Yield Growth Corp. (CSE:BOSS) (OTC:BOSQF) (Frankfurt: YG3) on a consolidated basis (the “Company”) has released its financial and operational results for the year ended November 30, 2018. These filings are available for review on the Company’s SEDAR profile at www.sedar.com.
UPDATE ON CASH POSITION
The Company received warrant and stock options exercises during the first quarter of 2019 for total proceeds in excess of $3.7 million. As at February 28, 2019, the Company had a cash balance of approximately $3.7 million.
The Company realized revenue of $3,055,442 for the twelve months ended November 30, 2018 as compared to nil for the prior year. The revenue included consulting revenue of $1,098,364 under Thrive Activations Inc. (“Thrive”) and licensing revenue of $1,957,078 under Urban Juve Provisions Inc. (“Urban Juve”) for manufacturing and distribution rights licensed to third parties for the Canadian, US and certain European markets.
The Company incurred net loss of $9,708,037 for the twelve months ended November 30, 2018 as compared to $1,229,685 for the prior year. However, many of the expenses incurred in 2018 were one-time and non-recurring expenses or were non-cash expenses not affecting cash flow. The adjusted earnings before interest, taxes, depreciation and amortization, excluding certain non-operating amounts as shown below (the “Adjusted EBITDA”) was negative $2,504,577 for the twelve months ended November 30, 2018.
The increase in loss was primarily driven by increased stock-based compensation for stock options granted to directors, officers, employees, consultants, and advisors, and consulting fees and wages for development activities and to build up internal capacity to launch Urban Juve and other product lines.
The Company was at the final stage of its initial public offering as at November 30, 2018 and incurred material amount of expenses during the year in professional fees, share-based compensation, office expenses, and other fees that are one-time and non-recurring in nature. The Company also incurred loss from investments in joint venture of $2,367,766 and loss from termination and amendment of licensing agreements of $1,447,572, and neither of these losses are expected to occur in the future.
Selected information for the years ended November 30, 2018 and 2017
|Basic and diluted loss per share||0.13||0.12|
|Dividends declared and paid out||–||–|
Adjusted EBITDA for the years ended November 30, 2018 and 2017
Adjusted EBITDA, a measure used by management to indicate operating performance, is defined as earnings before interest, taxes, depreciation and amortization, excluding certain non-operating amounts as shown below. Adjusted EBITDA is not a recognized term under IFRS and is not intended to be an alternative either to gross profit or income before taxes as a measure of operating performance or to cash flows from operating activities as a measure of liquidity. Additionally, Adjusted EBITDA is not intended to be a measure of free cash flow available for discretionary use, as it does not consider certain cash requirements such as interest payments, tax payments and debt service requirements. The Company uses Adjusted EBITDA to supplement IFRS results to provide a more complete understanding of the factors and trends affecting the business than IFRS results alone. Because not all companies use identical calculations, the presentation of Adjusted EBITDA may not be comparable to other similarly titled measurements used by other companies. Readers should not consider Adjusted EBITDA in isolation or as a substitute for profit (loss) for the period as determined by IFRS, or as a substitute for an analysis of our Financial Statements.
UPATE ON OPERATIONS
Yield Growth has five wholly owned subsidiaries, Urban Juve, UJ Topicals, UJ Beverages Inc. (“UJ Beverages”), Yield Botanicals Inc. (“Yield Botanicals”) and Thrive Activations Inc.
Urban Juve is an Ayurveda-inspired skin care and beauty brand that rejuvenates and nourishes from within: spirit to skin. Urban Juve’s key ingredient – cannabis sativa hemp root oil – combines with natural and pure essential oil-based formulations to create quality products that are now available online and are available at select retail stores across Canada.
As the Company’s flagship, Urban Juve is a bold brand rooted in the organic synthesis of ancient knowledge and modern techniques to create exceptional beauty and wellness solutions. Ayurvedic knowledge delineates three general categories or skin types, which Urban Juve has translated as Vitalize, Balance and Align, each with its own dedicated range of skin and body care formulations. Urban Juve has created unique formulas for more than 70 beauty and wellness products, has registered with Health Canada 35 products containing cannabis sativa hemp seed oil and hemp root oil and has filed 11 provisional patent applications in the United States.
The first eleven Phase I products have been launched through Urban Juve’s ecommerce website and over 70 retail stores across Canada have agree to carry the Urban Juve line.
Urban Juve is continuously developing new products and expects to launch over 20 additional products through 2019. It has licensed the use of all of its formulas to UJ Topicals and the right to combine the formulas to create products containing cannabis.
