Grown Rogue Completes Fiscal Year End Change, Reports Audited Financial Results for the Two Months Ending December 31, 2023
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Grown Rogue October 31 financial year end to a calendar year end, and is reporting a two-month stub period for the two months endingDecember 31, 2023 -
Revenue of
$3.6M and Operating Cash Flow (OCF), before changes in working capital (WC), of$0.7M -
Subsequent to period-end, the Company augmented
New Jersey presence with a retail investment, announced entry intoIllinois via a craft growers license, and announced the exercise and conversion of warrants, options, and debentures
Management Commentary
"We are excited to complete the transition of our fiscal year to now align with the calendar year. It was great to see that during November and December, typically the two slowest months for the Company, we saw 30% year-over-year revenue growth in our core markets of
"We are also pleased with the construction and business planning progress in
"The recent warrant exercises, which resulted in the Company adding an additional
I want to personally thank the entire
Financial Statements and aEBITDA reconciliation
|
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION |
|
|
|
|
$ |
$ |
|
ASSETS |
|
|
|
Current assets |
|
|
|
Cash and cash equivalents |
6,804,579 |
8,858,247 |
|
Accounts receivable (Note 18) |
1,642,990 |
2,109,424 |
|
Biological assets (Note 3) |
1,723,342 |
1,566,822 |
|
Inventory (Note 4) |
5,021,290 |
4,494,257 |
|
Prepaid expenses and other assets |
420,336 |
392,787 |
|
Total current assets |
15,612,537 |
17,421,537 |
|
Property and equipment (Note 8) |
8,820,897 |
8,753,266 |
|
Notes receivable (Notes 6.2.1 and 6.2.2) |
2,449,122 |
1,430,526 |
|
Warrants asset (Note 13.2) |
1,761,382 |
1,361,366 |
|
Intangible assets and goodwill (Note 9) |
725,668 |
725,668 |
|
Deferred tax asset (Note 20) |
246,294 |
470,358 |
|
TOTAL ASSETS |
29,615,900 |
30,162,721 |
|
LIABILITIES |
|
|
|
Current liabilities |
|
|
|
Accounts payable and accrued liabilities |
1,358,962 |
2,359,750 |
|
Current portion of lease liabilities (Note 7) |
925,976 |
824,271 |
|
Current portion of long-term debt (Note 10) |
780,358 |
1,285,604 |
|
Business acquisition consideration payable (Note 5) |
360,000 |
360,000 |
|
Derivative liability (Notes 11.1.1, 11.2 and 11.2.1) |
7,471,519 |
7,808,500 |
|
Income tax payable |
873,388 |
366,056 |
|
Total current liabilities |
11,770,203 |
13,004,181 |
|
Lease liabilities (Note 7) |
1,972,082 |
2,094,412 |
|
Long-term debt (Note 10) |
82,346 |
102,913 |
|
Convertible debentures (Notes 11.1, 11.2 and 11.2.1) |
2,459,924 |
2,412,762 |
|
TOTAL LIABILITIES |
16,284,555 |
17,614,268 |
|
EQUITY |
|
|
|
Share capital (Note 12) |
24,593,422 |
24,593,422 |
|
Contributed surplus (Notes 13 and 14) |
8,186,297 |
8,081,938 |
|
Accumulated other comprehensive loss |
(108,069) |
(114,175) |
|
Accumulated deficit |
(20,353,629) |
(20,996,449) |
|
Equity attributable to shareholders |
12,318,021 |
11,564,736 |
|
Non-controlling interests (Note 23) |
1,013,324 |
983,717 |
|
TOTAL EQUITY |
13,331,345 |
12,548,453 |
|
TOTAL LIABILITIES AND EQUITY |
29,615,900 |
30,162,721 |
|
CONSOLIDATED STATEMENTS OF INCOME & LOSS |
Two months ending |
Year ended |
|
AND COMPREHENSIVE INCOME & LOSS |
|
|
|
|
$ |
$ |
|
Revenue |
|
|
|
Product sales (Note 2.5) |
3,542,037 |
22,424,169 |
|
Service revenue (Note 2.5.1) |
96,050 |
929,016 |
|
Total revenue |
3,638,087 |
23,353,185 |
|
Cost of goods sold |
|
|
|
Cost of finished cannabis inventory sold |
(1,404,323) |
(11,155,676) |
|
Costs of service revenue |
(89,210) |
(308,641) |
|
Gross profit, excluding fair value items |
2,144,554 |
11,888,868 |
|
Realized fair value amounts in inventory sold |
(460,647) |
(2,573,151) |
|
Unrealized fair value gain on growth of biological |
686,867 |
3,355,797 |
|
Gross profit |
2,370,774 |
12,671,514 |
|
Expenses |
|
|
|
Accretion expense |
216,493 |
1,026,732 |
|
Amortization of property and equipment (Note 8) |
186,415 |
578,641 |
|
General and administrative (Note 19) |
1,437,353 |
6,465,877 |
|
Share-based compensation |
104,359 |
346,113 |
|
Total expenses |
1,944,620 |
8,417,363 |
|
Income from operations |
426,154 |
4,254,151 |
|
Other income and (expense) |
|
|
|
Interest expense |
(69,164) |
(370,616) |
|
Other income (expense) |
49,678 |
441,487 |
|
Unrealized gain on derivative liability |
336,981 |
(4,563,498) |
|
Unrealized gain on warrants asset |
400,016 |
129,113 |
|
Loss on disposal of property and equipment |
(87,699) |
(182,025) |
|
Total other income (expense), net |
629,812 |
(4,545,539) |
|
Gain (loss) from operations before taxes |
1,055,966 |
(291,388) |
|
Income tax (Note 20) |
(383,539) |
(370,932) |
|
Net income (loss) |
672,427 |
(662,320) |
|
Other comprehensive income (items that may be
