Dallas, TX -- May 22, 2020 -- InvestorsHub NewsWire -- Puration, Inc. (USOTC: PURA) today released a management update to highlight notable details regarding the company’s Q1 2020 financial report published earlier this week on Wednesday, May 20, 2020. The company’s revenue for the first quarter of 2020 increased 173% to $805,000 compared to the same period in the previous year. First quarter 2020 gross profit was $241,790. The Q1 2020 performance is in line with the company’s recently published 100% annual revenue growth outlook for 2020 and going forward. The management update today also includes new information on the company’s past spinoff of its cannabis cultivation operations to Nouveau (NOUV) that included an intended dividend distribution to PURA shareholders. The update is included in its entirety below.
Q1 2020 Performance Overview
The company recently published its 2019 annual financials reporting 121% annual revenue growth to over $2.7 million for the year ended December 31, 2019 compared to $1.2 million for the year ended December 31, 2018. In addition to achieving continued high revenue growth, the company reported over $200,0000 in net profit.
The company’s $805,000 in Q1 2020 revenue representing 173% growth to compared to the same period in the previous year and $241,790 in gross profit are consistent with management’s overall 2020 100% annual revenue growth outlook.
The 2020 100% growth outlook is based primarily on the company expanding its EVERx CBD Sports Water sales. Last year, PURA took a number of steps from making acquisitions to establishing new partnerships that all contributed to expanding PURA’s distribution potential for EVERx. PURA management anticipates realizing the results of the 2019 distribution expansion efforts in 2020.
With the sudden and dramatic increase in online sales and doorstep delivery of many products in reaction to the restrictions resulting from the current Covid-19 environment, PURA management also anticipates an increase from its online sales through www.USMJ.com, the online store for CBD products and marijuana essentials from North American Cannabis Holdings, Inc. (USMJ).
The company is actively pursuing an acquisition campaign to build a portfolio of additional CBD infused products that can be rebranded to benefit from PURA’s patented cannabis extraction process. In light of the Covid-19 impact to the economy, PURA management is concentrating efforts first on the growth of EVERx sales and monitoring the economic situation for the right time to launch rebranded products. Accordingly, PURA management has not yet included sales from acquired and rebranded products in its 2020 outlook. In the meantime, the company will continue with its acquisition campaign and build asset value with the addition of new CBD infused product properties.
While revenue grew as anticipated with healthy growth margins, the company did not show a net profit in the first quarter as a result of a onetime expense. The company has historic quarterly general expenses averaging approximately $130,000 per quarter. The Q1 2020 expenses were over $500,000. The nearly $400,000 in additional expenses this quartered resulted from realizing previously capitalized costs as a onetime expense. The majority of the capitalized costs realized as a onetime expense this quarter came from the capital structures assumed in previous business acquisitions.
Cannabis Cultivation Spinoff Update
In an effort to concentrate on its CBD infused products business, PURA spun off a cannabis cultivation business it had been developing to Nouveau (NOUV) in a transaction that included a planned dividend of NOUV stock to PURA shareholders. Brian Shibley, the CEO of PURA continues to serve as the interim CEO of PURA’s cannabis cultivation spinoff. While the dividend issuance has taken much longer than anticipated, management remains committed to the spinoff plan and dividend.
Former NOUV management have been slow to provide the necessary support required to update the NOUV delinquent filings. PURA management recently asked for former NOUV management’s help one final time. PURA management has now decided to execute on an alternative strategy to carry through with the spirit of the intended spinoff and dividend.
In conjunction with a developing deal tor PURA’s cannabis cultivation spinoff to work with Kali-Extracts’ (KALY) NCM Biotech subsidiary in a joint effort to develop a proprietary cultivar to advance NCM Biotech’s ongoing work to produce various medical treatments from their patented cannabis extraction process, PURA has devised a strategy to unwind the NOUV deal and simultaneously execute a new spinoff transaction. While the new strategy involves working with NCM Biotech, it does not include a stock transaction with KALY. The new strategy does include a dividend within the spirit of the original transaction with NOUV. PURA anticipates making specifics of the new strategy public next month.
In the meantime, the cannabis cultivation operation is thriving. The operation has recently purchased and relocated to a new property from its former leased property. Texas lawmakers have recently implemented hemp friendly farming regulations and in so doing, universities within the State of Texas have initiated hemp farming research programs. PURA’s cannabis cultivation spinoff has initiated a number of joint research applications with Texas universities.
For more information on Puration, visit http://www.purationinc.com
This news release contains forward-looking statements within the meaning of the Securities Litigation Reform Act. The statements reflect the Company's current views with respect to future events that involve risks and uncertainties. Among others, these risks include the expectation that any of the companies mentioned herein will achieve significant sales, the failure to meet schedule or performance requirements of the companies' contracts, the companies' liquidity position, the companies' ability to obtain new contracts, the emergence of competitors with greater financial resources and the impact of competitive pricing. In the light of these uncertainties, the forward-looking events referred to in this release might not occur. These statements have not been evaluated by the Food and Drug Administration. These products are not intended to diagnose, treat, cure, or prevent any disease.