Revenue for the Three months ended September 30, 2022, was $25.5 million, a 128% increase from revenue for the Three months ended September 30, 2021.
– Revenue for the Nine months ended September 30, 2022, was $80.9 million, a 133% increase over the same Nine-month period ended in 2021.
– Gross profit before fair value adjustments for biological assets for the Three months ended September 30, 2022, was $9.6 million, a 65% increase over the same Three-month period ended in 2021 and a 102% increase from 2022-Q2.
– General and Administrative Expenses totaled $3.188 million versus $11.920 million, a $8.731 million or 73% decrease compared to the same period in 2021 and a 108% decrease from 2022-Q2.
– Positive Adjusted EBITDA of $3.3 million for Q3.1
– During the Three months ended September 30, 2022, the Company successfully completed a comprehensive debt restructuring improving its near-term liquidity by over $100 million.
– Platinum Vape (“Platinum or PV”) continues to be the #1 vape brand in Michigan.2
– Platinum Skybar and Gummies launched in Q3 and are now carried over 300 dispensaries.
– Platinum Skybar has already been ranked as the #2 disposable based on current BDSA rankings since its launch.2
TORONTO, Nov. 29, 2022 (GLOBE NEWSWIRE) — Red White & Blooms Brands, Inc. (CSE:RWB, OTCQX: RWBYF) (“RWB” or the “Company”), a multi-state cannabis operator and house of premium brands in the U.S. legal cannabis sector, today announced the filing of its third quarter financial statements, management discussion and analysis (“MD&A”), and accompanying certificates for its Q3 filings for the quarter ended September 30, 2022 (collectively, the “2022-Q3 Filings”). In addition, the Company is providing certain Q3, 2022 financial results and select subsequent events. The 2022-Q3 Filings have been filed on the System for Electronic Document Analysis and Retrieval (“SEDAR”) and may be viewed by shareholders and interested parties under the Company’s profile at www.sedar.com.
Management Commentary
Colby De Zen, President, and Director, stated, “In Q3, we were able to continue to drive significant revenue, SG&A, and balance sheet improvements over 2021. We continue to proactively rationalize SG&A spend while remaining focused on driving (1) growth through the expansion of product offerings and geographic footprint utilizing our asset-light strategy and (2) profitability by selectively expanding branded offerings in higher margin product categories. The third quarter also saw the Company complete the largest debt restructuring in our history resulting in a marked improvement in near-term liquidity through the extension of loan maturities and new financing.
The achievement of positive adjusted EBITDA3 is a great milestone and there are still significant balance sheet improvements that continue to be implemented in Q4. The progress made to date is only the beginning of RWB’s success on its path to profitability and growth.
We are achieving operational improvements throughout the organization and have bolstered the management team while reducing headcount throughout the Company. We continue to increase the depth and breadth of the Platinum line while aggressively monitoring our costs.
In Florida, our St. Petersburg location commenced operations in the third quarter and our recently announced Clearwater location is anticipated to open in Q4 as scheduled. Renovations and fixturing of other locations continue as we aggressively drive the expansion of our retail footprint.”
Brad Rogers, CEO, stated, “We have successfully delivered our components to our partner in Missouri for the launch of Platinum branded products. The Platinum introduction has exceeded our expectations with a significant percentage of the dispensaries in Missouri already carrying the Platinum product with multiple re-orders received by the Company in Q4.
We are in late-stage negotiations with various partners for the expansion of Platinum into other states as it continues to build towards establishing itself as the premier Cannabis brand in the United States. We are looking forward to continuing to leverage the strengthening position of RWB in new and existing states.”
2022-Q3 Financial Highlights:
- Revenue was $25,543,993, a $14,341,672 or 128% increase when compared to the $11,202,321 revenues reported for the equivalent 2021 quarter.
- Gross profit before fair value adjustments for biological assets was $9,672,086, a $3,809,225 or 65% increase from $5,339,460 in the same quarter of 2021 and a 102% increase from Gross profit before fair value adjustments for biological assets recorded in 2022-Q2.
- Gross profit after fair value adjustments for biological assets was $8,208,447, a $1,344,504 or 20% increase when compared to $6,863,943 in gross profits for the same quarter in 2021 and a 140% increase from Gross profit after fair value adjustments for biological assets recorded in 2022-Q2.
- Operating expenses totaled $9,964,922, a $12,899,475 or 56% decrease when compared to Operating expenses of $22,864,397 for the same period in 2021.
- General and Administrative Expenses totaled $3,188,625 versus $11,920,136, a $8,731,511 or 73% decrease compared to the same period in 2021 and a 108% decrease from General and Administrative Expenses recorded in 2022-Q2.
- Adjusted EBITDA3 for the quarter was positive $3,311,531.
The Company has calculated Adjusted EBITDA for 2022-Q3 as follows:
| 3 months ended Sept 30, 2022 | |||
| $ | |||
| Net Income (Loss) for the Period | (8,455,562) | ||
| Depreciation and Amortization | 2,364,548 | ||
| Net finance expense | 7,492,481 | ||
| Net income tax expense (recovery) | 2,779,402 | ||
| Fair value of biological assets | (96,341) | ||
| Realized fair value of amounts in inventory | 1,559,980 | ||
| Loss on revaluation | – | ||
| Share based compensation | 926,000 | ||
| Foreign exchange | 6,276,603 | ||
| Gain on extinguishment of payables | (1,400,107) | ||
| Reversal of license liability | (8,135,473) | ||
| Adjusted EBITDA | 3,311,531 |
Restructuring completed in the Third Quarter ended September 30, 2022
As a result of the restructuring, the Company issued a series of amended and restated secured debentures as follows:
- A secured debenture in the principal amount of USD $25,885,000 maturing on September 12, 2024.
- A series of secured debentures with an aggregate principal amount of USD $9,505,000 maturing on September 12, 2024.
- A secured debenture in the principal amount of CDN $2,120,000 maturing on September 12, 2024.
- A secured promissory note in the principal amount of USD $5,850,000 maturing on September 12, 2024.
- The amending and restating of two secured promissory notes in the aggregate principal amount of USD $10,800,000 on October 4, 2021.
- A convertible promissory note in the principal amount of CDN $17,000,000.
- A subsidiary controlled by the Company issued a new secured debenture in the principal amount of USD $18,300,000 to an arm’s length third party with a maturity date of February 12, 2024.