|
|
|
|
Currency translation loss |
6,106 |
(4,562) |
|
Total comprehensive income (loss) |
678,533 |
(666,882) |
|
Gain
(loss) per share attributable to owners of the parent – |
0.00 |
(0.00) |
|
Weighted average shares outstanding – basic |
182,005,886 |
172,708,792 |
|
Gain
(loss) per share attributable to owners of the parent – |
0.00 |
0.00 |
|
Weighted average shares outstanding – diluted |
214,046,728 |
172,708,792 |
|
Net income (loss) for the period attributable to: |
|
|
|
Non-controlling interest |
29,607 |
(129,279) |
|
Shareholders |
642,820 |
(533,041) |
|
Net income (loss) |
672,427 |
(662,320) |
|
Comprehensive income (loss) for the period attributable to: |
|
|
|
Non-controlling interest |
29,607 |
(129,279) |
|
Shareholders |
648,926 |
(537,603) |
|
Total comprehensive income (loss) |
678,533 |
(666,882) |
|
|
Two months ending |
Year ending |
|
CONSOLIDATED STATEMENTS OF CASH FLOWS |
|
|
|
|
$ |
$ |
|
Operating activities |
|
|
|
Net income (loss) |
672,427 |
(662,320) |
|
Adjustments for non-cash items in net income (loss): |
|
|
|
Amortization of property and equipment |
186,415 |
578,641 |
|
Amortization of property and equipment included in costs |
209,985 |
1,757,672 |
|
Unrealized gain on changes in fair value of biological assets |
(686,867) |
(3,355,797) |
|
Changes in fair value of inventory sold |
460,647 |
2,573,151 |
|
Deferred income taxes |
224,064 |
(470,358) |
|
Stock option expense |
104,359 |
344,593 |
|
Accretion expense |
216,493 |
1,026,732 |
|
Loss on disposal of property and equipment |
87,699 |
182,025 |
|
(Gain) loss on fair value of derivative liability |
(336,981) |
4,563,498 |
|
(Gain) on warrants asset |
(400,016) |
(129,113) |
|
Effects of foreign exchange |
6,106 |
(2,210) |
|
|
744,331 |
6,406,514 |
|
Changes in non-cash working capital (Note 15) |
(513,222) |
(677,163) |
|
Net cash provided by operating activities |
231,109 |
5,729,351 |
|
|
|
|
|
Investing activities |
|
|
|
Purchase of property and equipment and intangibles |
(126,690) |
(1,456,782) |
|
Cash advances and loans made to other parties |
(1,018,596) |
(1,430,526) |
|
Payments of acquisition payable |
- |
- |
|
Net cash used in investing activities |
(1,145,286) |
(2,887,308) |
|
|
|
|
|
Financing activities |
|
|
|
Proceeds from convertible debentures |
- |
8,000,000 |
|
Repayment of long-term debt |
(568,166) |
(1,631,830) |
|
Repayment of convertible debentures |
(126,978) |
(261,006) |
|
Payments of lease principal |
(444,347) |
(1,673,344) |
|
Net cash provided by (used in) financing activities |
(1,139,491) |
4,433,820 |
|
|
|
|
|
Change in cash and cash equivalents |
(2,053,668) |
7,275,863 |
|
Cash and cash equivalents, beginning |
8,858,247 |
1,582,384 |
|
Cash and cash equivalents, ending |
6,804,579 |
8,858,247 |
|
|
|
|
|
Adjusted EBITDA Reconciliation |
Two months |
Year |
|
Net income (loss), as reported |
672,427 |
(662,320) |
|
Add back realized fair value amounts included in inventory sold |
460,647 |
2,573,151 |
|
Deduct unrealized fair value gain on growth of biological assets |
(686,867) |
(3,355,797) |
|
Add back amortization of property and equipment included in cost |
209,985 |
1,757,672 |
|
|
656,192 |
312,706 |
|
Add back interest and interest accretion expense, as reported |
285,657 |
1,397,348 |
|
Add back amortization of property and equipment, as reported |
186,415 |
578,641 |
|
Add back share-based compensation |
104,359 |
346,113 |
|
Deduct unrealized gain/add back unrealized loss on derivative |
(336,981) |
4,563,498 |
|
Add back loss on disposal of property plant and equipment |
87,699 |
|
|
Deduct unrealized gain on warrants asset, as reported |
(400,016) |
(129,113) |
|
Add back income tax expense, as reported |
383,539 |
370,932 |
|
EBITDA |
966,864 |
7,440,125 |
|
Compliance costs |
- |
83,747 |
|
Costs associated with acquisition of Golden Harvests |
20,000 |
110,000 |
|
Adjusted EBITDA |
986,864 |
7,633,872 |
NOTES:
|
1. The Company's "Free cash flow" metric is defined by cash flow from operations minus capital expenditures and expansion related advances |
|
2. The Company's "aEBITDA," or "Adjusted EBITDA," is a non-IFRS measure used by management that does not have any prescribed meaning by IFRS and that may not be comparable to similar measures presented by other companies. The Company defines "EBITDA" as the Company's net income or loss for a period, as reported, before interest, taxes, depreciation and amortization, and is further adjusted to remove transaction costs, stock-based compensation expense, accretion expense, gain (loss) on derecognition of derivative liabilities, the effects of fair-value accounting for biological assets and inventory, as well as other non-cash items and items not representative of operational performance as reported in net income (loss). Adjusted EBITDA is defined as EBITDA adjusted for the impact of various significant or unusual transactions. The Company believes that this is a useful metric to evaluate its operating performance. |
