MPX International Announces Third Quarter 2019 Financial Results
“The significant momentum we are experiencing in moving our strategic growth plan forward is reflected in the number of critical corporate milestones we have been able to achieve in the last quarter and subsequent period. We now have many of the elements in place to actualize on our mission of becoming a premier global cannabis producer,” said W. Scott Boyes, Chairman, President and Chief Executive Officer of MPXI. “Domestically, we have established and growing production capabilities as well as the sales licence for the Canveda Facility. Worldwide, we are moving fast to secure our future legacy as a global leader.”
“In Canada, we now have the ability to sell cannabis directly into a market that has been hampered by supply constraints. And with our exclusive rights to develop the Medical Cannabis Learning Network kiosks and our ability to reach veterans through Spartan Wellness, we have a strong tactical plan to grow our brand awareness, patient base and revenue.”
“Importantly, we are executing our European expansion and global growth strategy. Acquiring HolyWeed gives us access to one of the most well-known brands in Europe. Fully vertically-integrated from seed to sale, HolyWeed’s wide range of products provide MPXI with instant brand credibility. Development of our GMP-ready facility in Malta is continuing and will provide a production hub for Salus BioPharma products for distribution across Canada, Europe and Oceania,” continued Mr. Boyes. “That we will be one of the first companies to be entering multiple jurisdictions with such premier products provides us with a first mover advantage that we expect to capitalize on as the CBD market across Europe continues to grow rapidly.”
“Furthermore, MPXI Labs in Nyon, Switzerland provides us with our greatest source of near term revenue, with 70 hectares of sun-grown certified organic cannabis planted in spring 2019 nearly ready for harvesting and processing,” said Mr Boyes. “These specialized low THC cannabis strains with high CBD content and unique terpene profiles continue to set our products apart, driving both brand awareness and sales.”
“MPXI is also creating the ability to expand quickly into other global jurisdictions. Our Australian operations and future facility in Tasmania will be able to provide quick access to markets opening up in Asia. In addition, our joint venture in South Africa with First Growth provides us a strong foothold in a low cost production jurisdiction to supply quality raw cannabis inputs to our operations in Canada, Europe and Oceania.”
“We have accomplished each of these milestones just a few months after commencing operations. The strong, definable value we created in the United States was the result of our ability to create unique opportunities through being one of the first companies on the ground and by knowing how to navigate multiple regulatory jurisdictions,” noted Mr. Boyes. “As evidenced by the rapid development MPX International has achieved in this relatively new entity, we are committed to recreating our previous success.”
The key financial measures indicated below were used by management in evaluating and assessing the performance of MPXI's business for the fiscal third quarter of 2019. A more detailed discussion of these and other metrics, as well as operational events, can be found in the Company's Financial Statements and Management Discussion & Analysis ("MD&A") filed on www.sedar.com. All figures are presented in Canadian dollars.
For the three months ending June 30, 2019, MPXI reported revenue of $674,745 (three months ending June 30, 2018: $4,771). For the nine months ending June 30, 2019, MPXI reported revenue of $1,143,518 (nine months ending June 30, 2018: $10,315).
Gross profit before adjustment for the unrealized gain in the fair value of biological assets for the three months ending June 30, 2019 was $406,979 which represents a gross margin of 60.3%. Gross profit after adjustment for the unrealized gain in the fair value of biological assets was $1,684,065 which represents a gross margin of 249.6%.
Gross profit before adjustment for the unrealized gain in the fair value of biological assets for the three months ending June 30, 2018 was $3,583 which represents a gross margin of 75.1%. Gross profit after adjustment for the unrealized gain in the fair value of biological assets was $3,583 which represents a gross margin of 75.1%.
Professional fees increased to $680,464 for the three months ended June 30, 2019 as compared to $86,577 in the comparable period. Professional fees increased to $1,433,286 for the nine months ended June 30, 2019 as compared to $67,019 in the comparable period.
As part of the Company's incentive stock option plan, the Company recognized $17,705 of share-based compensation for the three months ended June 30, 2019 as compared to $125,842 in the comparable period. The Company granted stock options to employees, directors and officers of the Company under the Company's stock option plan on February 26, 2019 and May 29, 2019. For the nine months ended June 30, 2019, the Company recognized $1,248,081 of share-based compensation, as compared to $214,932 in the comparable period.
General and administrative expenses were $2,353,978 for the three months ended June 30, 2019 as compared to $246,928 in the comparable period. General and administrative expenses increased to $5,085,336 for the nine months ended June 30, 2019 as compared to $525,871 in the comparable period.
Overall, the increase in general and administrative costs for the three and nine months ended June 30, 2019, as compared to the three and nine months ended June 30, 2018, was largely due to increases in salaries and benefits, consulting fees to third parties, office and general and occupancy costs, ramping up operations at Canveda and preparing for the Company's expanding operations.
Other income and expenses
Other income was $734,804 for the three months ended June 30, 2019 as compared to $15,612 in the comparable period. Other expenses were $43,530 for the nine months ended June 30, 2019 as compared to other income of $15,612 in the comparable period.
Adjusted EBITDA was a loss of $2,611,862 for the three months ended June 30, 2019 as compared to a loss of $329,922 in the comparable period. Adjusted EBITDA was a loss of $5,502,152 for the nine months ended June 30, 2019 as compared to a loss of $585,386 in the comparable period.
Cash and Cash Equivalents
As of June 30, 2019, the Company had cash and cash equivalents available of $23,448,668, down from $30,253,164 at March 31, 2019.
About MPX International Corporation
MPX International Corporation is focused on developing and operating assets across the global cannabis industry with an emphasis on cultivating, manufacturing and marketing products which include cannabinoids as their primary active ingredient.
Cautionary Statement Regarding Forward-Looking Information
This news release includes certain “forward-looking statements” under applicable Canadian securities legislation that are not historical facts. Forward-looking statements involve risks, uncertainties, and other factors that could cause actual results, performance, prospects, and opportunities to differ materially from those expressed or implied by such forward-looking statements. Forward-looking statements in this news release include, but are not limited to, MPX International’s objectives and intentions. Forward-looking statements are necessarily based on a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties and other factors which may cause actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: general business, economic and social uncertainties; litigation, legislative, environmental and other judicial, regulatory, political and competitive developments; delay or failure to receive board, shareholder or regulatory approvals; those additional risks set out in MPX International’s public documents filed on SEDAR at www.sedar.com; and other matters discussed in this news release. Although MPX International believes that the assumptions and factors used in preparing the forward-looking statements are reasonable, undue reliance should not be placed on these statements, which only apply as of the date of this news release, and no assurance can be given that such events will occur in the disclosed time frames or at all. Except where required by law, MPX International disclaims any intention or obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.
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SOURCE: MPX International Corporation
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Released August 28, 2019