CannaRoyalty Announces Record Financial Results for the Second Quarter of 2018: Revenue of $3.5 million, +446% Sequentially; Earnings per Share of $0.18
- Q2-2018 Revenue of $3.5 million compared to $643,437 in Q1-2018 – marks the successful initiation of California distribution and manufacturing strategy.
- Net income of $9.3 million (EPS of $0.18) and EBITDA of $10.4 million generated through execution of stated strategy to rationalize non-core assets and an increase in gross margin related to growing product sales.
- FloraCal (closed July 2nd) and RVR Distribution ("RVR") (closing in Q3-2018) are performing above plan and are expected to drive sequential revenue growth through the second half of 2018 and beyond.
- Premier cannabis brand development platform powered by five licensed distribution and manufacturing facilities across California, delivering several of the state's top independent branded products to the majority of licensed dispensaries in the state.1
OTTAWA, Aug. 23, 2018 /CNW/ - CannaRoyalty Corp. (CSE: CRZ) (OTCQX: CNNRF) ("CannaRoyalty" or the "Company") today announced the Company's financial results for the three and six-month periods ended June 30, 2018. All figures are reported in Canadian dollars ($), unless otherwise indicated. CannaRoyalty's financial statements are prepared in accordance with International Financial Reporting Standards ("IFRS").
"Q2 marked a turning point for CannaRoyalty and its shareholders as the team translated strategy and execution into record financial performance. The Company generated earnings per share of $0.18 primarily by delivering on its stated objective of rationalizing early passive investments. The Company also generated a record adjusted EBITDA result for a Canadian-listed cannabis company2," said Marc Lustig, CEO of CannaRoyalty. "Q2 is the beginning of a multi-quarter parabolic step change in revenue, powered by sequential acquisitions and organic growth. CannaRoyalty generated a record $3.5 million in revenue this quarter, a 446% increase from Q1 and more than the Company generated in all of 2017. These results reflect the successful initiation of the Company's strategic focus on building its Californian distribution and brands platform. This growth is expected to continue in Q3 and Q4 as FloraCal and RVR are added to the Company's financials and as our team continues to grow market share and expand the Company's supporting manufacturing and value-add services footprint. Both RVR and FloraCal are performing above expectations, and we are actively executing our plans to increase the revenue generating capacity of both companies. I thank all of our long term shareholders for their faith in this team and our plan. I am proud to say that this is truly just the beginning of the CannaRoyalty story."
"Our goal is to be the home of origin for the global cannabis brands of the future. It's a model built on trust. Trust from our brand partners that we will drive their success in California and beyond. Trust from our retail partners that we will deliver exactly what they need. Without that trust, it is not possible to build the trust we are seeking from consumers – which is what we believe a brand to be. We've been hard at work building the infrastructure and services needed to support brands in building that consumer trust," said Afzal Hasan, President and General Counsel of CannaRoyalty. "This is a highly scalable platform. We touch the majority1 of licensed dispensaries in the state. We're doing this not just because we believe it will result in the formation of tomorrow's global cannabis brands, but also because we believe it will drive industry leading revenue growth in the next 12 months. We're actively pursuing distribution relationships with a number of California's leading brands, and each successful relationship that we enter into is immediately accretive to our revenue run rate. With $15.7 million in cash at the end of Q2, the proceeds from our recent convertible debenture issue and the combined $26 million sale of certain non-core assets, we have the financial strength to continue to take advantage of the accretive growth opportunities we see in the California market."
Recent Developments
For a more comprehensive overview of these recent developments, please refer to CannaRoyalty's Management's Discussion and Analysis of the Financial Condition and Results of Operations for the Three Months Ended June 30, 2018.
- On July 3, 2018, CannaRoyalty announced the close of the FloraCal Farms acquisition for a total consideration of US$1 million in cash and 35,088 CannaRoyalty Class A Compressed Shares, as well as up to an additional US$3 million in cash and 35,088 Compressed Shares to be paid over 3 years, based on completion of certain milestones and other considerations.
- On July 6, 2018, executing on its stated strategy to focus on expanding its California footprint, CannaRoyalty announced that it purchased a licensed distribution and manufacturing facility in the city of Cotati in Sonoma County, California for US$2.4 million. The Cotati facility will serve as an additional hub for distribution, as well as supporting manufacturing infrastructure, to meet the strong demand of CannaRoyalty's distributed brand portfolio.