NON-IFRS FINANCIAL MEASURES
EBITDA and aEBITDA are non-IFRS measures and do not have standardized definitions under IFRS. The Company has also provided unaudited pro-forma financial information, which assumes that closed and pending mergers and acquisitions in 2021 are included in the Company's financial results as of the beginning of the quarterly and annual periods in 2021. The Company has provided the non-IFRS financial measures, which are not calculated or presented in accordance with IFRS, as supplemental information and in addition to the financial measures that are calculated and presented in accordance with IFRS. These supplemental non-IFRS financial measures are presented because management has evaluated the financial results both including and excluding the adjusted items and believe that the supplemental non-IFRS financial measures presented provide additional perspective and insights when analyzing the core operating performance of the business. These supplemental non-IFRS financial measures should not be considered superior to, as a substitute for or as an alternative to, and should only be considered in conjunction with, the IFRS financial measures presented herein. Accordingly, the following information provides reconciliations of the supplemental non-IFRS financial measures, presented herein to the most directly comparable financial measures calculated and presented in accordance with IFRS.
About
FORWARD-LOOKING STATEMENTS
This press release contains statements which constitute "forward‐looking information" within the meaning of applicable securities laws, including statements regarding the plans, intentions, beliefs and current expectations of the Company with respect to future business activities. Forward‐ looking information is often identified by the words "may," "would," "could," "should," "will," "intend," "plan," "anticipate," "believe," "estimate," "expect" or similar expressions and include information regarding: (i) statements regarding the future direction of the Company (ii) the ability of the Company to successfully achieve its business and financial objectives, (iii) plans for expansion of the Company and securing applicable regulatory approvals, and (iv) expectations for other economic, business, and/or competitive factors. Investors are cautioned that forward‐looking information is not based on historical facts but instead reflect the Company's management's expectations, estimates or projections concerning the business of the Company's future results or events based on the opinions, assumptions and estimates of management considered reasonable at the date the statements are made. Although the Company believes that the expectations reflected in such forward‐looking information are reasonable, such information involves risks and uncertainties, and undue reliance should not be placed on such information, as unknown or unpredictable factors could have material adverse effects on future results, performance or achievements of the combined company. Among the key factors that could cause actual results to differ materially from those projected in the forward‐looking information are the following: changes in general economic, business and political conditions, including changes in the financial markets; and in particular in the ability of the Company to raise debt and equity capital in the amounts and at the costs that it expects; adverse changes in the public perception of cannabis; decreases in the prevailing prices for cannabis and cannabis products in the markets that the Company operates in; adverse changes in applicable laws; or adverse changes in the application or enforcement of current laws; compliance with extensive government regulation and related costs, and other risks described in the Company's public disclosure documents filed on Sedar.
Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward‐looking information prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. Although the Company has attempted to identify important risks, uncertainties and factors which could cause actual results to differ materially, there may be others that cause results not to be as anticipated, estimated or intended. The Company does not intend, and does not assume any obligation, to update this forward‐looking information except as otherwise required by applicable law.
The Company is indirectly involved in the manufacture, possession, use, sale and distribution of cannabis in the recreational cannabis marketplace in
No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein.
For further information on
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