Origin House Announces Sequential Revenue Growth of 89% for the Third Quarter 2018
- Record Q3 revenue of $6.6 million; growth of 89% over Q2 2018 and 790% over Q3 2017.
- On October 18, 2018, closed the acquisition of RVR Distribution ("RVR"), including five licensed distribution and manufacturing facilities across California, and several of the state's top independent branded products.
- Distribution platform reached 486 licensed California dispensaries as of September 30, 20181.
- Advancing acquisition of 180 Smoke to provide California brand partners with rapid access to the Canadian market.
- Closed the acquisition of premium Sonoma County craft cannabis producer, FloraCal® Farms.
- Continued to generate shareholder value through the monetization of non-core assets; +487%2 return on invested capital.
- Strong cash position of $75.3 million as of September 30, 2018 to continue executing our vision.
OTTAWA, Nov. 28, 2018 /CNW/ - Origin House Corp. d/b/a Origin House (CSE: OH) (OTCQX: ORHOF) ("Origin House" or the "Company"), a leading North American cannabis products and brands company, announced today the Company's financial results for the three and nine-month periods ended September 30, 2018. All figures are reported in Canadian dollars ($), unless otherwise indicated. Origin House's financial statements are prepared in accordance with International Financial Reporting Standards ("IFRS").
Marc Lustig, CEO of Origin House, commented, "Last quarter, we stated that after a substantial period of building a foundation, Origin House was at the beginning of a multi-period, sustainable acceleration in revenue growth. Year-to-date, we generated record revenue, completed four transformational acquisitions and are well-capitalized to continue growing. We expect to continue delivering strong revenue growth throughout Q4, 2019 and beyond, as RVR and 180 Smoke are integrated and as we further leverage our brand development and support platform. Our view is that the next 12 months are going to be critical in determining the winners in the cannabis space. Origin House is positioned as a premier operator in the largest and most dynamic cannabis market in the world and we believe we are just at the beginning of our growth curve. We expect this platform to become increasingly difficult to replicate and therefore increasingly valuable for our shareholders as our financial results accelerate, as well as for other operators in the cannabis space that need to be in California."
"One year ago, we unveiled our ambitions to the public. In that period, Origin House has already created a proven track record of identifying break-out brands, partnering with them and selling to customers in a competitive marketplace to drive mutual success," said Afzal Hasan, President and General Counsel of Origin House. "The financial results we generated in Q2 and Q3 are representative of just the initial framework of a model primed for growth. We have already shown some early success in supporting the growth of some of the largest independent brands in California, like Lowell's Smokes and King's Garden. Our growing suite of brand development and support solutions, including financing, allows us to structure innovative, revenue driving deals with other emerging brands, like we have done with Henry's Original, Pacific Remedy and Utopia. These deals are the first in an extensive pipeline of brand partnerships that we are now executing on. Investing in our partners enables them to scale and realize their aspirations while providing us with sizable upside and limited risk."
Mr. Hasan added, "We intend to leverage the foundation we have built in California to not just drive revenue growth, but also to grow and hone our employee base for deployment into new markets. The institutional knowledge we are developing from operating in the largest and most culturally significant cannabis market in the world has already taught us valuable lessons that we are carrying over to Canada. We are taking a calculated approach involving the use of a profitable and rapidly growing retail platform, 180 Smoke, for direct to consumer marketing by our brand partners. We are excited about this prospect, and are actively pursuing strategies for expansion of our brand partners into other regulated markets around the globe."
1) |
Internal source: based on rolling 6-month data |
2) |
Includes the sale of: Anandia Laboratories Inc.; and Wagner Dimas Inc. (equity interest and license) |
Financial Highlights – Q3 – 2018
The following are the major financial highlights of Origin House's operating results for the three months ended September 30, 2018, compared to the three months ended September 30, 2017:
- revenues were $6.6 million as compared to $744,302, an increase of 790%;
- gross margin was $298,619 as compared $128,010, an increase of 133%;
- operating expenses were $10.1 million as compared to $2.8 million, an increase of 261%;
- net loss of $7.5 million as compared to $3.3 million, an increase of 128%;
- net loss per basic and dilutive shares of $0.12 as compared to $0.08; and
- adjusted EBITDA loss of $4.5 million as compared to a loss of $1.8 million.
