Kiaro Mid-Year Corporate Update Includes Record Annual Revenue Of $17.1M, Q1 Revenue Of $5.2M, Acquisition To Enter US & Australia Cannabis Markets And Significantly Strengthened Balance Sheet
Kiaro's Business Development Continues Unabated As Company Reports Significant Revenue Growth, Major Acquisitions and Financing Placing Company In Best Ever Financial Condition To Support Further Organic and M&A Growth
VANCOUVER, BC, June 30, 2021 /CNW/ - Kiaro Holdings Corp. (TSXV: KO) (the "Company" or "Kiaro"), a national omni-channel cannabis retailer and wholesale distributor is pleased to share the following mid-year corporate update with respect to the Company's existing operations, organic growth, mergers & acquisitions growth and balance sheet strength.
Kiaro CEO, Daniel Petrov, stated "With the half-way point of the year now upon us, we are taking this opportunity to update our shareholders and the broader small cap investor community about Kiaro's incredible achievements to date, as well as, provide a view of our path forward. Suffice it to say that Kiaro is delivering a business performance that is matched by very few companies in the cannabis space. 2021 continues to be a transformative year with real revenues, growth and financial strength that will combine to provide us with strong continued growth within the parabolic growth of the Cannabis industry."
RECORD $17.1 MILLION ANNUAL REVENUE WITH 230% INCREASE OVER 2020
On May 4, 2021 Kiaro released its year end results for fiscal year 2021 ended January 31, 2021, highlights of which include the following:
- Record revenues of $17.1 million for fiscal year 2021, an increase of 230%, compared to $5.2 million the year prior
- Same store sales increase of 58% year over year
- Gross margin of 38.1% for the retail operations during fiscal year 2021 compared to 35% the prior year
- Milestone completion of qualifying transaction by reverse-take-over of DC Acquisition Corp., and listing on TSX Venture under the symbol 'KO' in October 2020
- Appointment of Eleanor Lynch as Chief Operating Officer, and Janet Hoffar as Chief Financial Officer, and achieving gender-equality on the executive leadership team
$5.2 MILLION QUARTERLY REVENUE WITH 94% INCREASE OVER Q1 2020
On June 28, 2021 Kiaro released its financial results for the first quarter ended April 30, 2021, highlights of which include the following:
- Quarterly revenues of $5.17 million, an increase of 94% vs $2.67 million the year prior
- Quarterly gross profit of $1.56 million, an increase of 118% vs $0.72 million in 2020
- Same store sales increase of 78% year over year
- Improvement of current ratio to 2.18 from 1.45 last quarter
MAJOR BUSINESS DEVELOPMENT DEALS INCLUDING INTERNATIONAL ACQUISITION, DOMESTIC ACQUISITION AND DISTRIBUTION AGREEMENTS
Subsequent to our record revenue success for the year ended January 31, 2021, Kiaro continued to set its sights on both organic and M&A growth with the following developments:
ACQUISITION - COZY CANNABIS (UNITED STATES, AUSTRALIA, ONTARIO)
On May 31, 2021 Kiaro signed a definitive agreement which will see the company enter the US, Australian and Ontario markets with the acquisition of Cozy Cannabis, the highlights of which include the following:
- Provides Kiaro a strategic entry into the U.S. and Australian market: The Transaction provides Kiaro with new revenue segments from the U.S. and Australian jurisdictions with consumption accessory sales. As a result of the Transaction, Kiaro is well-positioned to take advantage of any future U.S. and Australia advances towards federal legalization.
- Solidifies Kiaro's strategic entry into Ontario: The prime location in the heart of Trinity Bellwoods neighborhood of Toronto is Kiaro's first brick and mortar store in the Ontario cannabis retail market. The location on Dundas St W. will also serve as the eCommerce hub for Ontario thereby strengthening their best-in-class omni channel retail approach.
- Expands the Company's eCommerce reach both nationally and internationally: The addition of Vaped.ca, Vaped.com, and VaporizersDirect.com.au, complements Kiaro's current eCommerce platform and will strengthen Kiaro's technology-forward approach.
ACQUISITION - GRASSHOPPER CANNABIS (BRITISH COLUMBIA)
On March 16, 2021 Kiaro closed the acquisition of Grasshopper Cannabis' Kelowna retail assets, the highlights of which include the following:
- The subject location is in a prime area of downtown Kelowna, which expects significant residential and commercial investment in the near term
- Kiaro's first retail location in a key consumer market in the interior of British Columbia
- Acquisition Expected to:
- Increase revenue in current fiscal year
- Increase Kiaro retail location count to 8 across Canada
Kiaro Chief Operating Officer, Eleanor Lynch, commented "Kiaro is thrilled to add another location to the BC portfolio, a province that has an unparalleled moat around retail stores. Situated in downtown Kelowna we anticipate bringing a positive contribution to their shared vision of a thriving business community where people want to work, live and play."
EXCLUSIVE WHOLESALE DISTRIBUTION AGREEMENT - RUBICON ORGANICS (SASKATCHEWAN)
On February 11, 2021 Kiaro announced an Exclusive Wholesale Distribution Agreement With Rubicon Organics In Saskatchewan, the highlights of which include the following:
- NCD servicing over 60% of the licensed retailers in Saskatchewan, Kiaro continues to successfully differentiate itself from the competition by providing outstanding brands and expertly curated products to its current and future retailers.
- Rubicon Organics Inc. is becoming the global brand leader in organic cannabis products. Through its wholly-owned subsidiary Rubicon Holdings Corp, a licensed producer, the Company cultivates, processes and sells organic certified brands & cannabis 2.0 products, including its flagship brand Simply Bare™ Organic and its concentrate brand LAB THEORY™
SIGNIFICANTLY STRENGTHENED BALANCE SHEET THROUGH $3 MILLION BOUGHT DEAL PRIVATE PLACEMENT AND EQUITY CONVERSION OF $6.5 MILLION
On March 25, 2021 Kiaro announced a $3M bought deal private placement, the details of which are as follows:
- price of $0.16 per Unit for gross proceeds of $3,000,000.
- Each Unit consists of one common share of the Company ("Unit Share") and one half of one common share purchase warrant of the Company (each whole common share purchase warrant, a "Warrant"). Each Warrant entitles the holder thereof to acquire one common share in the capital of the Company (a "Warrant Share") at an exercise price of $0.23 per Warrant Share
- Financing done at top terms compared to peers. (See Table)
CONVERTED $6.5M CONVERTED TO EQUITY AND SETTLEMENT OF $1.75M IN PROMISSORY NOTES IN FISCAL YEAR 2021, LEAVING ONLY $895K IN TOTAL PRINCIPAL DEBT REMAINING
- Convertible debt and accrued interest of $6.5M converted to equity
- Settlement of $1.75M in promissory notes in fiscal year 2021
- Leaving only $895K in total principal debt remaining
CEO Petrov added "Suffice it to say we are very pleased with the performance we've been able to deliver in the first half of 2021. Nonetheless, our mission is far from complete and have our sights set on delivering even greater performance for our shareholders in the second half of 2021 on all fronts. We want to thank our shareholders for their patience and loyalty and look forward to continuing to build one of the strongest cannabis companies in the country."
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
For more information, visit: www.kiaro.com
SOURCE Kiaro Holdings Corp.
Investor Related Inquiries: Daniel Petrov, Chief Executive Officer, [email protected], 1-888-623-2420
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