- Revenue continues to accelerate. The Company generated
$1.2 million in revenue during
Q2-2020, reaching $1.7 Million YTD
2020 compared to $786,901 in its full
2019 fiscal year.
- Recent increase in active cultivation footprint readies
PharmaCielo to process and deliver more extracted product during
the second half of 2020 and into 2021.
- Production from the Company's Processing and Extraction
Centre will begin accelerating during Q3-2020. The Company intends
to initiate the GMP certification process during Q4-2020, which
will enable it to both expand its customer base and enter new
markets in 2021.
- PharmaCielo made significant progress in Q2 towards
enhancing and expanding its product portfolio, as well as on
segmenting global markets to align commercial efforts.
All figures are in Canadian dollars ($) unless otherwise
specified
TORONTO and RIONEGRO,
Colombia, Aug. 31, 2020 /CNW/ - PharmaCielo
Ltd. ("PharmaCielo" or the "Company") (TSXV:
PCLO) (OTCQX: PCLOF), the Canadian parent of Colombia's premier cultivator and producer of
medicinal-grade cannabis oil, PharmaCielo Colombia Holdings S.A.S.,
today announced financial results for the second quarter ended
June 30, 2020.
Management Commentary
David Attard, Chief Executive
Officer of PharmaCielo Ltd., commented, "I am proud of our team for
delivering continued revenue growth, while maintaining tight cost
control in a challenging environment. Establishing a robust,
recurring international sales pipeline in an industry that is still
in its early days, with established health and wellness product
producers looking for continuous and verifiable high-quality
supply, does take time. We are making steady progress and are
backed by arguably one of the industry's largest combination of
cultivation, state-of-the-art processing and extraction facilities
to produce a growing portfolio of value-added cannabis extract
products. With meaningful revenue growth in the back portion of the
year expected to drive cash flow positive exiting 2020, PharmaCielo
is set to begin delivering meaningful shareholder value while
becoming the input supplier of choice for leading brands."
"Our first priority in Q2, in a challenging COVID-19 environment
was to guarantee that existing important projects, related to our
future biomass availability as well to our production and
extraction facility stayed on track," said Henning von Koss who took over his
responsibilities as President of PharmaCielo Ltd. as of May, 2020.
"As David mentioned the medicinal cannabis extract market, beyond
the traditional dry flower market, is in its early days and
PharmaCielo plays an important role in this global evolution.
Hence, it has also been our priority to bring the Company to a new
stage in its objective of going beyond selling products and become
the solution provider for the sector. As of mid-Q2, we had put
significant effort into strengthening and aligning the business and
product development activities on an internal basis."
Operational Update
- By the end of Q2-2020 and announced on July 8th, 2020 the Company received
authorization from the Colombian Government to cultivate and
generate 10 tonnes of high THC content biomass for the production
of high-quality THC extract. This event triggers the interest of
geographies where the medical regulated use of THC is very advanced
and in high demand.
- Various negotiation rounds with contract growers during Q2
culminated in the announcement of August
13th, 2020, of the activation of the Company's
first external cultivation contract with a local grower,
immediately expanding the Company's active cultivation footprint by
32% to 1.6 million square feet, with continued enlargement to a
total of 2.6 million square feet expected, pending receipt by the
contract grower of technical licensing for the additional
area.
- The Company has continued to make progress on developing its
product pipeline with an expected Q3 introduction of a full breadth
of non-psychoactive formulations ranging from concentrates
(isolate, broad-spectrum oil and distillate) to a variety of
standardized formulations (including water-soluble CBD emulsions as
well as broad and full-spectrum diluted distillates).
- With a broader product portfolio, a review of our route to
market has been initiated, aiming to confirm, adapt and aligning
the Company's commercial efforts. With a solid, reliable and actual
market segmentation and expected to be completed in the beginning
of Q3, it is a key element on the evolution and implementation of
the commercial structure and partnerships in the various
geographies.
Financial Highlights – Q2-2020
- The Company generated Total Revenue of $1.2 million compared to $514,409 in Q1-2020 and $nil in Q2-2019.
- Cost of Goods Sold was $671,768 compared to $461,235 in Q1-2020 and $nil in Q2-2019. Gross
Margin excluding fair value items was $560,773 compared to $53,174 in Q1-2020 and $nil in Q2-2019.
- Total Selling, General and Administrative expenses were
$7.8 million compared to $7.3 million in Q1-2020 and $8.8 million in Q2-2019. The decrease from
Q2-2020 was primarily related to the inclusion of an allowance for
expected credit losses in Q2-2020, lower share-based compensation,
reduced office and general expenses and lower travel and
accommodation expenses.
- Adjusted EBITDA of ($4.8
million) compared to ($3.5
million) in Q1-2020 and ($3.1
million) in Q2-2019.
- Net loss of $7.7 million
compared to $6.3 million in Q1-2020
and $10.7 million in Q2-2019.
- "All-in" operating cost to produce dried cannabis of
$0.05 per gram during Q2-2020
compared to $0.04 per gram during
Q1-2020.
- The Company had cash and cash equivalents of $5.1 million at June 30,
2020 (Pro forma $9.1
million1 at July 3,
2020) compared to $13.7
million at December 31,
2019.