The following is a summary of key balance sheet totals as at September 30, 2018, compared to December 31, 2017.
- cash was $75.3 million as compared to $4.5 million an increase of 1,565%;
- total assets of $220.2 million as compared to $46.1 million, an increase of 377%;
- current assets of $90.8 million as compared to $7.9 million, an increase of 1,043%;
- current liabilities of $27.2 million as compared to $2.1 million, an increase of 1,172%; and
- long-term debt of $28.2 million as compared to $2.3 million, an increase of 1,147%.
Recent Developments
For a more comprehensive overview of these recent developments, please refer to Origin House's Management's Discussion and Analysis of the Financial Condition and Results of Operations for the Three and Nine Months Ended September 30, 2018.
- On October 3, 2018, Origin House signed a definitive agreement with Australis whereby Australis will purchase 2,200,000 common shares in the capital of Wagner Dimas from Cannroy Delaware Inc. ("Cannroy Delaware"), a wholly-owned subsidiary of Origin House. The sale closed on November 19, 2018.
- On October 3, 2018, Trichome, entered into an agreement with 22 Capital to complete a transaction that will result in a reverse take-over of 22 Capital by the shareholders of Trichome. If completed, the resulting issuer will be listed on the TSX Venture Exchange.
- On October 18, 2018, Origin House closed the previously announced acquisition of RVR Distribution ("RVR"). Upon closing the acquisition, Origin House gained legal control of RVR, however, the Company had control under IFRS 10 from September 1, 2018. Additionally, Ted Simpkins, Co-Founder and CEO of RVR joined the Origin House Board of Directors, effective October 18, 2018.
- On October 22, 2018, CannaRoyalty Corp. registered "Origin House" as a business name and began to conduct business under the Origin House brand.
- On October 23, 2018, the Company's changed its ticker symbol from "CRZ" to "OH" on the Canadian Securities Exchange and from "CNNRF" to "ORHOF" on the OTCQX market in the United States.
- On November 22, 2018, Origin House began partnering with Mendocino Cannabis Brand, Henry's Original, to offer strategic investment and innovative brand acceleration.
- On November 23, 2018, the Company accelerated the expiry of all outstanding common share purchase warrants to December 14, 2018. If all warrants are exercised they will generate proceeds of $10.6 million for Origin House.
Results of Operations (Summary)
The following tables set forth consolidated statements of financial information for the three and nine-month periods ending September 30, 2018, and September 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 September 30, 2018 and September 30, 2017 and the Company's Financial Statements for the periods ended September 30, 2018, published on Origin House's issuer profile on SEDAR at www.sedar.com and the Company's website at www.Origin House.com.
September 30, |
December 31, |
Change |
||||
Selected statement of financial position data |
||||||
Cash and cash equivalents |
$ |
75,282,348 |
$ |
4,522,644 |
$ |
70,759,704 |
Working capital |
63,658,301 |
5,813,705 |
57,844,596 |
|||
Total investments (1) |
10,874,921 |
26,674,288 |
(15,799,367) |
|||
Total assets |
220,204,036 |
46,139,757 |
174,064,279 |
|||
Long term and convertible debt |
28,171,149 |
2,258,467 |
25,912,682 |
|||
Purchase consideration payable |
2,136,274 |
- |
2,136,274 |
|||
Shareholders' equity |
147,220,545 |
40,468,344 |
106,752,201 |
|||
Dividends, per share |
- |
- |
- |
(1) This represents the sum of investments, royalty investments, and interests in equity method |
Three months ended September 30 |
