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Share Name | Share Symbol | Market | Type |
---|---|---|---|
HempFusion Wellness Inc | TSX:CBD.U | Toronto | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.035 | 0.035 | 0.05 | 0 | 01:00:00 |
HempFusion Wellness Inc. (TSX:CBD.U) (OTCQX:CBDHF) (FWB:8OO) (“HempFusion” or the “Company”), an industry leader in full spectrum cannabidiol (CBD) hemp extract wellness products and probiotics, today reported financial results for the first quarter ended March 31, 2021. All dollars are stated in US Dollars.
Q1-2021 Financial Highlights
Q1-2021 Business Highlights
"With nearly all international business paused due to COVID throughout 2020 and Q1 2021, and with slower than expected reopenings, the Company still achieved an incremental QoQ growth of 7.6%. Now, with vaccine rollouts taking place across the country, we are encouraged with reopening rates and excited that our sales, which currently take place in approximately 75% brick-and-mortar businesses, are beginning to reopen," commented Jason Mitchell, N.D., HempFusion's Co-Founder and Chief Executive Officer.
"We remain committed to developing new revenue channels and have entered additional countries including China, Ireland, and the United Kingdom, and we are excited with subsequent quarterly events in which new purchase orders were received, showing early signs of the return of international business. These international POs have the potential to drive millions in revenue. We are working feverishly to accelerate sales through organic channels and the continued pursuit of M&A opportunities; early indications have Q2 shaping up to be our best quarter yet," continued Dr. Mitchell.
Statements of Loss and Comprehensive Loss
The Below is from the Unaudited Condensed Interim Financial Statements for the Three Months Ended March 31, 2021 and 2020; Please Refer to the Complete Report, Including the Notes, Other Statements and Other Contents Therein.
Consolidated net revenue for the three months ended March 31, 2021 increased 7.6% quarter-over-quarter to $983,496 versus $913,646 in Q4-2020, and DTC e-commerce net sales increased 59.3% reflecting increased marketing efforts, a targeted DTC team, and targeted digital promotions. Site traffic increased by 62%, and conversion rates increased to 1.9%. DTC accounted for 24.8% of total revenue in the first quarter of 2021 versus 16.8% for Q4-2020.
Consolidated B2B net revenue decreased 2.8% to $739,241 from $760,341 in Q4-2020 reflective of the above-referenced growth in DTC and a decrease in conventional grocery.
International sales increased to $75,994 from nil showing a return to normal from Q4-2020, and early indication of future international orders accelerating and producing incremental quarterly gains. HempFusion maintains a leadership position in retailers across the United States, including the #1 in sales by dollar volume and SKUs in one of the top five largest FDM channel retailers.
Gross profit of $280,205 or 28.5% of net revenue is primarily attributed to improvement in inventory and supply chain management.
Operating expenses were $6,306,703, an increase of 42.9% from $4,414,792 in Q4-2020, primarily attributed to IPO related expenses, including D&O insurance and listing fees, as well as marketing and digital expenses.
Balance Sheet | Cash Position
The Below is from the Unaudited Condensed Interim Financial Statements for the Three Months Ended March 31, 2021 and 2020; Please Refer to the Complete Report, Including the Notes, Other Statements and Other Contents Therein.
The Company ended Q1-2021 with a strong cash position of $17,074,030 ensuring the capital requirements of the Company are met, with ample room for strategic M&A. The Company incurred $2,655,134 in general and administrative expenses and $3,651,569 in sales and marketing expenses.
“In 2019, HempFusion (combined with Probulin on a pro forma basis with respect to 2019) achieved net revenue of $4,627,544, followed by $3,823,638 in 2020. The impact COVID has had on our business is clear. We have adapted. It’s important to note we have strategically bolstered the Company’s online presence with the help of new channels such as Amazon for Probulin and Alibaba’s Tmall for both brands. Our efforts have resulted in early traction and success, as we continue to strengthen our foothold in the direct-to-consumer CBD market. This quarter showed a strong DTC sales increase of 59.3%. We expect this trend to continue as DTC now accounts for 24.8% of total revenue in the first quarter of 2021 versus 16.8% for Q4-2020,” commented Dr. Mitchell.
Conference Call
Management of the Company will host a conference call to discuss the Company's first quarter 2021 results at Monday, May 17, 2021 at 4:15 p.m., Eastern Time. To participate in the call, please dial 888-506-0062. For international callers, dial 973-528-0011. Use Participant Code: 795055. To join the webcast: https://www.webcaster4.com/Webcast/Page/2710/41342.
A replay will be available from the Investor Relations section of HempFusion’s website at HempFusion.com/corporate-information.
ABOUT HEMPFUSION
HempFusion is a leading health and wellness CBD Company utilizing the power of whole-food hemp nutrition. HempFusion distributes its family of brands, including HempFusion, Probulin Probiotics, Biome Research, and HF Labs, to approximately 4,000 retail locations across all 50 states of the United States and select international locations. Built on a foundation of regulatory compliance and human safety, HempFusion’s diverse product portfolio comprises 48 SKUs including tinctures, proprietary FDA Drug Listed Over-The-Counter (OTC) Topicals, Doctor/Practitioner Lines and more. With a strong focus on research and development, HempFusion has an additional 30 products under development. HempFusion is a board member of the US Hemp Roundtable, and HempFusion’s wholly-owned subsidiary, Probulin Probiotics, is one of the fastest-growing probiotics companies in the United States, according to SPINs reported data. HempFusion’s CBD products are based on a proprietary Whole Food Hemp Complex™ and are available in-store or by visiting HempFusion online at www.hempfusion.com or www.probulin.com.