Pursuant to its agreement with a licensed cannabis processing facility in Oregon, UJ Topicals’ products will be launching 9 cannabis products under the brand name “Wright and Well” in the Oregon legal cannabis market. UJ Topicals expects to launch these first 9 products in Oregon in the second quarter of 2019.
UJ Beverages has completed the acquisition of eight wellness beverage formulas designed to be infused with CBD and THC and one capsule product intended to treat hangovers.
The formulas have been developed to offer various health benefits, including an energy boost, hangover treatment, brain function boost, anxiety reduction, improved immunity, toxin removal and reduced inflammation. The formulations were developed in India and are based on Ayurvedic medicine using botanicals, fruit extracts and spices.
On March 12, 2019, Yield Botanicals entered an agreement with Vandenbosch Trading Company Ltd. to purchase a 10-acre property in Chilliwack, B.C., Canada. The purchase includes over 2.5 acres (approximately 100,000 square feet) of well-equipped and automated greenhouses, currently operating as an orchid flower grow and essential oil extraction business. The purchase price is $2.4 million subject to closing upon building inspection satisfactory to Yield Botanicals.
This strategic asset purchase will allow the Company to grow plants and build out extraction facilities in the existing infrastructure, while providing plenty of room for future expansion. Owning a farm will give Yield Botanicals complete control of key proprietary ingredients for its products, including hemp root oil. The purchase will also empower the Company’s in-house research capabilities for growth and innovation.
The Company is also planning to optimize the farm’s current orchid growth and essential oil extraction to include new products. It plans to set up an additional extraction facility dedicated to hemp root oil—a key ingredient in Urban Juve products and in the cannabis topicals line launching in Oregon. Subject to acquiring the appropriate licenses, Yield Botanicals may also apply to cultivate industrial hemp for the purpose of hemp root oil extraction, and to carry out research and development to create cannabidiol from the parts of the hemp plant exempt from the Cannabis Act. The farm facilities will allow Yield Growth to grow herbs currently used in the Urban Juve product line, and extract essential oils on site, according to the Ayurveda philosophy.
Thrive provides cutting-edge technology and marketing solutions to businesses. Thrive was created to make technology solutions accessible to businesses looking for a competitive advantage. Thrive provides technology advisory, marketing and other business incubation services to other businesses. Currently Thrive has two corporate clients.
About The Yield Growth Corp.
The Yield Growth Corp. is disrupting the global wellness market with hemp and cannabis-infused products that connect ancient healing with modern science. It is a vertically-integrated asset company with the leadership, financial position, and science-backed formulas to capitalize on the cannabis revolution. The Yield Growth management team has deep experience with relevant global brands including Johnson & Johnson, Procter & Gamble, M·A·C Cosmetics, Skechers, Best Buy, Aritzia, Coca-Cola, and Pepsi Corporation. Yield Growth serves mainstream, luxury consumers who demand sophisticated wellness solutions. Its flagship consumer brand, Urban Juve, has registered 35 products with Health Canada and has signed 70 retail locations to sell its products. Key ingredients in these products include Cannabis Sativa hemp seed oil and hemp root oil created using Urban Juve’s proprietary, patent-pending extraction technology. Urban Juve has also filed 11 provisional patents in the United States. Through its subsidiaries, Yield Growth is commercializing over 70 wellness and cosmetic products and has multiple revenue streams including licensing, incubation services and product sales.
Investor Relations Contacts:
Penny Green, President & CEO
Kristina Pillon, Investor Relations
The Canadian Securities Exchange has not reviewed, approved or disapproved the content of this news release.
Cautionary Statement Regarding Forward-Looking Statements
This press release includes forward-looking information and statements (collectively, “forward looking statements”) under applicable Canadian securities legislation. Forward-looking statements are necessarily based upon a number of estimates, forecasts, beliefs and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such risks, uncertainties and factors include, but are not limited to: risks related to the development, testing, licensing, intellectual property protection, and sale of, and demand for, Urban Juve, UJ Topicals, UJ Beverages and Yield Botanicals products, general business, economic, competitive, political and social uncertainties, delay or failure to receive board or regulatory approvals where applicable, and the state of the capital markets. Yield Growth cautions readers not to place undue reliance on forward-looking statements provided by Yield Growth, as such forward-looking statements are not a guarantee of future results or performance and actual results may differ materially. The forward-looking statements contained in this press release are made as of the date of this press release, and Yield Growth expressly disclaims any obligation to update or alter statements containing any forward-looking information, or the factors or assumptions underlying them, whether as a result of new information, future events or otherwise, except as required by law.
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