Continued Execution
2,400% YoY Revenue Growth
49% Growth in Gross Margins Over Q2
Reduced Losses, Positioned for further Growth
Earnings Conference Call Wednesday
Jon Paul, CFO of AUDACIOUS, added, "The third quarter was an important pivot for us, as we spent heavily towards future growth opportunities while moving further from our past. We successfully launched the AUDACIOUS brand at our highly trafficked booth at MJBizCon and the Roll-Up Launch Event featuring Machine
Financial Highlights Q3 Fiscal 2022
Income | 3 months | 3 months | Change Year Over | 3 months | Change Q3 Over | Pro Forma | ||
$ | $ | % | $ | % | $ | |||
Revenue | 2,371,218 | 90,378 | 2,623% | 2,271,830 | 4.4% | 2,940,876 | ||
Gross profit (loss) | 1,843,437 | (166,048) | n.a. | 1,233,766 | 49.4% | |||
Operating expenses | 6,164,519 | 4,898,793 | 25.8% | 5,637,907 | 9.3% | |||
Loss from operations | (4,321,082) | (5,064,841) | -14.7% | (4,404,141) |
-1.9%
|
Outlook
In the months ahead, AUDACIOUS will continue to execute on its strategy with further growth in its current markets and anticipates entering new jurisdictions, including
3Q 2022 Financial Highlights
- Total revenues of
$2.37 million , an increase of 2,623% year-over-year from$90,378 in the third fiscal quarter of 2021 and even grew 4% compared to the second quarter of fiscal quarter of 2022. During the quarter under review, the Company recorded its first billings inCalifornia , offset by lower kiosk income as the Cocoon business is wound down. Furthermore, as the Company had commenced exiting its investment in Body and Mind, no further consulting fees were generated from this relationship. - Gross profit for the fiscal second quarter of 2022 was
$1.84 million compared to a gross profit loss of ($166k ) in the comparable period of 2021 and increased by 51% from the second fiscal quarter of 2022. The increase in gross profit is predominantly from stronger utilization rates in the Company's high-margin ALPS business and management fees from Green Therapeutics. - Operating expenses increased to approximately
$6.16 million , or by 25.8%, as compared to the same period in the prior year, well below the recorded revenue growth rate of over 2,400% for the same period, showing the leverage built into the business as commercial activity increases. Cost increases driving this revenue growth were increases in personnel with the acquisition of ALPS and key management, the Company's successful rebranding as Audacious launched at MJBizCon, annual governance meeting costs, and investment in the relationship with theProfessional Bull Riders (PBR) association. - A 16% reduction in operating loss was recorded
$(4.3) million as compared to$(5.1) million for the prior year, with growth in margins offsetting increased operating costs.
Q3 Highlights and Subsequent Events
- LDA Funding – securing growth capital
- The Company announced a term sheet on staged funding with
LDA Capital , aU.S. based investment firm. Subsequent to the quarter, the Company announced it had closed its financing facility with LDA, bringing, initially, up to$10 million in funding, with the option to extend the facility with an additional$10 million . Much of the facility will be used towards working capital for high growth activities and initiatives. - MJBizCon
- The Company hosted a booth at MJBizCon in
October 2021 . MJBizCon is the largest industry trade show. At the event, the Company was able to showcase its products and operations to a broad audience of industry professionals, consumers, capital markets professionals, investors and potential partners. At the event, the Company signed an LOI withThailand basedGolden Triangle Health (GTH), a spinoff of $400m+ public Thai food company Instant Produce PCL. - Excellent start to global activities – GTH partnership in
Thailand - Subsequent to the quarter, the Company completed a definitive agreement with GTH, pursuant to which the Company will acquire, in stock, 25% of GTH. GTH is a spin off from $400M+ Thai public company NR Instant Produce PCL ("NRF"), who sell ethnic foodstuffs around the globe. Through NRF, GTH can access major distribution channels, ensuring wide availability of AUDACIOUS products, increasing brand awareness and sales opportunities.
- Bringing APIS to a new and significant audience - Priva partnership
- ALPS signed a partnership with Priva, the global pre-eminent environment control company for the horticultural industry. With over 12,500 projects worldwide, Priva is exceptionally well positioned to help market ALPS' APIS solution to its customers.