- On July 12, 2018, CannaRoyalty announced that it had acquired the exclusive rights to distribute and manufacture Pacific Remedy LLC's industry-leading infused pre-rolls in California.
- On July 12, 2018, the Company announced that it had closed a fully marketed private placement of unsecured convertible debentures raising aggregate gross proceeds of $32,980,000.
- On August 9, 2018, CannaRoyalty announced the close of Aurora's acquisition of Anandia Inc. for initial consideration valued at approximately $115 million in common shares and warrants of Aurora. CannaRoyalty's equity stake in Anandia was reported at approximately $26.4 million3 as of June 30, 2018.
- On August 9, 2018, CannaRoyalty announced its intention to commence normal course issuer bid. Under the proposed normal course issuer bid, CannaRoyalty may purchase up to 5% of CannaRoyalty's issued and outstanding common shares over a 12-month period using proceeds from asset divestitures.
- On August 14, 2018, the Company's previously announced (July 11th) sale of its Canadian pre-roll technology license to Aurora for aggregate consideration of $7 million4 in Aurora common shares, had closed.
| 1 |
Based on publicly available and internal CannaRoyalty statistics |
| 2 |
Based on publicly available financial information for Canadian publicly-traded cannabis companies |
| 3 |
CannaRoyalty's proceeds in Aurora equity generated through the sale of the Company's Anandia position is valued at $19.9 million based on the closing price of Aurora common shares on August 22, 2018. |
| 4 |
The value of these shares based on the closing price of Aurora common shares on August 22, 2018, was approximately C$6.1 million. |
Financial Highlights – Q2 – 2018
Operating Results
All comparisons below are to June 30, 2017, unless otherwise noted
- Revenues were $3.5 million as compared to $960,157, an increase of 266%;
- Gross margin was $820,935 as compared $421,681, an increase of 95%;
- Operating expenses were $6.3 million as compared to $2.7 million, an increase of 129%;
- Net income of $9.3 million as compared to a net loss of $2.0 million;
- Net income per basic share of $0.18 as compared to a net loss per basic share of $0.05;
- Net income per diluted share of $0.17 as compared to a net loss per diluted share of $0.05;
- Adjusted EBITDA income of $11.1 million as compared to a loss of $1.0 million, an increase of $12.1 million; and
- Adjusted EBITDA per basic share of $0.21 as compare to a loss of $0.02, an increase of $0.23 per basic share;
- Adjusted EBITDA income per diluted share of $0.20 as compared to a loss of $0.02, an increase of $0.22 per basic share.
Balance Sheet
All comparisons below are to December 31, 2017, unless otherwise noted
- Cash was $15.7 million as compared to $4.5 million, an increase of 248%;
- Total assets of $94.8 million as compared to $46.1 million, an increase of 105%;
- Current assets of $23.5 million as compared to $7.9 million, an increase of 196%;
- Current liabilities of $5.9 million as compared to $2.1 million, an increase of 178%; and
- Long-term debt of $290,457 as compared to $2.3 million, a decrease of 87%.
Results of Operations (Summary)
The following tables set forth consolidated statements of financial information for the three and six-month periods ending June 30, 2018 and June 30, 2017. For further information regarding the Company's financial results for these periods, please refer to the Company's Management's Discussion and Analysis for the periods ended June 30, 2018 and June 30, 2017 and the Company's Financial Statements for the periods ended June 30, 2018, published on CannaRoyalty's issuer profile on SEDAR at www.sedar.com and the Company's website at www.cannaroyalty.com.
