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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 |
Year Over Year Revenues Up 84%, Q2 net revenues up 25% sequentially over Q1 and Year Over Year Ecommerce Sales Up 268%
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 second quarter ended June 30, 2021. All dollars are stated in US Dollars.
“With year over year growth in net revenues of 84%, year over year direct to consumer ecommerce revenues up 268%, and our leading regulatory preparedness, HempFusion’s momentum shows it to be the right company, at the right time, to lead this new category into the future,” stated Dr. Jason Mitchell, HempFusion CEO. “Additionally, subsequent to the quarter end, the Company closed on two accretive acquisitions and highly respected CBD brands, adding significant new distribution points and products,” continued Mr. Mitchell.
Second Quarter 2021 Financial Highlights
Second Quarter 2021 Business Highlights
Statements of Loss and Comprehensive Loss
The Below is from the Unaudited Condensed Interim Financial Statements for the Three and Six Months Ended June 30, 2021 and 2020; Please Refer to the Complete Report, Including the Notes, Other Statements and Other Contents Therein.
For the three
For the three
For the six
For the six
months ended
months ended
months ended
months ended
June 30,
June 30,
June 30,
June 30,
2021
2020
2021
2020
$
$
$
$
Revenue, net of discounts1,232,942
670,728
2,216,438
1,681,303
Cost of goods sold
1,000,525
800,294
1,919,413
1,724,482
Gross profit (loss)
232,417
(129,566
)
297,025
(43,179
)
Expenses General and administrative Note 152,894,723
1,910,788
5,549,857
4,066,990
Sales and marketing
3,673,780
1,463,003
7,325,349
3,760,593
Total expenses
6,568,503
3,373,791
12,875,206
7,827,583
Net loss from operations
(6,336,086
)
(3,503,357
)
(12,578,181
)
(7,870,762
)
Other (income) expenses Other (income)(10,610
)
(6,500
)
(113,075
)
(71,768
)
Interest expense4,464
16,714
9,247
24,296
Change in fair value of derivative liabilities Note 11
—
100,279
—
35,892
Gain on derecognition of derivative liabilities
—
—
(70,809
)
—
Change in fair value of purchase consideration Note 4
203,710
77,280
167,368
254,555
Total other (income) expenses
197,564
187,773
(7,269
)
242,975
Net loss and comprehensive loss
(6,533,650
)
(3,691,130
)
(12,570,912
)
(8,113,737
)
Loss per common share - basic and diluted(0.06
)
(0.04
)
(0.11
)
(0.08
)
Weighted average number of common shares - basic and diluted116,852,879
99,699,196
116,852,879
99,699,196
Consolidated net revenue for the three months ended June 30, 2021 increased 84% year-over-year to $1,232,942 versus $670,728 in Q2-2020, and increased 25% over Q1-2021, and DTC e-commerce net sales year-over-year increased 268% reflecting increased marketing efforts, a targeted DTC team, and targeted digital promotions. New customer acquisition increased online by 69.7% over Q1, 2021, and not only did online increase for both Probulin and HempFusion, but traffic increased by 46.% over Q1, 2021. Probulin’s average conversion rate has remained very strong and consistent at 3.21%, and HempFusion has demonstrated a dramatic increase now at 4.37%.
Consolidated B2B net revenue increased 55% to $898,620 in Q2 2021 from $579,910in Q2-2020 and B2B net revenue increased by 22% to $898, 620 in Q2 2021 from $739,241 in Q1 2021. International sales began to return following Covid, increasing by 68% to $203,296 in Q2 2021 from $75,994 in Q1-2021. HempFusion maintains a leadership position in retailers across the United States, including the #1 in sales by dollar volume and unit sales in one of the top five largest FDM channel retailers.
Gross profit of $232,417 or 19% up from -19% in Q2 2020 of net revenue is primarily attributed to improvement in inventory and supply chain management. These efforts continue to make large improvements.
Operating expenses were $6,568,503, an increase of 95% from $3,373,791 in Q2-2020, primarily attributed to acquisition related expenses, 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 June 30, 2021 and 2020; Please Refer to the Complete Report, Including the Notes, Other Statements and Other Contents Therein.
June 30, December 31,2021
2020
$ $ (Audited) ASSETS Current Cash
11,370,824
9,262,517
Trade receivables Note 5
467,657
457,058
Inventory Note 6
2,831,938
2,576,866
Prepayments Note 7
1,596,179
1,530,846
16,266,598
13,827,287
Property and equipment Note 8
295,229
303,162
Right-of-use-assets Note 9
196,100
225,589
Prepayments - non current Note 7
242,815
—
Total assets
17,000,742
14,356,038
LIABILITIES Current Accounts payable and accrued liabilities Note 10
1,583,636
2,324,534
Derivative liabilities Note 11
—
13,975,514
Lease obligations Note 9
63,144
60,279
Purchase consideration payable Note 4
1,534,467
1,367,099
3,181,247
17,727,426
Non-current Lease obligations Note 9
132,956
165,310
Total liabilities
3,314,203
17,892,736
SHAREHOLDERS' EQUITY (DEFICIT) Share capital Note 11
57,590,356
45,002,867
Warrant reserve Note 11
17,206,393
1,572,556
Contributed surplus Notes 11 and 12
5,378,700
3,805,877
Accumulated deficit
(66,488,910
)
(53,917,998
)
Total equity (deficit)13,686,539
(3,536,698
)
Total liabilities and shareholders' equity17,000,742
14,356,038
The Company ended Q2-2021 with a strong cash position of $11,370,824. Incurring $2,894,723 in general and administrative expenses and $3,673,780 in sales and marketing expenses.
Management of the Company will host a conference call to discuss the Company’s second quarter 2021 results on Monday, August 16, 2021 at 8:30 a.m. (Eastern Time). To participate in the call, please dial 888-506-0062. For international callers, please dial 973-528-0011. Use Entry Code: 746381. To join the webcast, please visit https://www.webcaster4.com/Webcast/Page/2710/42495
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 over approximately 15,000 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, anticipated growth of the Company’s private label division, including private label orders from the noted leading national publicly traded grocery retailer, expansion opportunities for the Company’s ingestible products 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.
View source version on businesswire.com: https://www.businesswire.com/news/home/20210816005192/en/
Jason Mitchell, N.D. Chief Executive Officer and Director Email: ir@hempfusion.com Phone: 416-803-5638
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