- Speeding up high-quality cultivation – The AUDACIOUS ACHIEVE series
- At MJBizCon, the Company announced the launch of its turn-key all-in grow solution, the AUDACIOUS ACHIEVE series. The ACHIEVE facilities benefit from faster time to market, enabling customers to start generating revenues more quickly, especially through the Company's QuickGrow solution, which are prefab grow solutions ready to be installed. The Company has received significant interest in its ACHIEVE series and the first projects are under development.
- From the desert to the arctic – ALPS develops profitable facilities anywhere - Pure Harvest
$1.4M Kuwait deal - ALPS, thew world leader in sustainable agriculture greenhouse design, entered a contract with Pure Harvest of the
United Arab Emirates for project work concerning a large greenhouse facility inKuwait , in itself a partnership between Pure Harvest and TCS, the largest public grocery chain in theMiddle East . The Company indicates it anticipates further projects with Pure Harvest, a leading innovator in the region - Making waves in
California - Herbs + EAZE - The Company launched its LOOS brand in the
California market through its pending acquisition of the Herbs dispensary inSan Jose , and an accompanying partnership with EAZE, the world's largest legal cannabis delivery company with over 2 million registered customers. The Company also launched a limited product line under its Provisions brand inCalifornia . First batches of both brands sold out in short order, with LOOS products ranking second in popularity inCalifornia in their category, achieved without advertising or a large marketing spend. - PBR partnership off to successful start
- As part of its partnership agreement with PBR, the Company launched its CBD infused pain relief brand, Wreck Relief, on
Thursday February 10th . The launch was successful and customer orders are coming in through the Company's eCommerce site www.wreckrelief.com. - As the PBR Spring Season has kicked off, we've been seeing an increase in traffic to our website. In less than one week, close to 2,000 unique users visited our site from all over
the United States . - On
March 5 , Wreck Relief will be providing product samples and will be taking orders at the highly attended PBR Global Cup inArlington Texas . - License applications
- The Company announced it is applying for a variety of licenses in several jurisdictions, including
Ohio ,New Jersey andNew Mexico . - Award streak continues
- The Company's Tsunami brand won the inaugural NuWu cup in
Las Vegas for best extract, further validating the exceptional quality of the AUDACIOUS product line.
Conference Call Details
The Company will be hosting a conference call to discuss its results for the quarter on
Conference call details
1.647.794.4605 | |
North American Toll Free: | 1.888.204.4368 |
Webcast URL: | https://produceredition.webcasts.com/starthere.jsp?ei=1532386&tp_key=0ca289c8c0 |
Confirmation #: | 5701328 |
A replay of the call will be available until | |
Encore Replay Canada: | 1.647.436.0148 |
Encore Replay North American Toll Free: | 1.888.203.1112 |
Encore Replay Entry Code: | 5701328 |
About AUDACIOUS
AUDACIOUS is a next-generation MSO growing the cannabis industry of tomorrow from the ground up, led by industry pioneer
AUDACIOUS common shares trade on the CSE under the symbol "AUSA" and on the OTCQB under the symbol "AUSAF."
"
________________________________
Chief Executive Officer
Forward-Looking Statement
This press release contains "forward-looking information" within the meaning of applicable securities legislation. All statements, other than statements of historical fact, included herein is forward-looking information. Generally, forward-looking information may be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "proposed", "is expected", "budgets", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases, or by the use of words or phrases which state that certain actions, events or results may, could, would, or might occur or be achieved. In particular, this press release contains forward-looking information in relation to; the impact of the changes to
Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information. Such risks and other factors may include, but are not limited to: general business, economic, competitive, political and social uncertainties; general capital market conditions and market prices for securities; the actual results of the Company's future operations; competition; changes in legislation affecting the Company; the timing and availability of external financing on acceptable terms; lack of qualified, skilled labour or loss of key individuals; risks related to the COVID-19 pandemic including various recommendations, orders and measures of governmental authorities to try to limit the pandemic, including travel restrictions, border closures, non-essential business closures, service disruptions, quarantines, self-isolations, shelters-in-place and social distancing, disruptions to markets, economic activity, financing, supply chains and sales channels, and a deterioration of general economic conditions that could limit the Company's ability to obtain external financing.
