SANTA ANA, Calif., Nov. 15, 2021 (GLOBE NEWSWIRE) — Unrivaled Brands, Inc. (OTCQX: UNRV) (“Unrivaled” or the “Company”), a multi-state vertically integrated company focused on the cannabis sector with operations in California, Oregon, and Nevada, today reported its financial results for the quarter ended September 30, 2021.
Frank Knuettel, Chief Executive Officer of Unrivaled Brands stated, “I’m pleased to report the operating results for our first quarter after merging with UMBRLA, which was an important step forward in our effort to become the dominant west coast multi-state operator in the cannabis industry. During the third quarter, we recorded $23.4 million in revenues, up 274% from $6.3 million in revenues during the second quarter of this year and up 668% from $3.1 million in revenues during the third quarter of 2020.
“Moreover, while we have more work to do, the cost reductions we have enacted thus far this year are evident in our operating results. Selling, general and administrative (SG&A) expenses rose considerably less than our revenue increase and represent 58% of revenue for the third quarter of 2021 down from 183% of revenue for the third quarter of 2020.
“With our expanded footprint, including dispensaries that currently are operating and dispensaries in development that are scheduled to open in the coming months, we would like to take this opportunity to affirm our revenue guidance for 2022 in excess of $130 million for the year, notwithstanding any new relationship, partnerships or acquisitions we may make.”
Financial Update
- Our gross profit for the quarter ended September 30, 2021 was approximately $2.3 million, compared to a gross profit of approximately $1.4 million for the quarter ended September 30, 2020, an increase of $0.9 million. Our gross profit for this quarter was impaired by an approximate $4 million reserve we took against old inventory following the UMBRLA merger. While we made operational changes that we expect will reduce the supply and demand imbalance going forward, we remain cautious of the bulk market and are continuing to review that aspect of our business.
- Our selling, general and administrative (SG&A) expenses for the third quarter of 2021 were approximately $13.5 million, compared to approximately $5.6 million for the third quarter of 2020, an increase of $7.9 million or 142%. Importantly, as a percentage of revenue, SG&A expenses declined from 183% of revenue to 58% of revenue. As we continue to grow our operations, we will incur increased overhead expenses, but expect the SG&A expenses as a percentage of revenue to meaningfully decline.
- We reported a net loss from operations of $11.8 million for the third quarter of 2021 compared to a net loss of $14.1 million the third quarter of 2020. Importantly, our non-GAAP loss declined for the same period from $12.7 million to $0.9 million for this most recent quarter, a marked improvement. The non-GAAP details and reconciliation is set forth in the form 10-Q.
The Company will host a conference call at 4:30 p.m. Eastern Time on Monday, November 15, 2021 to discuss its financial results and business highlights.
Interested parties may listen to the call by dialing:
Toll-Free: 1-800 954 0633
Toll / International: 1-212 231 2902
Conference ID: 21999089
The conference call will also be available via a live, listen-only webcast and can be accessed through the Investor Relations section of Unrivaled Brands website at www.unrivaledbrands.com
About Unrivaled Brands
Unrivaled Brands is a multi-state vertically integrated company focused on the cannabis sector with operations in California, Oregon, and Nevada. In California, Unrivaled Brands operates four dispensaries, direct to consumer delivery, a state-wide distribution network, company-owned brands, and two cultivation facilities. In Oregon, we operate a state-wide distribution network, company-owned brands and outdoor and greenhouse cultivation. In Nevada, by way of a joint venture, Unrivaled Brands operates a cultivation and manufacturing facility. Unrivaled Brands is home to Korova, the market leader in high potency products across multiple product categories, currently available in California, Oregon, Arizona, and Oklahoma, as well as Sticks and Cabana.
For more info, please visit: https://unrivaledbrands.com.