Nine months ended September 30 |
|||||||
2018 |
2017 |
2018 |
2017 |
|||||
Consolidated Statements of Net Loss |
||||||||
Revenue |
$ |
6,623,998 |
$ |
744,302 |
$ |
10,778,901 |
$ |
2,005,570 |
Gross margin, excluding fair value items |
508,396 |
128,010 |
1,299,701 |
794,164 |
||||
Operating expenses |
10,064,130 |
2,834,939 |
20,824,360 |
8,629,385 |
||||
Loss from operations |
(9,765,511) |
(2,706,929) |
(19,734,436) |
(7,835,221) |
||||
Net loss |
(7,502,098) |
(3,295,477) |
(2,858,083) |
(7,816,773) |
||||
Other income (expense) |
2,015,184 |
(662,197) |
16,737,179 |
(212,254) |
||||
Total comprehensive loss |
(9,265,872) |
(3,618,961) |
(3,377,788) |
(8,677,392) |
||||
Net loss per common share - basic & diluted |
(0.12) |
(0.08) |
(0.05) |
(0.19) |
||||
Weighted average common shares - basic & diluted |
57,621,347 |
42,156,344 |
51,634,188 |
40,961,436 |
Revenue by Type |
||||||||
Three months ended September 30 |
Nine months ended September 30 |
|||||||
2018 |
2017 |
2018 |
2017 |
|||||
Product sales |
$ |
6,250,992 |
$ |
298,866 |
$ |
9,446,382 |
$ |
703,193 |
Services |
69,760 |
41,451 |
737,921 |
314,594 |
||||
Royalties |
108,306 |
385,001 |
364,553 |
928,095 |
||||
Interest income |
194,940 |
18,984 |
230,045 |
59,688 |
||||
Total |
$ |
6,623,998 |
$ |
744,302 |
$ |
10,778,901 |
$ |
2,005,570 |
Cost of Sales by Revenue Type |
||||||||
Three months ended September 30 |
Nine months ended September 30 |
|||||||
2018 |
2017 |
2018 |
2017 |
|||||
Cost of product sales |
$ |
5,900,572 |
$ |
327,986 |
$ |
8,354,623 |
$ |
688,917 |
Cost of services |
35,000 |
23,961 |
304,024 |
61,656 |
||||
Cost of royalties |
180,030 |
264,345 |
820,553 |
460,833 |
||||
Total |
$ |
6,115,602 |
$ |
616,292 |
$ |
9,479,200 |
$ |
1,211,406 |
Gross Profit by Revenue Type |
||||||||
Three months ended September 30 |
Nine months ended September 30 |
|||||||
2018 |
2017 |
2018 |
2017 |
|||||
Products |
$ |
350,420 |
$ |
(29,120) |
$ |
1,091,759 |
$ |
14,276 |
Services |
34,760 |
17,490 |
433,897 |
252,938 |
||||
Royalties |
(71,724) |
120,656 |
(456,000) |
467,262 |
||||
Interest |
194,940 |
18,984 |
230,045 |
59,688 |
||||
Total |
$ |
508,396 |
$ |
128,010 |
$ |
1,299,701 |
$ |
794,164 |
Gross Margin by Revenue Type |
||||
Three months ended September 30 |
Nine months ended September 30 |
|||
2018 |
2017 |
2018 |
2017 |
|
Products |
6% |
(10%) |
12% |
2% |
Services |
50% |
42% |
59% |
80% |
Royalties |
(66%) |
31% |
(125%) |
50% |
Interest |
100% |
100% |
100% |
100% |
All Types |
8% |
17% |
12% |
40% |
Operating Expenses |
||||||||||
Three months ended September 30 |
Nine months ended September 30 |
|||||||||
2018 |
2017 |
Change |
2018 |
2017 |
Change |
|||||
Sales and marketing |
$ |
1,947,706 |
$ |
422,362 |
361% |
$ |
3,535,796 |
$ |
1,068,443 |
231% |
Research and product development |
211,469 |
275,839 |
(23%) |
472,371 |
900,932 |
(48%) |
||||
General and administrative |
6,457,990 |
1,943,675 |
232% |
14,665,054 |
6,058,597 |
142% |
||||
Amortization of intangibles |
1,446,965 |
193,063 |
649% |
2,151,139 |
601,413 |
258% |
||||
Total |
$ |
10,064,130 |
$ |
2,834,939 |
255% |
$ |
20,824,360 |
$ |
8,629,385 |
141% |
Adjusted EBITDA1 |
||||||||
Three months ended September 30 |
Nine months ended September 30 |
|||||||
2018 |
2017 |
2018 |
2017 |
|||||
Add (Subtract) |
||||||||
Net loss for the period |
$ |
(7,502,098) |
$ |
(3,295,477) |
$ |
(2,858,083) |
$ |
(7,816,773) |
Depreciation of property and equipment |
174,274 |
46,532 |
300,072 |
137,730 |
||||
Amortization of intangible assets |
1,446,965 |
193,063 |
2,151,139 |
601,413 |
||||
Amortization of royalty investments |
180,030 |
245,753 |
820,553 |
411,145 |