A description of additional risk factors that may cause actual results to differ materially from forward-looking information can be found in the Company's disclosure documents on the SEDAR website at www.sedar.com. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. Accordingly, readers should not place undue reliance on forward-looking information. Readers are cautioned that the foregoing list of factors is not exhaustive. Readers are further cautioned not to place undue reliance on forward-looking information as there can be no assurance that the plans, intentions or expectations upon which they are placed will occur. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated.
Forward-looking information contained in this press release is expressly qualified by this cautionary statement. The forward-looking information contained in this press release represents the expectations of the Company as of the date of this press release and, accordingly, are subject to change after such date. However, the Company expressly disclaims any intention or obligation to update or revise any forward-looking information, whether because of new information, future events or otherwise, except as expressly required by applicable securities law.
The CSE has neither approved nor disapproved the contents of this news release. Neither the CSE nor its Regulation Services Provider (as that term is defined in the policies of the CSE) accept responsibility for the adequacy or accuracy of this release.
Condensed Interim Consolidated Statements of Financial Position
(Unaudited – in Canadian Dollars)
Notes |
|
| |
$ | $ | ||
Assets | |||
Current | |||
Cash and cash equivalents | 655,597 | 3,531,357 | |
Accounts receivable | 4 | 3,803,803 | 1,696,656 |
Inventory | 659,395 | 473,185 | |
Prepaid expenses | 418,273 | 470,479 | |
Current portion of deposits | 1,303,734 | 649,464 | |
Current portion of annuity receivable - SubTerra | 59,576 | 66,070 | |
Loans receivable | 2,386,414 | - | |
Marketable securities held for sale | 5 | 2,890,022 | 12,803,638 |
Land held for sale | 6 | - | 4,151,551 |
12,176,814 | 23,842,400 | ||
Non-current | |||
Investment in ALPS technology solution APIS | 8 | 3,034,309 | 1,130,233 |
Property, plant, and equipment | 9 | 2,122,250 | 298,258 |
Right-of-use assets | 9 | 754,156 | 1,097,361 |
Intangible assets | 11 | 13,287,857 | 14,227,461 |
11 | 15,057,796 | 15,057,796 | |
Derivative financial instrument – NCI call option | 8 | 7,320,630 | 7,320,630 |
Annuity receivable – SubTerra | 679,492 | 672,998 | |
Long-term deposits | 10 | 3,219,387 | 4,130,168 |
Other assets – acquisition deposit | 7 | 14,797,896 | 14,677,674 |
TOTAL ASSETS | 72,450,587 | 82,454,979 | |
Liabilities | |||
Current | |||
Accounts payable and accrued liabilities | 17 | 5,448,113 | 5,915,674 |
Deferred revenue | 8,858 | 17,813 | |
Current portion of lease liability | 12 | 438,641 | 459,895 |
Provisions | 10 | - | 1,029,014 |
5,895,612 | 7,422,396 | ||
Non-current | |||
Contingent consideration payable | 8 | 3,698,980 | 3,698,980 |
Lease liability | 12 | 369,991 | 686,191 |
Loan payable | 15 | - | 747,115 |
Deferred tax liability | 3,205,244 | 3,205,244 | |
TOTAL LIABILITIES | 13,169,827 | 15,759,926 | |
Shareholders' equity | |||
Share capital | 13 | 112,002,679 | 104,617,900 |
7,13 | (11,367,770) | (11,367,770) | |
Exchangeable shares reserve | 13 | 10,383,426 | 11,114,175 |
Reserves | 13 | 14,173,098 | 9,640,106 |
Accumulated other comprehensive income | 323,717 | 234,035 | |
Accumulated deficit | (71,303,420) | (52,937,270) | |
Equity attributable to owners of the Company | 54,211,730 | 61,301,176 | |
Non-controlling interest | 8 | 5,069,030 | 5,393,877 |