Cautionary Language Concerning Forward-Looking Statements
Certain statements contained in this communication regarding matters that are not historical facts, are forward-looking statements within the meaning of Section 21E of the Securities and Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, known as the PSLRA. These include statements regarding management’s intentions, plans, beliefs, expectations, or forecasts for the future, and, therefore, you are cautioned not to place undue reliance on them. No forward-looking statement can be guaranteed, and actual results may differ materially from those projected. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise, except to the extent required by law. We use words such as “anticipates,” “believes,” “plans,” “expects,” “projects,” “future,” “intends,” “may,” “will,” “should,” “could,” “estimates,” “predicts,” “potential,” “continue,” “guidance,” and similar expressions to identify these forward-looking statements that are intended to be covered by the safe-harbor provisions of the PSLRA. Such forward-looking statements are based on our expectations and involve risks and uncertainties; consequently, actual results may differ materially from those expressed or implied in the statements due to a number of factors.
New factors emerge from time-to-time and it is not possible for us to predict all such factors, nor can we assess the impact of each such factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. These risks, as well as other risks associated with the combination, will be more fully discussed in our reports with the SEC. Additional risks and uncertainties are identified and discussed in the “Risk Factors” section of the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other documents filed from time to time with the SEC. Forward-looking statements included in this release are based on information available to Company as of the date of this release. The Company undertakes no obligation to update such forward-looking statements to reflect events or circumstances after the date of this release.
Contact
Jason Assad
LR Advisors LLC.
jassad@unrivaledbrands.com
678-570-6791
For media inquiries:
Nic Johnson
Russo Partners
Nic.johnson@russopartnersllc.com
303-482-6405
| UNRIVALED BRANDS, INC. AND SUBSIDIARIES | ||||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||||
| (in thousands, except shares) | ||||||||||
| September 30, | December 31, | |||||||||
| 2021 | 2020 | |||||||||
| (Unaudited) | ||||||||||
| ASSETS | ||||||||||
| Current Assets: | ||||||||||
| Cash | $ | 15,238 | $ | 888 | ||||||
| Accounts receivable, net | 8,433 | 835 | ||||||||
| Short term investments | – | 34,045 | ||||||||
| Inventory | 15,865 | 1,602 | ||||||||
| Prepaid expenses and other assets | 3,260 | 234 | ||||||||
| Notes Receivables | 750 | – | ||||||||
| Current assets of discontinued operations | – | 2 | ||||||||
| Total current assets | 43,546 | 37,606 | ||||||||
| Property, equipment and leasehold improvements, net | 40,848 | 32,480 | ||||||||
| Intangible assets, net | 135,752 | 7,714 | ||||||||
| Goodwill | 23,575 | 6,171 | ||||||||
| Other assets | 15,054 | 13,040 | ||||||||
| Investments | 437 | 330 | ||||||||
| Assets of discontinued operations | 109 | 2,953 | ||||||||
| TOTAL ASSETS | $ | 259,321 | $ | 100,294 | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||
| LIABILITIES: | ||||||||||
| Current liabilities: | ||||||||||
| Accounts payable and accrued expenses | $ | 24,428 | $ | 8,622 | ||||||
| Deferred Gain on Sale of Assets | 139 | – | ||||||||
