively within the cannabis industry. We provide a best-in-class Point-of-Sale solution and are the leading cashless payment provider for cannabis retailers. We work tirelessly to build better financial services and transaction methods for merchants. We bring cutting edge software and technology to the cannabis industry so that all merchants can have a safe and compliant set of services to solve the problems of a cash-only industry. For additional information, visit www.posabit.com .

Contacts

Investor Relations:

investors@posabit.com

Media Relations:

Oscar Dahl

855-767-2248

oscar@posabit.com

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