||||
Interest expense |
1,185,257 |
85,935 |
1,846,540 |
122,054 |
||||
Interest income |
(194,940) |
(18,984) |
(230,045) |
(59,688) |
||||
Current income taxes |
191,258 |
- |
307,590 |
- |
||||
Deferred income tax recovery |
(439,487) |
(73,649) |
(446,764) |
(230,702) |
||||
EBITDA |
(4,958,741) |
(2,816,827) |
1,891,002 |
(6,834,821) |
||||
Listing expense |
- |
- |
- |
38,193 |
||||
Penalties from non-completion of transactions |
- |
(6,498) |
- |
214,555 |
||||
Gain on sale of equipment |
- |
(3,000) |
- |
(91,674) |
||||
Gain on settlement of interests at acquisition |
(1,098,374) |
- |
(1,098,374) |
- |
||||
Recovery on Achelois Inventory |
- |
- |
(441,370) |
- |
||||
Share based compensation |
1,143,050 |
695,144 |
4,222,563 |
2,499,356 |
||||
Unrealized loss on embedded derivatives |
- |
369,036 |
- |
369,036 |
||||
Realized fair value amounts included in |
1,161,471 |
- |
1,161,471 |
- |
||||
Unrealized fair value gain on growth of |
(951,694) |
- |
(951,694) |
- |
||||
Transaction costs on acquisitions |
254,714 |
- |
536,840 |
- |
||||
TOTAL ADJUSTED EBITDA |
$ |
(4,449,574) |
$ |
(1,762,145) |
$ |
5,320,438 |
$ |
(4,937,462) |
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 55,202,247 were issued and outstanding as at September 30, 2018 (December 31, 2017 – 43,898,445 common shares). The Company has issued 3,487,832 RSUs that have not been exercised as at September 30, 2018 including 2,357,837 that have vested (December 31, 2017 – 4,153,150 including 1,933,587 that had vested). As of September 30, 2018, there are share purchase warrants and broker warrants outstanding that can potentially be converted to 3,549,765 shares (December 31, 2017 – 4,112,712). The Company has issued 930,500 share options that have not been exercised as at September 30, 2018 including 270,750 that have vested (December 31, 2017 – 850,000 including 212,500 that had vested).
Conference Call
Origin House will host a conference call on, Wednesday, November 28, 2018 at 8:30 a.m. (Eastern Time) to discuss its 2018 third 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 1-888-390-0546 |
||
Replay (available for 2 weeks) |
416-764-8677 or 1-888-390-0541 |
543806 |
About Origin House
Origin House is a growing cannabis products and brands company operating across key markets in the U.S. and Canada, with a strategic focus on becoming a preeminent global house of cannabis brands. The Company's foundation is in California, the world's largest regulated cannabis market where it has delivered over 130 branded cannabis products to the majority of licensed dispensaries. Origin House's brand development platform is operated out of five licensed facilities located across California, and provides distribution, manufacturing, cultivation and marketing services for its brand partners. The Company is actively developing infrastructure to support the proliferation of its brands internationally, initially in Canada, through its pending acquisition of Canadian retailer 180 Smoke. Origin House's shares trade on the CSE under the symbol "OH" and on the OTCQX under the symbol "ORHOF". Origin House is the registered business name of Origin House Corp. For more information, visit www.originhouse.com.
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 Origin House'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 relating to timing for the Company's stock symbol change, the execution of the Company's strategy, including Phases I, II and III of the Company's business, the Company's timing and process for expansion in Canada and globally, timing for the Company's acquisition of 180 Smoke, new opportunities, future growth and other statements.