| Short-term debt | 8,648 | 8,033 | ||||||||
| Current liabilities of discontinued operations | 8,632 | 9,768 | ||||||||
| Total current liabilities | 41,847 | 26,423 | ||||||||
| Long-term liabilities: | ||||||||||
| Long-term debt, net of discounts | 13,545 | 6,632 | ||||||||
| Long-term lease liabilities | 8,065 | 8,082 | ||||||||
| Long-term liabilities of discontinued operations | – | 28 | ||||||||
| Total long-term liabilities | 21,610 | 14,741 | ||||||||
| Total liabilities | 63,457 | 41,164 | ||||||||
| STOCKHOLDERS’ EQUITY: | ||||||||||
| Common stock, par value 0.001: | 460 | 218 | ||||||||
| 990,000,000 shares authorized as of September 30, 2021 and December 31, 2020; 432,886,195 shares issued and 430,557,787 shares outstanding as of September 30, 2021; 196,512,867 shares issued and 194,204,459 shares outstanding as of December 31, 2020. | ||||||||||
| Additional paid-in capital | 373,878 | 275,060 | ||||||||
| Treasury Stock (2,308,408 shares of common stock, 4 shares of Preferred Stock Convertible Series A) | (808 | ) | (808 | ) | ||||||
| Accumulated deficit | (240,274 | ) | (219,803 | ) | ||||||
| Total Unrivaled Brands, Inc. Stockholders’ Equity | 133,256 | 54,667 | ||||||||
| Non-controlling interest | 62,608 | 4,463 | ||||||||
| Total stockholders’ equity | 195,864 | 59,130 | ||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 259,321 | $ | 100,294 | ||||||
| UNRIVALED BRANDS, INC. AND SUBSIDIARIES | |||||||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||||
| (UNAUDITED) | |||||||||||||||||
| (in thousands, except for shares and per-share information) | |||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||
| September 30, | September 30, | ||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||
| Total revenues | $ | 23,434 | $ | 3,053 | $ | 34,809 | $ | 9,806 | |||||||||
| Cost of goods sold | 21,146 | 1,615 | 27,750 | 4,796 | |||||||||||||
| Gross profit | 2,288 | 1,438 | 7,059 | 5,010 | |||||||||||||
| Selling, general and administrative expenses | 13,516 | 5,588 | 33,841 | 20,409 | |||||||||||||
| Impairment of assets | – | 9,792 | – | 19,910 | |||||||||||||
| (Gain) / Loss on sale of assets | – | – | 6 | (35 | ) | ||||||||||||
| Loss from operations | (11,227 | ) | (13,943 | ) | (26,788 | ) | (35,273 | ) | |||||||||
| Other income (expense): | |||||||||||||||||
| (Gain) / Loss on Extinguishment of Debt | 185 | – | (5,976 | ) | – | ||||||||||||
| Interest expense, net | (740 | ) | (529 | ) | (1,344 | ) | (1,885 | ) | |||||||||
| Other income/loss | 5 | 372 | 367 | 349 | |||||||||||||
| Gain (loss) on investments | – | – | 5,337 | – | |||||||||||||
| Total other income (expense) | (550 | ) | (157 | ) | (1,616 | ) | (1,536 | ) | |||||||||
| Income / (Loss) from Subsidiaries | – | – | – | – | |||||||||||||
| Income (Loss) from continuing operations | (11,777 | ) | (14,100 | ) | (28,404 | ) | (36,809 | ) | |||||||||
| Income (Loss) from discontinued operations, net of tax | 6,312 | (4,199 | ) | 6,270 | (17,342 | ) | |||||||||||
| NET INCOME (LOSS) | (5,465 | ) | (18,299 | ) | (22,134 | ) | (54,151 | ) | |||||||||
| Less: Income (Loss) attributable to non-controlling interest from continuing operations | (118 | ) | (138 | ) | (604 | ) | (479 | ) | |||||||||
| Less: Income (Loss) attributable to non-controlling interest from discontinued operations | – | – | – | – | |||||||||||||
| NET INCOME / (LOSS) ATTRIBUTABLE TO UNRIVALED BRANDS, INC. | $ | (5,347 | ) | $ | (18,161 | ) | $ | (21,530 | ) | $ | (53,672 | ) | |||||