Follow HempFusion on Twitter, Facebook and Instagram and Probulin on Twitter, Facebook and Instagram.
FORWARD-LOOKING STATEMENTS
This news release contains forward-looking statements and forward-looking information within the meaning of Canadian securities legislation (collectively, “forward-looking statements“) that relate to HempFusion’s current expectations and views of future events. Any statements that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions or future events or performance (often, but not always, through the use of words or phrases such as “will likely result,” “are expected to,” “expects,” “will continue,” “is anticipated,” “anticipates,” “believes,” “estimated,” “intends,” “plans,” “forecast,” “projection,” “strategy,” “objective” and “outlook”) are not historical facts and may be forward-looking statements and may involve estimates, assumptions and uncertainties which could cause actual results or outcomes to differ materially from those expressed in such forward-looking statements. No assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this news release should not be unduly relied upon. These statements speak only as of the date of this news release. In particular and without limitation, this news release contains forward-looking statements relating to the continued growth of the Company’s international business and revenue, the Company’s plans to accelerate sales, DTC sales expectations and the Company’s other plans, focus and objectives.
Forward-looking statements are based on a number of assumptions and are subject to a number of risks and uncertainties, many of which are beyond HempFusion’s control, which could cause actual results and events to differ materially from those that are disclosed in or implied by such forward-looking statements. Such risks and uncertainties include, but are not limited to, the impact and progression of the COVID-19 pandemic and other factors set forth under “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” in the annual information form of the Company dated March 31, 2021 and available under the Company’s profile on SEDAR at www.sedar.com. HempFusion undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by law. New factors emerge from time to time, and it is not possible for HempFusion to predict all of them or assess the impact of each such factor or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statement. Any forward-looking statements contained in this news release are expressly qualified in their entirety by this cautionary statement.
Neither the TSX nor its Regulation Services Provider (as that term is defined in the policies of the TSX) accepts responsibility for the adequacy or accuracy of this release.
HEMPFUSION WELLNESS INC Unaudited Condensed Interim Consolidated Statements of Loss and Comprehensive Loss (Express in US dollars)
For the three For the three months ended months ended March 31, March 31,2021
2020
$ $ Revenue, net of discounts983,496
977,379
Cost of goods sold
703,291
944,756
Gross profit
280,205
32,623
Expenses General and administrative Note 14
2,655,134
2,176,528
Sales and marketing
3,651,569
2,238,264
Total expenses
6,306,703
4,414,792
Net loss from operations
(6,026,498
)
(4,382,169
)
Other (income) expenses Other (income)(102,465
)
(65,268
)
Interest expense4,783
7,582
Change in fair value of derivative liabilities Note 10
—
(64,387
)
Gain on derecognition of derivative liabilities(70,809
)
—
Change in fair value of purchase consideration Note 4
(36,342
)
177,275
Total other (income) expenses
(204,833
)
55,202
Income tax (recovery) expense
—
—
Net loss and comprehensive loss
(5,821,665
)
(4,437,371
)
Loss per common share - basic and diluted(0.05
)
(0.04
)
Weighted average number of common shares - basic and diluted116,351,760
99,699,196
HEMPFUSION WELLNESS INC. Unaudited Condensed Interim Consolidated Statements of Financial Position (Express in US dollars)
March 31, December 31,2021
2020
$ $ (Audited) ASSETS Current Cash
17,074,030
9,262,517
Trade receivables Note 5
341,026
457,058
Inventory Note 6
2,931,910
2,576,866
Prepayments Note 7
2,611,815
1,530,846
22,958,781
13,827,287
Property and equipment Note 8
309,975
303,162
Right-of-use-assets Note 9
211,003
225,589
Prepayments - non current Note 7
259,997
—
Total assets
23,739,756
14,356,038
LIABILITIES Current Accounts payable and accrued liabilities
1,685,275
2,324,534
Derivative liabilities Note 10
—
13,975,514
Lease obligations Note 9
61,595
60,279
Purchase consideration payable Note 4
1,330,757
1,367,099
3,077,627
17,727,426
Non-current Lease obligations Note 9
149,408
165,310
Total liabilities
3,227,035
17,892,736
SHAREHOLDERS' EQUITY Share capital Note 10
57,383,871
45,002,867
Warrant reserve Note 10
17,412,878
1,572,556
Contributed surplus Notes 10 and 11
5,455,635
3,805,877
Accumulated deficit
(59,739,663
)
(53,917,998
)
Total equity20,512,721
(3,536,698
)
Total liabilities and shareholders' equity23,739,756
14,356,038
View source version on businesswire.com: https://www.businesswire.com/news/home/20210517005906/en/
Jason Mitchell, N.D. Chief Executive Officer and Director Email: ir@hempfusion.com Phone: 416-803-5638
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