Summary Financials
|
Q2
2020
|
Q1 2020
|
Q2 2019
|
Revenue
|
$1,232,541
|
$514,409
|
$nil
|
Gross margin before
fair value adj.
|
$560,773
|
$53,174
|
$nil
|
Gross
margin
|
$152,469
|
($156,720)
|
$nil
|
SG&A
|
$7,775,734
|
$7,298,998
|
$8,774,494
|
Adjusted EBITDA
(loss)
|
($4,811,858)
|
($3,548,818)
|
($3,113,223)
|
Net income
(loss)
|
($7,719,863)
|
($6,317,998)
|
($10,685,917)
|
|
|
|
|
Wt. avg. shares
outstanding – basic & diluted
|
104,856,355
|
99,051,447
|
96,264,358
|
Basic and diluted
(loss) per common share
|
($0.07)
|
($0.06)
|
($0.11)
|
Q2 Financial Results Conference Call and Webcast
PharmaCielo will host a conference call on Monday, August 31st, 2020, at 8:30 a.m. ET to discuss its second quarter
financial results and provide investors with key business
highlights. The call will be chaired by David Attard, CEO, Henning Von Koss, President, David Gordon, CCO and Scott Laitinen, CFO.
Date: August 31st, 2020 |
Time:8:30 a.m. ET
Participant Dial-in: 416-764-8650 or 1-888-664-6383
Replay Dial-in: 416-764-8677 or 1-888-390-0541
Conference ID: 11880297
Playback #: 880297 (Expires September 14th,
2020)
Listen to webcast: event.on24.com
About PharmaCielo
PharmaCielo Ltd. (TSXV:PCLO,
OTCQX:PCLOF) is a global company, headquartered in Canada, with a focus on ethical and
sustainable processing and supplying of all natural,
medicinal-grade cannabis oil extracts and related products to large
channel distributors. PharmaCielo's principal (and wholly owned)
subsidiary is PharmaCielo Colombia Holdings S.A.S., headquartered
at its cultivation and processing centre located in Rionegro,
Colombia.
The board of directors and executive team of PharmaCielo are
comprised of a diversely talented group of international business
executives and specialists with relevant and varied expertise.
PharmaCielo recognized the significant role that Colombia's ideal location plays in building a
sustainable business in the medical cannabis industry, and the
Company, together with its directors and executives, is executing
on a business plan focused on supplying the international
marketplace.
|
|
|
|
|
1
|
Includes $4.0 million
in net proceeds of the bought deal offering of common shares, which
closed on July 3, 2020. For further information please see
PharmaCielo's Management's Discussion and Analysis for the
three months ended June 30, 2020, available on the Company's
website or on SEDAR.
|
Forward-Looking Statements:
Certain statements contained in this news release, such as
those relating to processing and delivery of more extracted product
during the second half of 2020 and into 2021, acceleration of
production, the Company's initiation of the GMP certification
process and associated expansion of customer base, entry of new
markets, that the Company will be cash flow positive by the end of
2020, the Company's expansion of its portfolio, revenue growth of
the Company in the back half of the year, delivery of shareholder
value, becoming a solution provider for the sector, the continued
enlargement of the Company's active cultivation footprint, the
Company's commercial introduction of a range of products and
completion of Route to Market in Q3 and the Company's plans to hold
a public conference call regarding its Q2-2020 financial results
contain "forward-looking information" as such term is used in
applicable Canadian securities laws. Forward-looking information is
based on plans, expectations and estimates of management at the
date the information is provided and is subject to certain factors
and assumptions, including the Company's ability to obtain all
necessary governmental regulatory and TSXV approval related to the
exportation of PharmaCielo's CBD and THC products from Colombia, that there will be demand for the
Company's products, that the Company's development plans do not
change as a result of unforeseen events and that the Company's
business generally and shipping logistics are not disrupted by
COVID 19, Forward-looking information is subject to a variety of
risks and uncertainties and other factors that could cause plans,
estimates and actual results to vary materially from those
projected in such forward-looking information. Factors that could
cause the forward-looking information in this news release to
change or to be inaccurate include, but are not limited to, the
risk that any of the assumptions referred to prove not to be valid
or reliable, that risks such as those referred to above are
realized and result in delays, that the Company's financial
condition or development plans change, the Company's failure to
obtain necessary TSXV or applicable government regulatory approvals
in order to export its products from Colombia or into other countries, failure to
obtain GMP certification for the Processing and Extraction Centre,
less than anticipated market demand for the Company's products, the
Company's ability to ship its products is delayed or otherwise
disrupted due to COVID 19 or due to other economic or operational
circumstances, risks associated with operating in Colombia, risks associated with the cannabis
industry generally, risks associated with global economic
instability relating to COVID-19, currency exchange risk and
additional risks described in the Company's Annual Information Form
for the year ended December 31, 2019
filed with the Canadian securities regulatory authorities under the
Company's SEDAR profile at www.sedar.com. The Company undertakes no
obligation to update these forward-looking statements, other than
as required by applicable law.
Neither the TSX Venture Exchange nor its Regulation
Services Provider (as that term is defined in the policies of the
TSX Venture Exchange) accepts responsibility for the adequacy or
accuracy of this press release.
SOURCE PharmaCielo Ltd.