| June 30, 2018 |
December 31, 2017 |
Change |
||||
| Selected statement of financial position data |
||||||
| Cash |
$ |
15,724,845 |
$ |
4,522,644 |
$ |
11,202,201 |
| Working capital |
17,558,886 |
5,813,705 |
11,745,181 |
|||
| Total investments (1) |
44,096,031 |
26,674,288 |
17,421,743 |
|||
| Total assets |
94,791,037 |
46,139,757 |
48,651,280 |
|||
| Long term and convertible debt |
290,457 |
2,258,467 |
(1,968,010) |
|||
| Shareholders' equity |
85,244,780 |
40,468,344 |
44,776,436 |
|||
| Dividends, per share |
- |
- |
- |
|||
| (1) This represents the sum of investments, royalty investments, and interests in equity method investees |
| Three months ended |
Six months ended |
|||||||
| June 30, |
June 30, |
June 30, |
June 30, |
|||||
| Consolidated Statements of Net Income (Loss) |
||||||||
| Revenue |
$ |
3,511,466 |
$ |
960,157 |
$ |
4,154,903 |
$ |
1,261,268 |
| Gross margin |
820,935 |
421,681 |
791,305 |
666,154 |
||||
| Operating expenses |
6,280,216 |
2,741,685 |
10,760,230 |
5,794,446 |
||||
| Loss from operations |
(5,459,281) |
(2,320,004) |
(9,968,925) |
(5,128,292) |
||||
| Net income (loss) |
9,298,488 |
(2,017,556) |
4,644,015 |
(3,984,161) |
||||
| Other income (expense) |
698,464 |
(449,955) |
1,244,069 |
(537,135) |
||||
| Total comprehensive income (loss) |
9,996,952 |
(2,467,511) |
5,888,084 |
(4,521,296) |
||||
| Net earnings (loss) per common share - basic |
0.18 |
(0.05) |
0.10 |
(0.10) |
||||
| Net earnings (loss) per common share - diluted |
0.17 |
(0.05) |
0.09 |
(0.10) |
||||
| Weighted average common shares - basic |
51,560,197 |
41,829,704 |
48,536,866 |
40,356,024 |
||||
| Weighted average common shares - diluted |
55,308,327 |
41,829,704 |
52,462,527 |
40,356,024 |
||||
| Revenue by Type |
||||||||
| Three months ended |
Six months ended |
|||||||
| June 30, 2018 |
June 30, 2017 |
June 30, 2018 |
June 30, 2017 |
|||||
| Product sales |
$ |
3,110,617 |
$ |
372,993 |
$ |
3,195,390 |
$ |
404,328 |
| Services |
238,344 |
232,574 |
668,161 |
273,142 |
||||
| Royalties |
137,189 |
332,630 |
256,247 |
543,094 |
||||
| Interest income |
25,316 |
21,960 |
35,105 |
40,704 |
||||
| Total |
$ |
3,511,466 |
$ |
960,157 |
$ |
4,154,903 |
$ |
1,261,268 |
| Cost of Sales by Revenue Type |
||||||||
| Three months ended |
Six months ended |
|||||||
| June 30, 2018 |
June 30, 2017 |
June 30, 2018 |
June 30, 2017 |
|||||
| Cost of product sales |
$ |
2,378,378 |
$ |
360,931 |
$ |
2,454,052 |
$ |
360,931 |
| Cost of services |
60,000 |
25,885 |
269,023 |
37,695 |
||||
| Cost of royalties |
252,153 |
151,660 |
640,523 |
196,488 |
||||
| Total |
$ |
2,690,531 |
$ |
538,476 |
$ |
3,363,598 |
$ |
595,114 |
| Gross Profit by Revenue Type |
||||||||
| Three months ended |
Six months ended |
|||||||
| June 30, 2018 |
June 30, 2017 |
June 30, 2018 |
June 30, 2017 |
|||||
| Products |
$ |
732,239 |
$ |
12,062 |
$ |
741,338 |
$ |
43,397 |
| Services |
178,344 |
206,689 |
399,138 |
235,447 |
||||
| Royalties |
(114,964) |
180,970 |
(384,276) |
346,606 |
||||
| Interest |
25,316 |
21,960 |
35,105 |
40,704 |
||||
| Total |
$ |
820,935 |
$ |
421,681 |
$ |
791,305 |
$ |
666,154 |
| Gross Margin by Revenue Type |
||||
| Three months ended |
Six months ended |
|||
| June 30, 2018 |
June 30, 2017 |
June 30, 2018 |
June 30, 2017 |
|
| Products |
24% |
3% |
23% |
11% |
| Services |
75% |
89% |
60% |
86% |
| Royalties |
(84%) |
54% |
(150%) |
64% |
| Interest |
100% |
100% |
100% |
100% |
| All Types |
23% |
44% |
19% |
53% |
| Operating Expenses |
||||||||||
| Three months ended |
Six months ended |
|||||||||
| June 30, 2018 |
June 30, 2017 |
Change |
