Delivra Health Brands Inc V.DHB

HVT REPORT POSITIVE Q4 2021 & YR END FIN RESULTS

[Humanist]

Harvest One and its Brands LivRelief (TM) and Dream Water (TM) Report Positive Q4 2021 and Year End Financial Results
 
by @newsfile on 28 Oct 2021, 21:05
   

• Strategic transformation to a uniquely positioned health and wellness company that provides top selling brands to the global marketplace
• Improved net revenue by 2.2% growth year over year despite aggressive COVID travel restrictions
• Improved gross profit, 24% in fiscal 2021 vs. 9% in fiscal 2020
• Lowered selling, general and administrative ("SG&A") expenses by 28% year over year
• Improved adjusted earnings before interest, taxes, depreciation and amortization ("EBITDA")⁽¹⁾ by 33% year over year
• Improved financial position with the reduction of current liabilities by 62%
• LivRelief ^TM infused topical is the top selling cannabis-infused topical in the Ontario market
• Innovation excellence with the launch of Dream Water ^TM sleep aid gummies in the U.S.

Vancouver, British Columbia--(Newsfile Corp. - October 28, 2021) - Harvest One Cannabis Inc. (TSXV: HVT) (OTCQB: HRVOF) ("Harvest One" or the "Company"), a uniquely positioned cannabis-infused health and wellness consumer packaged goods ("CPG") leader, with brands LivRelief ^TM and Dream Water ^TM, is pleased to announce its fiscal Q4 financial and operating results for the three and twelve months ended June 30, 2021.

Management Commentary
"Our year-end financial results clearly illustrate that the Company is continuing to increase its revenues and significantly reduce operating and overhead expenditures to achieve profitability," said Gord Davey, President and Chief Executive Officer of Harvest One. "This past year has been challenging to say the least. We have focussed on reducing our costs and overheads to improve our financial position. In parallel, we have been relentless in a very restricted COVID and travel environment in attaining new customers, distribution partners, products, and channels that are expected to increase our revenues and set the Company up for future sustainable success. Management's efforts to uniquely position Harvest One as a hybrid cannabis-infused and non-infused CPG leader that develops and distributes innovative health, wellness, and selfcare products are resonating with consumers and generating improved profit margins. During our next fiscal year, we expect to continue to increase our revenues from recently negotiated distribution agreements and the introduction of new products in international markets."

Key Highlights
Equity financing and improved financial position and liquidity
On March 17, 2021, the Company successfully closed a $5.75 million bought-deal public offering (the "Bought-Deal Financing") with Mackie Research Capital Corporation, as sole bookrunner, and ATB Capital Markets Inc., as the co-lead underwriters. The recent closing of this upsized Bought-Deal Financing significantly improved the working capital position of the Company and its ability to invest in branding and marketing activities.

Completion of the Strategic Review
On March 29, 2021, the Company announced the conclusion of its strategic review process (the "Strategic Review"). Key achievements of the Strategic Review include:

• Asset light and streamlined business model: The Company has been repositioned from a cultivation and processing entity to a lean, non-capital-intensive cannabis-infused and non-infused CPG operation focusing on innovation, sales, marketing, and distribution channels.
• Improved financial position and liquidity: The recent closing of an upsized Bought-Deal Financing significantly improved the working capital position of the Company and its ability to invest in branding and marketing activities.
• Improved cost structure: A significant reduction in operating and overhead costs, created a leaner, more efficient organization.
• Corporate Structure: Significant changes to the Company's management team and leadership model created a flatter corporate structure with a strong CPG-focused management team.

Expanded distribution and supply agreements that will drive future growth

1. International Expansion for Dream Water ^TM Products: On June 10, 2021, the Company announced that agreements were reached with five major national key account partners in Virginia, Arizona, Massachusetts, North Carolina and Montana for expansion in the U.S. market, further contributing to Harvest One's growth and brand expansion initiatives strategy for 2021.
2. b) Distribution in the Caribbean, Central America, and Cruise/Travel Retail
   On July 20, 2021, the Company announced that it had signed a three-year renewable marketing and distribution agreement for international market expansion with WB Canna Co. & Wellness, a leading CBD and wellness products distributor in the Caribbean, Central America, and the travel retail/cruise channel. This partnership aligns the Company's growth strategies for its core brands, and further contributes to the Company's growth and brand expansion initiatives for 2022.