Although the Company 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 that are engaged in activities currently considered illegal under US federal law; 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. The Company disclaims any intention or obligation to update or revise such information, except as required by applicable law, and the Company 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
(UNAUDITED) |
Three months ended September 30 |
Nine months ended September 30 |
|||||||
2018 |
2017 |
2018 |
2017 |
||||||
Revenue |
$ |
6,623,998 |
$ |
744,302 |
$ |
10,778,901 |
$ |
2,005,570 |
|
Cost of sales |
(6,115,602) |
(616,292) |
(9,479,200) |
(1,211,406) |
|||||
Gross margin, excluding fair value items |
508,396 |
128,010 |
1,299,701 |
794,164 |
|||||
Realized fair value amounts of inventory sold |
(1,161,471) |
- |
(1,161,471) |
- |
|||||
Unrealized fair value gain on growth of biological assets |
951,694 |
- |
951,694 |
- |
|||||
Gross margin |
298,619 |
128,010 |
1,089,924 |
794,164 |
|||||
Operating expenses |
|||||||||
Sales and marketing |
1,947,706 |
422,362 |
3,535,796 |
1,068,443 |
|||||
Research and product development |
211,469 |
275,839 |
472,371 |
900,932 |
|||||
General and administrative |
6,457,990 |
1,943,675 |
14,665,054 |
6,058,597 |
|||||
Amortization of brands and technologies |
1,446,965 |
193,063 |
2,151,139 |
601,413 |
|||||
Loss from operations |
(9,765,511) |
(2,706,929) |
(19,734,436) |
(7,835,221) |
|||||
Other income (expenses) |
|||||||||
Gain (loss) on investments |
(2,802,373) |
- |
12,762,704 |
- |
|||||
Gain on the sale of licensed technology |
4,196,477 |
- |
4,196,477 |
- |
|||||
Fair value gain on warrants |
104,344 |
- |
104,344 |
- |
|||||
Recovery of convertible notes receivable |
379,572 |
- |
4,100 |
- |
|||||
Profit (loss) from equity accounted investees, |
10,106 |
(137,093) |
168,664 |
706,821 |
|||||
Gain on settlement of interests at acquisition |
1,098,374 |
- |
1,098,374 |
- |
|||||
Foreign exchange gain (loss) |
213,941 |
(79,631) |
249,056 |
(266,911) |
|||||
Interest expense |
(1,185,257) |
(85,935) |
(1,846,540) |
(122,054) |
|||||
Penalties for non-completion of share swap transaction |
- |
6,498 |
- |
(214,555) |
|||||
Unrealized loss on embedded derivatives |
- |
(369,036) |
- |
(369,036) |
|||||
Listing expense |
- |
- |
- |
(38,193) |
|||||
Gain on disposal of equipment |
- |
3,000 |
- |
91,674 |
|||||
Interest income |
- |
- |
- |
- |
|||||
Net loss before tax |
(7,750,327) |
(3,369,126) |
(2,997,257) |
(8,047,475) |
|||||
Current tax expense |
(191,258) |
- |
(307,590) |
- |
|||||
Deferred tax recovery |
439,487 |
73,649 |
446,764 |
230,702 |
|||||
Net loss for the period |
$ |
(7,502,098) |
$ |
(3,295,477) |
$ |
(2,858,083) |
$ |
(7,816,773) |
|
Net loss per common share - basic & diluted |
(0.12) |
(0.08) |
(0.05) |
(0.19) |
|||||
Net loss per common share - diluted |
(0.13) |
(0.08) |
(0.05) |
(0.19) |
|||||
Weighted average number of common shares outstanding - basic & diluted |
57,621,347 |
42,156,344 |
51,634,188 |
40,961,436 |
|||||
Weighted average number of common shares outstanding - diluted |
54,150,686 |
42,156,344 |
50,464,588 |
40,961,436 |
|||||
Total net loss for the period attributable to: |
|||||||||
Owners of the company |