June 30, 2018 |
June 30, 2017 |
Change |
|||||
| Sales and marketing |
$ |
1,219,066 |
$ |
409,221 |
198% |
$ |
1,697,582 |
$ |
646,081 |
163% |
| Research and development |
75,445 |
148,852 |
(49%) |
151,410 |
625,093 |
(76%) |
||||
| General and administrative |
4,456,638 |
1,977,734 |
125% |
8,207,064 |
4,114,922 |
99% |
||||
| Amortization of intangibles |
529,067 |
205,878 |
157% |
704,174 |
408,350 |
n/a |
||||
| Total |
$ |
6,280,216 |
$ |
2,741,685 |
129% |
$ |
10,760,230 |
$ |
5,794,446 |
86% |
| Adjusted EBITDA1 |
|||||||||
| Three months ended |
Six months ended |
||||||||
| June 30, 2018 |
June 30, 2017 |
June 30, 2018 |
June 30, 2017 |
||||||
| Add (Subtract) |
|||||||||
| Net loss for the period |
$ |
9,298,488 |
$ |
(2,017,556) |
$ |
4,644,015 |
$ |
(3,984,161) |
|
| Amortization of property and equipment |
80,530 |
49,456 |
125,798 |
91,198 |
|||||
| Amortization of intangible assets |
537,306 |
205,878 |
704,174 |
408,350 |
|||||
| Amortization of royalty investments |
252,153 |
144,271 |
640,523 |
165,392 |
|||||
| Interest expense |
341,293 |
18,499 |
661,283 |
36,119 |
|||||
| Interest income |
(25,316) |
(21,960) |
(35,105) |
(40,704) |
|||||
| Current income taxes |
115,898 |
- |
116,332 |
- |
|||||
| Deferred income tax recovery |
(176,090) |
(78,681) |
(7,277) |
(157,053) |
|||||
| EBITDA |
10,424,262 |
(1,700,093) |
6,849,743 |
(3,480,859) |
|||||
| Listing expense |
- |
- |
- |
38,193 |
|||||
| Penalties from non-completion of transactions |
- |
37,578 |
- |
221,053 |
|||||
| Gain on sale of equipment |
- |
10,000 |
- |
(88,674) |
|||||
| Recovery on Achelois Inventory |
(441,370) |
- |
(441,370) |
- |
|||||
| Share based compensation |
1,092,235 |
645,816 |
3,032,278 |
1,804,212 |
|||||
| Transaction costs on acquisitions |
- |
- |
282,126 |
- |
|||||
| TOTAL ADJUSTED EBITDA |
$ |
11,075,127 |
$ |
(1,006,699) |
$ |
9,722,777 |
$ |
(1,506,075) |
|
| Weighted average number of common shares outstanding - basic |
51,560,197 |
41,829,704 |
48,536,866 |
40,356,024 |
|||||
| Weighted average number of common shares outstanding - diluted |
55,308,327 |
41,829,704 |
52,462,527 |
40,356,024 |
|||||
| ADJUSTED EBITDA per share - basic |
0.21 |
(0.02) |
0.20 |
(0.04) |
|||||
| ADJUSTED EBITDA per share - diluted |
0.20 |
(0.02) |
0.19 |
(0.04) |
|||||
| 1 EBITDA and Adjusted EBITDA are non-GAAP financial measures and accordingly they are not earnings measures recognized by IFRS and do not carry standard prescribed significance. Moreover, our method for calculating Adjusted EBITDA may differ from that used by other companies using the same designation. Accordingly, we caution readers that Adjusted EBITDA should not be substituted for determining net income (loss) as an indicator of operating results or as a substitute for cash flows from operating and investing activities. |
Share Capital
The Company's authorized share capital is an unlimited number of common shares of which 53,694,947 were issued and outstanding as at June 30, 2018 (December 31, 2017 – 43,898,445 common shares). The Company has issued 3,842,990 RSUs that have not been exercised as at June 30, 2018 including 2,203,345 that have vested (December 31, 2017 – 4,153,150 including 1,933,587 that had vested). As of June 30, 2018, there are share purchase warrants and broker warrants outstanding that can potentially be converted to 4,491,866 shares (December 31, 2017 – 4,112,712). The Company has issued 967,500 share options that have not been exercised as at June 30, 2018 including 308,250 that have vested (December 31, 2017 – 850,000 including 212,500 that had vested).