Product development and licensing

1. Launch of LivRelief™ extra strength transdermal CBD cream
   On May 13, 2021, the Company announced its new LivRelief™ product SKU, Extra Strength Transdermal CBD Cream, which launched on the Medical Cannabis by Shoppers™ platform in June 2021 as part of its strategic growth and brand expansion initiatives.
2.  
3. Licence agreement with The Valens Company
   On July 28, 2021, the Company announced that its wholly-owned subsidiary, Delivra Inc., had granted Valens Agritech Ltd., a wholly owned subsidiary of The Valens Company, a leading manufacturer of cannabis products, an exclusive two-year licence to manufacture, distribute and sell infused LivRelief™ branded topicals in Canada. The partnership with The Valens Company is expected to accelerate national and global growth opportunities and advance the manufacturing of LivRelief™ branded topicals and its future extensions.
4. Launch of Dream Water ^TM Sleep Gummies
   On August 25, 2021, the Company announced that its Dream Water ^TM brand launched a new line for sleep gummies in the American market. The launch of Dream Water ^TM sleep gummies is expected to increase growth in the Company's traditional distribution and retail channels and improve overall channel penetration by leveraging the Company's expertise in branding, marketing, and distribution.
5.  

Financial Highlights

• Net revenue: The Company reported total net revenue of $7.96 million in fiscal 2021 compared to $7.78 million in fiscal 2020 from continued operations. This year over year 2.2% increase in net revenue is driven by the Company's best selling LivRelief ^TM infused topical during the year.

• Gross profit: The Company reported gross profit of $1.91 million or 24% compared to $0.72 million or 9% from continued operations. This increase is attributed to operational improvements, cost alignment projects, and reduction in financial inventory write-downs.

• Expenses including SG&A and excluding non-cash items: The Company reported expenses of $8.97 million in fiscal 2021 compared to $12.47 million in fiscal 2020, representing a 28% reduction for the year from continued operations. This decrease is driven by the management's efforts to reduce costs and overhead to achieve profitability in light of the Strategic Review.

• Adjusted EBITDA⁽¹⁾: The Company reported Adjusted EBITDA $(6.06) million in fiscal 2021 compared to $(9.06) million in fiscal 2020, representing a $3 million or 33% year over year improvement from continued operations. This increase is driven by margin improvements and reductions in SG&A and overheads.

Subsequent to Quarter End
On July 26, 2021, the Company announced that it engaged an arm's length service provider, Jonathan Carroll (the "Consultant") to provide strategic advisory and consulting services to the Company (the "Consulting Services") for a 24-month period. As partial consideration for the Consulting Services, the Company will grant an aggregate of 1,500,000 warrants (the "Warrants") to purchase common shares of the Company (the "Common Shares") to the Consultant in accordance with the provisions of the consulting agreement. On September 27, 2021, the Company issued 300,000 Warrants of the total grant of 1,500,000 Warrants.
In September 2021, the Company received payment in Common Shares for all amounts due from the Cann Group Limited ("Cann Group") in relation to the closing of the transaction announced by the Company on March 10, 2021, whereby the Company sold its wholly-owned subsidiaries Satipharm Limited, Satipharm AG and Phytotech Therapeutics Ltd. to the Cann Group.
Summary of Key Financial Results


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Adjusted EBITDA (non-GAAP measures)


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Expenses excluding non-cash items


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Outlook
Management anticipates sales volumes, net revenues, and Adjusted EBITDA⁽¹⁾ to improve throughout the next fiscal year due to a full year of infused topical sales, expanded distribution coverage, launch initiatives, branding initiatives, improvements in gross profit, and a continued focus on reducing overhead costs.
 

[StartupInvestor]

Seeing minimal revenue growth, but would give them credit for the big reduction in liabilities.  The increase in accounts receivable and substantial decrease in inventory are slightly concerning.  While the cash did increase, when compared to the assets held for sale they may still be burning cash.   Overall, seeing a company that might become stable, but their growth has