(7,179,771) |
(3,286,719) |
(2,608,647) |
(7,780,398) |
|||||
Attributable to non-controlling interest |
(322,327) |
(8,758) |
(249,436) |
(36,375) |
|||||
$ |
(7,502,098) |
$ |
(3,295,477) |
$ |
(2,858,083) |
$ |
(7,816,773) |
Condensed Interim Consolidated Statements of Financial Position (Unaudited)
In Canadian dollars
(UNAUDITED) |
September 30, |
December 31, |
|||
ASSETS |
|||||
Current |
|||||
Cash and cash equivalents |
$ |
75,282,348 |
$ |
4,522,644 |
|
Amounts receivable |
2,699,574 |
1,429,123 |
|||
Inventory |
7,380,045 |
270,169 |
|||
Biological assets |
698,766 |
- |
|||
Prepaid and other assets |
2,310,972 |
250,744 |
|||
Advances and loans receivable - current |
1,376,166 |
1,102,168 |
|||
Asset held for sale |
1,064,910 |
- |
|||
Convertible notes |
- |
373,127 |
|||
90,812,781 |
7,947,975 |
||||
Non-Current |
|||||
Deferred financing charges |
1,561,852 |
- |
|||
Advances and loans receivable |
- |
66,421 |
|||
Interest in equity accounted investees |
2,734,811 |
3,596,333 |
|||
Investments |
6,852,062 |
17,243,342 |
|||
Royalty investments |
1,288,048 |
5,834,613 |
|||
Property and equipment |
11,143,101 |
1,084,098 |
|||
Intangible assets |
49,920,100 |
5,607,598 |
|||
Goodwill |
55,891,281 |
4,759,377 |
|||
129,391,255 |
38,191,782 |
||||
Total Assets |
$ |
220,204,036 |
$ |
46,139,757 |
|
LIABILITIES |
|||||
Current |
|||||
Amounts payable and accrued liabilities |
$ |
12,579,989 |
$ |
1,606,689 |
|
Loans payable and other liabilities |
13,184,582 |
425,345 |
|||
Current tax liability |
1,389,909 |
102,236 |
|||
27,154,480 |
2,134,270 |
||||
Non-Current |
|||||
Capital lease |
261,551 |
- |
|||
Purchase consideration payable |
2,136,274 |
- |
|||
Convertible debt |
27,909,598 |
1,431,950 |
|||
Line of credit |
- |
826,517 |
|||
Deferred tax liability |
15,521,588 |
1,278,676 |
|||
Total Liabilities |
72,983,491 |
5,671,413 |
|||
SHAREHOLDERS' EQUITY |
|||||
Share capital |
$ |
105,823,518 |
$ |
50,007,891 |
|
Share subscription and contingent shares |
48,002,790 |
- |
|||
Warrants reserve |
4,590,904 |
4,149,703 |
|||
Contributed surplus |
15,280,457 |
9,902,292 |
|||
Accumulated other comprehensive loss |
(1,552,424) |
(1,032,719) |
|||
Accumulated deficit |
(25,099,602) |
(22,381,817) |
|||
Non-controlling interest |
174,902 |
(177,006) |
|||
Shareholders' Equity |
147,220,545 |
40,468,344 |
|||
Total Liabilities & Shareholders' Equity |
$ |
220,204,036 |
$ |
46,139,757 |
Condensed Interim Consolidated Statements of Cash Flows (Unaudited)
In Canadian dollars
(UNAUDITED) |
Nine months ended September 30 |
||||
2018 |
2017 |
||||
CASH FLOWS USED IN OPERATING ACTIVITIES |
|||||
Net income (loss) for the period |
$ |
(2,858,083) |
$ |
(7,816,773) |
|
Items not affecting cash: |
|||||
Bad debt expense (recovery) |
33,122 |
(7,268) |
|||
Income from equity accounted investees |
(168,664) |
(706,821) |
|||
Amortization of property and equipment |
300,072 |
137,730 |
|||
Amortization of intangibles |
2,151,139 |
601,413 |
|||
Amortization of royalties |
820,553 |
411,145 |
|||
Amortization of fees related to line of credit |
611,631 |
68,469 |
|||
Share based compensation |
4,222,561 |
2,499,356 |
|||
Consulting fees paid via issuance of shares |
- |
30,000 |
|||
Transaction adjustment paid via issuance of shares |