Conference Call
CannaRoyalty will host a conference call on, Thursday, August 23, 2018 at 8:30 a.m. (Eastern Time) to discuss its 2018 second quarter financial results. The call will be chaired by Marc Lustig, Chief Executive Officer, Afzal Hasan, President and General Counsel and François Perrault, Chief Financial Officer.
| Participant Dial-in |
Webcast |
Reference Number |
|
| Conference Call
|
416-764-8688 or 1-888-390-0541 |
||
| Replay (available for 2 weeks) |
416-764-8677 or 1-888-390-0541 |
597811 |
About CannaRoyalty
CannaRoyalty is a North American cannabis consumer product company currently focused on building a leading distribution business in California, the world's largest regulated cannabis market. By building a world-class logistics platform and supporting contract manufacturing assets, the Company intends to support the growth of new and established cannabis brands. The Company believes California, home to some of the world's most discerning consumers and a nexus of information and trends, will be the point of inception for the global cannabis brands of the future. CannaRoyalty has developed a diversified portfolio of assets within the cannabis sector, including research, infrastructure and intellectual property to support our existing brands, partner products and distribution networks. The Company's leadership and staff combines passion and a hands-on understanding of the cannabis industry, with proven financial and legal expertise. CannaRoyalty's shares trade on the Canadian Stock Exchange (CSE) under the symbol CRZ and in the US on the OTCQX under the symbol CNNRF.
Forward Looking Statements
Statements in this news release that are forward-looking statements are subject to various risks and uncertainties concerning the specific factors disclosed here and elsewhere in CannaRoyalty's periodic filings with Canadian securities regulators. When used in this news release, words such as "will, could, plan, estimate, expect, intend, may, potential, believe, should," and similar expressions, are forward- looking statements.
Forward-looking statements may include, without limitation, statements including the Company's expectations with respect to pursuing new opportunities, anticipated timing for release of the Company's financial results and filing of its final prospectus, and its future growth and other statements of fact.
Although CannaRoyalty has attempted to identify important factors that could cause actual results, performance or achievements to differ materially from those contained in the forward-looking statements, there can be other factors that cause results, performance or achievements not to be as anticipated, estimated or intended, including, but not limited to: dependence on obtaining regulatory approvals; investing in target companies or projects which have limited or no operating history and are engaged in activities currently considered illegal under US Federal Laws; changes in laws; limited operating history; reliance on management; requirements for additional financing; competition; hindering market growth and state adoption due to inconsistent public opinion and perception of the medical-use and adult-use marijuana industry and; regulatory or political change.
There can be no assurance that such information will prove to be accurate or that management's expectations or estimates of future developments, circumstances or results will materialize. As a result of these risks and uncertainties, the results or events predicted in these forward-looking statements may differ materially from actual results or events.
Accordingly, readers should not place undue reliance on forward-looking statements. The forward-looking statements in this news release are made as of the date of this release. CannaRoyalty disclaims any intention or obligation to update or revise such information, except as required by applicable law, and CannaRoyalty does not assume any liability for disclosure relating to any other company mentioned herein.