TOTAL SHAREHOLDERS' EQUITY | 59,280,760 | 66,695,053 | |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 72,450,587 | 82,454,979 |
Condensed Interim Consolidated Statements of Financial Position
(Unaudited – in Canadian Dollars)
Three months ended | Nine months ended | ||||
Notes | 2021 | 2020 | 2021 | 2020 | |
Revenue | $ | $ | $ | $ | |
Revenue-Services | 1,993,131 | 8,430 | 5,137,007 | 43,102 | |
Revenue-Kiosks | 94,522 | 35,181 | 315,787 | 71,510 | |
283,565 | 46,767 | 918,617 | 143,368 | ||
2,371,218 | 90,378 | 6,371,411 | 257,980 | ||
Cost of goods sold | (527,781) | (256,426) | (2,229,669) | (484,534) | |
Gross profit (loss) | 1,843,437 | (166,048) | 4,141,742 | (226,554) | |
Operating expenses | |||||
Wages and benefits | 1,183,865 | 3,451,617 | 3,825,604 | 5,097,118 | |
Share-based payments | 13 | 1,097,784 | (1,263,126) | 3,759,580 | 391,507 |
Selling, general and administrative | 14 | 3,476,327 | 2,557,961 | 7,415,624 | 4,137,737 |
Depreciation and amortization | 9,11 | 406,543 | 152,341 | 1,281,555 | 496,355 |
6,164,519 | 4,898,793 | 16,282,363 | 10,122,717 | ||
Loss from operations | (4,321,082) | (5,064,841) | (12,140,621) | (10,349,271) | |
Other income (expense) | |||||
Gain on asset disposal | (83,460) | 82 | (83,496) | 138 | |
Loss on investment in associate | - | (427,739) | - | (1,282,451) | |
Gain (loss) on sale of marketable securities | (142,217) | - | (180,880) | - | |
Loss on settlements | - | (3,000,000) | (237,338) | (4,025,477) | |
Loss on true-up provision | - | - | - | (1,615,835) | |
Loss on impairment - intertangle assets | - | (7,684,824) | - | (7,684,824) | |
Loss on remeasurement of land held for sale | - | (2,250,241) | - | (2,250,241) | |
Net change on investment at fair value through profit or loss | 5 | (275,278) | (796,163) | (6,202,654) | (992,718) |
Other income | - | 70 | - | 483 | |
Other expense – merger and acquisition costs | - | (118,311) | - | (286,846) | |
Foreign exchange gain (loss) | 323,052 | (88,989) | 214,362 | (87,192) | |
Income tax expense | (77,596) | - | (77,596) | - | |
Interest and other expense | (184,599) | (12,712) | (94,436) | (23,195) | |
Interest expense - leases | (4,616) | (4,880) | (33,670) | (38,685) | |
Interest income | 62,259 | 26,460 | 145,332 | 86,120 | |
(382,455) | (14,357,247) | (6,550,376) | (18,200,723) | ||
Net loss | (4,703,537) | (19,422,088) | (18,690,997) | (28,549,994) | |
Other comprehensive income (loss) | |||||
Foreign currency translation | (175,046) | 6,010 | 89,682 | (247,153) | |
Share of OCI from investments in associates | - | 144,441 | - | (51,976) | |
Total comprehensive loss | (4,878,583) | (19,271,637) | (18,601,315) | (28,849,123) | |
Net loss attributable to: | |||||
Shareholders of the Company | (4,714,729) | (19,422,088) | (18,366,150) | (28,549,994) | |
Non-controlling interest | 11,192 | - | (324,847) | - | |
Net loss | (4,703,537) | (19,422,088) | (18,690,997) | (28,549,994) | |
Total comprehensive loss attributable to: | |||||
Shareholders of the Company | (4,889,775) | (19,271,637) | (18,276,468) | (28,849,123) | |
Non-controlling interest | 11,192 | - | (324,847) | - | |
Total comprehensive loss | (4,878,583) | (19,271,637) | (18,601,315) | (28,849,123) | |
Net loss per share attributable to shareholders of the Company | |||||
Basic and diluted | (0.02) | (0.11) | (0.08) | (0.17) | |
Weighted average number of shares outstanding | |||||
Basic and diluted | 247,284,636 | 176,512,309 | 239,885,621 | 172,937,978 |
View original content to download multimedia:https://www.prnewswire.com/news-releases/audacious-reports-fiscal-q3-2022-financial-results-301493444.html
SOURCE
© Canada Newswire, source