– Quarterly revenue from continuing operations increase of 354% over the comparative period
– Year-to-date revenue from continuing operations increase of 326% over the comparative period
VANCOUVER, British Columbia, Nov. 26, 2019 /CNW/ — Sunniva Inc. (“Sunniva”, the “Company”, “we”, “our” or “us”) (CSE:SNN) (OTCQB:SNNVF), a North American provider of cannabis products and services, today released its financial results and management’s discussion and analysis for the three and nine months ended September 30, 2019. All figures are reported in Canadian dollars ($), unless otherwise indicated. Sunniva’s financial statements are prepared in accordance with International Financial Reporting Standards (“IFRS”). The Company also reports receipt of a 30-day notice of termination under its build to suit lease for the Cathedral City Glasshouse and notices of default regarding funding of the facility.
“While the third quarter saw further progress with the construction of the Cathedral City Glasshouse as we move towards its completion, significant cost overruns have resulted in delays in payments and disputes over responsibility to cover construction costs. Sunniva has already funded over US $22 million in tenant improvements. A dispute about additional payments required to complete construction has prompted our lessor to give us a 30-day notice of termination and default under our build to suit agreement. We intend to vigorously defend our rights under the agreement,” said Dr. Anthony Holler, CEO, Sunniva. “We continue to work towards finalizing the sale of Natural Health Services Ltd. and completion of the disposition of Sunniva Medical Inc., and the property at Okanagan Falls. While our principal focus is on completing these transformational corporate objectives, we have been successful in growing revenues from our existing businesses which year to date have exceeded our 2018 total revenue.”
“If the Natural Health Services and Sunniva Medical Inc. transactions are completed, we will have achieved our transition to a pure play cannabis company in California,” said Holler. “Sunniva is unwavering in our pursuit of our vertical integration strategy and the large scale, high-quality flower production from the world-class glasshouse will provide supply our extraction facility and will enable us to continue the development of our flower and concentrate brands and distribution businesses.”
Financial Highlights – Three and nine months ended September 30, 2019
Consolidated Financial Highlights expressed in 000’s of CAD$, except per share amounts
Three Months Ended September 30, |
|||
2019 |
2018 |
Change |
|
Revenue |
$ 5,361 |
$ 1,182 |
$ 4,179 |
Cost of Goods Sold |
3,788 |
968 |
2,820 |
Gross Margin |
1,573 |
214 |
1,359 |
Selling, General and Administrative |
6,545 |
4,543 |
2,002 |
Production Facility Costs |
1,262 |
– |
1,262 |
Share-based Payments |
293 |
2,303 |
(2,010) |
Amortization Expense |
612 |
251 |
361 |
Loss from Continuing Operations |
(7,139) |
(6,883) |
(256) |
Net Loss |
$ (20,462) |
$ (6,781) |
$ (13,681) |
Basic Loss Per Share |
$ (0.52) |
$ (0.21) |
$ (0.31) |
Weighted Average Number of Shares |
39,174,040 |
32,042,054 |
7,131,986 |
Nine Months Ended September 30, |
|||
2019 |
2018 |
Change |
|
Revenue |
$ 21,228 |
$ 4,980 |
$ 16,248 |
Cost of Goods Sold |
15,942 |
4,171 |
11,771 |
Gross Margin |
5,286 |
809 |
4,477 |
Selling, General and Administrative |
18,518 |
10,788 |
7,730 |
Production Facility Costs |
3,051 |
– |
3,051 |
Share-based Payments |
1,821 |
6,408 |
(4,587) |
Amortization Expense |
1,763 |
678 |
1,085 |
Loss from Operations |
(19,867) |
(17,065) |
(2,802) |
Net Loss |
$ (38,888) |
$ (17,961) |
$ (20,927) |
Basic Loss Per Share |
$ (1.00) |
$ (0.59) |
$ (0.41) |
Weighted Average Number of Shares |
39,014,649 |
30,386,117 |
8,628,532 |
Results of Operations – Three and nine months ended September 30, 2019
For the three and nine months ended September 30, 2019, the Company’s continuing operations generated $5.4 million and $21.2 million in revenue as compared to $1.2 million and $5.0 million during the three and nine months ended September 30, 2018. CP Logistics, LLC (“CPL”) contributed $2.6 million and $14.1 million and Full-Scale Distributors, LLC (“FSD”) contributed $2.8 million and $7.1 million over these same periods. Net loss from continuing operations for the three and nine months ended September 30, 2019 was $9.2 million and $26.0 million as compared to $7.0 million and $17.5 million during the three and nine months ended September 30, 2018. Natural Health Services Ltd. (“NHS”) is classified as a discontinued operation as at September 30, 2019. Net loss from discontinued operations for the three and nine months ended September 30, 2019 was $11.3 million and $12.9 million as compared to net income of $0.3 million and a net loss of $0.4 million during the three and nine months ended September 30, 2018.