Condensed Interim Consolidated Statements of Net Income (loss) (Unaudited)
In Canadian dollars
| Three months ended |
Six months ended |
||||||||||
| June 30, 2018 |
June 30, 2017 |
June 30, 2018 |
June 30, 2017 |
||||||||
| Revenue |
$ |
3,511,466 |
$ |
960,157 |
$ |
4,154,903 |
$ |
1,261,268 |
|||
| Cost of sales |
(2,690,531) |
(538,476) |
(3,363,598) |
(595,114) |
|||||||
| Gross margin |
820,935 |
421,681 |
791,305 |
666,154 |
|||||||
| Operating expenses |
|||||||||||
| Sales and marketing |
1,219,066 |
409,221 |
1,697,582 |
646,081 |
|||||||
| Research and development |
75,445 |
148,852 |
151,410 |
625,093 |
|||||||
| General and administrative |
4,456,638 |
1,977,734 |
8,207,064 |
4,114,922 |
|||||||
| Amortization of brands and technologies |
529,067 |
205,878 |
704,174 |
408,350 |
|||||||
| Loss from operations |
(5,459,281) |
(2,320,004) |
(9,968,925) |
(5,128,292) |
|||||||
| Other income (expenses) |
|||||||||||
| Changes in fair value of investments |
15,222,971 |
- |
15,565,077 |
- |
|||||||
| Impairment of convertible notes receivable |
- |
- |
(375,472) |
- |
|||||||
| Profit (loss) from equity accounted investees |
(295,246) |
(98,483) |
158,558 |
843,914 |
|||||||
| Foreign exchange gain |
111,145 |
388,327 |
35,115 |
349,855 |
|||||||
| Interest expense |
(341,293) |
(18,499) |
(661,283) |
(36,119) |
|||||||
| Penalties from non-completed transaction |
- |
(37,578) |
- |
(221,053) |
|||||||
| Listing expense |
- |
- |
- |
(38,193) |
|||||||
| Gain (loss) on disposal of equipment |
- |
(10,000) |
- |
88,674 |
|||||||
| Interest income |
- |
- |
- |
- |
|||||||
| Net income (loss) before tax |
9,238,296 |
(2,096,237) |
4,753,070 |
(4,141,214) |
|||||||
| Current tax expense |
(115,898) |
- |
(116,332) |
- |
|||||||
| Deferred tax recovery |
176,090 |
78,681 |
7,277 |
157,053 |
|||||||
| Net income (loss) for the period |
$ |
9,298,488 |
$ |
(2,017,556) |
$ |
4,644,015 |
$ |
(3,984,161) |
|||
| Net income (loss) per common share - basic |
0.18 |
(0.05) |
0.10 |
(0.10) |
|||||||
| Net income (loss) per common share - diluted |
0.17 |
(0.05) |
0.09 |
(0.10) |
|||||||
| Weighted average number of common shares outstanding - basic |
51,560,197 |
41,829,704 |
48,536,866 |
40,356,024 |
|||||||
| Weighted average number of common shares outstanding - diluted |
55,308,327 |
41,829,704 |
52,462,527 |
40,356,024 |
|||||||
| Total net income (loss) for the period attributable to: |
|||||||||||
| Owners of the company |
9,200,127 |
(2,005,754) |
4,571,124 |
(3,956,544) |
|||||||
| Attributable to non-controlling interest |
98,361 |
(11,802) |
72,891 |
(27,617) |
|||||||
| $ |
9,298,488 |
$ |
(2,017,556) |
$ |
4,644,015 |
$ |
(3,984,161) |
||||
Condensed Interim Consolidated Statements of Financial Position (Unaudited)
In Canadian dollars
| June 30, 2018 |
December 31, 2017 |
||||||
| ASSETS |
|||||||
| Current |
|||||||
| Cash |
$ |
15,724,845 |
$ |
4,522,644 |
|||
| Amounts receivable |
763,166 |
1,429,123 |
|||||
| Inventory |
3,754,328 |
270,169 |
|||||
| Prepaid and other assets |
1,356,299 |
250,744 |
|||||
| Loans receivable - current |
1,902,913 |
1,102,168 |
|||||
| Convertible notes - current |
- |
373,127 |
|||||
| 23,501,551 |
7,947,975 |
||||||
| Non-Current |
|||||||
| Loans receivable |
- |
66,421 |
|||||
| Interest in equity accounted investees |
3,803,045 |
3,596,333 |
|||||
| Investments |
33,379,709 |
17,243,342 |
|||||
| Royalty investments |
6,913,277 |
5,834,613 |
|||||
| Property and equipment |
1,555,987 |
1,084,098 |
|||||
| Intangible assets |
12,204,871 |
5,607,598 |
|||||
| Goodwill |
13,432,597 |
4,759,377 |
|||||
| 71,289,486 |
38,191,782 |
||||||
| Total Assets |
$ |
94,791,037 |
$ |
46,139,757 |
|||
| LIABILITIES |
|||||||
| Current |
|||||||
| Amounts payable and accrued liabilities |
$ |
5,374,501 |
$ |
1,606,689 |
|||
| Loan payable |
90,166 |
425,345 |
|||||
| Current tax liability |
477,998 |
102,236 |
|||||
| 5,942,665 |
2,134,270 |
||||||
| Non-Current |
|||||||
