Post by
RisingFalcon99 on Aug 26, 2019 8:48am
JAMES E. WAGNER CULTIVATION REPORTS FISCAL THIRD QUARTER 201
EQNX::TICKER_START (TSX-V:JWCA),(Other OTC:JWCAF ),(CNSX:TER.CN),(Other OTC:TRSSF), EQNX::TICKER_END James E. Wagner Cultivation Corporation ("JWC" or the "Company") (TSX VENTURE: JWCA, OTCQX: JWCAF), a licensed cannabis cultivator and manufacturer focused on producing clean, consistent cannabis, today reported the Company's interim financial results for the fiscal third quarter ended June 30, 2019. Dollar amounts are in Canadian dollars unless otherwise noted. Fiscal Q3 2019 Financial and Operational Highlights -- Revenue totaled a record $749,000, up 32% sequentially from $566,000, and compared to $3,500 in Q3 2018. -- Net loss and comprehensive loss declined 87% sequentially and 91% from the same year-ago quarter to $434,000 or $(0.01) per share. -- Both JWC's pilot facility ("JWC1") and phase 1 of its flagship facility ("JWC2") achieved full operational capacity and production, with initial sales from JWC2 launched in the current quarter. -- Shipped demonstration equipment to Ascendo Group in South Africa, representing the first potential international deployment of the Company's GrowthSTORM(TM) Dual Droplet(TM) System. -- Added 23 new strains to the Company's dried flower collection, including its proprietary Wagner GE brand, a uniquely balanced 1:2 THC to CBD strain. -- Received cultivation license from Health Canada for the first pod of phase 2 in JWC2, a production and distribution complex totaling approximately 345,000 sf. that will utilize JWC's proprietary GrowthSTORM cultivation platform and methodologies. Management Commentary "Q3 was a milestone quarter for JWC," said Company president and CEO, Nathan Woodworth. "Revenue grew 32% sequentially and we celebrated our first harvest from our new JWC2 facility, allowing us to produce record amounts of our clean, consistent cannabis using our unique aeroponic technology. "In fact, we achieved a 28% increase in actual yield per plant versus our previously reported estimated yields, and we expect this to be sustainable. We estimate the additional yield alone could boost revenue by at least $25 million annually once JWC2 is fully operational. "Initial sales from the JWC2 harvest began following the end of the third quarter. However, right before the end of the quarter, we secured the additional license from Health Canada to add 11,000 sf. of flowering space, bringing the total to 22,000 sf. at JWC2. We anticipate initial sales generated by this additional capacity to begin in fiscal Q1 2020. Within the next couple of months, we expect to receive a license to double this capacity again to a total of 44,000 sf. "In July, we received approval of a license amendment from Health Canada to allow the sale of formulated cannabis oil from our pilot JWC1 facility, thereby adding another valuable revenue stream. More recently, we signed a purchase and supply agreement with TerrAscend Corp (CSE: TER, OTCQX: TRSSF) to provide dry cannabis flower and cannabis oils for sale on its online medical sales platform. We also continue to be engaged in numerous discussions with potential partners to expand the deployment of our GrowthSTORM platform both domestically and abroad. "As we complete the final quarter of our fiscal year, we will continue to focus on building out production capacity and distributing premium branded products for medical use and the fast-growing Canadian recreational market. Our strong progress in fiscal Q3, which has continued into the current quarter, has set the stage for rapid revenue growth and profitability, and a tremendous finish to fiscal 2019." Summary Financial Results Q3 2019 Q3 2018 Change % Q2 2019 Change % Revenues $ 749,294 $ 3,463 21,537 % $ 566,315 32 % Operating expenses 2,889,845 4,161,245 (31 ) % 3,235,685 (11 ) % Loss from operations 454,547 4,216,291 (89 ) % 3,434,883 (87 ) % Net and comprehensive loss 433,908 4,648,038 (91 ) % 3,405,264 (87 ) % Net and comprehensive loss per share (0.01 ) (0.06 ) (0.04 ) 9M 2019 9M 2018 Change % Revenues $ 1,835,985 $ 3,463 52,917 % Operating expenses 8,512,340 7,441,251 14 % Loss from operations 6,265,364 6,440,025 (3 ) % Net and comprehensive loss 6,164,463 8,064,865 (24 ) % Net and comprehensive loss per share (0.07 ) (0.12 ) 6/30/2019 9/30/2018 Change % Cash and cash equivalents $ 3,778,462 $ 8,504,790 (56 ) % Agricultural produce and biological assets 5,661,624 2,607,433 117 % Other working capital 1,031,544 604,172 71 % Non-current assets 17,293,655 5,475,701 216 % Other liabilities and long-term debt 6,945,912 3,411,615 104 % Shareholder's equity 15,681,818 19,639,466 (20 ) % For the third fiscal quarter ended June 30, 2019, revenue totaled a record $749,000, up 32% sequentially from $566,000, and compared to $3,500 in the same year-ago quarter. Revenue for the first nine months of fiscal 2019 increased to a record $1.8 million from $3,500 in the same period last year. Net and comprehensive loss was $434,000 or $(0.01) per share in fiscal Q3 2019, improving 87% sequentially from $3.4 million or $(0.04) per share, and improving 91% from $4.6 million or $(0.06) per share in the year-ago quarter. For the first nine months of the fiscal year, net and comprehensive loss was $6.2 million or $(0.07) per share, improving 24% from $8.1 million or $(0.12) per share in the same year-ago period. Cash and equivalents at June 30, 2019 totaled $3.8 million, compared to $2.3 million at March 31, 2019 and $18.0 million at June 30, 2018. The decrease in cash is attributable to cash used in operations. Outlook Inventories totaled approximately 458 kg of dried cannabis and 14 liters of formulated oil at the end of fiscal Q3 2019. These products are in the process of being sold in the fourth quarter of fiscal 2019. The Company expects to soon begin selling cannabis products through recreational channels, further developing customer demand, as it continues scaling JWC2 towards full production capacity. Given its expanding production capacity, the Company anticipates revenue growth to accelerate over the next several quarters, with modest increases in expenses. Management sees this trend resulting in the Company achieving breakeven to positive net and comprehensive income in Q4 2019 on an IFRS accounting basis (factoring in the anticipated net increase in biological assets). In Q1 2020, the Company expects to be revenue positive (revenue exceeding expenses), along with positive net and comprehensive income. By Q2 2020, the Company sees continued revenue growth driving strong gross margins, positive cash flow, and net and comprehensive income. Additional Information Additional details of the Company's results for fiscal Q3 2019 are available in the interim financial statements and the management's discussion and analysis as filed on SEDAR at www.sedar.com and available on the Company's website at www.jwc.ca. Conference Call JWC management will hold a conference call to discuss the third quarter results later today, followed by a question and answer period. Date: Monday August 26, 2019 Time: 5:00 p.m. Eastern time (2:00 p.m. Pacific time) Toll-free: 1-877-407-9208 Toll/International: 1-201-493-6784 Conference ID: 13694040 Please call the conference telephone number five minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact CMA at 1-949-432-7566. A replay of the call will be available after 8:00 p.m. Eastern time on the same day through September 9, 2019. Toll-free replay number: 1-844-512-2921 International replay number: 1-412-317-6671 Replay ID: 8692665 The conference call will also be webcast live and available for replay here.