The key components contributing to the change in net loss from the three and nine months ended September 30, 2019 compared to the prior comparative periods comprise the following:
Key Developments in the Third Quarter 2019
Recent Operating Developments Subsequent to September 30, 2019
Copies of our consolidated financial statements for the three and nine months ended September 30, 2019 and related management’s discussion and analysis of financial results are available on SEDAR at www.sedar.com.
The Company’s executive management will discuss the results during a conference call on Wednesday November 27, 2019 at 11:00 am Eastern Time / 8:00 am Pacific Time. To participate in the call please dial 1-800-319-4610, or (604) 638-5340. An audio replay will be available shortly after the call by dialing 1-855-669-9658 or (604) 674-8052 and entering code 3884. The replay will be available for two weeks following the call.
For more information about the Company please visit: www.sunniva.com and view our construction photo gallery and progress videos at www.sunniva.com/sunniva-campus/california-campus.
To be added to the Sunniva email distribution list please register at www.sunniva.com/email-alerts.
Neither the Canadian Securities Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Canadian Securities Exchange) accepts responsibility for the adequacy or accuracy of this release.
About Sunniva Inc.
Sunniva, through its subsidiaries, is building a vertically integrated cannabis company operating in two of the world’s largest legal cannabis markets – California and Canada. In Canada, Sunniva’s wholly owned subsidiary Natural Health Services Ltd. operates medical cannabis clinics that provide educational and clinical services to patients. In California, Sunniva is constructing a 325,000 square-foot, purpose-built cGMP designed greenhouse for cannabis cultivation and operates a fully licensed cannabis extraction facility, in-house marketing and licensed cannabis distribution businesses.
Forward Looking Statements
This press release contains forward-looking statements within the meaning of applicable securities laws. All statements that are not historical facts, including without limitation, statements regarding future estimates, plans, programs, forecasts, projections, objectives, assumptions, expectations or beliefs of future performance, statements regarding the Company’s operations and growth opportunities; the expected timing of completion of the Cathedral City Glasshouse, including the timing of receipt of the certificate of occupancy; the timing of the expected completion of the SMI Transaction; the anticipated timing of completion of the NHS Transaction; the transition to a pure play cannabis company in California; the Company’s strategy of vertical integration; the expectation that the large scale, high quality flower production from its world-class glasshouse will enable the Company to fully utilized its extraction facility and will enable the Company to internally supply the continued development of its flower and concentrate brands; and the timing for the conference call to discuss financial results are “forward-looking statements.” Forward-looking statements can be identified by the use of words such as “plans”, “expects” or “does not expect”, “is expected”, “estimates”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, events or developments to be materially different from any future results, events or developments expressed or implied by such forward-looking statements. Such risks and uncertainties include, among others, the risk factors included in the Sunniva’s continuous disclosure documents available on www.sedar.com. These factors should be considered carefully, and readers are cautioned not to place undue reliance on such forward-looking statements. Although Sunniva has attempted to identify important risk factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other risk factors that cause actions, events or results to differ from those anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in forward-looking statements. Sunniva assumes no obligation to update any forward-looking statement, even if new information becomes available as a result of future events, new information or for any other reason except as required by law.
Company Contacts: |
|
Sunniva Inc. |
Investor Relations Contact |
Dr. Anthony Holler |
Rob Knowles |
Chairman and Chief Executive Officer |
VP Corporate Development |
Phone: (866) 786-6482 |
Phone: (587) 430-0680 |
Email: [email protected] |