| Convertible debt |
- |
1,431,950 |
|||||
| Line of credit |
290,457 |
826,517 |
|||||
| Deferred tax liability |
3,313,135 |
1,278,676 |
|||||
| Total Liabilities |
$ |
9,546,257 |
$ |
5,671,413 |
|||
| SHAREHOLDERS' EQUITY |
|||||||
| Share capital |
$ |
81,377,459 |
$ |
50,007,891 |
|||
| Share subscription and contingent shares |
3,824,094 |
- |
|||||
| Warrants reserve |
5,625,652 |
4,149,703 |
|||||
| Contributed surplus |
12,050,171 |
9,902,292 |
|||||
| Accumulated other comprehensive income (loss) |
211,350 |
(1,032,719) |
|||||
| Accumulated deficit |
(17,919,831) |
(22,381,817) |
|||||
| Non-controlling interest |
75,885 |
(177,006) |
|||||
| Shareholders' Equity |
85,244,780 |
40,468,344 |
|||||
| Total Liabilities & Shareholders' Equity |
$ |
94,791,037 |
$ |
46,139,757 |
|||
Condensed Interim Consolidated Statements of Cash Flows (Unaudited)
In Canadian dollars
| Six months ended |
|||||
| June 30, 2018 |
June 30, 2017 |
||||
| CASH FLOWS USED IN OPERATING ACTIVITIES |
|||||
| Net income (loss) for the period |
$ |
4,644,015 |
$ |
(4,521,296) |
|
| Items not affecting cash: |
|||||
| Bad debts recovery |
(63,183) |
(13,219) |
|||
| Income from equity accounted investees |
(158,558) |
(843,914) |
|||
| Amortization of property and equipment |
125,798 |
91,198 |
|||
| Amortization of intangibles |
704,174 |
408,350 |
|||
| Amortization of royalties |
640,523 |
165,392 |
|||
| Amortization of fees related to line of credit |
403,753 |
- |
|||
| Share based compensation |
3,032,278 |
1,804,212 |
|||
| Deferred tax recovery |
(7,277) |
(157,053) |
|||
| Loss on impairment of convertible notes receivable |
375,472 |
- |
|||
| Recovery on previously impaired inventory |
(441,370) |
- |
|||
| Accretion of derivative assets and liabilities |
34,146 |
- |
|||
| Gain on disposal of equipment |
- |
(88,674) |
|||
| Fair value gain on investments |
(15,565,077) |
- |
|||
| (6,275,306) |
(3,155,004) |
||||
| Changes in non-cash items relating to operations: |
|||||
| Decrease (Increase) in amounts receivable |
389,738 |
(747,099) |
|||
| Increase in inventory |
(725,391) |
(72,508) |
|||
| Increase in prepaid and other assets |
(436,653) |
(96,020) |
|||
| Increase (Decrease) in accounts payable and accruals |
707,975 |
(794,122) |
|||
| Increase in current tax liability |
(11,239) |
- |
|||
| (6,350,876) |
(4,864,753) |
||||
| CASH FLOWS USED IN INVESTING ACTIVITIES |
|||||
| Purchase of property and equipment |
(295,223) |
(132,014) |
|||
| Purchase of Kaya and Alta, net of cash received |
(1,018,428) |
- |
|||
| Purchase of interests in equity accounted investments |
- |
(1,601,218) |
|||
| Royalty financing arrangement |
(1,290,000) |
(2,750,631) |
|||
| Loans advanced to debtors, including costs, net of repayment |
(2,163,234) |
(1,140,800) |
|||
| (4,766,885) |
(5,624,663) |
||||
| CASH FLOWS FROM FINANCING ACTIVITIES |
|||||
| Proceeds from shares in bought deal financing, net of issuance costs |
11,888,206 |
10,958,243 |
|||
| Proceeds from issuance of warrants, net of issuance costs |
3,756,734 |
2,787,000 |
|||
| Proceeds from exercise of warrants |
7,444,895 |
292,092 |
|||
| Repayment on line of credit |
(1,000,000) |
- |
|||
| Repayment of loans payable |
(7,702) |
- |
|||
| Proceeds from shares issued to minority holders of Trichome |
180,000 |
- |
|||
| Proceeds from issuance of stock options |
- |
25,000 |
|||
| Tax withholding paid on exercise of restricted share units |
- |
(77,511) |
|||
| 22,262,133 |
13,984,824 |
||||
| Effect of movement of exchange rates on cash held |
57,829 |
- |
|||
| INCREASE (DECREASE) IN CASH |
$ |
11,202,201 |
$ |
3,495,408 |
|
| CASH, BEGINNING OF PERIOD |
4,522,644 |
2,945,895 |
|||
| CASH, END OF PERIOD |
$ |
15,724,845 |
$ |
6,441,303 |
|
SOURCE CannaRoyalty Corp.
please contact: Marc Lustig, CEO, [email protected], 1-844-556-5070, www.cannaroyalty.com; Jonathan Ross, LodeRock Advisors Inc., [email protected], 416-283-0178
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