| Income / ( Loss) from continuing operations per common share attributable to Unrivaled Brands, Inc. common stockholders – basic and diluted | $ | (0.03 | ) | $ | (0.07 | ) | $ | (0.09 | ) | $ | (0.20 | ) | |||||
| Net Loss per common share attributable to Unrivaled Brands, Inc. common stockholders – basic and diluted | $ | (0.01 | ) | $ | (0.09 | ) | $ | (0.07 | ) | $ | (0.29 | ) | |||||
| Weighted-average number of common shares outstanding – basic and diluted | 457,745,655 | 206,828,614 | 317,491,979 | 186,295,127 | |||||||||||||
| UNRIVALED BRANDS, INC. AND SUBSIDIARIES | ||||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||
| (UNAUDITED) | ||||||||||
| (in thousands) | ||||||||||
| Nine Months Ended | ||||||||||
| September 30, | ||||||||||
| 2021 | 2020 | |||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||
| Net Loss | $ | (22,134 | ) | $ | (54,151 | ) | ||||
| Less: Net Income (loss) from discontinued operations | 6,270 | (17,342 | ) | |||||||
| Net loss from continuing operations | (28,404 | ) | (36,809 | ) | ||||||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||
| Bad debt expense | – | 650 | ||||||||
| Gain from debt forgiveness | (86 | ) | – | |||||||
| (Gain) loss on sale of assets | 6 | (35 | ) | |||||||
| Amortization of debt discount | – | 845 | ||||||||
| Depreciation and amortization | 4,480 | 5,062 | ||||||||
| Operating lease expense | 633 | 680 | ||||||||
| Stock based compensation | 2,884 | 1,672 | ||||||||
| Impairment loss | – | 19,910 | ||||||||
| Gain on sale of investments | (5,337 | ) | – | |||||||
| Non-cash portion of severance expense | 7,990 | – | ||||||||
| Loss (gain) on extinguishment of debt | 5,976 | – | ||||||||
| Non cash interest expense | 30 | – | ||||||||
| Change in operating assets and liabilities: | ||||||||||
| Accounts receivable | (1,766 | ) | 292 | |||||||
| Inventory | 3,100 | (518 | ) | |||||||
| Prepaid expenses and other current assets | (1,392 | ) | 218 | |||||||
| Other assets | 338 | (1,024 | ) | |||||||
| Accounts payable and accrued expenses | (3,798 | ) | 1,567 | |||||||
| Operating lease liabilities | (45 | ) | (380 | ) | ||||||
| Net cash provided by / (used in) operating activities – continuing operations | (15,391 | ) | (7,870 | ) | ||||||
| Net cash provided by / (used in) operating activities – discontinued operations | (925 | ) | (5,020 | ) | ||||||
| NET CASH PROVIDED BY / (USED IN) OPERATING ACTIVITIES | (16,316 | ) | (12,890 | ) | ||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||
| Purchase of property, equipment and leasehold improvements | (6,442 | ) | (46 | ) | ||||||
| Purchase of equity investment | – | 243 | ||||||||
| Proceeds from sale of investments | 39,382 | – | ||||||||
| Cash outflow for loans | – | (250 | ) | |||||||
| Cash paid for acquisitions | (15,000 | ) | – | |||||||
| Cash from acquisitions | 2,258 | 57 | ||||||||
| Proceeds from sales of assets | 72 | 35 | ||||||||
| Net cash provided by / (used in) investing activities – continuing operations | 20,271 | 39 | ||||||||
| Net cash provided by / (used in) investing activities – discontinued operations | 8,350 | 11,189 | ||||||||
| NET CASH PROVIDED BY / (USED IN) INVESTING ACTIVITIES | 28,621 | 11,228 | ||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||
| Proceeds from issuance of notes payable | 6,000 | 2,954 | ||||||||
| Payments of debt principal | (3,778 | ) | (430 | ) | ||||||
| Cash paid for debt discount | – | (8 | ) | |||||||
| Proceeds from issuance of common stock | – | 250 | ||||||||
| Cash contribution from non-controlling interest | – | 152 | ||||||||