- |
204,060 |
|||
Deferred tax recovery |
(446,764) |
(230,702) |
|||
Recovery on impairment of convertible notes receivable |
(4,100) |
- |
|||
Loss related to change in fair value of embedded derivatives |
- |
369,036 |
|||
Write-off of inventory, net of recoveries |
12,267 |
- |
|||
Accretion of convertible debt |
378,292 |
- |
|||
Gain on reclassification of assets held for sale |
- |
- |
|||
Gain on disposal of equipment |
- |
(91,674) |
|||
Realized fair value amounts of inventory sold |
1,161,471 |
- |
|||
Unrealized fair value gain on growth of biological assets |
(951,694) |
- |
|||
Gain on settlement of interests at acquisition |
(1,098,374) |
- |
|||
Fair value gain on warrants |
(104,344) |
- |
|||
Gain on the sale of licensed technology |
(4,196,477) |
- |
|||
Gains on investments |
(12,762,704) |
- |
|||
(12,900,096) |
(4,532,029) |
||||
Changes in non-cash items relating to operations: |
|||||
Increase in amounts receivable |
(123,412) |
(1,064,247) |
|||
Increase in inventory |
(1,860,749) |
(147,211) |
|||
Increase in prepaid and other assets |
(1,224,839) |
(156,794) |
|||
Increase (decrease) in accounts payable and accruals |
1,863,400 |
(1,021,754) |
|||
Increase in biological assets |
(259,917) |
- |
|||
Increase in current tax liability |
251,968 |
- |
|||
(14,253,645) |
(6,922,035) |
||||
CASH FLOWS FROM/(USED) IN INVESTING ACTIVITIES |
|||||
Purchase of property and equipment |
(6,811,821) |
(151,861) |
|||
Purchase of Intangible assets |
(54,924) |
- |
|||
Payments for acquisitions, net of cash received |
(1,074,056) |
- |
|||
Proceeds from the sale of investments |
28,139,404 |
- |
|||
Proceeds from the collection of convertible debt |
392,100 |
- |
|||
Purchase of interests in equity accounted investments |
- |
(1,917,884) |
|||
Royalty financing arrangements |
(1,265,000) |
(3,962,131) |
|||
Loans advanced to debtors including issuance costs, net of repayment |
(2,848,359) |
(1,488,018) |
|||
16,477,344 |
(7,519,894) |
||||
CASH FLOWS FROM FINANCING ACTIVITIES |
|||||
Proceeds from issued shares in bought deal financing, net of costs |
12,015,990 |
10,958,243 |
|||
Proceeds from issuance of convertible debt, net of costs |
31,249,904 |
- |
|||
Proceeds from issuance of warrants, net of costs |
3,628,950 |
2,787,000 |
|||
Proceeds from exercise of warrants |
11,665,043 |
404,592 |
|||
Repayment of line of credit |
(3,000,000) |
- |
|||
Rapayment of loans |
(71,467) |
- |
|||
Proceeds from common and preferred shares issued to minority holders of Trichome |
13,259,530 |
- |
|||
Proceeds from issuance of stock options |
186,500 |
25,000 |
|||
Payments related to share buyback bid |
(98,382) |
- |
|||
Tax withholding paid on exercise of restricted share units |
- |
(84,887) |
|||
68,836,068 |
14,089,948 |
||||
Effect of movement of exchange rates on cash held |
(300,063) |
- |
|||
INCREASE (DECREASE) IN CASH |
$ |
70,759,704 |
$ |
(351,981) |
|
CASH, BEGINNING OF PERIOD |
4,522,644 |
2,945,895 |
|||
CASH, END OF PERIOD |
$ |
75,282,348 |
$ |
2,593,914 |
SOURCE Origin House
Marc Lustig, Chairman and CEO, [email protected], 1-844-556-5070, www.originhouse.com; Jonathan Ross, CFA, LodeRock Advisors Inc., [email protected], 416-283-0178
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