| Cash paid for debt issuance cost | (178 | ) | – | |||||||
| Cash distribution to non-controlling interest | – | (145 | ) | |||||||
| Purchase of treasury stock | – | – | ||||||||
| Net cash provided by / (used in) financing activities – continuing operations | 2,044 | 2,773 | ||||||||
| Net cash provided by / (used in) financing activities – discontinued operations | – | – | ||||||||
| NET CASH PROVIDED BY / (USED IN) FINANCING ACTIVITIES | 2,044 | 2,773 | ||||||||
| NET CHANGE IN CASH | 14,350 | 1,112 | ||||||||
| Cash at beginning of period | 888 | 1,226 | ||||||||
| CASH AT END OF PERIOD | $ | 15,238 | $ | 2,338 | ||||||
| SUPPLEMENTAL DISCLOSURE FOR OPERATING ACTIVITIES: | ||||||||||
| Cash paid for interest | $ | 705 | $ | 892 | ||||||
| SUPPLEMENTAL DISCLOSURE FOR NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||||||||||
| Debt principal and accrued interest converted into common stock | $ | 2,100 | $ | 2,252 | ||||||
| Stock Issued for the acquisition of OneQor | $ | – | $ | 9,305 | ||||||
| Stock options exercised on a net share basis | $ | 79,032 | $ | – | ||||||
| Stock, stock options and warrants issued for the acquisition of UMBRLA | $ | 2,986 | $ | – | ||||||
| Assumption of Halladay mortgage | $ | 58,749 | $ | – | ||||||
| Promissory note issued for severance | $ | – | $ | – | ||||||
| Fixed assets in accounts payable | $ | 3 | $ | 792 | ||||||
| Non-cash contribution from non-controlling interest | $ | – | $ | 702 | ||||||
| Net assets acquired from acquisitions of Umbrla and People’s | $ | 153,571 | $ | – | ||||||
| Non-GAAP Reconciliation (in thousands) | ||||||||||||||||
| Three Months Ended September 30 | Nine Months Ended September 30 | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Net loss attributable to Unrivaled Brands Inc. | $ | (5,347 | ) | $ | (18,161 | ) | $ | (21,530 | ) | $ | (53,672 | ) | ||||
| Non-GAAP adjustments | ||||||||||||||||
| Amortization of intangible assets | 1,136 | – | 1,512 | 761 | ||||||||||||
| Depreciation expense | 1,091 | – | 2,968 | 1,913 | ||||||||||||
| Stock based compensation | 1,685 | – | 2,883 | 1,244 | ||||||||||||
| Impairment of assets | – | 4,998 | – | 10,118 | ||||||||||||
| Interest expense | 740 | 454 | 1,344 | 1,356 | ||||||||||||
| Severance expense for Series A share repurchases | – | – | 8,990 | – | ||||||||||||
| Loss (Gain) on sale of investments | – | – | (5,337 | ) | – | |||||||||||
| Gain on sale of assets | – | – | 6 | (35 | ) | |||||||||||
| Gain for debt forgiveness | – | – | (86 | ) | – | |||||||||||
| Loss on extinguishment of debt | (185 | ) | – | 5,976 | – | |||||||||||
| Non-GAAP gain / (loss) | $ | (880 | ) | $ | (12,709 | ) | $ | (3,273 | ) | $ | (38,315 | ) | ||||
| Non-GAAP Reconciliation (in thousands, except for share amounts) | ||||||||||||||||
| Three Months Ended September 30 | Nine Months Ended September 30 | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Non-GAAP net income (loss) | $ | (880 | ) | $ | (12,709 | ) | $ | (3,273 | ) | $ | (38,315 | ) | ||||
| Denominator | ||||||||||||||||
| Weighted average common shares – Basic | 457,745,655 | 206,828,614 | 317,491,979 | 186,295,127 | ||||||||||||
| Weighted average common shares – Diluted | 457,745,655 | 206,828,614 | 317,491,979 | 186,295,127 | ||||||||||||
| Non-GAAP earnings (loss) per common share: | ||||||||||||||||
| Non-GAAP earnings (loss) – Basic | $ | (0.00 | ) | $ | (0.06 | ) | $ | (0.01 | ) | $ | (0.21 | ) | ||||
| Non-GAAP earnings (loss) – Diluted | $ | (0.00 | ) | $ | (0.06 | ) | $ | (0.01 | ) | $ | (0.21 | ) | ||||
Source: Globenewswire